Mobile Payment Magazine

Research Report: Positioning for Payments in the New Mobile-Social Technology Era

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We are at the beginning of a new technology cycle as consumer adoption of mobile and social media extends the reach of the web and integrates those media into the physical world.

Facebook is only eight years old, and yet its planned $5 billion IPO is the largest Internet IPO ever. As in every new technology cycle, network effects make room for new players and the creation—and destruction—of vast amounts of wealth.

The Gang of Four—Apple, Amazon, Facebook, and Google—is a group of network players entering the banking and payments environment. How will the strengths and weaknesses of the Gang of Four play against those of major financial institutions, payment networks, and wireless carriers? Surprisingly, PayPal rates on equal footing with the Gang of Four when it comes to innovation and emerges as a possible leader in the next tech cycle.

Research & Markets recently released a report entitled Positioning for Payments in the New Mobile-Social Technology Erathat  focuses on the relationship of brands to consumer perceptions of trust, innovation, and privacy in order to identify opportunities and threats.

Primary Questions

  • What is the newest technology cycle? Which brands are positioned to take advantage of the next cycle?
  • What models are developing that will intersect with the financial services space?
  • How will the strengths and weaknesses of the Gang of Four play against those of major financial institutions, payment networks, and wireless carriers?
  • How well do consumers trust the Gang of Four compared with the major financial institution, payment network, and wireless carrier brands when it comes to their financial information?
  • How do consumers rate the Gang of Four compared with the major financial institution, payment network and wireless carrier brands when it comes to protecting their private information?
  • Which brands are viewed as most innovative?
  • How do customers of the primary financial institutions rate their own institutions on the issues of trust, innovation, and privacy?
  • How should brands position themselves to best compete in the new technology cycle?


Methodology
The report is based mainly on data collected online from a random-sample bank benchmark panel of 5,878 consumers in December 2011. The survey targeted respondents based on proportions of gender, ethnicity, age, and income representative of those of the overall U.S. online population. The margin of sampling error is ±1.28% at the 95% confidence level.

It is also based on a survey of 5,211 consumers conducted online in October 2011 on KnowledgePanel. This sample is representative of the U.S. census demographics distribution and is recruited from the Knowledge Networks panel. Data is weighted using 18+ U.S. Population Benchmarks for age, gender, race/ethnicity, education, census region, and metropolitan status from the September 2011 Current Population Survey (CPS) and household Internet access from the October 2010 CPS Supplement. The margin of sampling error is ±1.73% at the 95% confidence level.

Table of Contents

  • Overview
  • Methodology
  • Executive Summary
  • Platforms That Are Able to Gather the Biggest User Base Usually Gain the Most Power and Wealth in Each
  • Technology Cycle
  • Mobile + Social Defines the Newest Technology Cycle
  • Wealth Is Created—and Destroyed—During Each New Technology Cycle
  • Apple, Amazon, Google, and Facebook
  • Platforms That Gather the Biggest User Base Usually Gain the Most Power and Wealth in Each Technology Cycle
  • Mobile Platform
  • Two Diverging Views of Mobile Success—Open (Google) vs Protected (Apple)
  • Social Media Platform
  • Mobile-Social Integration Opens Opportunity for Competitor to Move on Facebook
  • Game-Changing Business Models Rapidly Emerge During Times of Technological Upheaval
  • Tablets
  • Alliances Can Use Mutual Strengths and Weaknesses Can Fill Gaps to Respond Faster and with Better Products
  • Javelin TIP Model for Mobile Wallets
  • Trust
  • Apple Leads in Innovation—at Least for Now
  • Innovation
  • Privacy
  • Don’t Count out the Financial Institution’s Primary Relationship with the Consumer
  • No Brand Reaches the Gold Zone—Without an Alliance
  • Appendix
  • Related Research
  • Companies Mentioned

– Amazon, American Express, Apple, AT&T, Bank of America, Chase, Citibank, Discover, Facebook, Google, MasterCard, Microsoft, PayPal, Research In Motion, Sprint, Twitter, U.S. Bank, Verizon, Visa, Wells Fargo, zvelo

More information: Research and Markets

Visa Certifies Samsung, LG and Blackberry Smartphones as Visa payWave Mobile Payment Devices

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Visa payWave

Visa Inc. and Visa Europe today announced that NFC-enabled smartphones from Samsung Electronics, LG Electronics and Research In Motion (RIM) have been certified for use with Visa’s mobile application for payments at the point-of-sale, Visa payWave.

The Samsung Galaxy SII, LG Optimus NET NFC, BlackBerry  Bold  9900, BlackBerry Bold 9790, BlackBerry  Curve 9360 and BlackBerry Curve 9380 have been added to the list of Visa compliant payment products available for commercial deployment by financial institutions.

All the new devices certified by Visa host the Visa payWave application on a secure SIM card and feature NFC (Near Field Communication) technology, the short range communications standard that enables mobile phones to securely transmit payment information to a contactless payment terminal.

“This is an important step for Visa, its financial institution partners and the mobile industry,” said Bill Gajda, Global Head of Mobile Product, Visa Inc. “In addition to issuing plastic magnetic stripe or chip-enabled payment cards, financial institutions can now consider offering their account-holders a way to transform their smartphones into fully functional mobile payment devices.”

Visa’s certification of these smartphones paves the way for mobile device manufacturers, mobile operators and retailers to partner with financial institutions to offer Visa mobile payment functionality to consumers globally.

Visa’s Certification Process

Visa has played a leadership role in establishing global standards for mobile payments, making sure that they are aligned with existing technology and security standards for chip payment cards and can easily be integrated into the existing payments ecosystem. For example: Visa payWave on mobile devices is compatible with existing contactless (NFC) payment terminals already installed at retail outlets worldwide, enabling Visa accountholders to simply wave their enabled phone in front of a payment terminal in order to pay.

Visa has a compliance testing process for both mobile devices and the secure elements that host the Visa payWave mobile application. The process includes extensive technical and usability testing with respect to the Visa mobile payment functionality. This helps to ensure reliable and secure Visa transactions which are compatible with the global standard for chip-enabled payments, and establishes a required signal range for all mobile (NFC-enabled) Visa payment devices. Visa’s compliance testing process helps to ensure the combination of the phone; secure chip and Visa’s mobile payment application will provide the level of security and user experience Visa accountholders have come to expect from Visa.

“Today’s announcement is another example of the momentum we are seeing behind NFC as an industry standard for mobile payments,” said Nick Holland, senior analyst Yankee Group. “Yankee Group predicts that the value of NFC-based transactions will grow significantly, from $27 million in 2010 to $40 billion in 2014.”

Source: Business Wire

Visa Europe Launches Mobile Person-to-Person Payments

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Visa Europe today announced the launch of Visa Mobile Person-to-Person payments for making payments via mobile phone.

Announced this morning by Visa Europe Chief Executive Peter Ayliffe in his keynote speech at the EFMA conference in Paris, the new services give Visa Europe’s member banks the tools to respond to growing consumer demand for fast, secure, convenient and innovative ways to make and manage payments using their mobile phones.

“The way we pay is changing, driven by the rapid uptake of new technologies and growing consumer demand for more flexible payments. Today’s announcement is the first in a series of new products and services that Visa Europe will be launching in the coming months to reflect the fundamental shift in consumer behaviour. We are already seeing early adoption of mobile payments, and in the coming months we will see the arrival of mainstream NFC technologies, advanced loyalty and e-commerce services, and ultimately, the launch of a new digital wallet,” said Ayliff.

Visa Mobile Person-to-Person payments allow registered users to transfer funds to any Visa cardholder in Europe from their mobile phone, backed by all the security and expertise of Visa Europe’s industry-leading processing systems. The app makes it easy to send money to an address book contact, to a mobile phone number, or to a specific Visa card number – whether or not the recipient is registered with the service.

At launch Visa Mobile P2P payments will be available through an English-language Android application and will support transfers in a single currency for Visa and V PAY cardholders within Europe. Support for other mobile Operating Systems, multiple currencies and payments to and within non-European countries will be added over following months.

Visa Mobile Person-to-Person Payments was developed by Visa Europe in partnership with Monitise, the first of many services that will be made available through the partnership announced in early 2011.

 

New Report Focuses on NFC and Mobile Payments Landscape

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There is much buzz around the growth of mobile payments in the United States, with predictions that it will hit $214 billion by 2014, according to Aite Group.  But which of the many possible approaches — including integrated NFC, non-integrated contactless, bar codes, cloud-based solutions, and text messaging — is the best choice?

The Smart Card Alliance today released a white paper entitled, “The Mobile Payments and NFC Landscape: A U.S. Perspective.”

The white paper provides an overview of the current state of the market for mobile payments and NFC-enabled payment applications in the U.S., and evaluates the advantages and disadvantages of different mobile payment approaches.

“Technology is always changing, especially within the mobile and payments industries, so it is difficult to predict when and how mobile payments will become commonplace in the United States,” said Randy Vanderhoof, executive director of the Smart Card Alliance. “The goal of this white paper is to help industry stakeholders understand the current mobile payments landscape, anticipate how mobile payments are likely to change, and appreciate the opportunities that mobile payments, and particularly NFC-enabled mobile contactless payments, present.”

Some of the topics covered in this snapshot of mobile payments include:

  • A description of the different types of mobile financial applications in use today
  • Discussion of the different mobile payments approaches with implementation examples
  • A summary of the merchant, consumer, issuer, and mobile operator requirements for NFC mobile proximity payments and the attendant benefits
  • An update on the status of Near-Field Communications (NFC) mobile proximity payments infrastructure
  • Evaluation of how different mobile payment approaches fulfill overall market requirements

Payments Council members involved in the development of this white paper included: Accenture; American Express; Apriva; Bank of America; Capgemini; Capital One; Connexem Consulting; CPI Card Group; Datacard Group; DeviceFidelity; Discover Financial Services; Gemalto; Giesecke & Devrient; Heartland Payment Systems; Infineon Technologies; INSIDE Secure; JPMorgan Chase; LTK Engineering Services; MasterCard Worldwide; NACHA; NagraID Security; NXP Semiconductors; Oberthur Technologies; Quadagno & Associates; Thales e-Security; WatchData Technologies USA; VeriFone; Visa Inc.; ViVOtech; and Mike Kutsch; Dale Laszig; and Chandra Srivastava.

Source: MarketWire

Research Report: 2011 Contactless Near Field Communication (NFC) Mobile Payments

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Javelin Strategy and Research has release a new report entitled “2011 Contactless Near Field Communication (NFC) Mobile Payments: Framing Mobile Payments on the Foundation of Mobile Banking.”

Mobile payments have been the source of much excitement for over half a decade, with the latest focus being on near field communication (NFC) payments, which uses short-range wireless technologies to allow a consumer to tap or wave a supporting mobile phone to complete an in-store payment.

Late 2010 experienced a flurry of NFC-related mobile payments announcements, detailing pilot initiatives from numerous financial institutions (FIs), payment networks, mobile phone carriers, technology giants, and third-party developers.

Despite this activity, mobile contactless/NFC is a payment option that is battling limited availability of contactless-ready merchant terminals and mobile technology, as well as low consumer demand. In order to ensure the greatest opportunity for success, FIs should integrate NFC mobile payments with their existing mobile banking platform. Javelin data shows that mobile bankers are the prime financial demographic to jumpstart mobile payments, and FIs should promote the service accordingly.

Primary Questions

  • What is the current state of the contactless payment market, and how has it changed from recent years?
  • What are the key drivers preventing consumer adoption of contactless payments?
  • How should FIs integrate mobile contactless pilots within their existing financial infrastructure, and who should the target demographic be?
  • What are some of the current NFC programs in market today?
  • What is the demographic makeup of today’s contactless payment population, and how can that information be utilized to boost mobile NFC adoption?
  • How can FIs establish the value proposition of NFC among merchants, in an effort to increase merchant acceptance of the service?

Report Index

  • Overview
  • Primary Questions
  • Methodology
  • Executive Summary
  • The State of U.S. Contactless and Mobile Commerce
  • The Consumer Roadmap to Mobile Payments
  • Mobile Banking as the Springboard for Mobile Contactless Payments
  • Demographic Trends – Who Are the Likely Mobile Contactless Users of Today?
  • Mobile Contactless Payments: The Proverbial Chicken and the Egg Dilemma
  • Appendix
  • Related Research
  • Companies Mentioned

Table of Figures

Figure 1: Mobile Payments Ecosystem
Figure 2: Percent of Consumers Who Indicate That They Are Open to Using a Contactless-Enabled Card or Device, 2007-2010
Figure 3: Key Drivers Preventing Contactless Adoption, by All Consumers
Figure 4: Consumer Adoption Roadmap to Mobile Payments
Figure 5: Likelihood of Storing Credit or Debit Card Information on Mobile Phone to Complete a Mobile Payment, by Mobile Bankers and All Consumers
Figure 6: Factors That Drive Contactless Use, by Mobile Bankers and All Likely or Current Contactless Users
Figure 7: Last Time Made Purchase Using Mobile Device, by Mobile Bankers and All Mobile Phone Owners
Figure 8: Frequency of Mobile Purchasing in the Past Month, by Mobile Bankers and All Mobile Phone Owners
Figure 9: Average Mobile Purchase Amount, by Mobile Bankers and All Mobile Phone Owners
Figure 10: Desirability of Mobile Phone Functionality, by Frequent Mobile Bankers, Mobile Bankers (Past 90 Days), and All Mobile Phone Users
Figure 11: Likelihood of Using Mobile Contactless, by Gender, Generation, and All Consumers
Figure 12: Likelihood of Using Mobile Contactless, by Ethnicity and All Consumers
Figure 13: Likelihood of Using Mobile Contactless, by Smartphone Owners, Standard Mobile Phone Owners, and All Consumers
Figure 14: Likelihood of Responding to Mobile Marketing Coupons or Promotions, by All Mobile Contactless Users and All Mobile Phone Owners
Figure 15: Percent of Consumers Who Have Used Particular Contactless Payment Devices, 2009-2010
Figure 16: Likelihood of Using a Contactless-Enabled Card or Device, by Mobile Bankers and All Consumers
Figure 17: Average Times Per Month Consumers Use a Particular Payment Option Per Month for In-Store Purchases
Figure 18: Likelihood of Using Mobile Contactless, by Income and All Consumers
Figure 19: Likelihood of Using Mobile Contactless, by iPhone Owners, BlackBerry Owners, and Android Owners

More information: 2011 Contactless Near Field Communication (NFC) Mobile Payments

Visa’s Plan to Dominate Mobile Payments

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It’s no secret that credit card companies are shelling out big bucks and aggressively forming partnerships and deals to start cashing in on the mobile and digital payments innovations currently taking place. American Express, which recently debuted its own digital payments product Serve, has been particularly aggressive on the partnerships front, striking recent deals with both Foursquare and Facebook. Mastercard has bet on NFC with a partnership with Google for Google Wallet and bought online payments gateway DataCash for $520 million last fall. And Visa has made a number of major movies in the mobile and digital payments space of late; including making an investment (and taking on an advisory role) in disruptive startup Square, buying virtual goods payments platform PlaySpan for $190 million, and acquiring mobile payments company Fundamo for $110 million. We sat down with Visa’s Global Head of Mobile Product Bill Gadja and the company’s Head of Global Product Strategy, Innovation and eCommerce Jennifer Schulz to discuss how the financial company is planning to compete in both mobile and digital payments.

Read more, via The Washington Post.

Mobile Banking and Payments Report: The Role of the Mobile Phone as a Banking Device

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With over 2 billion users worldwide, mobile phone usage penetrates every core demographic of the world’s population. Research and Markets has announced the release of a new report entitled “ Mobile Banking and Payments.” The report assesses the role of the mobile phone as a banking device as well as a payment function. The report provides readers with the ability to:

  • Assess the prospects for mobile banking and payments
  • Learn how additional revenue can be raised through value added services
  • Review the strategic and operational issues that face the mobile banking sector
  • Study the profiles of leading banks within the mobile banking arena

After abandoning initial roll-outs a few years ago following poor consumer take up, banks worldwide are now re-entering the market. Mobile banking is an opportunity and a threat to established retail financial players. The first section of this report provides the business case for successful mobile banking. It presents the short-term solutions and the longer-term strategy needed to create a successful program.

Key Points Addressed in This Report:

  • The mobile banking phenomenon explained.
  • Trends among emerging and developed markets.
  • Mobile banking and mobile payments defined.
  • Reasons for low adoption by banking customers.
  • Importance of mobile as a marketing tool and as a customer retention strategy.
  • Negotiating the relationship between banks and mobile carriers.

Case Studies and Examples Include:

  • Bank of America
  • Blaze
  • Charles Schwab
  • Citi
  • ClairMail
  • Co-op Bank
  • Elite mBanking
  • Facebook
  • Fi-Mobile
  • First National Bank
  • iTunes
  • Mfoundry
  • Microsoft
  • Mshift
  • MTN bank
  • Nokia
  • Paypal
  • Regalo Card
  • St George Mobile Banking
  • Sun mBanking
  • Twitter
  • Vancity CU
  • Visa
  • Wells Fargo
  • Wizzit bank

Key Topics Covered:

  • Business case for mobile banking
  • Business case for mobile banking
  • Generate revenue through value added services
  • Enhance other delivery channels
  • Marketing via the mobile channel
  • Banking the unbanked
  • Strategic and operational issues
  • Choosing the technology platform
  • Security considerations
  • Usability considerations
  • Marketing considerations
  • Market profiles
  • USA
  • South Africa
  • Key emerging markets

More information: Research and Markets – “Mobile Banking and Payments Report”

 

Source: Business Wire

How ISIS Consortium Screwed Itself Out of Mobile Payments Market

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There has been a huge scrum amongst the smartphone players to capture the market for phone-based purchases. In a very surprising move, the major US-based carriers simply gave up. Isis, the mobile payment system sponsored by Verizon, AT&T and TMobile, announced that it had signed deals with Visa, MasterCard, American Express and Discover to its touch and go payment systems.

Why are US carriers not going after this incredibly lucrative market?

There’s actually a very simple reason. Payment providers require trust, and the US carriers decidedly do not have their customers’ trust.

Read more, via VentureBeat.

Mobile Banking Markets and Opportunities Report Announced by Research and Markets

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Research and Markets  has announced the release of a new report, entitled “M-Banking Markets and Opportunities.”

Mobile banking refers to a client-server system that is specifically designed for mobile devices, allowing banking customers to use handheld devices to access their accounts, pay bills, authorize fund transfers, or perform other activities. Like many other m-commerce services, mobile banking services can be challenging and no single company has all the expertise required to develop and deliver compelling services on its own. This report evaluates the mobile banking ecosystem and mobile banking solutions including mobile payments, provides a SWOT analysis for Visa and competitors, analyzes solutions for Visa’s weak points, discusses mobile banking implementation, and evaluates the market, applications, and methods. [Read more…]

Visa Acquires Fundamo for Greater Foothold in Develping Market Mobile Banking

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Visa Inc. today announced that it is acquiring Fundamo, a leading platform provider of mobile financial services for mobile network operators and financial institutions in developing economies. It also announced a new, long-term commercial agreement with Monitise plc (LSE: MONI.L), a leading provider of mobile money solutions for financial institutions in more developed geographies. [Read more…]