Microfinance Focus, June 15, 2010 : In this era of multi-channel banking, the people present represented payments of physical goods using mobile, payment of internet content using mobile and some card based systems were also available either on offer or in interaction with the mobile phone. For example, you could surf on the internet and buy digital content by paying through an addition to your telephone bill. In many companies, mobile phones can be used to make small payments. According to Semra Uzumcu, consultant with Innova, in Turkey, these payments have to be less than 40 Turkish lira (or 20 Euros). In Turkey, there are three telecom operators, of which two (Avea, the cell phone subsidiary of Turk Telecom and Turk cell) are doing micropayments. The third operator, Telsim (recently purchased by Vodafone), has not yet entered the field.
The overall landscape of Mobile Banking appears complex. Essentially, a Telecom operator links the bank to the customer through a mobile telephone. The telecom operator (example Turk Telecom) chooses the technology such as broad band or cellular to offer its customers. The telecom facilities are available for all the different devices. These devices have a SIM card. The mobile payment balances can be recorded either on a SIM card or on a distant server hosted by a Trusted Service Manager representing the Bank or the Payment Service Provider. A graphical presentation will be the subject of a more academic paper after validation by the different actors.
From this discussion with the actors, the Mobile payments services can be divided into a few categories, Telecom top ups, E-commerce payments, Cash Access (With Cash in Cash out) permitting transfers and Complete payment facilities (with embedded cards). The rest of the paper presents the different actors and their services.
The Japanese have set the pace.
NTT DOCOMO: Hiroshi Tamano of NTT DOCOMO (over 56 million customers) outlined the services provided by NTT DOCOMO in Japan. All kinds of applications are now available on Japanese phones thanks to service providers, r/w vendors, chipset vendors, handset vendors and mobile network operators. Approx. 70% of mobile handsets in Japan are having capability of enjoying Mobile e-wallet facility with FeliCa NFC chip and NTT DOCOMO will probably phase out 2G telephones by 31st March 2012. 3G telephones allow high speed email and web access. The Mobile facilities include viewing balances, top ups, 20 to 30 applications and all this in a high security environment. For example, there is an application called EDY (Euro Dollar Yen) which is provided by bitWALLET and allows payments and transfers.
Global operators in Mobile Banking: Paytoo, Tag Attitude
Paytoo: Michel Poignant, CEO, presented Paymotech, which offers the Paytoo solution. His byline is: Anywhere in the world, any provider, one cell phone and one mobile wallet! Paymotech has become a telecom operator, offering also a worldwide SIM card to any mobile wallet user. Thanks to the mobile wallet, people can transfer money in real time all over the world, not only to Paytoo users but to anyone else. They are open to all systems, being able to use the credit online, pay retail outlets using micropayments, contactless and bar code, and offering a debit card sharing the same balance in multi-currency. The question is of placing cash in. Over 3 years, they have formed an agent of networks for toping up. This solution is offered to Banks and Telecom partners that can integrate the Solution in their SIM. Their SIM card without roaming charges works in 200 countries with voice SMS and DATA. The transfer of credit can be to anyone as long as they own any cell phone in the world. It is a universal mobile wallet. The SIM is an add-on for people who already use their current cell phone. With the wallet users also gets access to calling features saving them lots of money when calling international.
Their target market is, firstly, people who don’t have a bank account or a debit card and secondly, micropayments. With a Paytoo Mobile wallet you can pay simply by dialing a phone number when you check out of a hotel. It works worldwide; the amount is deducted from the wallet and sent to the store. Micropayments are payments of a few cents or a few dollars. Each mobile wallet user can also request a contactless sticker. Their debit card can be used worldwide. The balance in the telephone and in the card is the same. The card uses the telephone account. People can talk and then make a payment with the debit card associates to the same wallet.
120 countries with more than 200,000 locations allow top up and cash out. Present soon in EU (can’t possibly be for regulatory reasons yet!!!). By the end of the year, they expect 10 banks and 20 telecoms partner to use their technological platform. For Paytoo users, all is secured thanks to Live Ensure from Palm tree Technology. All the transactions are backed by insurance coverage from the largest German insurance company.
Paytoo users know how to pay, transfer and redeem. Their partners are PalmTreeTechnology, Oberthur, LiveEnsure, BICS and MasterCard . They offer a network of worldwide top up, e commerce platform access, worldwide GSM network access, prepaid master card, mobile money transfer, secure system. It provides real time money transfer, 100% secured transactions from a cell phone. They have to observe regulations like KYC, Customer Identification profile,( CIP), AML and fraud monitoring. The major market sectors are travel industry, remittance market, worldwide immigrants, and unbanked population. They earn money on their telecom and get some money from other telecom operators, credit cards, co-branding which allows revenue-sharing etc. Also, they get a part of the commission on cash in and cash out. The money on the account is used by the bank which manages the float.
Tag Attitude: Hervé Manceron (COO) explained that Tag Attitude was also in the mobile payment space permitting retail transactions, money services and e-commerce. Their distinctive feature is the use of Near Sound data Transfer (NSDT) technology to get audio cryptograms to sign transactions. This technology allows any existing mobile phone to become a secure mobile payment tool. NSDT™ is a mobile transaction contactless technology and it runs without any modification of the mobile phone. This allows any bank or PSP to deploy a secure mobile payment scheme independently from telecom operators. Tagattitude has developed a complete mobile payment platform offering up to 12 mobile payment services such as retail transaction, e-commerce transaction, ATM withdraw, bill payment. TagPay platform is used in 25 countries supporting more than 30 mobile Payment schemes. TagPay and NSDT™ are starting to be deployed in Europe thanks to the undetermined delay of NFC deployment. The latest version of TagPay can run on any IP POS terminal, this opens the mobile payment market to millions of western retail stores.
An experiment in India:
Edgar, Dunn & Co: Pascal Burg and Samee Zafar of Edgar, Dunn and Compnay, presented the work of pilot project of Citi in Bangalore in the second half of 2009. EDC is a global firm started in 1978. They divide advanced payments in three categories: online commerce, contactless cards and mobile payments with Remote or Near Field Communications (NFC) technology.
Their rough projections show Online commerce will be 1842 billion dollars in 2015, contactless cards will be 395 billion $ and mobile payments will be about 510 billion $ in the world. Subscriber volumes are expected to reach 4.5 billion by 211/12. According to them, only 1.5 billion have bank accounts. So, 3 billion phone owners don’t have a bank account. Samee Zafar has found that even illiterate people are able to use mobile menus and they are able to decipher some SMS text messages!
The top mobile operators include China Mobile, Vodafone, Telefoncia, China Telecom etc. Skype, with 521 million users, has overtaken the biggest of these (China Mobile). They divide the market into Mobile Banking, Mobile money transfers (P2P), Mobile Payment Acceptance (Mobile as a point of Sale). Mobile Payments include: Mobile Proximity Payments, Mobile Remote & Bill payments, Mobile Digital Payments (song downloads, etc). The most significant success in online payments is social networking: Facebook (face credits), twitter (twittpay), second life (Linden dollars). Today, there are many payment technology suppliers.
Innovation in mobile payments is going to come from poorer countries. It is such a necessity in these countries that some very interesting innovations are going to come from these countries. Developing countries are going to make significant investments in this area. An example of this success is MPesa: 9.5 million subscribers in 4 years; more than all the bank accounts in Kenya.
Their Pilot study was in Bangalore (very educated, high tech, computer literate people participated) as a collaboration between Citibank, Master Card, Vodafone and Nokia. 250 merchants took part. For users to take part, they had to be a Citi MasterCard holder, Vodafone mobile operator and willing to take a Nokia ($ 200). Cost of the phone could come back if you use the phone enough (100% back if you have 12 transactions). There was a high profile launch with NDTV media display. 3,948 people applied. 3,000 phones were sold, 43,500 purchases. Normally we use mobile for low purchases, but in India only high purchases were made since people were using credit cards (up market ). Total 260 million rupees of purchases. The typical profile was young salaried male, annual income of 7.2 lakhs rupees per year. The credit card info was not on the SIM card but in an embedded chip. People first signed up. They went to Nokia and bought the phone. The first payment was made using the phone. When people walked out of the shop, the phone was working.
The study identified three kinds of people, Non-adopters, self adopters and solicited. Self-adopters were very high in India and their payments grew by more than 300%. These are people who searched for offers and purchased things. Self adopters went to more merchant categories and increase in number of merchants (compared to credit cards). 60% were expensive grocery stores, 17% were Telecom stores, 8% were apparel retailers, 7% were bookshops, 4% were department stores, 2% were restaurants.
When the incentives were over, the growth curve of payment flattened out. Many people also stopped using the card once they had done 12 transactions.
The challenges were that the communication campaign was not good; bad timing; lost in translation; low credit card usage in India and problems with the phone: people had to carry old phone as well as the second phone. Most of the problems were related to the particular Nokia phone which was being used. Nokia 6212 is the only NFC telephone. The participants didn’t like this phone since it was too clunky. Also, people thought the service will end when the pilot was over. Merchant coverage was limited.
Where are the French in this?
Jean-Philippe Betoin of CASSIS, Christian Chabrerie of MOBINEAR, François Lecomte of Forum SMSC, Jérémie Leroyer of AIRTAG and Lionel Brahami of FOCOMO took part in a round table of mobiles NFC and the contactless cards and their adoption in France..
François Lecomte of Forum SMSC, the moderator, explained that Forum SMSC is initatied by the French government. The Mobile Contactless Services Forum is a non-profit making association mobilizing large companies – MNO’s, banks, retailers, medias, public transportation and technology industry – and several contributing workgroups for reinforcing synergies between stakeholders and offer a national perspective for mobile contactless services developments. He moderated the round-table. He steered the discussion towards introduction, security, adopting, diffusion, threats. NFC uses RFID technology. There is an ecosystem in place so that the final user has a friendly and secure experience. Orange expects to sell 500,000 new NFC telephones this coming year.
Jéremie Leroyer of Airtag, indicated that for the moment there is no NFC telephone in France. So, basically we’re using smart cards. This includes transport cards (like Navigo in the French metro), banking cards and and marketing services (loyalty cards in our wallets). There are also some restaurant people who have started this smart card usage. We can order by mobile telephone and can just pick up the order (Go MacDo) and used by Alice telephones. The telephone has a bar code. For the adoption of this technology in telephones in the near future, an essential element is that contactless technology is already being sued (Navigo, university restaurants, loyalty cards).
Lionel Brahami of FAMOCO has worked with a lot of cards (example, GEMALTO in HongKong) to convert them to NFC telephones. Contactless cards already allow a broad gamut of services including discount coupons, etc. The mobile telephone will have to provide more that this and give more applications to be able to draw people away from the contactless card. There is a standardization of the procedures between the terminal and the phone. The application creates a coupon and a code. The security of the NFC ensures that the right discount coupon of the right manufacturer is read by the terminal and credited against the bill. The platform ensures that things are easy for the client. If you lose your telephone, when you get a new phone, you will get all your applications and cards in exactly the same status as before.
Christian Charbrerie of Mobinear explained that they used technologies that are already in telephone like bluetooth. So they want to use this for “NFC-like” usages and NFC telephones when they come in or for contactless cards. With bluetooth telephones, they can work right now. Wifi is also coming in with smart phones. Finally, barcodes are being included as well. They install a hardware box at the retailers or at museums. When you go to museum, you start your bluetooth and you go from hall to hall and at each hall you get the right explanations of the paintings. At their experiment in the Cité des Sciences, the wifi serves to geo-locate you and the bluetooth allows you to get the appropriate content. The Buzz on the smart phone masks the complexity of the technology, especially because the models which are coming in are more user friendly than earlier models tested.
Jean-Philippe Betoin of CASSIS explained that it was a spinoff of GEMPLUS in 2002 and they now have about 100 employees all over the world. Cassis developed its first market in Korea and it now has 12 million users in Korea alone. They offer systems and solutions for their operators of service. They are the Trusted Service Manager (TSM) who operates between the telecom operator and the bank. For example, in France they work with Orange, RATP. They are the TSM of Université de Nice Sophia-Antipolis. They are expecting NFC terminals to come in soon. It seems that pilot studies indicate that French people love this technology and will incorporate it very quickly. There are a number of legal constraints and standards provided by different countries. For example, one can’t transfer the telephone number of the user. The operator and SNCF, for example, want to keep ownership of their clients. So, the solution has to respect all these constraints.
Internet payments by mobile: Boku and Zong as well as Paydoo, Absolu Payment, Cell Fish
Boku (Pay by mobile), a company based in San Francisco: James Patmore, VP & MD, EMEA gave a talk on Mobile Monetization – converting customer by customer on a global scale. It has raised $38 million in financing from Venture capital. The main mission is pay with your phone. The product is Paymo. Boku has global payment coverage, available in 62 countries, 200 carriers and 2.5 B mobile users who are using this Pay by mobile.
A lot of facebook applications are provided by application aggregators (E.g.) Playdom), also virtual worlds (E.g. Stardoll) and online gaming companies such as (E.g. JAGEX). Ebay now allows mobile payment mechanisms for their classified advertising business. All Paymo payments either end up on the mobile bill or use mobile prepaid credit.
Where does Boku fit in all this. Essentially, merchants now have three payment options: Credit (Visa, MC, AE), Paypal and Mobile (Paymo). Of these, the credit cards have their network based on Gateways and terminals. Paypal has its own Paypal network. The Boku payment network contains two components: tools for the merchants and Applications for the Merchants. The Applications include covering risk, frauds, legal compliance, mobile payment flow, International settlement and credit issuance and authorizations. All these require Inter-carrier connectivity and Inter-country legal compliance.
A wide range of online verticals are not yet being served by mobile payments. So there is a big market opportunity to expand mobile payments into these new verticals. The Android system also needs mobile payments. Essentially, a carrier can connect either via SMSC gateway or have a Direct billing. It can also use aggregators as middlemen in each case.
To assess the market size, James Patmore provided some statistics. There are 2 Billion card holders and 4.5 Billion phone owners. Many of the current 2.5B mobile users could use mobiles for payments mechanisms as a bridge. Global payments revenue = $914B, of which Global interchange revenue= $134B , and US interchange revenue alone is $ 61B. Total mobile payments revenue transaction value estimates vary from $210 to $ 82 billion (different estimates of different agencies).
Which vertical markets will mobile payments be used for? He estimates the market for Virtual goods ($5b e.g. Facebook applications), digital goods ($12B, E.g. itunes) and e-commerce ($175B, e.g., amazon, ebay). In S. Korea, 10% of e-commerce transactions are mobile payments. The virtual goods market is where Mobile payments is today: in social media, virtual goods and games. Tomorrow, it may go to e-commerce.
Boku charges the merchants a commission. The commission varies with transaction volume. It is revenue sharing (no fixed charges). Mobile is a more expensive payment mechanism. However, it does not cannibalize existing revenue: it adds to new customers. Moreover, operators’ commissions are going down, so fees should go down. The industry has high barriers to entry: in terms of capital costs. Boku offers risk management systems, tax formalities, etc. But have to be innovative to stay ahead of competition.
Zong: David Marcus presented Zong and the future of mobile payments. Zong has a global mobile payment platform. It believes in spreading frictionless mobile payments all over the world. Zong is the leading online mobile payments company. It has processed payments for over 20 M unique users. Can take face book credits by paying with Zong, paypal or credit cards. Over 1000 online merchants are in their system. 178 mobile operators are connected in over 40 countries. Mobile footprint: 2 billion users.
According to David Marcus, Mobile payment in 2010 is like the telecom industry in 1998. In 1998, transatlantic calls cost $1 per minute: today, its 5 cents per minute. Today, we are still using plastic online payment, even if the experience is awful. In the US, there in no cheap real-time bank to bank transfer solution. The last real innovation was Paypal.
For banks, there is more regulation. In the US they used to charge crazy interest rates. According to David Markus, now banks cannot sell to campuses and students. Therefore, need to focus on interchange. For this, banks need more transactions. For Mobile operators: their content services are a failure. Voice costs are going down. Data transfers usage is growing. Need to invest in backhaul networks.
Merchants increase conversion from shopper to buyer by removing friction during the payment experience. They need to reduce cost of transaction and fraud as well as ease refunds. They need to get more data on their customers, better CRM, promotional tools. Users find that wireless broadband is everywhere, almost everyone has a smart phone in industrialized countries. We have a huge capacity which is not being used. Zong is between merchants, carriers, card networks and users. David Marcus categorizes the Mobile payments as P2P, POS, Online and On-device.
P2P: share my restaurant bill, or send money abroad. The goal is to compete with western Union. This leads to regulatory complexity because of presence in so many countries. However, the network needs local infrastructure to cash out. There are huge fraud risks. One active company in this field is Obopay. POS is essentially NFC (Near Field Communications). Here, distribution is tough. Need to implement a new terminal. The new terminal can’t be independent. RFID is promising, but will take time to reach critical scale at POS. In the US, there is Billing Nation.
Online Payments: Boosted by Freemium model in gaming and social networking, virtual goods and many currencies. Massive distribution is involved. Conversion from user to buyer is the primordial focus for publishers. This is ideal for mobile operator billing. Online gaming companies are on 1% to 2% of paid users. They would like to increase the percentage. Zong is in this market. It uses a phone number and the cell phone next to you to get a pin code. So, instead of typing in a large credit card number, you type in just your phone number which you remember.
On-device: There is a user iPhone / App Store. Android is booming for applications, but still needs to develop a user friendly experience. This is ideal for mobile payments. Zong is making online Android application for payments. Major operators are mobile operators. Everyone has a cellphone. The carriers need to lower the cost of transaction massively. But carriers don’t want people to get 1000 Euro phone bills. Therefore, this market is ideal for digital transaction.
David Markus expects that by 2015, there would be no more plastic in the online market. Your mobile phone will be your major authentication device and will be linked to your payment source of choice. There will be a tidal change in online purchasing behavior. In the online world, you will pay with mobile. By 2020, RFID/ contactless devices and POS equipments would have developed. So, in the physical world, plastics may still be required till these devices are replaced.
Zong has more telecom carriers in its network than anyone else. Moreover, it provides a hybrid billing: carrier billing and credit card transactions. As a result, larger transactions are possible and Zng users are not limited to micropayments.
According to David Marcus, mobile payments are safer than a credit card. Zong authenticates the consumer transaction. First, frauding an SMS authentication is not technically easy. Once you give your credit card number to someone, he can use it. In the mobile, you get a pin-code. If you need to enter the whole card number, it creates more friction. If I use my mobile, what happens? The thing is that we note the loss of credit card after a delay of a day or two days (next time we need it). But we note the loss of a phone within a few minutes!!! Therefore, we can call up faster and disable faster. The mobile phone acts as an authentication. People can use your credit card for fraud for bigger amounts than telephones.
There are 85 billion paypal users (at least once a year). This is small in relation to Zong’s capacity of 2 billion potential users. The business model of Zong is a commission on the transaction between the mobile operator and the merchant. Zong takes care of all the disputes for all their merchants. Merchants can have real time access to their products and can give a refund or not. Zong tries to avoid calls to carriers or to merchants.
Paydoo: CEO Stéphane Banfield explained a bit about the digital goods market. Here, the consumer surfs the internet or a mobile website or application (iPhone or Android App for example) and decides to use or download digital products or content like a song or a game. He can then make a secure, simple and fast payment, 2 clicks away from his content. The payment is carried over his bill from his ADSL / ISP supplier (Free, Orange, sfr) or his mobile operator (Orange, Bouygues, SFR). Although these methods of payments have a specific status in the EU Payment service directive, the operators have decided to auto-regulate themselves in France. Stéphane Banfield explained that ISP suppliers will not allow charges of more than 30 € for digital shopping and mobile operators will not accept charges of more than 10 €. Thus, these items remain micropayments and only for digital goods or services and are not covered by banking regulations.
Paydoo provides the software interface (platform) between the retailer and the telecom. Paydoo is not just for making single purchases, but also subscription based payments, providing the retailer recurrent revenues. The customer pays the telecom, say 10 €. The telecom keeps about 20%, say 2 Euros and pays Paydoo 8€. Paydoo keeps 0.50 € and passes the rest on to the retailer. Paydoo serves MSN.fr and Virgin Mega. Their market is already 18 million transactions, of which 70% is for subscriptions. 300 000 subscribers are billed every week or month through the Paydoo payment platform. In a population of 62 million French people, 56 million mobile phones and 32 million internet connections, Paydoo is looking at a huge market just in its own country. The advantage for the customer is that his personal and banking information is not disclosed, it is easier and faster than using a credit card, and he gets credit till his next telephone bill.
CellPass by Cellfish Media: Cathy Bellot explained that they have developed a new solution for payment for the iPhone, called CellPass. They are in the “Micro-Payment Mobile & Enablers or MPME” market, helping digital publishers (songs, movies, games, news) to have their contents paid by all mobile telephone bills such as SFR, Bouygues and Orange. Payments need to be less than 8 Euros per purchase and subscriptions can be for up to 10 Euros per month. They are the first system which will work on iPhones. The advantage of this payment solution is that it provides customers a fluent experience: customers just have to select the content they want to buy (on a Webapp or in an application for instance) and click on a “validation” button on an operator internet mobile page. The customer is billed on his mobile operator invoice. No need to put any name, any mobile phone number, any credit card number. This payment solution will help digital publishers to increase their revenues. Implementing CellPass solution is quite easy and only takes a few days, as they aggregate into one API the different operator billing kits. The digital publisher has just to implement one single API whether he wants to sell digital goods on a pay per purchase model or on a subscription model. CellPass is the first solution to be connected to 3 the French operators to provide MPME billing. CellPass is the first one on this market who has already customers using this new mobile payment solution (MPME). CellPass also provides other type of payment solutions, adapted to web editors : IVR, Premium SMS, MPME (also available on web), Credit Card, Paypal and Internet + .
IVR and Premium SMS are payment solutions based on the operator billing. Internet + is a payment solution based on the Internet Service Provider billing (Free, Alice, Orange, SFR and BT very soon). Customers can purchase some digital goods or services (on pay per purchase or subscription model) on a web site. They select the content they want to buy, and just click on a confirmation button on a second web page which summarise the amount, the shop and his Internet Service Provider. The customer is billed on his ISP invoice. Once again, no need to put any name, any mobile phone number, any credit card number …
With this payment solution, customers will be able to buy contents up to 30 € (with pay per purchase and with monthly subscription model). CellPass facilitates the implementation of this solution by providing editors with a simple API that will also help editors to implement easily the subscription. CellPass is the leading payments company. Processed payments for over 5 M unique users. Each year, more than 210 M transactions are processed on CellPass payment platform.
Absolu Payment: Anne-Sophie VIAL explained their exclusive solution for micro-payment market for internet and mobile telephones in simple terms. You surf, you click, the website asks you to telephone a premium rate phone number. The Interactive Vocal Server tells you your access is authorized. That’s all that is required. You get access to the digital content and the payment is made on your phone bill. There is no need to get a code on your mobile phone or web site which you then would have to re-enter on your computer and make mistakes.
Absolu Payment plans to enter the MPME market too, in order to offer a large variety of payment solutions. Indeed, editors now propose that customers could pay by various means (phone, sms …). Offering MPME would therefore increase the payment and subscription offers. The intention is to cover a maximum of editors and enable them to reach all targets.
The consultancy and interface application market for payments by mobile
Lemon Way: President Damien Guermonprez and CTO Armand dos Santos explained that Lemon Way is occupying a number of positions in the mobile payments landscape. The company should receive its Payment Service Provider status from the French authorities during the summer.
Lemon Way makes applications for mobile telephones which permit interface with the bank. For this, it provides software consultancy to the bank. One challenge in the field is to understand that different countries have different regulations and that different arrangements with local partners are required in each country for success. Their payment platform works in several countries with clients in France (Groupama Banque Mobile), Greece (National Bank of Greece), Madagascar (Orange Money is using Lemon Way mobile payment platform with Postal Offices and Transfer Express). They’ve created a JV in the Middle East with Al Ghunaim Holding Group, and they have strong partnerships in Northern Africa with monetic leaders i.e. Bitaka in Tunisia. Next countries to be deployed are Ivory Coast and Cameron.
Their main challenge is to move from a B2B model towards a B2C model that requires recruiting hundreds of thousands of clients. Partnership agreements are already signed in several “niches”: check-in and check-out in the hotel industry, payment of home services, urgent payment of insurance services for vehicles and sports, cash transfers from France to Africa.
S2M: Development Manager, Mohamed Chami explained that they are software consultants to banks. They provide applications for the mobile phone which allow an interface with the bank. The customer can download this application from the bank’s website if the bank has a partnership with S2M. Essentially, the bank is S2M’s customer.
Digital Airways: Franck Lefevre, Business Development MD, explained that one important party is the Trusted Service Manager (TSM). He is trusted because he is allowed to interact with the information contained in your SIM card, which banks are not allowed to access. Digital Airways make applications which allow an interface of the mobile phone with three parties: the Trusted Services Manager as well as the manufacturer and the retailer. For example, the yoghurt manufacturer provides a 50 cent discount coupon which he would like to place on your phone. The TSM should be able to place this on the phone. Then when you go to the retail store like Carrefour and you pay by your cellphone, the discount coupon should automatically be used to get the promised discount. This entire interface is done by Digital Airways.
Other applications
Widmee: Director Général Frédééric Boy explained that Widmee provides financial applications to banks. The customers of the banks can download these applications for free. Thereafter, if the e-commerce wants to launch discount coupons, the bank can offer these to its clients via the Widmee application. The mobile users then spread the message using the coupon which has a special number for the bank. The bank earns money for the coupons used which have the bank’s number.
You Transactor: Bendict Kahan and Joel Huberson presented You Transactor which is a tablet like PDA which allows merchants, especially those who are on the move, to accept payments by cards, anywhere in the world.
Pay By Phone : Philippe Lerouge explained that in the landscape of the Mobile Payment, the parking is most probably the most used service in the developed countries. All European countries and North American countries are using mobile to pay for Parking and PayByPhone is the leading actor in this market. If you travel to London, San Franscisco, Miami, Vancouver, you will see PayByPhone in all streets. In France, they have introduced PayByPhone last year for the Parking in Issy-les-Moulineaux, and have also introduced the same service for 2 other useful services like the bike rental which is running in Nice and Vannes and more recently with the possibility to pay with an NFC phone in the Bus of Nice together with Veolia Transport (global project Nice Ville NFC). PayByPhone is no more a pilot stage like many other initiatives, but serves approximately 2 million users daily, and the service in France is probably one of the most concrete m-payment service that exist.
Evidently, a lot of happening in the developed world. A lot of it will be transferred to the poorer countries. In the beginning, the beneficiaries may be the rich consumers who already have bank accounts. But if the service is useful, it will spread roots downwards to the poor and include them in the overall market. The poor actually pay huge transactions costs in terms of time spent to travel and make payments in cash. With mobile payments, their notional savings will be huge in terms of time. Of course, if they have no jobs, the opportunity cost is zero. So the savings are zero. Perhaps economic opportunities to the poor are required faster than payment means.
Editor`s Note : In the Mobile Payment Expo which was conducted in Paris on June 9-10, 2010, Arvind Ashta of Burgundy School of Business presented a detailed account of the expo.