Mobile phones have increasingly become tools that consumers use for banking, payments, budgeting, and shopping. Given the rapid pace of developments in the area of mobile finance, the Federal Reserve Board began conducting annual surveys of consumers’ use of mobile financial services in 2011. This 78-page report, “Consumers and Mobile Financial Services” (March, 2015) examines trends in the adoption and use of mobile banking, payments, and shopping behavior and how the emergence of mobile financial services affects consumers’ interaction with financial institutions.
NFC Technology in Smartphones Spurs Commercial Vialbility of Mobile Payments
The near field communication (NFC) market has moved from an ‘innovator’ to an ‘early adopter’ phase and from trial development to the first commercial roll out.
The key driver for the market is the wide adoption of the NFC solution in mobile phones, as without massive number of NFC-enabled mobile phones in use, the market will not be able to realize its immense potential.
According to industry analysts at Frost & Sullivan, NFC-enabled mobile phones will reach 863 million units in 2015. At this time, NFC-enabled mobile phones will represent more than 53 per cent of the overall market.
A recent report from the company entitled :NFC: When Will Be the Real Start?” states that in 2015, NFC will clearly be the most-used solution for mobile payment, and analysts expect that the total payment value for NFC globally to reach approximately $180 billion in 2015, while the NFC payment value in the EU is expected to reach $67.55 billion.
Frost & Sullivan forecasts a five-year compound annual growth rate (CAGR) of 118 per cent between 2010 and 2015.
“There are two possible business models for the NFC market; the first one is based on a memory rental model where the NFC application will rent the memory space used by its application and the second is a pure rental model coupled with extra cost per use where the application will pay a cost per year with a given number of actions,” explains Frost & Sullivan Global Program Director Jean-Noël Georges. “When this number of actions on the application such as update, patch, read and write is reached, extra costs are charged to the application provider.” Frost & Sullivan anticipates the second model to be the most applicable. The pure rental model will probably be the most widely used in future.
“Different secure elements for NFC methods have allowed different technology players in industries such as telecoms operators and electronic device manufacturers to establish their own payment infrastructure,” remarks Jean-Noël Georges. “This lack of harmonization has been an obvious restraint for the NFC industry.”
For nearly a decade, the NFC solution has been facing political and commercial problems. Most industries involved in NFC trials did not want to share the substantial revenues generated by this solution. Illustrating this point was the commercial discussion between banks and network operators, neither of whom wanted to share revenues. At the beginning, each wanted to force the other to adopt their business model. At the end, after network operator acquisition of banks and financial company acquisition of network operators, they were forced to admit that cooperation was the best compromise.
The NFC market also has the potential to create revenues for the entire NFC ecosystem. Even if it seems that purely hardware–SIM card and NFC controller–revenues will decrease, the gain will still be really important.
However, most technology providers have been able to offer new services directly linked with NFC. Handset manufacturers, trusted service management system providers and marketing and commercial NFC service providers all stand to benefit.
“Many marketing companies are already involved in the NFC ecosystem,” concludes Jean-Noël Georges. “This is a good signal because, in the past, marketing companies were involved in new technology roll-outs only when the transition occurred from purely trials to first commercial deployments.”
More information: NFC: When Will be the Real Start?
Source: Frost & Sullivan
NFC for Apple iPhones and iPads Could Disrupt Mobile Payment Industry
Apple could cause some serious disruption in the mobile payments market if it enters that arena as reported, say analysts.
Reports noted earlier this week that Apple is planning to embed Near-Field Communications NFC technology into its next-generation iPhones and iPads. What’s likely to make Apple’s offering vastly different, however, is the company’s huge base of 160 million iTunes users, said Avivah Litan an analyst at Gartner. That base gives Apple the ability to operate largely as a “closed payment system” with minimal need to interface with credit card companies and banks, she said. “They can largely shut out credit card companies if they choose to,” and operate in much the same way that PayPal has done in the virtual world, she said.
via Computerworld
NFC Mobile Payment System to Launch in UK Summer 2011
Everything Everywhere, a and Barclaycard today announced the first contactless mobile phone payment solution for UK consumers will launch by early summer.
Everything Everywhere is the name of a new company created last year when Orange and T-Mobile merged. Barclaycard and Orange, had announced their strategic partnership to bring contactless mobile payments to market in 2009.
Gerry McQuade, Chief Development Officer, Everything Everywhere, said: “This is the beginning of a revolution in how we pay for things on the high street. It’s a cultural shift that is as important as the launch of the personal credit card or ATMs.”
“We’re making something that’s been talked about for many years a reality and, very soon, using your mobile to buy a sandwich, a cinema ticket or, in time, even something bigger like a computer will simply be the norm.”
“As Britain’s biggest communications company, we’re proud to be delivering this technical and cultural innovation to the UK through the Orange brand. Orange and Barclaycard customers will be the first to be able to use their mobiles to make payments on the high street wherever contactless payments are accepted. This is part of our wider strategy to re-define what people use their mobiles for, with mobile payments being the start.”
David Chan, CEO of Barclaycard Consumer Europe, said: “Barclaycard is well known as a leader in helping consumers and businesses to make and take payments in their everyday lives. Finding new and better ways of doing this is what drives us, so it’s exciting, with Orange, to be giving consumers in the UK the choice to make contactless payments on their mobile phone as well as their card. Barclaycard is going to lead the innovation and explosive growth you’ll see in mobile payments.”
“I believe that future generations will find it surprising that early this century we were still carrying separate items to buy goods and to communicate with each other. As payment experts, our role is to make it easier, more convenient and incredibly secure for people to make purchases and manage their money while on the move.”
Working with the world’s leading handset manufacturers, the new offering from Orange and Barclaycard will enable customers to use their mobiles to pay for goods and services at more than 40,000 retailers that use contactless technology, by simply waving their mobile phone against a contactless reader.
The new contactless mobile payment technology has been developed to ensure customers’ transactions and personal data will be protected and secure. The launch proposition will focus on an industry backed, SIM-based approach to payments ensuring enhanced security for customers, as well as to initially provide a single point of customer care contact. MasterCard will provide the payment capability for the contactless mobile transactions.
Contactless mobile phone payments will feature as part of the wider Orange portfolio of products, developed in conjunction with Barclaycard, and which already features a contactless co-branded credit card as well as the forthcoming contactless Orange Cash prepaid payment card.
The move builds on existing contactless payment technology with 11.6m contactless credit and debit cards already in circulation, of which over 10m have been issued by Barclaycard and Barclays. There are also already 42,500 live Barclaycard contactless terminals in retail outlets including Pret a Manger, EAT, Little Chef and, soon, Co-Op.
Source: Barclays
Verizon’s Ryan Huges to Join Isis Mobile Commerce Network
Verizon Wireless VP of business development Ryan Hughes is leaving his position at the largest wireless carrier in the US.
Hughes has opted to come on board as chief marketing officer for Isis, the upstart mobile commerce network.
BilltoMobile Expands Verizon Carrier Billing Options to Include Boku
BilltoMobile is expanding its direct carrier billing relationship with Verizon Wireless to process transactions from other payment platforms starting with mobile payment start-up Boku. The agreement allows Boku to tap into BilltoMobile’s direct billing gateway and will greatly expand the number of merchants and consumers who can use direct billing on Verizon. BilltoMobile’s deal with Boku is non-exclusive so BilltoMobile could also process transactions from Zong and other payments providers as well.
BilltoMobile last year secured the first U.S. carrier billing deal when it agreed with Verizon Wireless to process payments directly through the carrier’s billing system.
via GigaOm.
Jumio Announces Star-Studded Advisory Board
Jumio, the payment solution dubbed as one of the “hottest start-ups of 2011” and currently in the final stages of development, today announced part of its high profile advisory board. The board reads like a Who’s Who of Internet pioneers.
“We are extremely pleased that our ideas and technology attract such talent. It shows me that we are right on track with our approach to make online and mobile payments easier and more secure,” says Daniel Mattes, founder and CEO of Jumio Inc.
Mattes invited — amongst others — Internet pioneers Zain Khan (former Google executive), Mark Britto (former Amazon executive) and Maarten Linthorst (former NASA partner).
Zain Khan, a former Google executive known as the “Ops guy,” built Google’s impressive infrastructure from scratch in 1999. Zain, now turned private investor, says about Jumio: “It’s mainly the technological brilliance and the complexity that lies in this payment solution that excites a tech-person like me. Add a proven team and the product is bound to be successful.”
Board member of Bill Me Later (acquired by eBay) and founder of Accept.com (acquired by Amazon), Mark Britto was responsible for building the main payment infrastructure for Amazon. He sees Jumio as the solution to one of the few remaining Internet problems: “The challenge of fully securing online payments has been an ongoing one. Jumio is perfectly prepared to solve the problem.”
Working with NASA back in 1969, Maarten Linthorst paved the way for the Internet as we know it, interconnecting the first two servers to become the ARPANET. He also developed the X25 protocol, which is used for every credit card transaction worldwide. Linthorst believes that “Jumio will revolutionize the way we think about online payment — both from a technological and a social point of view.”
A former CEO of one of the largest online gambling groups worldwide, Bjorn Evers sees “Jumio as a definite game changer and the answer to online payment fraud.”
Jumio’s mission is to make payments simpler, faster, more convenient and — above all — more secure. “$191 billion is the annual cost caused by credit card fraud in the United States, and it’s time to act,” says Mattes. “With our advisory board of brilliant minds, we are well-prepared.”
Source: MarketWire
MasterCard and Telefónica Announce Mobile Banking Initiative for Latin America
MasterCard and Telefónica have announced a joint venture in the development of mobile financial solutions in twelve Latin American countries where Telefónica is present with the Movistar brand.
What is unique about this initiative is that it partners a payments company and a telecommunications company partner to create a new entity focused on integrating mobile phones and a financial solutions that will work with existing electronic payment systems. [Read more…]
Mobilescape Mobile Payment Solution Selected by U.S. Fund for UNICEF for Transaction Processing
BankServ’s Mobilescape mobile payment devices have been selected by The U.S. Fund for UNICEF to process transactions at a variety of events over the past year, enabling donors to quickly, safely and make a donation using a credit or debit card. With a quick signature on the device’s screen, a receipt is provided to donors and the record of the donation is immediately accessible to accounting staff through Mobilescape’s web portal.
The U.S. Fund for UNICEF supports child survival, protection and development worldwide through education, advocacy and fundraising. The U.S. Fund for UNICEF first introduced the Mobilescape solution in December 2009 at its annual Snowflake Ball, and noted an immediate improvement in the ease of collecting and accounting for donations made at the events. The organization has since utilized the solution in fundraising events for its Haiti reconstruction program, hurricane disaster relief fund, and a number of other events throughout 2010.
“The Mobilescape solution has significantly simplified the contribution process at our fundraising events,” said Roberta Wallis, managing director of the U.S. Fund for UNICEF. “The ability to easily and securely process credit cards at these events makes a tremendous difference in our ability to focus on fundraising activities rather than on filling out and managing donation paperwork. And, we’ve found that our donors appreciate the ease of the transaction and the fact that their credit card information is not written down on paper forms.”
Wallis also estimated that the Mobilescape solution has helped save the organization several thousand dollars in transaction fees from lower swiped processing rates rather than the higher card-not-present fees for dialled in or key-entered transactions.
“For charities and non-profit organizations that rely on event fundraising, the customizable, easy-to-use Mobilescape solution increases donations by giving donors the option of an on-the-spot bankcard transaction that is safe, secure and costs less.”
Source: Globe Newswire
Visa and Wireless Dynamics to Introduce iPhone Contactless Payment Solution for Europe
Visa Europe and Wireless Dynamics Inc. have developed a mobile contactless payment solution that will bring Visa contactless payments to iPhone users across Europe.
The solution relies on Wireless Dynamic’s iCarte accesory. iPhone users simply attach the Wireless Dynamics iCarte, available through their bank or mobile operator, to their iPhone and download the companion Visa Mobile application for iCarte App from the App Store.
The iCarte accessory contains an antenna and an embedded Secure Element where the Visa mobile card is safely stored. This “card”, in turn, works with an app from the App Store to enable payments on the iPhone. Once the Visa mobile card is activated, consumers can start making purchases by simply launching the app and touching their iPhone on any contactless-enabled point of sale terminal across Europe, without the need to enter their PIN.
The iCarte accessory is designed to equip iPhone users with the tools they need to buy goods using mobile contactless technology from a growing number of European retailers. Visa Europe’s first deployment has been launched in collaboration with Yapi Kredi bank and Turkey’s largest mobile operator, Turkcell. Yapi Kredi customers equipped with a Turkcell mobile plan will be the first who can purchase directly from their iPhone at 40,000 contactless point of sale terminals in Turkey using their iCarte payment accessory.
The product is also being used in the UK with Visa staff in London with partners FIS, a leading provider of prepaid platforms, and Coventry Building Society. To further commercialize the accessory, Visa Europe will engage its member banks and partner mobile operators in Italy, France, Poland, Spain, Switzerland, Turkey and the UK, all of which have rapidly maturing contactless payment infrastructure.
Sandra Alzetta, SVP, Head of Innovation at Visa Europe said: “It’s clear from trials across Europe that mobile contactless payment is a strong and compelling customer proposition. Visa recognizes that consumers who use smart phones like iPhone are more likely to be early adopters of advanced payment technology. Given that the availability of a wide range of mobile devices supporting contactless services remains a key hurdle for take-up, we are overcoming this obstacle by bringing the capability to the iPhones already in their pockets.”
Ambrose Tam, President and CEO at Wireless Dynamics commented: “Working with Visa Europe to commercialize our iCarte accessories is a leap forward in increasing the number and types of mobile payment solutions. We’ve worked hard to design and build a feature-rich and appealing product for our partners and iPhone users across Europe.”
Recent consumer research of 4,200 people across Turkey, the UK, Italy and Poland confirms strong consumer demand for mobile contactless payments with 41 per cent of respondents stating that they “definitely would” or “probably would” sign up to use Visa mobile payments. Critically, this percentage increased to 57 per cent when directed to iPhone users, which demonstrates that the device is the ideal cross-over of target mobile users and consumers with positive attitudes to new payment technologies. The research also indicated that 87 per cent of this iPhone users surveyed would be willing to use an accessory to enable their device for mobile contactless payments.
The Wireless Dynamics iCarte accessory is compatible with iPhone 4, iPhone 3GS and iPhone3G on iOS 3.1 or higher. The iCarte Secure Element can be associated with multiple Visa accounts.
Source: Wireless Dynamics, Inc.
Facebook Plans to Acquire Mature Mobile Startups, Says CTO
With its newly replenished cash hoard, Facebook plans to acquire mature mobile start-up companies to work toward its goal of being a platform company, according to Facebook CTO Bret Taylor.
“We’re really focused on acquisitions,” Taylor said at the Inside Social Apps conference at UC San Francisco on Tuesday. “Every investment we make is aligning ourselves with the vision of being a platform company.”
The company raised $1.5 billion last week through an investment organized by Goldman Sachs, and is likely to file for an IPO later this year.
via Wall Street Journal.