Issue 48 • MARCH 2014
‘Malvertising’ and PSMS scams blighting smartphone ecosystem
THIS MONTH... News
• Charities to benefit from new tech and PPP rules tweak 3 • PPP levies £115k in fines for bad Ts & Cs... 4 • ... and raises levy and registration fees for 2014/15 4 • Consumers now want Click-to-call on ads, says Google 6 • The future of SMS is enterprise, suggests OpenMarket study 7 • Third of online sales now made through mobile 8 • txtNation opens up operator billing in India 8
Analysis
‘MALVERTISING’, the mobile adverts which leaves mobile users vulnerable to attacks, has replaced pornography as the biggest threat on mobile devices and this threat has tripled in size from 2013, says Blue Coat security labs, which assesses 850 petabytes of data per year and protects 75 million people worldwide, in its report on mobile security. According to the study, pornography is now seen as a threat by 16.5% of users, compared with 22.16% in 2012. Today, ads are seen as more risky among 19.5% of people, compared with just 5.69% in 2012. The study also finds that PSMS scams around ads and apps are also causing problems for consumers, especially using Android phones. Premium SMS apps have quickly become the most popular piece of Android malware due to the fact that mobile devices have a banking system built into it. The functionality that allows someone to donate money to a charity during a natural disaster is the same system being exploited by cybercriminals. Each SMS text message of $5 or more to a number owned by the cybercriminal is added to your mobile bill. The SMS text messages are often sent without mobile phone users being able to
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EDITORIAL Ecosystems & inter-praneurs Fresh from the halls of Mobile World Congress, Paul Skeldon assess the key trends of the show and finds it wasn’t about handsets it was all about who now drives innovation. 9 ANALYSIS Get customers by the calls Triton Global’s VP of sales and marketing Martin Grace contends that voice service providers are well positioned to fill a market niche by letting smartphone users call businesses 10 ANALYSIS: MWC14 M-payments sets the scene We kick off our look at the key themes at Mobile World Congress with a look at how m-payments was one of the hottest topics at the show 12 ANALYSIS: MWC14 Making contact There is more to NFC than payments – and MWC14 prooved this in spades. Neal Michie, technical business development director at Helixion explains 14 ANALYSIS: MWC14 Wearing with pride Shingo Murakami, MD of Rakuten’s Play. com online marketplace explains what retailers made of the tech on offer at MWC14 15
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NEWS #REGULATION Charities benefit from new donations technology and PPP rule tweaks CHARITIES ARE benefitting from new SMS donation rules that are being introduced by premium rate services regulator PhonepayPlus. £2.7 million has already been raised for charity during a pilot scheme, which allows donor supporters the option to skip their monthly donation rather than stop it altogether. These donations have been used by charities including Save the Children and Breakthrough Breast Cancer. The scheme has been praised by charities such as Save the Children and Breakthrough Breast Cancer for giving them a more flexible way to raised money and helping bring a new generation of supporters to their cause. Over 150,000 supporters were recruited by charities via SMS giving during the pilot scheme. Matthew Jupe, Direct Marketing Manager at Breakthrough Breast Cancer, said: “At Breakthrough Breast Cancer, we want to stop women dying from breast cancer through improving early diagnosis, developing new treatments and preventing all types of breast cancer. We have been offering regular giving by SMS for nearly a year and nearly a thousand people so far have decided to support us in this way. SKIP is ideal for these donors - offering them the flexibility to support us in a way that
suits them - and also ideal for us as fewer donors cancel outright so we’re able to raise more money to save and change the lives of those affected by breast cancer.” Annie Moreton, Save the Children’s Deputy Director of Individual Giving & Legacies, added: “Regular giving via mobile offers people a convenient and flexible way to donate to Save the Children. In 2013, we recruited just over 5% of our new donors through this channel, and raised over £100,000 to date. The monthly option to STOP or SKIP payments is clear and simple, and we can see that 40% of donors who choose to SKIP 3 or more consecutive payments do then choose to donate again.” Paul Whiteing, Chief Executive of PhonepayPlus, said: “We want to support charities in making the most of mobile fund-raising and help people give their donations to the good cause they support. We are pleased the pilot has proved so successful and we are happy to introduce SKIP for all charity giving today at an exciting time for mobile charitable donations.” The changes to the rules on SMS-based charity giving that are introduced today also include a requirement to remind con-
sumers every three months of how to stop their donation. The changes and the conditions attached to them are: • The use of a SKIP facility, allowing subscribers to text SKIP to miss a month’s subscription payment, but without opting out of the ongoing donation entirely; • Dis-application of the requirement at rule 2.3.12(d)(v) of the Code to remind consumers of the STOP command each month, replacing it with a requirement to remind consumers every three months, and • Dis-application of the requirement for PRS-based charitable donations operating on a subscription basis to seek permission to operate where the donation exceeded £4.50 in any given 7-day period.
>>>from page 1 Malvertising growth detect it and could run up hundreds of dollars in charges before the users receives their mobile phone bill. But smartphone users should not forget the threat pornography has as it is still the most potent threat. Although requests for pornography on mobile devices don’t even reach one percent of all requested content, yet it accounts for more than 16 percent of all attacks. In comparison, users are being served far more web adverts (12 percent of requested content), with only a slightly higher (20 percent) rate of infection. In fact PSMS scams and porn still go
hand in hand. Most of these malicious apps have some connection with mobile porn sites. Either the sites have links to download a mobile porn app that is really a malicious SMSbot APK or social engineering techniques on a mobile porn site are used to convince a user to download the malicious app. As a result of the volume of consumer complaints about premium SMS scam applications, some mobile phone service providers are actively working to thwart these scams by giving phone users the ability to block this type of service entirely. The report also explains why we are
the weakest link in security as today’s threats rely on social engineering – tricking mobile users to take actions that give control to cybercriminals. Recreation categories in the form of mobile entertainment and games account for 11.74 percent of all content requested by mobile users. The huge success of mobile games make it a prime target for cybercriminals looking for popular watering holes to exploit unsuspecting consumers. DOWNLOAD THE FULL REPORT HERE https://positivemarketing.egnyte. com/h-s/20140305/tyouh9zD1h
NEWS
#REGULATION All in the small print: PPP levies £115k in fines for unclear Ts&Cs... PHONEPAY PLUS has fined Australian based Bongo Operations £70,000 and ordered refunds for its Ask Bongo service, after complaints from parents. Some parents reported bills of hundreds of pounds including one parent who reported that their 11 year old had run up charges of £200. Users of Ask Bongo text their name, town and a question – that was replied to – to a premium rate shortcode. But some children were unaware the texts cost £2.50 a time because the cost wasn’t made clear. This meant that some children were sending a large number of texts without knowing that they would be charged, leaving their parents to pick up the bill. Ask Bongo was advertised during reality TV shows and at live music events, some of which were largely attended by children, including One Direction concerts and Capital VIP events. Wrist bands were distributed at the events with the number to text, but the cost of
texting was written on the inside of the wristband in small print. In a recent study, PhonepayPlus found that parents were just as concerned about high phone bills as they were about their children accessing inappropriate content. PhonepayPlus has taken action in a number of cases involving children’s use of digital goods and it has led the debate about the risk of children running up large app bills with the Children as Connected Consumers report. The regulator advised parents to talk to their children about phone charges and to visit the PhoneBrain website that has information for both parents and children about avoiding shock bills. Patrick Guthrie, PhonepayPlus’ Director of Strategy & Communications, said: “This case involved some high charges and in many cases users were children. This highlights the need for providers to be absolutely transparent about the cost of their service and for
parents to discuss with their children how to use services without running up high bills. The PhoneBrain website, which we run, gives advice to parents about how to talk about phone charges and has an interactive quiz for children to help them recognise services that will charge them.” Back in October, Phonepay Plus also clobbered a £45,000 fine on a subscription games and competition service operated by Nobinet under the brand names “Playneto” and “Gameztour”. PhonepayPlus received 8 complaints in relation to the service. The majority of complainants stated that they had received unsolicited text messages and that they had not engaged with the Service but had been charged. The Tribunal upheld three breaches of the Code in relation to misleading affiliate marketing material, noncompliant pricing information and the visibility of key terms.
#REGULATION ... and ups its levy and registration fee as it publishes latest budget PHONEPAY PLAY has confirmed its budget for 2014/15 – and has upped both its levy and its registration fee. The total cost of premium rate services (PRS) regulation in 2014/15, covering PhonepayPlus’ core activity and the Registration Scheme, is expected to be £4,444,645 including VAT. The proposed PhonepayPlus budget for levy-funded activity in 2014/15 is £4,088,173 including VAT. PhonepayPlus’ budget up to 2013/14 was reduced by 24.5% in real terms over three years. However, against the backdrop of rising quantity and complexity of calls, enquiries and complaints and increased legal costs it is unsustainable for PhonepayPlus to continue to reduce its budget into 2014/15. With the budget now confirmed, PhonepayPlus has announced the adjusted levy along with the fees for the Registration Scheme for 2014/15, which will apply from
1 April 2014 and will rise by 0.45%. This adjusted levy applies to all outpayments payable by network operators to providers in respect of revenue generated by PRS. With Ofcom’s approval of PhonepayPlus’ budget for the coming financial year, PPP can announce that the registration fee for 2014/15 will rise to £150 plus VAT for all providers unless they are eligible for an exemption. This rise was forecast in the Business Plan and Budget 2013/14, based at that point on levels of registrants and the split between those who pay and those who are exempt from charges remaining in the same proportion. The alternative to an increase, attempting to bring more exempt categories into fee payment, would, be, says PPP, counter-productive as it would almost certainly deter more new entrants from the market than it would generate in additional income.
The exemption from paying the fee is maintained for registered charities and for new entrants. New entrants to the market whose turnover for premium rate services is less than £10,000 in their first year of operation will be exempt from the registration fee. After this first year of registration they will then be expected to pay the full fee. This better targets the exemption to support new entrants to the market while also ensuring that more providers contribute to the costs of the Registration Scheme. PhonepayPlus undertakes routine checks on registration status and eligibility for exemptions which may lead to regulatory action where appropriate. Renewal notices will be sent to all providers in good time for them to renew their registration, which will apply from 1 April.
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NEWS
#TELECOMS Talk to Me: consumers expect brands to offer click-to-call, says Google NEW RESEARCH from Google reveals that 94% of UK smartphone users have, at some point, needed to call a business directly when searching for information on a smartphone. Of the 1,500 respondents surveyed, just under one third (32%) regularly need to call a business when searching for services or products on their smartphone. The research, which was commissioned to understand the use of the click-to-call option in mobile search, found that almost half of those surveyed (42%) had used this function, with the need to talk to a real person stated as the main motivation. Wanting answers more quickly and needing more information than a website could provide were the other main reasons provided for using click-to-call. The average click-to-call conversation is six minutes, suggesting the option can
lead to high level of engagement for companies. Click-to-call is seen as most important for mobile searchers in the purchase phase. 48% find it extremely important to be able to call the business when they are about to make a purchase and 36% need it when researching an item or service. The findings also suggest that businesses that do not offer the option risk damaging their brand image and could lose customers. 36% of mobile searchers indicated they would be more likely to explore other brands if click-to-call was not offered. 32% would feel frustrated or annoyed and 30% would be disappointed in the brand. The business value is further highlighted through previous Google Adwords research, which found that the service increases average ad click-
through rate by 8%. Ian Carrington, Director of Performance Solutions & Innovation at Google, comments: “Globally, we know that 40 million calls are driven by Google Ads each month so it’s fair to say that click-to-call is a clear sales driver. Moreover, for businesses that haven’t yet built a responsive or mobile site, click-to-call is a great way to ensure consumers can still reach your business easily, showing that mobile advertising doesn’t just have to be for the mobileready.” The research also compared behaviours across different verticals. It found that consumers use click-to-call across different sectors but are most likely to need the capability for local services (63%), automotive (42%) and tech (38%) businesses. Travel (36%) and hospitality (27%) followed.
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03/03/14 14.58
NEWS
#MESSAGING OpenMarket sees increasing enterprise demand for global SMS in 2014 ACCORDING TO OPENMARKET, increasing numbers of Global 2000 companies are realizing the immense value of SMS in optimizing their business processes and enhancing their relationships with customers and employees. A 2013 survey of enterprise decision makers by market research firm Forrester found that 86% of respondents plan to use SMS in their business operations this year – the highest rate of any mobile technology across businesses worldwide. “It’s clear that SMS has moved beyond basic marketing campaigns,” said Steve French, Global Vice President of Product Management and Marketing of OpenMarket. “Companies are using mobile to more efficiently serve twoway communication needs across the entire organization, including customer service, human resources, IT and security,
operations and logistics, and sales and marketing. From appointment reminders, shipping confirmations and customer surveys, to mission-critical messages like fraud notifications, emergency alerts, and secure PIN authentication, companies can use mobile for numerous use cases. But to fully take advantage of the benefits mobile has to offer, enterprises need reliable two-way SMS connectivity available on a worldwide level from a trusted partner – which is where OpenMarket comes in.” At the heart of OpenMarket’s enterprise messaging services is its Mobile Engagement Platform, a powerful, feature-rich, and fully scalable SaaSbased platform that allows enterprises to create customized solutions according to their specific operational requirements. Four of the world’s top ten global brands use OpenMarket’s Mobile Engagement Platform to power their
mobile messaging programs. OpenMarket continues to expand its two-way SMS connectivity to meet the worldwide demand for global messaging services. The company has recently added two-way connectivity in the Asia-Pacific region to reach high-growth, high-volume commercial centers such as Hong Kong, India, Japan, and Singapore. As an industry leader, OpenMarket processes over one billion mobile messaging interactions per month. The company differentiates itself from other mobile engagement providers by offering enterprise-grade global SMS services backed by demonstrated performance and reliability with service level agreements (SLAs), a geo-redundant SMS platform, award-winning 24x7 customer support spanning all time zones, and a dedicated account management team.
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NEWS #RETAIL A third of online sales now made via mobile devices ONE IN THREE of all UK online sales are now made on a mobile device, according to the latest results from the IMRG Capgemini Quarterly Benchmarking (Q4 2013/4). In the period November 2013 to January 2014, m-retail accounted for 32% of online sales – 6% were via smartphones, while tablet devices were used for 26% of e-retail sales during the quarter. This compares with 27% overall m-retail penetration in the previous quarter and represents 18% growth between Q3 and Q4. Visits to e-retail websites via mobile devices also increased and now account for 45% of traffic. Significantly, online clothing and fashion retailers have a higher mobile commerce penetration rate, with 36% of sales completed via smartphones and tablets during the fourth quarter. Mobile visits to apparel website also reached a tipping point with over half of traffic now coming via mobile devices. Tina Spooner, Chief Information Officer at IMRG, said: “With an estimated 12 million tablet devices sold in the UK alone last year, and 70% of UK consumers now owning a smartphone, it is not surprising that the penetration of mobile commerce has reached a third of the UK online retail market. In fact, the latest Quarterly Benchmarking results reveal the penetration of m-retail has surged 2,000% in just three years. “Consumer confidence in mobile continues to increase and improvements in mobile optimisation and the user experi-
ence are certainly factors in this. We expect this trend to continue throughout 2014, with visits set to surpass desktop usage over the coming months”. Chris Webster, Head of Retail, Capgemini: “As these results clearly demonstrate, retailers have been hugely successful in encouraging consumers to adopt mobile devices as a shopping platform. This is thanks, in no small part, to the significant investments that have been made to m-commerce sites which are now more intuitive and user friendly than ever before. This has helped ensure customers not only use the sites to browse but make purchases from them too, thereby reducing visitor bounce rates. “However, there are some challenges that remain. As our shopping behaviours shift from a traditional e-retail model to mobile, retailers will need to overcome the consistently high basket abandonment rates, as well as the significant number of items that are returned. So while enormous strides have been made, opportunities to materially improve performance remain.” Neil Sansom, Ecommerce Director at Moss Bros said: “Mobile now is as important as the full website version and we are now optimising the customer journey on both tablet and other mobile devices. Click and collect also played an important part as customers look for more flexibility and convenience in delivery offers and order closer to big occasions like Christmas”.
#PAYMENTS txtNation Now Offers Mobile Billing in India TXTNATION has launched its mobile billing solution for India, enabling merchants to accept mobile payments via Premium SMS. This latest development marks the availability of mobile payments in all four BRIC countries, following the launch of Direct Operator Billing in Russia, in January. With the fastest growing telecom network in the world, development potential and a population of 1.237 billion, India is a big market to enter.
India has 635.51 million subscribers in total, or a 53.77% penetration rate, with a monthly mobile phone addition rate of 4.90 million. txtNation has linked up with Vodafone, Uninor, Tata Docomo, Idea, Airtel and Aircel and offers customer price points / tariffs available across 3 to 50 INR. The new shortcode for India has been added to txtNation platform and is live now, complementing the company’s existing Asian footprint.
OPINION
FROM THE EDITOR
Ecosystems and inter-praneurs These are the two key things to come out of Mobile World Congress this year. Forget the handsets and incremental changes to the tech, it is the fundamental shift in who drives mobile innovation that is the real game changer, argues Paul Skeldon
SO ANOTHER MOBILE WORLD CONGRESS is under our belts – and, if the organisers are to be believed, 85,000 people turned up. It certainly seemed like I literally bumped into all of them or stood behind them in a queue for food/drink/toilet/entry/exit at some point during the week. That aside, though, it was an interesting event. Much of what was on offer was trumpeted with Stalinist like zeal, but in reality was merely incremental improvements on tech that is already in the field. But there were some very interesting trends developing: mostly missed by the mainstream media and the raft of bloggers, vloggers and dead horse-floggers that make up today’s ‘media’. For me the most interesting thing out there was how the way mobile tech is being developed and innovation incubated not by the mobile industry, but by the vertical markets that are looking to put it to use. Take payments: this year MasterCard and Visa had enormous stands – that is not something you’d have seen a few years ago. Likewise, there were cars all over the place – and not just the F1 racers that are usually there to ramp up the already catastrophic levels of testosterone at the show, but real cars. Real cars that are connected to the web. And then there were the endless retail-led marketing solutions centred around beacons and all manner of other technologies. Oh and let’s not forget NFC. Mainly from the transport and payments communities, bit still there it was. What all these have in common is that they are curious new eco-systems where vertical markets have taken the technology and developed their own fit-for-purpose adaptations to create the solutions they need. This is a very interesting – and for the mobile industry, very worrying – development. Much as they would like to be in charge of technological developments for mobile within different verticals, MNOs simply aren’t. They were cut out of the content business and they are poised now to be cut out of the messaging, payments, marketing and retail businesses too. For the end user and consumer this is great: left to MNOs we would have really dire, backwards looking services (even Orange’s top man admitted that he was baffled as to why MNOs hadn’t invented Whatsapp). The trouble is operators just can’t hack it. They are huge and run like dinosaur corporations from the 1970s. Instead they are being superceded by the very companies they saw their future sales lying in. These verticals are creating their own super innovative offerings. There is hope on the horizon. The idea of Inter-praneurship, where big companies set up autonomous ‘skunk works’ within their own organisation to allow for the agility that at 5 person start up can exercise has been the saving grace for vertical markets looking to innovate around mobile. Now MNOs are doing the same. But the question is, can they catch up? We’ll have to wait and see at next year’s MWC.
Editorial Editor Paul Skeldon paulskeldon@me.com | Sales & Marketing info@telemediamagazine.com | Production Director Annika Micheli annika@telemediamagazine.com | Publisher Jarvis Todd jarvis@telemediamagazine.com To subscribe, please go to www.telemedia-news.com What we’ve been listening to Everyday is like sunday – Morrisey | What we’ve been amused by The History of Rock with Brian Pern | Who we’ve been following @TheMobileView | What we’ve been reading about How to do video overlays| MARCH 2014 will bring... Spring
ANALYSIS
VOICE SERVICES
Grab your customers
BY THEIR CALLS
Triton Global’s Vice President of Sales and Marketing Martin Grace contends that voice service providers are well positioned to fill a market niche by enabling Smartphone users to quickly connect with businesses
VOICE SERVICES, once somewhat the Cinderella of mobile marketing is making an explosive comeback. Fueled by mobile searches and enabled largely by the exponential adoption rates of Smartphones, inbound phone calls to contact centers are booming. Savvy marketers have long recognized the value created when consumers are connected in real time to a business. Telephone calls continue to be rated the number 1 most valuable lead source. Talking to a potential customer has significantly higher conversion rates generally 10 to 15 times greater than clicks. Desktop searches are quickly reaching a plateau and
research suggests that they will continue to decline as consumer switch to Smartphone searches. It is estimated that 61 percent of mobile searches result in a phone call. Therefore the availability of click-to-call technology is paramount to allow consumers to connect to businesses conveniently and initiate the purchase phase of the shopping process. This simple but vital tool grabs the customer while they are hot enabling them to get the answer they need, talk to a real person, get the most accurate information, or ensure they get whatever they need as quickly as possible. With 47 percent of mobile searchers abandoning if a brand does not have a phone number attached to its search results, embracing such technology makes strong business sense. When you also examine the benefits of talking rather than typing and consider the ability to immediately engage mobile consumers, clickto-talk clearly emerges as a winner for mobile marketing. The inbound call channel and click- to- talk technology provides brands and advertisers with a unique engagement tool for mobile audiences. It provides the opportunity for direct
and immediate interaction with consumers to optimize any targeted mobile campaign. The technology integrates seamlessly into any call center presenting pre screened callers to agents who have initi-
ated the communication based on the call to action of the campaign. This affirmative action ensures the brand or company product or service is already of interest to the consumer resulting in significantly higher conversion rates. Routing phone traffic to an IVR platform ensures all calls are consistently and accurately reported and analyzed and extremely valuable data such as call dates, calling parties, call duration and geographical location are collected and collated. This allows meaningful performance based data to be captured so the effectiveness of a given marketing campaign can be established as well as providing a clear audit trail for agreed CPA performance criteria. Consumers take affirmative action by pressing the call button which indicates a real interest in the campaign content. So agents are assured of more than a casual interest in the product or service and know that they have a strong sales lead. With smartphones making calls a finger-tap away, smart companies are seeing how lucrative the inbound call channel has become. The inbound call channel is becoming marketing’s next big competitive advantage. With, billions of Smartphone users using their devices to inquire about products and services, click-to-call technology from voice service providers represents the next significant competitive advantage in marketing
ANALYSIS VOICE SERVICES
The following exhibits show the market sectors experiencing the most growth and the highest conversion rates. With a somewhat declining market in traditional voice services, adopting to new voice applications is a smart move for service providers and an easy new source of recurring revenue. Partnering with marketing agencies that create and manage brand and product campaigns is clearly the best option to market the service. Mobile marketers are often not familiar with voice services and since many campaigns are performance driven, they need to accurately measure all calls generated and track the disposition of the calls from inception to completion. Applying unique identifiers to each campaign and using IVR technology to answer and route the calls to the contact center fills this requirement with consistency and provides an audit trail so marketers can establish
performance based criteria such as the call duration for their clients. Consumers want to talk rather than filling in contact forms for a variety of reasons. Did you know that the number of mobile devices exceeded the world’s population in 2012(Source; Cisco) and that mobile drove one third of paid clicks by the end of 2013? (Source: ClickZ). Voice service providers can now offer marketing agencies an innovative CPA product that integrates seamlessly into call centers to provide a better indication of caller intent. The product evolves traditional Click-to-Call (C2C) and mobile CPA campaigns to a new level and provides a more accurate representation of acquisition through analytics and software integration.
ANALYSIS
MOBILE WORLD CONGRESS: PAYMENTS
The year of
MOBILE PAYMENTS
Mobile World Congress last month attracted a record 85,000 people and offered up some interesting insights into where mobile is going. We kick off our look at the highlights of the show with an assessment of how mobile payments was the key theme
gether around this. While they are entering into the online conversations – 15% of total conversations online were from merchants and 48% of merchant conversations were about m-payments – there is still a sluggishness to adopt m-payments among retailers. According to the research, non-adopting merchants are predominantly turning to social media to seek mobile payments advice from other merchants. Nearly 90% of these merchant conversations are now driven by those who have implemented mobile solutions, the study finds.
2014 IS GOING TO BE the year of mobile payments. Mobile World Congress – the annual jamboree for the world’s mobile industry – was dominated this year by payments. Even the launches of devices, which tend now to garner all the headlines in the mainstream media covering the show – drilled down into some form of payment related tech. But perhaps the most interesting announcement to my mind around this that was made at the show was that consumers actually want it. One of the biggest and growing bugbears with MWC is that it acts just as an echo chamber for the mobile industry, often paying scant regard to what consumers who actually fund all this actually want. But research by MasterCard and PRIME research of 13million tweets, other social media mentions and blogs globally of mobile payments – and announced on day one of the show – suggests that real people want real mobile payments.
Industry ready While MasterCard’s research shows that consumers are ready to adopt mobile payments – well at least to start to – Michael Abbott, chief executive of mobile payments venture Isis, a joint venture between Verizon Wireless, AT&T, and T-Mobile in the US, told delegates that he felt that the platforms are there and the interest to make mobile payments happen. Abbott is optimistic that mobile payments will grow in a big way. He noted that the world would see 300 million smartphones shipped that are capable of using Isis’s mobile-payments system. On the merchant end, 95% of the new point-of-sale terminals will ship with near-field communications, or NFC, the wireless technology Isis and Google Wallet uses to execute a transaction. Abbott said Isis has 90% of devices covered with the compatible NFC technology, although he counts the iPhone, which needs a specially designed cover to use NFC. Isis is about to push, but as Abbott admitted, its not about Isis “we can’t do this alone”.
People ready The key finding of this report was that adoption of mobile payments is in and confusion is out. Confusion over mobile payment options found in the 2012 study by MasterCard has been replaced by discussions focusing on the quality and staying power of various products. This year’s research shows consumers have moved from questioning whether to use mobile payments (the third most discussed topic in 2012) to deciding which mobile payments option to use (the second most discussed topic in 2013). Adopters now drive most of the conversation (81%), finds the report. Non-Adopters drove 68% of the conversations in 2012. This indicates that consumers have shifted from discussing mobile payments to trying out various options. And all this means that merchants need to get their acts to-
In-app ready It was MasterCard again that made much of the big name payments play at the show, unveiling a raft of payment announcements and taking up a huge stand in Hall 5 – something you wouldn’t have seen two years ago. MasterPass in-app payments eliminate the need to store payment card credentials across numerous mobile apps, providing consumers with a fast and simple payment experience. Forbes Digital Commerce, Fat Zebra, NoQ, Starbucks Australia and Shaw Theatres Singapore are among the first app providers that will power their in-app purchasing capabilities with MasterPass. Consumers are shopping and paying in whatever way best fits their needs and lifestyles – and from every device they have. They are looking for digital ‘shortcuts’ that provide speed, convenience
ANALYSIS
MOBILE WORLD CONGRESS: PAYMENTS
and a great experience. With MasterPass, this can be a simple tap, click or touch at checkout, at home, on the go, and now, directly within an app. According to ABI Research, overall revenues from mobile applications, including in-app purchases, will reach $46 billion by 2016, more than five times greater than the $8.5 billion earned in 2011. With the average global smart device user having downloaded 26 apps, consumers are storing payment card and other sensitive information with numerous app providers to set up accounts and make purchases. MasterPass in-app payments extend the capabilities of the current browser-based MasterPass digital service into the mobile app environment, and provide consumers with one secure direct relationship with their bank. Apps with MasterPass embedded in them enable consumers to complete a purchase with as few as one click or touch on their favorite connected device without leaving the app environment. The optimized checkout process creates a seamless shopping experience, supported by the highest levels of security and cryptology. “We’re excited to begin offering MasterPass to our customers as an innovative digital payment solution. This fully aligns with our philosophy to make in-app commerce as easy and efficient as possible,” said Robert Tibbs, Chairman & CEO, Forbes Digital Commerce at the show.
“MasterPass in-app payments is the latest offering from MasterCard to address the specific needs of the digital ecosystem. We’re creating great experiences for consumers across all channels and all devices, and enabling merchants to reach new consumers in ways not possible in the pre-digital world,” added Ed McLaughlin, Chief Emerging Payments Officer at MasterCard. “We’re also developing a framework to make all payments using MasterPass as or more secure than anything we can do on cards today, ensuring that consumers can benefit from the highest possible levels of security.” Samsung and Paypal ready One of the main announcements at the show was the launch of the Galaxy S5 handset. While the press made a huge fuss over the new device – which is really just an incremental upgrade of the S4 – one of the exciting things about the launch was the deal between Samsung and PayPal that allows the S5’s finger print recognition system to be used to pay with PayPal through the phone. The real meat here is that S5 users will no longer have to remember and input passwords to use PayPal in stores that use PayPal’s in-store technology – which is also starting to gain some ground. Apple, of course, was the first handset maker to introduce fingerprint recognition, but Samsung is the first to incorporate it into payments. Apple – not at MWC – can’t be far behind.
ANALYSIS
MOBILE WORLD CONGRESS: NFC
Making
CONTACT
One of the key things being pushed at Mobile World Congress 2014 was NFC –especially for payments. But there is way more to it than that, believes Neal Michie, Technical Business Development Director at Helixion
STEPPING BACK from the sheer manic scale that is Mobile World Congress, the first thing that struck Helixion was the number of cars on display at the show – this is a mobile show after all not the Geneva motor show. We heard one anecdote of an exhibitor being asked “where does the SIM card go?” and smugly responding by opening the glove box. Though the story here wasn’t about cars being mobile phones but about how mobile technology is being used within the automotive industry. This was a trend throughout the show – technology being developed by the mobile industry now finding applications in more traditional sectors. This real world usage of mobile technology matches Helixion’s belief that the true power of a mobile device is connecting the virtual world with the physical one. Using a mobile phone and NFC to access secure services (like payment) is a perfect example of this. At Helixion we believe that replacing a contactless card with a mobile phone is cool but it’s only half the story. The
real value, to both the consumer and the card issuers, comes when using the mobile device to offer a much more integrated solution. A simple one dimension integration that allows the user to manage their card services directly from a mobile phone brings real and tangible benefits; but it is not until we get a more radical two (or even three or four) dimensional integration, where different services (payment, ticketing, loyalty, identification…) all interact that mobile phones will start to simplify our everyday lives. This was certainly a theme that the GSMA were promoting through some of the various demonstrations in their Connected City. Mobile World Congress is a great event to meet contacts old and new, in formal meetings and less formal environments. It was great to discuss how to bring these services to mobile with so many people; and whether the current NFC/ Secure Element approach was correct or whether HCE and Beacon technologies would take over. The consensus seemed to be that NFC/Secure Element was still the standard we should be aiming for but that HCE and Beacon would have their place – they certainly should be seen as complimentary, rather than competing, technologies. Finally, Helixion were based on the Scottish Pavilion this year, and we’d like to thank the whole team at Scottish Development International for their hard work and insight before, during and after the event – and of course for the whisky! Slàinte mhath!
ANALYSIS
MOBILE WORLD CONGRESS: WEARABLES
Wearing
WITH PRIDE
Shingo Murakami, MD of Rakuten’s Play.com, was at Mobile World Congress and gives a unique insight into how retailers should be looking at the next big things in mobile tech right now or risk getting left behind
ONE OF THE biggest trends that was clear at Mobile World Congress this year is that mobile technology is no longer just about the smartphone. Instead, the ongoing development of nanotechnology and the Internet of Things is allowing any object to become smart. From wearable technology such as watches and headphones to everyday objects such as a pair of shoes, the possibilities are endless. Most interestingly, by incorporating nano-devices with these objects and hooking them up to internet we are provided with a whole new world of data. This means that retailers have unparalleled access to shopping habits, information about customers’ lifestyles and even in store shopping selections. On social media we share the things that stir up our emotions, revealing to brands what makes us feel happy and sad. With access to details about the feelings that affect consumers every day when they are on the move, retailers will be able
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