1 / 24

MOBILE PAYMENTS OOCUR 8 TH ANNUAL CONFERENCE NOVEMEBER 03-05, 2010

MOBILE PAYMENTS OOCUR 8 TH ANNUAL CONFERENCE NOVEMEBER 03-05, 2010. Topics. What is Mobile Payment? Services Case Studies – Japan, Korea & Philippines Risks & Issues Lessons The Future. What Is Mobile Payment?. General Definition

xyla-collier
Download Presentation

MOBILE PAYMENTS OOCUR 8 TH ANNUAL CONFERENCE NOVEMEBER 03-05, 2010

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. MOBILE PAYMENTS OOCUR 8TH ANNUAL CONFERENCE NOVEMEBER 03-05, 2010

  2. Topics • What is Mobile Payment? • Services • Case Studies – Japan, Korea & Philippines • Risks & Issues • Lessons • The Future

  3. What Is Mobile Payment? General Definition Payment made at a point of sales using a mobile device (Ref: SearchMobileComputing) Any chain of payments that are initiated by use of a mobile device. ( Ref: KPMG: Mobile Payments in Asia Pacific) Estimated Market Value 2009 - $68.7B 2014 - $633.4B

  4. What Is Mobile Payment? Stakeholders • Mobile Operators – new revenues, increase traffic • Financial institutions – reduce transaction costs, reach new customers • Retail Merchants • Content Providers • Payment Platform Hosts

  5. What is Mobile Payment? Types of Mobile Payments Proximity Payment: made at point of sale Technology – Near Field Communications (NFC) Remote payment over wireless network Technology – Short Message Services (SMS), Wireless Application Protocol (WAP) & Unstructured Supplementary Services Data (USSD)

  6. Services • Mobile Banking • M-Wallet • Top-Up and Remittance • Content Download • Touch and Pay

  7. Services Mobile Banking • Simple services offered: account enquires and funds transfer • Limiting factor: perceived security risk • Advantages: (i)“Unbanked Market” access to bank services (high mobile penetration, high cash transaction, low access to banking facilities, large rural population) (ii)Banks can acquire customers at less cost.

  8. Services M-Wallet • Electronic wallet housed in your phone • Used for small purchases ( purchase of coffee, tickets etc.) • Presently Retailer driven model dominant • Used to drive customer loyalty • Carrier Driven m-wallet holds great potential. Would enable customers to use it at different retailers. • Obstacle: interoperability of hardware and security

  9. Services Top-Up And Remittance Used for: • Purchasing prepaid minutes ( Prepaid market estimated at US$100B; cost of prepaid vouchers to MNO $15B annually) • Transferring or gifting of minutes • Money remittance • Purchase of virtual goods or game attributes (Gamers – more often own a phone than a computer )

  10. Services Content Download • Ringtones are very popular • MNO well placed to facilitate the payment service , control the interface and have the billing capabilities

  11. Services Touch and Pay • A chip in a mobile phone enables it to act like a smart card • Payment is executed when card/phone is brought close to point of sale reader • Smart cards very popular in the transportation sector (Oyster – UK; Octopus – Hong Kong; Presto – Toronto) • Credit Card Companies also launching payment using mobile phone ( Visa – pay Wave; MasterCard – Pay Pass)

  12. Case Studies -Japan • More advance m-payments services than the West • NTT DoCoMo and Sony partnered to develop the contactless FeliCa IC chip used in contactless touch-and-pay cards. • DoCoMo used the FeliCa chip to create m-wallet; rents space on m-wallet (20m phones sold) • KDDI and Mitsubishi-Tokyo UFK Bank launched Shinginko (m-wallet phones – 5m sold)

  13. Case Studies - Korea • First attempt of m-payment unsuccessful (numerous menus, POS readers not interoperable, high transaction fees to card issuers) • Third Party Providers: - Saw opportunity in the online gaming and content download market - Targeted youth without credit card, allowing purchases on mobile phone to be charged to customer’s bill - Led to paying for other services ( cable TV, membership fee, subscriptions, etc)

  14. Case Studies - Korea • Bank On: - Mobile Banking , an alternative to ATM and transit card - Launched by LG Telecom and Kookmin Bank - Did not provide m-payment service, but increase customer base for LG Telecom and encouraged others MNO to venture into the market • M-payment Services: - Offered by:- SKT and Visa; KT Freetel and MasterCard - Uniqueness:- chip interoperable between banks and transit applications, capable of migrating to NFC technology • Korea Smart Mobile T Money - Fare payment venture between SKT and Korea Smart Card Company

  15. Case Studies - Philippines • Smart Load - Venture between Smart Communications and Philippine Long Distance Telephone Company (PLDT) - Store owners able to download airtime and resell as top-ups - Uses SMS messaging • Smart Money - Collaboration between Smart Communications and MasterCard - Money transferred to Smart Money Account used to make payments or transfers to other users - Uses SMS messaging

  16. Case Studies - Philippines • Pasa Load - A Smart Communications service - Targeting low income and “unbanked” customers - Subscribers able to buy small units of airtime at low prices and can also roll over airtime to other customers • Remittance Services - Smart Communications partnered with MTC Vodafone and Ahili United Bank of Bahrain to create Smart Services Hub - Customer base was Filipinos workers overseas ( $14B market annually) - Filipinos in the Middle East can send money home to relatives using their mobile phones

  17. Risks • Skimming (Security of personal Information when transmitted over the network) • Phone lost, stolen (unauthorized payments, installation of malicious software) • When a phone or mobile provider is changed what happens to the information on the chip • Vast peak volumes • Information system failure

  18. Risks Mitigation of Risks • NFC enabled phones require PIN to make payment • Security standards being developed by Financial Services Technology Consortium (FSTC) and European Payment Council • Encryption of data on chip

  19. Issues - Interoperability Lack of interoperability across phone devices, mobile carriers and readers Open loop system will allow payments to be processed by open national and international networks

  20. Issues - Regulation • Telecoms and financial sectors regulated to varying extent in most countries • M-payments expected to attract national, international and industry regulators • International Regulations likely to affect m-payment:- - Basel III - Anti-Money Laundering - Know your Customer

  21. Issues - Regulation Question: Should MNOs who offer m-payment services be treated as a Bank? • E-payment regulations in place in some countries, but do not cover m-payments • Europe’s E Money Directive has created Electronic Money Institutions (ELMI) • ELMIs subject to lighter regulations than credit companies • MNOs and m-payments presently exempt from licensing under ELMI

  22. Lessons • Collaboration between stakeholders to provide m-payment services • Business case/drivers vary from country to country • Potential to: - Increase revenues and diverse revenue source - Attract new customers and retain customers (loyalty)

  23. The Future • Brazil and India – lead by Banks • Russia - Mobile Operators • China – Use SMS Infrastructure • Western Countries - Banks, Credit Card companies, MNOs, Retailers

  24. Thank you

More Related