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2011 Mobile Money Forum – Event Summary

Anant Tailor,  
Date Posted: Sunday, August 14, 2011

2011 Mobile Money Forum – Event Summary
The 2nd annual Mobile Money Forum hosted by Neotelis took place earlier this week on June 21st and 22nd at the Hyatt Regency Hotel in Montreal.  The folks at Neotelis did a fabulous job of pulling together key participants from within the Canadian Mobile Money ecosystem as well as experts from other parts of the world. 
The conference spanned two full days and covered key Mobile Money topics including Mobile Commerce, Mobile & Contactless Payments, Mobile Wallets, and Mobile Money Transfer.
The following are some common themes that arose in several of the sessions:

  • Mobile Contactless Payments (proximity payments) are still 1-2 years out.  Much work has been done and several of the pieces are falling into place, but the ecosystem to support mobile contactless payments has not been completely flushed out at this point
  • Consumers don’t fully understand the concept of a Mobile Wallet or the value that it will bring to them.  The value proposition for consumers needs to be very clear and well-communicated in order to initiate a change in consumer behavior
  • The conditions for Mobile Commerce are ripe, but there are still several hurdles to overcome, including Consumer Perception, Merchant Adoption, Operator Adoption, and Ecosystem Complexity
  •  The mobile money ecosystem is currently very fragmented resulting in confusion for consumers.  Retailers, service providers, financial institutions, etc. all have their own platforms and apps resulting in the consumer going to multiple places to conduct various mobile transactions

Day 1 Session Summaries:
Keynote:  Mobile Commerce & the New Payments Ecosystem
Presented by: David Schropfer – The Luciano Group

  • What is Mobile Commerce:
    • Acquisition (Advertising)
    • Conversion (Loyalty)
    • Transaction (Payments)
  • The industry is poised to fundamentally modernize the payment experience and enhance the way that consumers, merchants and banks interact
  • There are over 2.1 Billion Loyalty / Reward accounts in North America
  • Convenience and Value-Add will attract the consumer
  • Breakage – percentage of net revenues for companies come from pre-paid cards / accounts such as Gift Cards, or loadable cards where the balance isn’t used.  This is interestingly high E.g. 3.3 % for Starbucks
  • Mobile apps greatly reduce the cost for merchants (advertising, loyalty, payment)
  • Two points of vulnerability with Mobile Commerce are Privacy and Security

The Future of the Mobile Wallet in Canada
Presented by: Christie Christelis – Technology Strategies International

  • A study of 1003 Canadians (both English & French) was conducted
  • The study provided consumers with a definition of a Mobile Wallet to get their perspective and interpretations:
    • What is it
    • How to use it
    • What can one do with it
    • What other value-add does it provide
  • Staggeringly low number of consumers indicated that they would use the mobile wallet for mobile payments (<19%)
  • Majority of consumers indicated that they would use a mobile wallet that is offered by a Bank (vs. Payment Network, MNO, Retailer etc.)
  • Discounts & Offers resonated most with consumers
  • Consumers are warm to the idea of a mobile wallet but there is not a lot of awareness and understanding of what it is
  • The success of the Mobile Wallet will come down to identifying and hitting the hidden drivers


Panel: Consumer Privacy & Mobile Money

  • Does the industry need new forms of regulation?
    • Canada has different legislation around privacy, making some US-based models inadequate for use in Canada
    • The consumer will be the driver of standards
  • There are a lot of dynamics of how payments will roll-out
  • There will be several different opt-in mechanisms around enrolling in these services

Visa & Mobile Contactless Payments
Presented by: Derek Colfer – Visa Inc.

  • Canadian mobile landscape has changed significantly since 2009:
    • New operators have entered the market
    • New phones
    • New Infrastructure
  • Elements for success:
    • Contactless Issuance & Acceptance
    • Technology
    • Business Model
    • Trust & Security
    • Payment Experience
  • There is one Visa PayWave transaction every two seconds in Canada
  • Visa Digital Wallet:  People will use because of their trust in Visa

Presented by: Bruce Burke – Gulf Bay Consulting

  • SMS is a $105 Billion business globally (2010 Revenue)
  • Economic structure is very digital based (or reliant)
  • FI’s are viewing Mobile Wallet services as high pioriity strategic projects
  • 2010 CAGR for SMS is expected to be 54%
  • SMS is predicted to exceed 10 Trillion messages in 2013
  • SMS is used by 4.2 Billion consumes worldwide
  • Example Given:  Murphy Oil:  MurPay is a Text to Pay application linked to customer’s bank account. 
  • It’s important to consider SMS in your mobile money deployment as it is clear that many consumers are still using phones that are not smartphones, and are using SMS quite extensively

Alternative Payment Approaches in Developed Markets
Presented by: Vince Kadar – Telepin Software

  • Mobile Money Evolution: 
    • E-voucher Distribution
    • Airtime Balance Transfer
    • Mobile Financial Services
    • Domestic Money Transfer
    • International Money Transfer
    • Mobile Commerce
  • Going from Domestic, closed-loop systems to global, connected services
  • Value Proposition to Consumers:
    • Simple to use
    • Convenience
    • Immediate
    • Increased Productivity
    • Entrepreneurship
  • Challenges:
    • Agent Network – growing a widespread distribution
    • Operator Network – growing the list of destination countries for recipients
    • Repeat Customers – growing stickiness to the service
    • New Customers – Building awareness of the availability of services

The Convergence of Payments & Media
Presented by: Jean-Christophe Raynon – VeriFone Inc.

  • VeriFone believes that 2011 is the year for NFC
  • Projection – NFC enabled phone shipments could reach 100 Million units in 2011
  • NFC Solution #1 – Easy Coupon Redemption
  • NFC Solution #2 – Loyalty Program
  • NFC Solution #3 – Establishing Presence
  • Standards & Technology contribute to a complex & evolving world
  • VeriFone’s solution abstracts this complexity

The Future of Mobile Payments
Presented by: Rodger Desai – Payfone Inc.

  • Consumers are ready for Mobile Payments
  • < 2 Billion people have credit cards and this is concentrated in 30 countries worldwide
    • This translates to <28% of the world’s population
  • > 70% of the world’s population have a mobile phone
  • Mobile Commerce Industry Challenges:
    • Consumer Perception
    • Merchant Adoption
    • Operator Adoption
    • Eco-System Complexity
  • Mobile Payments Innovation & Advancement
    • Open across device, OS, operator, merchants, financial solutions
    • Online, Wi-Fi, Tablet, Mobile
    • User Experience
    • New Tech Features, such as intelligent routing and variable price points
    • Manage Fraud

A Smarter Wallet for a Smarter Planet
Presented by: Thomas Hissam - IBM

  • What if your wallet enriched the full purchasing life-cycle?
    • Where are the best prices?
    • Receive valuable coupons
    • Competitive data
    • Returns & warranty; keeps receipts
  • A smart mobile device becomes a smart wallet when industry stakeholders align around a TSM to enable it


Day 2 Session Summaries:

Case Study:  Mobilizing Interact e-Transfer:
Presented by: Alexander Chan – Central 1 Credit Union, and Andrew Ross – Interac Association / Acxsys Corporation

  • Interac accounts for 60% of card payment transactions in Canada
  • 4 Billion transactions processed in 2010
  • Services: Debit, Cash, Chip, Online, e-Transfer, International
  • Mobilizing Interac e-Transfer
    • Anticipated to be a large part of the business in the future
    • Needed to be ubiquitous and consistent across and with other channels
    • Building on the banks’ mobile banking platform
    • Consumers should be able to transact how and when the want to
    • Using a mobile phone number
  • Central 1 Credit Union
    • $10B in assets
    • 170 M in revenue in 2010
    • They do online and mobile banking and electronic payments
    • Launched text banking in Q1 2008 – send a txt msg command to retrieve balance etc.
    • iPhone web app launched in Q3 2008
    • Alerts launched in Q2 2009
    • Mobile Web – Q1 2010
    • Mobile P2P Payments – Q4 2010
    • Mobile Downloadable Apps – currently in progress
    • First to market with Interac e-Transfer for the mobile handset (Nov 2010) with Prospera Credit Union
    • Payment and software development expertise.  They are a technology enabler
    • Prospera Credit Union – launched interact e-Transfer on mobile in Nov 2010 – first to launch
      • 40% jump in volumes after launch
      • Have had very positive feedback
      • Saw an increase in mobile users
  • Cost of transfer – is set by the financial institutions; paid by the sender
    • Range in market is between FREE - $1.50 per transfer
  • Average $ value of transaction is north of $100


Starting M-Commerce Today:
Presented by: Jim Brown - Admeris

  • Provides:
    • Blackberry, iPhone, Android API’s
    • Authentication
    • Rendering
    • OneTouch Payment
    • Digital Signatures
    • Credit Card Storage
    • Fraud Scoring
    • Processing
    • Settlement
    • Daily Deposit of funds into Merchant Account
  • They authenticate down to the device level to enable billing to mobile account
  • Why m-commerce now?
    • By 2013 Google will see more traffic from mobile vs. PC – mobile transactions will follow
    • 82% of smartphone users notice mobile ads
  • Best Practices
    • Discovery Drives Conversion
      • What is the customer doing, how are they interacting, when, and how are they responding/ discovering
    • Customer Experience – Make it Easier
      • Speed is paramount – simplified user exp leads to higher conversions. Focus on impulse and conveniences vs. in-depth shopping experiences
      • Is a login a necessity?
      • Give customers control with regards to whether they can opt-in to share additional info
    • Technology & Platforms – Make it Work and securely
      • Be prepared for constant change – customers change devices every 18-24 months which leads to the question – are you prepared to manage variations of apps or are you better off with HTML5 type of site
      • How are you protecting / securing information
      • How will you Integrate into existing infrastructure

 Mobile NFC > Business as Usual for Payments?
Presented by: Susan Mackeown – Interac Association / Acxsys Corporation
Cornerstones of the industry:

  • Safe
  • Secure
  • Convenient
  • Efficient

Interac – Pay in a Flash

  • Rolling out later this year with Scotiabank and RBC
  • There is a huge opportunity to convert cash transactions to flash transactions
  • 66% of transactions that take place are still done using cash
  • There is a shift in delivery of services – from organizations specifying how or what consumers use, to consumers choosing how and when they transact
  • Consumers
    • It’s my money - consumer
    • It’s my business - merchants
  • Loyalty
    • Consumers like to collect loyalty points / rewards
  • Risk – need to manage this
  • Liability – liability and risk management.  What is the process when things go wrong?
  • Value –where is the real value in a transaction.  Each part of the transaction needs to add value otherwise it shouldn’t be there

Panel:  The evolution of mobile banking – leveraging the mobile channel
Moderated by: Bob Egan – The Sepharim Group

  • Mobile brings context to the banking transaction
  • How to make mobile banking unique and different from internet banking
  • What are the new features that will be of value


Case Study: Making Business Payments Mobile
Presented by: Brian Harris – Western Union Business Solutions
Western Union

  • 2010 Revenue 5.2B USD

Mobile Phones & remittances:

  • Current Customers:  Percentage of WU Customers with a mobile phone
    • Senders - 86%
    • Receivers - 91%
  • WU Customer calls home an ave of 51.7 times a year
  • Western Union Business Solutions
    • Division of WU
    • $111 M in revenue in 2010
    • International Payments, FX
    • Operates in 9 Countries; on target for expansion to 14 by end of year
    • Clients mostly SME’s
    • Key industries:  Wine & Spirits, importers, education, charitable orgs
    • 50k active B2B clients using payment solutions
    • 2/3 transact online
    • Many transactions after normal business hours
    • 40% of txns in US done online
  • Case study:  Making business payments mobile
    • High percentage of SME clients have smartphones
      • 85% of people in the USA have mobile phones
    • Potential to increase txns, frequency of use
    • Offering a mobile option encourages users to reactivate online accounts
    • Customers want to make transactions on the go, in real time
    • Global research found that SME’s:
      • Want notification when payment is sent, received (Transparency)
      • Desire convenience of sending funds 24/7
    • WU did the following:
      • Create a mobile interface for existing online customers
        • Offered for iPhone, BBerry, Android
        • Device-agnostic, unlike apps
      • Allows clients to initiate payments, check rates (with capability for new services in future)
      • Created in-house in 8 wks.
      • App is an extension of the online platform
      • Clients connect directly via mobile device to online payment interface
        • This eliminates the learning curve and there is nothing to download
        • No change in process
    • Results:
      • Roughly 2% of txn’s now conducted via mobile
      • More than 15% of existing account holders have logged onto mobile site
      • Increased client loyalty
      • Value of txn’s are the same via mobile as online
    • Leveraging success:
      • Upcoming launch in multiple European countries
      • Rollout to partner sites
      • Enhancements:
        • SMS notifications
          • Payment sent / received
          • Currency limit reached
          • Payment approval required
          • Limit orders

The NFC Collaboration Blueprint:
Presented by: Jeppe Dorff – Rogers Communications

  • There is no blueprint
  • Where is NFC now?
    • ’06 – ’10:  Stabilize technology, Understand Operations, Develop Business Models
    • ’10 – ’12:  Educate Ecosystem, Support Standards, Enhance SaaS and high privacy Tech
    • ’12 and beyond: Grow Technology, Drive Consumer Usage, expand eco-system
  • What has been the challenges:
    • Terminology
    • Hardware & Software
    • Legacy Infrastructure
    • Standards & Compliance
    • Mult-handshake deals
    • Resources are vertical
  • How does the Rogers eco-system look?
    • Rogers Responsibility:
      • Secure Element (UICC)
      • Mobile Wallet Framework
      • SEM
      • Handset
    • Issuer’s Responsibility:
      • Vertical TSM x
      • Aggregator TSM x
      • Issuer-owned Issuance Server
  • Long-term customer vision for Mobile Wallet
    • The mobile wallet will enable customers to store / use multiple payment cards (Visa, M/C, Amex, Discover etc.)
    • Gift Cards
    • Loyalty Cards
    • Store locator
    • Other services
    • Overall, a customer –centric mobile commerce model
  • Acceleration of Payments Innovation
    • The volume and impact of payment innovation over the past 6 years has been unprecedented
  • Rogers values & principles
    • Non-competitive
      • Open Issuance
      • Non intrusive business model to ensure integrity in ecosystem
      • Portalble – increase consumer choice in handest and wireless
    • Paymen industry requirements
      • Platofrm based on global issuers and global standards
      • Focused on security – payment network certified
      • Supportive of payment network rules & regulations
      • Global approach – adaptive to Canadian environment


The Convergence of Mobile Payments and Technology:
Presented by: Eddie Chan - Ericsson

  • Mobile Money Challenges
    • Personal Credit Card – Fraud
      • High level of charge backs
    • In Canada – there are many alternatives
      • Interac
      • PayPal
    • Delay of MT from Bank Account
      • Currently takes 1-2 business days to transfer money to / from your personal bank account
    • Regulatory Compliance
      • KYC
      • PCI
      • FINTRAC
      • OSFI
  • There are different needs for Mobile Money within various markets
    • Developed vs. Emerging markets
  • Key enablers for Money Services
    • Legal Compliance
    • Service Enablement
    • Settlement of Funds
  • Ericsson solves the key complexities
    • Originating Party (Load and Send)
    • Interconnection
    • Terminating Party


Money Transfer:  Mobile Remittances
Presented by: Tom De Koninck – BICS – a Belgacom Company

  • Delivers telecom services and solutions to enable customer to grow their business and improve end user value
  • JV between Belgacom, Swisscom, and MTN
  • 1.61 B Euros revenue in 2010
  • 550+ Telecom operators as customers
  • 4th largest international voice carrier
  • World leader in mobile data carrier services
    • Voice
    • Roaming
    • Messaging
    • Connectivity
    • MFS
  • Market Assessment
    • Remittance Market – 440B USD in 2010 estimated to grow to 500B in 2012
    • Over 80% of the world’s pop do not have access to any banking services
  • Mobile Money Drives new revenues
    • Commissions on Transactions
    • Monetize Float
    • Subscription Fees
  • Hurdles to Mass Adoption
    • Exponential take up in the emerging economies or receiving markets
    • No pure international Mobile to Mobile remittances yet
    • Sending markets have seen little or no deployments (but it’s changing)
    • Issues with wallet interoperability and complex full end to end clearing and settlement
    • Own agent networks / distribution is key in home markets
    • 117 Live Deployments, 88 Planned Deployments
    • Fragmented market, many players in the market
  • Complexities of the ecosystem
    • Requires a coordinated effort by all participants involved in order to move to a truly open ecosystem
  • Tapping into MMT Effectively
    • Bilateral Model vs Hub Model
    • Bilateral models in ecosystems with hundreds of participants are simply not scalable
  • Regulatory Complexities
    • Apart from adhering to existing laws and telecoms regulation, MNO’s also have to ensure AML and FATF compliance
  • ‘Homesend’ is a remittance hub currently available in 7 markets.  End points are MNO’s, Financial Institutes, and Agents


Name: Anant Tailor
Title: Mobile Financial Services Delivery Lead
Company: DonRiver Inc.
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