Mobile payments

1. Mobile payments Informing a new design framework Steinar Kristoffersen

2. The problem • Usage of mobile services is dropping • Revenue is down by a couple of %, even though traffic still increases • New services are needed • Development costs are increasing and needs to be recovered • Content providers fear alternatives to operator-controlled billing are too cumbersome • This seems to implicate a need for m-payment Steinar Kristoffersen

3. However,... • Can m-payment beat credit cards and cash? • ”Mobilhandel”, a platform for mobile purchases have 40 000 users per week, according to Telenor • Bank access card generate 460 million transactions annually • Little evidence of users being too lazy to get a service that they need or want • Mobile payment could offer ”fringe benefits” • Is this a disruptive technology ”in the making”? Steinar Kristoffersen

4. Vending machines and ’meters • Mpay in Norway (2005) • C-mode in Japan (2004) • Easypark and Telenor (2003) • Telstra’s ”dial-a-Coke” (2001) • Sonera’s ”Virtual Parking System” (2000) Steinar Kristoffersen

5. Tickets • Octopus, Hong Kong (”more than ecash”) • Prestige (London) and • __ • Basically pre-paidRFID-based travelcards • Until ”value-added” services • Cinema tickets • With “Mobile Purchase” Steinar Kristoffersen

6. TV2 DropZone (i) • PDA service for TV2 and HP in Norway • TV2 wanted to distribute content effectively to customers with PDAs • News • Sports • Entertainment • Content was updated continuously • Synch-ed seamlessly even through intermittent connections Steinar Kristoffersen

7. Introductory free offer, receiving a fair bit of attention Then, web-based payment No interest! Then, included with web-TV suscriptions, which are still successfully paid for with Payex Still no interest,... TV2 DropZone (ii) Steinar Kristoffersen

8. Send SMS Needs to have a ”mobile purchase account” with Telenor, Which is, Visa or direct withdrawal for smaller amounts Only selected flights Cannot change Need to check-in, Etc. Norwegian Air Shuttle Steinar Kristoffersen

9. Four digit access number SMS redirected via gateway to content provider CDR generated according to ”standard” Content (URL) return via push-WAP or SMS Operator collectsthe payment, on the regular phone bill Content Provider Access (CPA) Steinar Kristoffersen

10. Users trust of mobile payments Steinar Kristoffersen

11. What do users make of it? • Method: Quantitative examination of the relationship between • mobility, • emotive aspects such as trust, • experiences with m/e-commerce and • usability • We carried out several pilots with small samples from various populations: • Students • A: 27 from a course on Mobile Informatics • B: 58 from the Bachelor-program on Digital Media • Random sample • C: 21 people (respondents, family, friends,...) Steinar Kristoffersen

12. Results from A • Young males paying for their own phone usage • Not very mobile • 75% have purchased mobile content and paid for it using their mobile, • But, that was more than 4 weeks ago for 85% of them! • Ring tones and logos ”not very often” • Games and cinema tickets even rarer • Tickets to the cinema slightly more often on the Internet, but even there airline tickets, e.g., scored 1.6 on a scale from 1 to 7 (1 being never), which is exactly the same score as for buying a pdf-newspaper and paying for it with e-cash • There is nothing wrong with using the mobile phone to purchase content for the mobile phone, but there is nothing special about it either Steinar Kristoffersen

13. Results from B (expected) • People increasingly see themselves as depending on their mobile phones • Trusting the technology is determinant of a positive evaluation of the scenario as well as actual use (of mobile parking) • Can be used ”everywhere” • Interesting scenario • Simple to connect • Better receipts Steinar Kristoffersen

14. Results from B (surprising?) • Anonymity – longer ownership • Anonymity – wants better receipts • Use everywhere – dedicated currency • Dedicated currency – age • Trust credit cards more – younger users • Or, rather, ”older” users are less concerned? • But, this is one point where the low number of ”older” user may (most likely?) invalidate the observation • Credit cards are unanimously more trusted than m-payment • No correlation on mobility? Steinar Kristoffersen

15. Results from C • Experienced, professional PC/Internet users • Generally positive attitude to technology • Specifically indifferent attitudes to their own mobile phones • WAP • UMTS • Purchasing airline tickets using SMS • One person mentions e-payment as an issue for SMS as an m-commerce channel Steinar Kristoffersen

16. So, perhaps it is true that: • ”The days when billing was a simple back-office administration function are long gone (Crookes, BT Technnol J 14(3), 1996).” • The need is still there: • New services are required to defend 3G investments • Such services have to have a commercial soundness, however: • Enrolment and overhead of preferred payment is sometimes excessive, but still • That does not seem to hinder adoption • What then, stands in the way of ”the best m-payment solution”? Steinar Kristoffersen

17. Payment Application Buying Withdrawing Confirming receipt Using The design framework • Consider payment as an integrated part of purchasing experience • Focus on the ”immediatness” of issuing confirmations • Focus on the ”inspiredness” of buying • Model these aspects more precisely Steinar Kristoffersen

18. Applying the framework Drop Different ”medium” Paying and buying CPA Norwegian Same ”medium” Immediately Later Confirmation Steinar Kristoffersen

19. Implications for mobile IS research • Mobility (in a physical sense) is not a particularly interesting determinant • Technology can be good enough without that resulting in adoption • Social vs. technological, push vs. pull • The social construction of technology needs to be seen as technology actually being tested against user expectations • Framing devices are recognizably rhetorical and technology still has to prove itself • Disruptive innovation (seems to be) a post-hoc rationalization • Most successful companies do not end up implementing disruptive innovation • But, then again, neither do ”less successful” companies Steinar Kristoffersen

20. Implications for m-payment • M-payment is about facilitating action in mobile value networks, rather than re-representing value • Payment is either an integrated part of the shopping experience, or it is a barrier • The ultimate receipt is a confirmation that ”the product” works, therefore buying, paying and trying should take place in the same ”ambient” Steinar Kristoffersen

21. Summary • Mobility is not a particularly interesting predictor of ”mobile services” adoption • There is an uninteresting contrast between the ”indifference” of mobile content and the ”heavy” enrolment needed for (alternative) payment schemes • There is a much more intriguing ambient relationship between the ”hereness” of paying for content and the ”nowness” of testing it • Users are not impressed by the services they have been offered by the industry. So far. Steinar Kristoffersen

22. Questions? • Steinar Kristoffersensteinar.kristoffersen@ifi.uio.no Steinar Kristoffersen

23. Epilogue (i): Mobile banking • 5% or 175 000 bank customers in Norway uses SMS or WAP to do mobile banking • Account information • Money transfer between (own) accounts • *Some* use it to pay their bills • 25% (800 000 customers) would like to be able to use SMS or WAP to do banking in the future Steinar Kristoffersen

24. ”Disruptively” similar to Drop, Radio from Internet sources Buffered and synch-ed to the iPod from the desktop Played back ”offline” when it is most convenient Popular hardware and fashion is important And, it proves that nothing beats ”a free lunch”, after all,... Can the framework of ”dis-ambience” presented earlier be used to analyse iTunes and Podcasting? Norwegian Drop Paying and buying are ”dis-ambient” CPA Buying Is paying Immediate confirmation Postponed confirmation Epilogue (ii): Podcasting iTunes Steinar Kristoffersen