Opinion

Mobile Money Industry Insights – May 17, 2013

News and insights from this week in the Mobile Money industry, by Monitise Director of Market Intelligence, Andrew Griffin.

Andrew Griffin, Monitise Director of Market Intelligence

Andrew Griffin, Monitise Director of Market Intelligence

STOCK MARKET

We’re at the tail-end of quarterly reporting. Groupon beat expectations, though profitability almost halved. The company reported that 45% of transactions were via mobile. On the mobile operator side, Telefonica, which at 247 million mobile subscribers has over twice the number of AT&T or Verizon, sees Europe under pressure with revenues down 7% (pretty normal for a European MNO operation) but up 11% in Latin America, their other main market. In fact, Brazil just became Telefonica’s biggest market. Their model of ceasing to subsidize phones in Spain has been successful, with a -16% revenue decline but flat cash-flow year-over-year.

TECH/MOBILE COMMERCE

The big story late last week was the departure of Google’s mobile wallet chief ahead of the big annual Google IO conference. Back in 2011, PayPal complained bitterly to Google for stealing Osama Bedier to head their wallet project.  He’s now left for unspecified reasons and in the words of Yankee Group: “Two years after launch, Google’s initiative remains stagnant”. At the last minute, Google reportedly scrapped plans to launch a physical credit card at Google IO. They did, however, announce two new Google Wallet product features:

  1. P2P via Gmail: Integrating Google Wallet with Gmail, this gives users the ability to send and receive money from within Gmail using an “attach payment” button. There is a 2.9% fee charged to the sender for card-funded payments and free via ACH for bank accounts linked to Google Wallet; there is no cost to receive funds.
  2. Instant Buy API: An extension of the “Buy With Google” function (that allows users to pay more quickly on eCommerce sites by automatically filling in all fulfillment details/payment credentials) to Android native apps. When integrated into the mobile app, the API provides payment info in just a couple of clicks, simplifying purchases made through a mobile app. MobilePaymentsToday described it as similar to Braintree’s Venmo functionality.

Though the new features are aimed primarily at PayPal (which also allows users to send and receive money via email), this is yet another example of non-banks muscling into the financial services space.

Monitise has products covering both of these segments for its FI customers and other companies. We prefer mobile phone numbers over email addressed-based P2P (phone contact lists typically have more numbers than email addresses); undoubtedly, Google will eventually move that way too, as otherwise the mobile user presumably would have to use the Gmail app to make payments (not a problem on Android, but perhaps less common on iOS). Monitise’s instant mobile checkout functionality (brought in-house when we fully acquired Mobile Money Network in 2012) aims to bring instant-purchase into the mobile banking app and thus to millions of our end users, all within the mobile banking app, which is rapidly morphing into a mobile wallet.

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May 17, 2013 | Competition, mobile banking, mobile commerce, Mobile Money, mobile payments and Opinion | 0 Comments
Opinion

Trust Revisited: How Banks Can Redefine Relationships One Swipe at a Time

Carl Tsukahara, Monitise’s Chief Marketing Officer, contributed the following article to Bank Systems & Technology this week:

Banks have lost a great deal of public trust since the financial crisis, but they can recover some of that trust by fulfilling consumers’ desire for innovative and convenient mobile solutions.

Carl_BW_150A recent Gallup Poll clearly suggests that the brand perception of US banks is nearing generational lows. From a global financial crisis to new fees that are often seen as predatory, the once-undisputed trust banks had with their consumers continues to erode across demographic categories. With demographics shifting toward a new, mobile-first consumer, banking institutions have an opportunity to completely rethink interaction and engagement to re-establish a stronger bond of trust with their customers.

Today’s “mobile-first” generation has seriously upset the traditional way of thinking. The digital age is upon us, and interaction has almost completely shifted from physical to digital. As banks and financial institutions struggle to understand how to compete under increasing regulatory pressures, tech intermediaries are coming into the fold to create new, direct-to-consumer relationships that seek to disrupt the financial services and payment industries forever. With trust low and consumers inundated with new offers for mobile services from all sides, banks cannot afford to simply follow technology innovation; they must begin to lead it.

Mobile is a Key Vehicle in Regaining Consumer Trust

While today’s consumer may visit a bank’s physical location once per month, they log into online banking services six times and their mobile applications much more, on average, during the same period. Mobile offerings are the best channel for banks to drive a more personalized, frequent interaction leading to a deeper customer engagement. Through mobile, forward-thinking banks can create the types of differentiated solutions – from real-time access, alerts and personalized user experiences based on certain factors, to unique loyalty rewards, deals and payment vehicles that match a consumer’s desires and profile – all designed to attract and engage their customer bases and to drive future monetization opportunities. Read More »

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May 16, 2013 | Biz Press, Byline, disintermediation, mobile banking, mobile commerce, Mobile Money, mobile payments and Opinion | 0 Comments
News

The Frontrunners in mWallet Trust

Alastair Lukies, CEO and founder of Monitise, was recently quoted in a Wall Street Journal article about winning the mWallet/mPayment war. Below is a transcript of the article, written by Joe Mullich and published in the Wall Street Journal on May 13, 2013:

alistairlukies7Mobile money—sometimes referred to as the intersection of mBanking, mWallets or mPayments—is reshaping how people buy goods and services and interact with merchants and brands. Much of the focus on mobile money has been around delivering a seamless transactional process that helps people conduct commerce on their mobile phones or tablets. As the use of mobile money expands, consumers will be even more concerned with who they can trust with their secure data and financial transactions.

“Mobile money is in a similar phase as the ATM was in the early days of the 1970s,” says Alastair Lukies, CEO and founder of Monitise, a global leader in mobile banking, payments and commerce. “As excited as people were about the prospect of using them, ATMs didn’t become mainstream among consumers until they trusted them.”

In the process of transactions, mobile wallets can gather personal identities, spending data and other sensitive information—the types of information that consumers want to know is secure and protected.

“Consumers need to trust the infrastructure that underlies the mobile-commerce transaction long before they use a service,” Lukies says. “When voice over IP came along, people immediately gravitated to the Internet to make phone calls. That won’t happen with mobile payments in the same way, because people require a higher level of trust in the infrastructure that manages their money and financial information.”

The early adopters of mobile money “are inherently more willing to take on risk than are their more-conservative peers,” wrote Denée Carrington in the Forrester Research report Why the Digital Wallet Wars Matter in August 2012. But the next wave of users will “differentiate among digital wallets based on their perception of the wallet operator’s ability to protect data, ensure the integrity of transactions, and inspire confidence in their ability to do so.”

Banking on Reputation

Up until now, mobile banking has largely been devoted to tasks that did not make consumers unduly concerned about security, such as checking their account balances or moving funds between their own accounts. “When you are using mobile money to make purchases and send money to someone overseas, the level of trust you require rises exponentially,” says Lukies. Read More »

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May 15, 2013 | Monitise in the News and News | 0 Comments
Video

Leon Cooperman of Omega Advisors Speaks About Monitise on CNBC

Billionaire investor Leon Cooperman, chairman and CEO of Omega Advisors (a New York-based investment advisory firm managing over $6 billion in assets) spoke last week about Monitise on CNBC.

CNBC_Cooperman

 

 

Click here to watch the video.

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May 13, 2013 | Monitise in the News and Video | 0 Comments
Opinion

Mobile Money Industry Insights – May 10, 2013

News and insights from this week in the Mobile Money industry, by Monitise Director of Market Intelligence, Andrew Griffin.

Andrew Griffin, Monitise Director of Market Intelligence

Andrew Griffin, Monitise Director of Market Intelligence

STOCK MARKET

The big card networks reported Q1 earnings over the last week. Both emphasized their mobile credentials, though with differing flavors. Visa reported 15% revenue and 20% earnings growth. Commenting on the conference call on mobile, Visa said, “It’s a critical access point to a network and continued investment in that is absolutely critical for us”. The call went on to discuss v.me: 31 merchant sites live at the start of the year with another 132 signed up, 63 issuers representing 55 million Visa cards, including 12 of the top 25 banks, and 51 US regional banks.

Mastercard reported revenues up 8-9% and earnings up 16-17% on constant currency basis. Mastercard emphasized its mobile network operator relationships: “We continue with our efforts to develop partnerships in mobile network operators around the world. We now have relationships with over 30, with a combined reach of 1.3 billion people in 28 countries.” In the US, 100 merchants now accept MasterPass, and they have now launched in Australia and Canada; the UK is coming at the end of the summer, with 13 countries by the end of the year.

Facebook always has something to say on mobile, and this quarter was no exception. Facebook posted Q1 revenue of £1.46 billion, up 38% year-over-year.  Ad revenue is growing more strongly at 43% (an acceleration from 2012), while payment revenue grew 15%.  Mobile ads grew from 23% to 30% of total (remember this business was zero in Q1 2012) and Asia was cited as particularly strong (likely mobile is a much bigger proportion of users there, too). Despite Nielsen’s claim that Facebook is losing users in the US, North American monthly average users (MAU) rose by 2 million and daily average users (DAU) grew by 4 million. Globally, Facebook has 1,110 million MAU, 665 million DAU, 751 million mobile MAU (so, 68% of total) and 189 million mobile-only, up 128% year-over-year.

TECH/MOBILE COMMERCE Read More »

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May 10, 2013 | mobile banking, mobile commerce, Mobile Money, mobile payments and Opinion | 0 Comments
Opinion

Five-Year Forecast: The mPayments Landscape

Carl Tsukahara, Monitise’s Chief Marketing Officer, recently shared his thoughts on how the mobile payments and commerce landscape will take shape over the next three-to-five years in PYMNTS.com. Below is an excerpt:

Carl_BW_150The mCommerce space is now a trillion-dollar space, with players from various different verticals and industries all fighting for a share of the rapidly growing mobile market. The advantages that mCommerce and mPayments offer are obvious. What’s less obvious is who’s best poised to take advantage of the trend, and what these entities need to do to ensure mobile supremacy.

PYMNTS.com spoke with Tsukahara to discuss these topics, and to learn what we can expect to see from mobile in the coming years.

“There are so many folks still engaged in commerce, there won’t be one winning industry. But we do believe with great conviction that the financial services entities, the banks and payments companies, will have a very, very strong, dominant role in this,” Tsukahara said.

But despite that bet, Tsukahara predicted that other entities, such as retailers, mobile network operators and entertainment companies, will all make pushes in the mobile industry too. And interestingly, Tsukahara says he thinks we’ll see some “standalone” companies take a closed loop approach to mobile payments as well.

Those entities will likely subside over time, though, as Tsukahara sees more “collaborative capabilities” coming to the mPayments forefront.

“Whoever ends up owning the consumer phone top and the mindshare of engagement, other folks who want to use this as a commerce channel will need to migrate to those points. And it’s really based on the premise that you have to go to where the eyeballs are,” he said. “It’s not the other way around where you have content that sucks in the eyeballs and creates a large entity.”

So which companies will be the ones who own that “mindshare of engagement?” According to Tsukahara, it’s those entities that understand that the real consumer value in mPayments comes from the features that surround transactions, and not the physical payment itself.

“There’s a big misnomer that some people think about the mobile wallet, and they associate it by monetizing the payment, and that’s not correct. You really want to monetize everything around the experience,” Tsukahara said. “Those could be things such as creating loyalty. If you’re a retailer or a financial institution, you want to have loyalty. You want your consumers to look at this as really the extension of your brick-and-mortar in building a relationship. You want to make sure that you’re driving the monetization not necessarily around, ‘I can wave the phone at a terminal in store.’ It’s more what you can do when you have those vehicles and have the consumers.”

To hear more from Tsukahara on the mobile payments landscape and the players that will shape it in the coming years, listen to the full podcast by following this link.

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May 8, 2013 | mobile commerce, mobile payments, Monitise in the News and Opinion | 0 Comments

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