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Breaking Mobile Financial News
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PayD. A new way to pay with a Debit Card.
October 13, 2011
 Some months ago, MTN announced a new payment initiative that has been launched in South Africa in collaboration with Standard Bank and Nedbank (Read here). The technology utilised in this product uses SIM cards and PIN entry to turn mobile phones into secure encrypted point-of-sale terminals. In a related announcement, Paygate (one of the largest online aggregators in South Africa), announced that they will allow PayD (Read here). This opens up a large merchant community (ranging from major airlines to smaller retailers) for consumers that have registered their debit cards with PayD. In order for this service to succeed it is now important to make it available to a large community of subscribers, for the subscribers to sign up to the service and to use it in earnest. The transaction volumes will ultimately dictate if this service will be seen as successful or not. It will take dedicated attention and some smart marketing initiatives to drive transactions. 
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Two divergent views on mobile banking security
September 7, 2011
 Two very similar articles were published on the 10th of October. Both discusses the security of mobile banking, yet they get to totally different conclusions: The first argues that mobile devices are much less sophisticated in defending against malicious attacks, it does not come with firewalls and subscribers are more likely to download bad applications on their mobile phones. Mobile banking are therefore much more vulnerable than online banking.
The second article reckons that many of the hacking tools that exist for PC's are not available for mobile platforms. With so many variants of operating systems and hardware it is difficult to find common access mechanisms to launch malicious attacks. In addition, because mobile banking can be implemented with transactional security, utilising various additional techniques it is much more difficult to penetrate. The writer then concludes that mobile banking are much more secure than online banking. Both articles published on the same day, yet with different conclusions. Which one is right? 
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Importance of trust in brand to conduct mobile payments
September 5, 2011
 There is a lot of trust involved in performing a payment transaction. It is probably the most important ingredient in making sure that consumers complete payments. While it is relatively easy for first mover people to try out new payment schemes, this is not the case for the majority of people.
In an online survey performed by Ogilvy & Mather, 500 Americans were asked which brand they would trust most in mobile payments. (Read here). (The graph can be found here). The results (while predictable) were quite interesting. Visa (and Mastercard, American Express etc.) carried the most trust, while companies like eBay and Facebook had a much lower score. This means that even in the online world, a brand carries a lot of weight when it comes to payments.
Some questions:
How to ensure that criminals don't masquerade as a trusted brand.How will consumers recognise a brand in a mobile world - especially when space to display brands are limited.How to build products that carries the brand promise.
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Facebook money implications: where will it take us?
August 30, 2011
 I previously wrote a blog about the Facebook credits and the likelihood of it becoming a serious currency. It is unclear how much money is locked into this currency and how this will grow. It is also interesting to speculate how it will evolve to become an important component of the Facebook business case. The potential size of revenue does not seem to be that big and will not substantially increase the $ 2 Billion revenue that Facebook is making (predominantly) out of advertising.
What is interesting, though, is other aspects to consider. Finextra reported recently (Read here), that Facebook silently tweaked some of the rules to ensure that they do not breach US anti-trust laws. (They needed to ensure that they do not use their dominant position to arrange an unfair advantage to themselves.) Other considerations that will be important in future are consumer protection considerations and ensuring that the scheme is not contravening deposit-taking laws.
Also, the economics of funding the credits are interesting. When buying credits, one can use the ...
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The key to the Nokia Money strategy is a flexible mobile application
July 24, 2011
 Nokia announced a collaboration with MCB bank in Pakistan recently. With this move, they have demonstrated that they could move the concept started in India into other markets. (Read here). MCB have successfully used Fundamo technology to roll out their mobile strategy and have won numerous awards for the success that they have achieved in the Pakistan market. (Read here). Not only then is this move extending Nokia's regional reach, but also an extension of technology suppliers. This is of course a positive move.
The ability of Nokia to offer mobile banking as a primitive feature on all of their handsets will be critical to the success of these initiatives. According to some media reports, it is the intention of Nokia to offer the mobile banking application on all of their handsets (from the basic sets to smartphones). (Read here). It is going to be their ability to do this in a seamless way, integrating into multiple different back-office ...
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BNZ mobile banking in the spotlight, but what is really happening in New Zealand?
July 24, 2011
 It seems as if the new mobile banking solution developed by BNZ met with a lot of positive feedback when launched recently in Kiwi Land. The application and mobile web solution was reported to have been well-received in the social media and the iPhone app quickly rose to be the application downloaded most. (Read here). The bank must have done something right and reading between the lines, I believe that they treated mobile as mobile and developed a mobile banking solution, specifically designed for new requirements.
On the other hand, it could also be that this is a light shining in an industry with a mediocre and ill-conceived offering to consumers. Kiwibank refers to their mobile banking as being available to "phones that can access the internet" and to "use your internet banking access number" to do mobile banking (Read here). Whatever happened to the Kiwibank mobile banking launched in 2007 with "features not previously available anywhere in the world"? This was supposed to be ...
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Signature-based security is the biggest source of Fraud attempts
July 18, 2011
 At the risk of stating the obvious: The chances of fraud is significantly higher with payment instruments based on signatures than those using PIN's. This is made clear in a blog posted on the 27th June on Retail Payment Risk Forum. Based on information collected during 2010, fraud is more likely by a factor for instruments that use signatures as payment authorisation. The relevance of this research in my mind is that the cost component allocated to security could be reduced by as much as 80% by making use of a more secure mechanism. By taking these concepts into consideration in the deployment of mobile payments, it is possible to offer much less expensive solutions. It is important to consider security designs from this perspective. 
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The risk-profile for mobile operators
July 10, 2011
 Online banking in South Africa is much more secure because of the use of SMS to deliver one time passwords (OTP) to banking customers. Unfortunately, even this practice can be manipulated by criminals to intercept passwords. This was recently highlighted when it was reported that a Vodacom employee colluded with criminals to intercept the OTP's sent to customers. In the process fraud of R2.4 million (about $340 000) was committed. (Read here). The immediate question is if Vodacom is liable in any way for this damage and the answer is quite clearly: no. The commercials and infrastructure that supports existing telecommunication services (the delivery of voice and data products), were never designed to cater for the additional liability of financial services. Many examples exist where banks have been held liable for fraud perpetrated on their networks (Read for instance here). Banks have to implement systems to cater for this, they have to price their products accordingly and take out insurance to achieve this. The question is if Mobile Operators understand these implications and if ...
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Mobile Money in Mexico
July 10, 2011
 Mexico is such an important market from a mobile money perspective. The profile of the citizens, the proximity (and dependency on) a large remittance market and the big growth in mobile phones make this country one of the best candidate for the next big mobile money deployment. Not much has been achieved in the past years. With many false starts (and failures), have marked the early stages of mobile money in Mexico. The big success of micro lending institutions to bring financial services to the lower income is an indication of the need that exist at the bottom of the pyramid and that fact that well-defined and managed services can be rolled-out to reach a large part of the population. Changes in the regulatory framework have made the possibility to roll-out more financial services grow. I have reported on this in a previous blog (Read here). In a recent CGAP report a very good clue is given to why the rate of deployment is low. (Read here). None of the initiatives launched has been focused on growing ...
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Taking location out of the payment process
June 24, 2011
 In the early days of mobile payments, I found the mobile payment application for parking in Estonia interesting (Read here). Paying for parking the way that I am used to, was always location-dependent... and still is where I live. You could only pay for your parking when you were actually, physically present at the parking space. Now, with mobile payments, location is taken out of the equation. The payer could be different to the parker and could be anywhere in the world! Another implication of taking location-dependency out of the payment process, is that the role of payer and buyer can now be separated. It is not necessary now to send money (or a cheque) with the buyer as one could authorise a payment without having to be present. The impact on business process and implication related to risks and disputes must be analysed carefully in order to unlock the real benefits. It is not possible to deploy everything immediately, but it is important to at least consider the implications. When thinking about mobile ...
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