Category: Telecoms and Media

[Dave Birch] I’ve been in Istanbul working for a customer in the telecommunications field. As always, I’ve really enjoyed it. I love coming to Istanbul because it’s a dynamic place. There’s a lot going on and people are always trying to launch new products and services. Right now, it’s a really great living case study of the co-evolution of banks and telecommunications operators because of the early adoption of contactless payment technology in Turkey.

Technorati Tags: banking, contactless, EMV, interoperability, payments

Continue reading “Turkish delights”

[Dave Birch] I have to say that I sort of disagree with industry observers who point to NFC security as being the key reason why banks and mobile operators can’t agree on how to secure account and transaction data. The reason why financial institutions have been experimenting with “secure elements” that are separate from the SIM is not because they suspect SIMs to be insecure — apart from anything else the SIMs, secure elements and EMV cards are all using the chips and operating systems — but because they (correctly) suspect SIMs to be under the control of mobile operators. An impasse? No, I don’t think so. A lot has been happening in recent months: I think the mobile operators are being more realistic about the potential business model (ie, not asking for transaction revenues) and banks are being to adjust to the idea of a payment device that the belongs to the customer, not the institution. With services actually launching, it seems to me that the new value network is beginning to co-ordinate ready for 2008. I imagine this is the sort of thing, by the way, that informed people will be discussing at IIR’s Mobile & NFC Payment Strategies conference in Geneva in November.

Technorati Tags: payments

Continue reading “Geneva convention”

[Dave Birch] Well, that’s what someone said to me in Portugal a couple of weeks. I’d mentioned the story about how a bank and operator in China are launching something which Card Technology oddly called the first commercial project putting contactless stickers on the back of mobile phones but sounds rather like — in fact, exactly like — the Dexit scheme in Toronto. Anyway, Chongqing Commercial Bank began issuing cards with the contactless “Pay Ease” e-purse onboard earlier this month. Chongqing Mobile, a branch of China Mobile, will distribute the contactless stickers with the same “Pay Ease” purse on them for sticking to the back of the subscribers’ handsets. Several hundred merchant locations in Chongqing are already accepting the scheme: coffee shops, restaurants, beauty shops and cinemas. Cardholders will be able to reload the purse — using either the bank card or the telco sticker — at bank branches, putting up to 1,000 yuan (US$131) on it. Predictably, and rather confirming last week’s comments about contactless as a step on a mobile roadmap, Chongqing Mobile is considering moving to NFC phones when the handsets hit the market, probably next year sometime.

Technorati Tags: contactless, e-purse, mobile, payments

Continue reading “Stickers are the future, I’m telling you”

[Dave Birch] You’ve probably heard of the Chatham House rule but you may not know that Chatham House is both an institute and, in fact, an actual house in St. James’ Square, London. I can testify to its existence because I was kindly invited there for a breakfast seminar on the use of mobile phones to provide financial services in developing countries. It was called to launch Vodafone’s policy paper no. 6 on The Transformational Potential of M-Transactions (highlighted by our good friends at Payments News yesterday) which kicks off with an overview by Forum friend and our favourite economist Diane Coyle. I dream of one day being able write a book with a fraction the quality of her latest “The Soulful Science: What Economists Really Do and Why It Matters”. Anyway, Diane gave an excellent talk about the economic development potential of mobile transactions, followed by a talk on using mobile phones to provide banking services by Howard Williams and a talk on regulation by Ivan Mortimer-Schutts.

Technorati Tags: mobile, payments, remittances

Continue reading “A chat room of the old kind”

[Dave Birch] I dropped in at the RSA for another seminar, this time including Nick Hughes from Vodafone talking about one of our favourite projects, M-PESA. He gave an excellent talk about the role of m-payments in improving the life of people in developing countries. A few points he made to establish context (my paraphrasing):

• The average European cow gets €2.50 per day in subsidy and 75% of Africans live on less than that: they don’t have much spare money.
• In Kenya, 30% of household income goes on what we in the West would call bribes.
• A fifth of working Kenyans send money from the cities back to the countryside but there are few banks or ATMs. High transaction fees for sending money hit them hard.
• In Kenya, mobile phone penetration is already 30% (in South Africa is it 60%).
• As The Economist pointed out back in March 2005, poor countries don’t need a PC in every home, they need more mobile phones.

They’ve certainly done something right. There are already 477 agents live where you can take in cash to top-up your M-PESA account and the number of people signing up has accelerated to currently 2,500 per day (it was 1,500 per day last month) and there are now around 140,000+ customers. Safaricom are now targeting a million customers by the end of this year. They’ve processed around a million transactions. The average customer is already doing 3-4 transactions per month. The average P2P transfer is for UKP23 (say around $40). By the end of May, a billion Kenyan shillings had been through the system. Nick mentioned that the scheme is now being trialed in Afghanistan and Tanzania and will soon begin trials in Sri Lank and also gave some examples of the scheme’s use, which I won’t repeat here, except to note that they demonstrate how a good, functional payment system makes life better for the average person.

Technorati Tags: community, MMORPGS, mobile, payments

Continue reading “M-PESA at the RSA”

[Dave Birch] I’ve been reading an interesting paper by Jan Ondrus at HEC Lausanne about technology foresight. His multi-user, multi-criteria approach maps the criteria applied by different stakeholders and their evaluation of new technology. If I’ve understood correctly — and I may not have — it recognises that technology adoption is driven by groups of stakeholders (eg, banks and telcos) rather than by any one group alone, because everything is interconnected today. The reason I was looking at it relates to some work we are doing for a client concerning new NFC-based mobile applications, and Jan happens to use the combination of smart cards, contactless cards and NFC as a specific example (albeit limited to Switzerland) with a large set of stakeholders: banks, mobile operators, retailers, IT suppliers, transit systems and so on.

Technorati Tags: contactless, mobile, nfc

Continue reading “Disruptive or just different?”

[Dave Birch] Yet more new payment mechanisms. In the U.K., the Post Office has already launched an electronic money transfer service which enables recipients to receive funds via a barcode sent to a mobile phone or e-mail address. The “Payout Service” allows companies to distribute cash payments at a fraction of the cost of issuing cheques, the Post Office says. Bascially, companies send a barcode by text, e-mail or post to the recipient. This barcode can be scanned at any Post Office branch counter, and the recipient receives an instant cash payment. It might be worth printing out a few random barcodes and going down to the Post Office to see if any of them are worth anything — sort of like a lottery, but more fun and available at 14,000 Post Office branches in the U.K. There must be more to it, because British Gas and Unilever liked the pilot and plan to extend their use of it. Unilever used it for fulfillment of a promotion for one of its products to 22,000 customers. Joanna Weston, a Unilever direct communication executive, says:

We didn’t have a clear fulfillment process in place to make a large quantity of small payments to our customers… This could have been problematic for us, as raising a cheque is 600 percent more expensive than using the Post Office Payout service.

For people like me who can’t even be bothered to go down to the Post Office office, there’s Obopay’s AOL instant messenger plugin, enabling you to make payments directly from your AIM Buddy List. The Obopay AIM plugin is accessible via your desktop or your mobile phone, so no matter where you are, you can access your Obopay account using AIM. Since Obopay comes with a pre-paid MasterCard, this means that one of your buddies can send you cash via AIM and then you can go spend it using the card. I’ll see if I can find out what the charges are so we can compare it with Post Office barcodes.

Technorati Tags: mobile, payments, prepaid, retail

Continue reading “Quasi-bank account?”

[Dave Birch] I gave a talk to executives at a financial services company, focusing on the relationship between banks and mobile operators. In the payments world, technology is pushing this relationship back up the agenda. In Japan, remember, they’re getting over the co-operation issue by getting in to bed together. KDDI Corporation and Mitsubishi-Tokyo-UFJ Bank have created a joint venture — the “Mobile Net Bank Development Corporation”, MNBDC — in preparation for the two companies to launch a mobile-centric bank, Shinginko (which just means “new bank” in Japanese). MNBDC has already started building the systems for the New Bank and, subject to regulatory approval, products and services will be offered to the public soon. The idea of Shinginko is to offer a full line-up of financial services to individual consumers, capitalising on the strengths of the mobile phone as a channel using operator expertise. We once did some work for a UK joint venture like this but it never went anywhere because the goals of the bank and the operator were too divergent. Perhaps in Japan, and with a few more years experience, it will be different. There is certainly an appetite for mobile banking in the region. As Ericson Chan, group head of systems development for consumer banking at Standard Chartered Bank, boted recently, although many of the bank’s current customers may not be comfortable with using smartphones to make payments, the next generation of consumers are apt at doing so. Banks aren’t the only option for operators looking for partners to expand payments services: in Italy, Vodafone has joined forces with Poste Italiana, home of the prepaid scheme that we look at from time to time. Poste Italiana sees scope to link up the new MVNO customers with electronic payment cards, for which the post has 9 million customers, allowing customers to make payments using their mobile phones. Mobile phones can be filled up with 200 or 500 euros of credit, which can then be spent in retail outlets. I’m not sure whether customers would really want to use SIM-based services for this kind of thing so it’s not transparently obvious that this side of the venture will be successfull. When the NFC handsets come along though, this could be big.

Technorati Tags: banking, mobile, payments

Continue reading “Another template from Japan?”

[Dave Birch] Who can’t help be fascinated by Japan. DoCoMo started bringing mobile and contactless together sometime ago — they’ve sold 30 million or so phones with Sony’s Felica chip in them — and use them to provide a mobile purse (EDY). Then they wanted to offer a credit product, but you have to be a bank to offer credit. So they bought a bank and began offering the DCMX credit “card” alongside the purse. Now they apparently want to accelerate retail acceptance of mobile payments, so they’re buying into a retail chain, FamilyMart. Currently, only 140 out of their 7,000 stores accept mobile payments. But from July 10, FamilyMart convenience stores nationwide will begin accepting mobile credit via DoCoMo’s iD™ platform, thereby enabling users to make payments simply by waving their phones over a reader/writer. So instead of whining about retailers, arguing about fees or trying advertising or whatever, DoCoMo have decided to spend their money in a more effective way to get all 7,000 on board: invest in the retailer.

Technorati Tags: contactless, mobile, payments, retail

Continue reading “Now this is what I call mobile payment strategy”