Telemedia month May Newsletter

Issue 50 • MAY 2014

70% of merchants now transact via mobile, Adyen study reveals

News

THIS MONTH...

• Record £250k fine and ban for rogue text quizzers as PPP clamps down 3 • Vodafone launches M-Pesa in Romania

5 • Monthly contactless spend tops £100m as NFC gains ground 5 • Half of consumers willing to accept offers via beacons...

6 • ... while 68% of 4G users shop more than ‘slow’ phoners 7 • Norwich City launches premierships first response m-web site 8 • TxtNation adsobs PushMobileMarketing

8

Analysis EDITORIAL Putting payments in its place Merchants are starting to love mPayments. Consumers are starting to love them too. So now is the time to start making them work – and the telemedia industry faces a huge opportunity. Paul Skeldon explains 9

70% OF MERCHANTS WORLDWIDE are seeing payments traffic originating from the mobile web. So finds the latest quarterly benchmark from international omnichannel payment provider Adyen, which shows that mobile web payments accounted for 20.1% of all payment transactions on Adyen’s network worldwide in March – more than 66% higher than March 2013. Of that 20.1%, smartphones accounted for 10.9% of all payment transactions while tablets generated 9.3% of total transactions.

This growth in mobile payments manifested across several key verticals tracked by Adyen each quarter, including Travel (+5%), Ticketing (+3.2%), Retail (+2.8%) and Digital Goods (e.g., books, movies, music, etc.; (+6.2%). The Index illustrates that the previous high growth rates in mobile web payments is starting to level out as m-commerce becomes more mainstream. The Gaming sector showed a small decline this quarter (-1.6%) as in-app payments have become more prevalent.

“Now that the majority of merchants worldwide are engaging with consumers via the mobile web, the paradigm has shifted from, ‘Will people actually buy goods and services with their mobile devices?’ to ‘Fact: mobile commerce is a vital sales channel for both merchants and consumers – and therefore deserves increased focus,” said Roelant Prins, Chief Commercial Officer at Adyen, which processed more than $2.2 billion in mobile payments in 2013.

For merchants, the key to maximizing mobile conversions is to make m-commerce as convenient and frictionless as possible for consumers by implementing one-click payments using previously stored secure payment data. For merchants, it is crucial to ensure the highest levels of security using features like Adyen’s Client Side Encryption, which encrypts the shopper’s payment data the moment it is transmitted from an app or the shopper’s browser.

Another key feature that is driving the growth of secure mobile commerce is

ANALYSIS Where SMS goes next Alex Kinch, CEO of Ziron, explains how SMS is about to see a renaissance in how its used – and that could save telemedia and the operators 12 ANALYSIS BitCoin and Commerce Many people don’t know what BitCoin is, many that do don’t want to use it. But, as Paul Skeldon finds, we may be writing it off too soon

13 SHOW PREVIEW mSummits: the power of two Take a sneak peak at what is happening on 15 May at the industry leading gaming and payments events 15

DIRECTORY

The leading industry directory of services 19

continued page 2>>>

Latest news at www.telemedia-news.com Catch our blog at www.telemedia360.blogspot.com

NEWS >>>from page 1 Adyen mobile transactions Tokenization, whereby merchants can complete payment transactions using a digital ‘token’ that is linked to the customer’s securely stored payments data on Adyen’s servers – rather than collecting and storing the payments data themselves. Combined, these technologies facilitate seamless mobile commerce for consumers while enabling PCI compliance for merchants.

Mobile web transaction volume increased in Q1 across all industry sectors tracked except Gaming, whose transaction numbers declined on both smartphones (-19%) and tablets (-10%) as in-app payments are becoming more and more popular in this sector.

This quarter, Digital Goods purchases (e.g., books and other content) on tablets grew 50%, and smartphone purchases increased 30%. In Retail, Travel and Ticketing, smartphone purchases increased 31%, 26% and 21% respectively, but tablet purchases saw less than 10% growth each (8%, 5% and 8% respectively).

In terms of transaction amounts, the Travel sector was the clear winner in Q1, with its average value per transaction increasing 63% on tablets and nearly 30% on smartphones over Q4. Despite a reduction in actual mobile web transactions, the Gaming sector’s average per-transaction value increased 18% on smartphones and nearly 7% on tablets. Ticketing showed marginal growth in Q1 (3% on tablets, 2% on

smartphones), but both the Retail and Digital Goods sectors saw a decline in transaction values (Retail: -8% on tablets, -15% on smartphones; Digital Goods: -4% on tablets, more than 4% on smartphones). Across all industry sectors, consumers spent more money via tablets than via smartphones, and tablets also beat out PC purchases in Ticketing, Gaming and Digital Goods.

“The decrease in average pertransaction value for Retail and Digital Goods this quarter may be attributed to a post-holiday season correction, as mobile consumers return to more normal purchasing behaviors, or the fact that mobile has become more mainstream, generating an increasing number of smaller transactions,” said Prins. “Either way, the continued popularity of m-commerce among consumers sends a clear signal that merchants should increase their focus on the mobile channel.”

The transaction data that Adyen captures from its merchants base worldwide is helping companies such as Groupon, Wonderlist, Soundcloud, Polagram and others formulate successful mobile strategies that optimize the customer experience.

Adyen’s omni-channel payments platform enables merchants to monitor and analyse their mobile traffic and compare to other sales channels, empowering them to make more informed decisions.

“At Polagram, we offer our services exclusively to mobile users, who use our app to bring the photos on their mobile devices to life in the physical world,”said Jeremy Charoy, co-founder of Polagram.“We have ambitious international expansion plans and identified Adyen as the best partner to support our mobile commerce strategy on an international scale.”

Share of Transaction Volume: • Travel: smartphones 22% (up from 17.5% in Q4); tablets 12.5% (up from 11.9%) • Retail: tablets 16.5% (15.9%); smartphones 9.3% (7.1%) • Ticketing: smartphones 15.75% (13%), tablets 8.1% (7.5%) • Digital goods: smartphones 16.9% (13%); tablets 7.5% (5%) • Gaming: smartphones 7.3% (down from 9% in Q4); tablets 2.7% (down from 3%)

Average transaction value:

• Travel: PC €203 ($281 USD); tablets €145 ($201); smartphones: €57 ($79) • Retail: PC €104 ($144); tablets €82 ($113); smartphones €56 ($77) • Ticketing: tablets €48 ($66); PC €47 ($65); smartphones €44 ($61) • Gaming: tablets €48 ($66); PC €40 ($55); smartphones €39 ($54) • Digital Goods: tablets €25 ($35); PC €24 ($33); smartphones €21 ($29)

#REGULATION £250k fine and record ban for text quizzers PPP has imposed a fine of £250,000 and a record eight year prohibition against JJP Mobile B.V. over a text message based quiz competition service. The Netherlandsbased company was found to have sent spam texts and emails to consumers without their consent, marked correct answers as incorrect and failed to show evidence that prizes existed.

PPP’s independent tribunal also found that the company had provided misleading information to investigators. The company was referred to PhonepayPlus’ tribunal after a number of months of forensic investigation. Despite the misleading information given, this identified that JJP Mobile was behind the service.

Consumers caught out by the service told PhonepayPlus that they had received personalised text messages or emails asking them questions. The questions often asked for yes or no answers to statements such as: “Giggling is also known as laughing?”, or “is Steve Jobs the CEO of Apple?” Some consumers were not credited for correct answers by JJP Mobile.

A message sent to consumers in the lead up to Christmas said “WIN £500 Xmas shopping voucher”. The draw for the prize wasn’t until June the next year.

One consumer reported to PhonepayPlus that they had run up a bill of £70, others reported bills around £40 .

The regulator also found that JJP Mobile

B.V. had not put the company name on the text messages. Under PhonepayPlus’ rules companies have to do this so they can be quickly identified.

When imposing the sanctions the PhonepayPlus tribunal described the failings of JJP Mobile BV as “very serious”.

The tribunal also ordered the company to refund all consumers who had complained to PhonepayPlus.

Joanne Prowse, Director of Operations at PPP, said: “JJP Mobile failed consumers and it is now paying the price. The record eight year prohibition and £250,000 fine demonstrate how seriously we take companies trying to take advantage of consumers.”

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mPAYMENTS

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NEWS #PAYMENTS Out of Africa: Vodafone M-Pesa starts march on Europe with Romania launch VODAFONE M-PESA - the mobile money transfer and payment service that has transformed the lives of millions of people in emerging markets in Africa - has come to Europe for the first time, following its launch in Romania.

M-Pesa will offer simple, safe and secure mobile money transfer and payment services to approximately seven million Romanians who transact mainly in cash. The service also offers banked customers the convenience of being able to access and transfer money via the mobile phone.

M-Pesa is based on simple text messaging technology and operates over any of Vodafone Romania’s mobile network connections, including 4G services which launched in 2012. Romanian M-Pesa customers will be able to transfer as little as one new Romanian leu (0.22 euro cents)

up to 30,000 lei (€6,715) per day.

Vodafone Director of Mobile Money Michael Joseph said: “The majority of people in Romania have at least one mobile device, but more than one third of the population do not have access to conventional banking. Vodafone M-Pesa is already used regularly by nearly 17 million customers and we look forward to bringing the significant benefits of the service to the people of Romania.”

From today, Vodafone M-Pesa can be activated at any one of around 300 Vodafone Romania stores and participating retail outlets as well as through authorised agents, and will be accessible to approximately six million people in both rural and urban areas. It will be extended to other parts of the country, comprising a total of 2,000 retail and distribution points of presence by the end of 2014.

M-Pesa also will allow Vodafone Romania’s customers to top up pre-pay airtime on a mobile device, pay utility bills, make a deposit and withdraw cash from participating agents, and purchase goods such as flowers, a newspaper and a coffee.

#PAYMENTS Monthly contactless card spend tops £100m as transactions triple in a year NFC PAYMENTS made a huge step forward with news that monthly spending on contactless cards has exceeded £100 million for the first time, according to data published on 29 April 2014 by The UK Cards Association, and that78 million NFC enabled SIM cards were shipped in 2013 globally showing that consumers appear ready to make the NFC leap.

The new figures from the UK Card Association show that UK consumers spent a record £109.2 million using their contactless cards during March 2014, up by £22.2 million since February and by over 200 per cent since the same month last year. More than 370 contactless transactions are now made every minute in the UK – six every second. The number of monthly transactions has more than tripled in a year.

The SIMAlliance meanwhile suggests that shipments of NFC SIMs rose by 159% to 78 million, with the biggest orders coming from Japan/Korea (37

million shipments). North America hit 24 million shipments.

But the number of SIMs still lags the number of NFC-enabled phones. Analyst IHS says NFC was in 275 million units in 2013, up 128% from 120 million in 2012.

Meanwhile Berg Insights has estimated that 53% of the world’s POS terminals will be NFC ready by 2017.

But despite this, the UK Cards Association finds that there is still a hunger for NFC payments on cards – which is a start. Its study shows that there are more than 42.4 million contactless cards in circulation in the UK, with approximately 1 in 3 cardholders currently having a contactless card. The average value of a contactless transaction in £6.46.

Consumers can use a contactless card to pay for purchases up to £20 simply by touching their card against the contactless reader.

Graham Peacop, Managing Director of The UK Cards Association, said:

“Contactless technology is a fast, easy and secure way to pay by card. Whether it’s to buy a cup of coffee or pay for a trip on the bus, today’s figures show that consumers are voting with their wallets and find contactless cards a very convenient way to pay.”

The figures are backed up by WorldPay, which in total has carried more than 61 million contactless payments with a total cash value of £433 million over its network.

Worldpay UK’s chief marketing officer James Frost says: “The UK Cards Association simply reconfirms the surge we’ve already seen in consumer confidence – which has seen average sale size grow 27% in just two years.

If you’re a business regularly taking payments of £20 or less, contactless is a must. You can serve customers quicker, cut down queues and never miss a sale during peak times. That’s why we helped over 70 large retailers move to contactless last year.

NEWS #RETAIL Half of mobile consumers willing to receive retailer messages via beacons...

ALMOST HALF (45%) of smartphone owners would be ‘very willing’ or ‘somewhat willing’ for retailers to send messages to their smartphone, according to recent research from Voice of the Customer specialist eDigitalResearch.

Location-based, direct messages have become more of a reality after Apple introduced their iBeacon, Bluetooth based technology late last

Announcing...

year. Beacons open up the potential for retailers to send location-based content to smartphone owners via apps as they wonder past a store – as well as revolutionise the mobile payment and advertising industry.

Unsurprisingly, shoppers would most like to receive special offers and promotions, as well as discount codes, straight to their mobile, although a handful would also be happy to be sent store or product information.

Of the 1,300 smartphone owners surveyed, one third (33%) believe that personalised, direct messages sent straight to their smartphone when out shopping would ‘likely’ or ‘very likely’ influence their purchase decisions, representing a huge opportunity for retailers to boost their revenue streams.

The fact that messages are transmitted through apps means that retailers also have the opportunity to personalise and tailor promotions based on previous

browsing and purchase data in an attempt to increase footfall through shop doors. 78% of those that would be happy to receive messages would be ‘extremely willing’ or ‘somewhat willing’ for retailers to use this data if it meant more personalised messages for them.

Derek Eccleston, Commercial Director at eDigitalResearch, comments, “Apple subtly introduced iBeacon technology into the market at the end of 2013. As retailers and brands get to grips with what it is and how it works, consumer opinion demonstrates that it could potentially revolutionise the instore and high street shopping experience.

We found last year that half (50%) of smartphone owners regularly shop through retail apps and have them installed on their mobiles. It opens up the potential for retailers to digitally reach outside their stores and tempt smartphone owners in, increasing footfall and, as these results demonstrate, boost their revenue streams”.

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Premium Content, Billing & Traffic

NEWS #COMMERCE ... while 68% of 4G users more likely to shop from their smartphone, studies find MORE THAN two thirds of 4G users feel that faster access to the internet encourages them to make more purchases from their smartphone, according to the latest consumer research from eDigitalResearch and online retail body IMRG. IMRG and eDigitalResearch first researched the 4G market in April 2013 and found that the continued roll out of 4G was likely to have a positive impact on how often consumers would shop and browse from their smartphone.

The latest results reveal that 4G users are much more engaged with the online and digital retail sphere than their 3G smartphone counterparts. Over half (54%) of 4G users surveyed have shopped online from their mobile compared to just under a third (32%) of non-4G smartphone owners.

Similarly, almost three quarters (70%) of 4G users have browsed retail websites from their mobile, compared to under half (48%)

of non-4G users who have done the same.

It is no surprise then that 4G users are more likely to turn to their smartphone first before other channels to shop and browse compared to non-4G users. Just 2% of smartphone owners state that mobile sites or apps are their first port of call when they shop and browse, compared to 11% of 4G users who said the same.

According to the results, around 1 in 5 (19%) of consumers now own a 4G enabled smartphone device - 62% of whom have used 4G to access the internet when browsing from their mobile- compared to just 9% of consumers who had access to the technology this time last year.

Tina Spooner, Chief Information Officer at IMRG, explains: “With over half of 4G users having shopped via their smartphones, compared with around a third of their 3G counterparts, it is clear that faster access brings a higher level of customer engage-

Heart Communications operate a bureau call centre in London, which is supported by a network of homeworkers.

We handle calls and texts (SMS) covering adult and non-adult.

heartcommunications 0844 745 1915 admin@heartcommunications.co.uk www.heartcommunications.co.uk/telemedia.html

ment via mobile. During the mid-2000’s we saw a similar trend in overall e-retail, when the adoption of faster broadband connections resulted in a surge in online sales “Mobile has become an integral part of the online shopping journey, with a third of UK e-retail sales now coming via smartphone and tablet devices. Although tablets currently account for the lion’s share of m-retail, as 4G adoption increases and more users sign up to high-speed mobile internet services, there is little doubt we will see an increasing number of consumers shopping on the move.”

Derek Eccleston, Commercial Director at eDigitalResearch, adds: “These results demonstrate that the technology is likely to have a real impact on our shopping and browsing habits as UK networks charge ahead with their planned roll out to more locations and more users - mobile is likely to become even more pivotal for retailers”.

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CaLL HandLing

NEWS #SPORT Norwich City has Premiership’s first responsive m-site NORWICH CITY Football Club has launched what’s believed to be the Premiership’s first responsive ecommerce website.

The website was developed by PureNet to be responsive on any device, from smartphones and tablet computers to PCs. Features include social feeds, wishlists and personalisation. The solution also integrates with the football club’s back office systems, ticketing, CRM and stock management systems.

Dr Paul Gibson, PureNet chief executive, said: “We were delighted to be

selected to work with a Premiership Football Club with such a strong fan base. PureNet pride ourselves on innovation and building for the future, we are therefore thrilled to have delivered the first responsive website for a Premiership Football Club. This project really enabled us to show our creativity and passion for website design and is a fantastic achievement for all the team involved.”

A Norwich City FC spokesperson said: “PureNet have a proven track record and have identified a business need for the football industry. They have always delivered for their clients in a difficult environment and we look forward to having future significant sales success.”

Responsive design websites have been introduced by a number of large retailers, such as House of Fraser, as they have seen more of their traffic originate from mobile devices.

#MESSAGING txtNation absorbs PushMobileMarketing as it grows messaging Your partner for mobile billing www.imimobile.com

TXTNATION HAS absorbed Manchester based mobile messaging company, PushMobileMarketing in a move that sees Paul Adams, PushMobileMarketing Managing Director appointed as Head of Messaging at txtNation. This comes as part of the award-winning mobile billing and messaging provider’s push to scale up its mobile messaging division.

PushMobileMarketing provides both UK and Global SMS termination through stable and secure quality routing options, offering access to 800+ mobile operators around the world.

As txtNation’s newly appointed Head of Messaging, Adams brings a wealth of experience and a solid reputation to txtNation, allowing the business to offer increased service levels to its already blossoming client base. Previous to PushMobileMarketing, he has had roles

across wholesale voice and telecoms.

Michael Whelan, CEO of txtNation commented “The demand for SMS messaging is rising. This combined with our platform, analytics and commercial improvements across our core messaging mix of SMS, HLR and USSD, it’s a very exciting time. We have absorbed PushMobileMarketing and have are delighted to bring Paul on-board, benefiting from his experience and vast industry knowledge.”

Paul Adams, txtNation’s new Head of Messaging commented “After speaking with Michael and spending time at txtNation’s head office, the vision that he and the rest of the business have for messaging made it an easy decision to join the team and help deliver results with the new dedicated bulk SMS division.”

OPINION

FROM THE EDITOR

Putting payments in its place – The Royal Mint ACCORDING TO RESEARCH by payment network Adyen – as witnessed in our lead story – 70% of merchants worldwide are now taking mobile payments. And that is right across the board from travel to ticketing to entertainment and to retail.

But what does this really tell us about mobile payments? Well, really it suggest that consumers are embracing e-commerce on mobile phones and are paying for things on their devices despite it being really quite a clunky, difficult experience. Let’s not forget, these transactions are happening before we get any real mainstream use of any of the mobile payment tools that have been talked about for many years and which are just months away from happening (well, apart from PayPal).

Couple this with the news that the shipment of NFC enabled SIM cards has rocketed globally and that transactions via contactless (NFC) cards is also growing and suddenly you see that things are finally moving in payments.

And this is good news. The ground work has been laid for getting people to not feel that it is odd to pay by mobile phone for things – nor indeed is it insecure to wave the payment device about and for it all to work seamlessly. The age of mobile payments is upon us.

But what does that mean for telemedia? The telemedia industry has been selling mobile payments services for years. PSMS is a mobile payment tool and it has been used for 10 or more years by an ever growing number of people. Even the relatively new Payforit scheme is a mainstream mobile payment technology. Why all the hoo-hah about PingIt, Zapp and Paym?

Well they have gained mainstream consumer trust and, let’s face it, having FSA licences so that they can be used to pay for real world things. Of course, were this to apply to carrier based billing on mobile then there are all manner of prizes to be won. But even without the ability to pay for real world goods and items, carrier based payments do have a huge role to play. They are the key to car parking, bike hire, subscriptions, access to things, ticketing (though it’s a moot point as to whether this is a ‘real thing’ or not), wifi access, in game purchases, gambling… the list goes on.

But we haven’t really seen much in the way of capitalisation on this in the past few years. This needs to change. And that is why we are running the mPayments Summit on 15 May to showcase to the widest possible audience of merchants – and the mGambling community that are at the mGambling summit in the same venue – just what can be done these days.

Covering everything from how to acquire merchants to dispelling the myths about payout rates, to customer service to how these types of billing schemes work in media, gaming, charity and other sectors, the event is an ideal opportunity to really push this kind of establishing mpayment mechanic at the world.

With speakers from EE, Three, Vodafone, PPP, AIME, Boku, Oxygen8, txtNation, IMIMobile, ImpulsePay, OpenMarket, Empello, Cognia, and many more, the event is a showcase for the power of existing mPayments and a place where we hope to create the roadmap that will drive forward the way in which not only telemedia services can see new growth, but also to showcase how these established and now very well regulated payment tools can be put to work to help the merchant community and to create really super convenient ways for consumers to pay for certain things.

So why not come and join the debate and sign up for your pass at www.msummits.com See you at The Royal Mint on 15 May for a really fascinating day.

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 Remixes of Wrote for Luck – The Happy Mondays | What we’ve been amused by UKIP frenzy! | Who we’ve been following @Mrskeldon | What we’ve been reading about Adobe After Effects| MAY 2014 will bring... mSummits a-go-go

ADVERTORIAL

JUST A CLICK AWAY We all now know about the value of mobile payments. But even if the reasons why you should introduce mobile payments aren’t new, they are worth repeating.

More people own a mobile phone than own a credit card - so by adding mobile to your checkout options you are increasing your customer base; in many circumstances consumers don’t want to pay with complicated and often fiddly credit card options - so you are creating a smoother checkout experience for your customer; and it is more secure to pay by mobile - your customers are more confident handing over mobile phone details than their credit card number.

All of these mean a greater conversion rate for you.

But did you know even with the added convenience of mobile payments, statistics show that for each extra click you ask a consumer to make there can be up to a 50% drop off rate? Which is why the introduction of Payforit Enhanced Single Click is such a positive step forward for the mobile payments sector.

What is Payforit Enhanced Single Click?

Quite simply it’s a development of Payforit that takes the mobile payment service, backed by all the UK’s operators, to the next level.

“The Payforit community, along with the operators, is working hard to constantly develop and improve the service.

We realised that a single click payment option would help our merchants to increase their conversion rates and therefore profitability, so that’s what we developed,” said Chris Newell, CEO of ImpulsePay. The new development does what it says on the tin: for any consumer making a purchase while on 3G all they need to do is make one click to buy. The system recognises the mobile number of the phone they are using and automatically bills their account - in a similar way to how the 1-click option on Amazon works.

And of course, all the existing Payforit safeguards are in place, but now with increased convenience for your customers.

Why use Payforit Enhanced Single Click?

The main reason is the fact that you can increase your revenues through increased conversion rates. But there are many other reasons too.

If you’re giving people access to your content - whether that content is new dating profiles to review, games to play or content to view through the purchase of credit bundles your customers want to get to the content as quickly as possible. Now you can let them do that - it’s just one click away.

On top of that the single click service gives you greater control over the payment screen - meaning that you can

Chris Newell, CEO, ImpulsePay: always looking to innovate in payments

control the final point of sale marketing.

Finally, whether you want to price something at £4.99 or £9.99, Payforit Enhanced Single Click can offer you complete flexibility over your pricing choices.

All of this, combined with the fact that your consumers only need to make one click, means a smoother process, increased conversion rates and greater revenues for you.

Direct Operator Connections Leading the way with Payforit Enhanced Single Click is ImpulsePay - a company that has been pioneering the whole Payforit service. And they are making further strides by switching on direct connections with all the UK operators.

“We are always looking to innovate and grow the service we can offer to our merchants. Our direct connections will allow us to do just that,” said Chris Newell, CEO of ImpulsePay. “We can now directly tap into the technology within the operators, which allows us to offer further enhancements to merchants.”

An example of the way that ImpulsePay’s direct connections benefit merchants is with dynamic billing - whether you want to price something at £4.99 or £9.99, it is only through the direct connections that ImpulsePay can offer such flexibility over the billing price.

“The direct connections also mean we can work closely with merchants to create better conversion rates for them and ultimately increased revenues,” Newell continued.

Single click purchasing from a directly connected pioneer of Payforit - mobile billing is looking even more attractive right now.

OPINION SMS

How can operators

LEVERAGE A2P SMS

Let’s debunked a myth: SMS is not dying. With Application-to-Person (A2P) messaging growing at 6% CAGR, the real question is: how can operators leverage and monetise this opportunity? In the second part of a major series charting the latest in SMS, Alex Kinch, CEO of Ziron, outlines the new opportunities for SMS SO HOW CAN operators leverage and monetize the SMS opportunity? To reach the answer, we first need to take a quick look back through the history of SMS. When operators agreed to establish a roaming agreement, it was usual to allow SMS to flow between the subscribers on their respective networks.

With the larger operators reluctant to give third parties direct access to their networks for A2P messaging, a handful of new companies – calling themselves SMS aggregators - started persuading smaller operators to allow installation of privately owned SMSCs which would leverage those roaming agreements to reach the larger operators.

The cost of these messages to the aggregator was next to nothing – usually less than half a pence. The aggregators were making money from their clients, the smaller operators were making money from the aggregators, but the operators receiving these messages were losing out, as they were not charging for delivering these messages to their subscribers. The net effect was a huge imbalance of traffic – and, due to the very low cost per message, a massive increase in spam.

After some discussion, The GSM Association acted, and started strongly encouraging the introduction of monetary agreements for the delivery of SMS between operators. It was hoped that these agreements, known as ‘AA19’ after the GSM Association document reference, would not only increase revenue by rebalancing the traffic, but also additionally reduce the amount of A2P spam by dramatically increasing the monetary value of a message.

However, AA19 agreements could be time consuming to implement. Smaller operators didn’t always have the resources to dedicate, and in some cases, larger operators refused to even consider an AA19 agreement unless traffic levels and the potential loss hit a particular threshold. Because of this, cheap ‘grey’ routes emerged, utilising operators that hadn’t signed interworking agreements (or in some cases, even had a roaming relationship with the destination operator), and in some extremes, relied on techniques bordering on fraudulent, such as Global Title address (GT) spoofing.

Since then, interworking agreements have become more prevalent, and decreases in subscriber ARPU have refocused operators onto making up these revenues from other parts of the business. However, that’s not to say the problem has been fixed. In fact, according to the latest Cloudmark Global Messaging report, mobile subscribers in the UK reported an 11% increase in spam SMS in the last quarter alone.

But now the water is being muddied by the advent of good, transactional A2P SMS, which customers want to receive. As many operators are finding that their ARPU is being crushed, the fact that a new revenue stream is opening up is music to their ears. Yet they are in a difficult position - how do they encourage and monetise the good, transactional A2P traffic that customers want to receive, without opening the floodgates for a deluge of spam SMS? The answer is a dual-pronged approach, with quality assurance at the heart. Firstly, operators must start working with trusted SMS aggregators – like Ziron – who carefully screen clients, focus solely on high quality transactional A2P traffic, and aren’t in a ‘race for the bottom’ to increase message volume by driving down market rates.

Secondly, operators must also use revenue assurance and anti-spam technology to analyse, filter and potentially block unscrupulous or spammy message traffic. Providers like Anam are well placed to assist with this – it recently added £50 million to Telenor’s bottom line when it installed its anti-spam technology.

Operators must ensure that they do not work with unscrupulous aggregators who claim they can police access to their network in return for exclusive access for A2P traffic. Deals like this may sound tempting, offering promises of additional revenue in return for no CAPEX or OPEX, but they must be considered with caution. Some operators have found with horror that an aggregator has turned from gamekeeper to poacher, and in a bid to make these promised revenue targets, would often sell A2P access on the wholesale SMS market to other aggregators, with little or no checks on traffic quality.

Whilst there are some really exciting applications are emerging for A2P SMS – e.g. pharmaceutical companies managing drug trials, banks and credit card companies alerting customers in real time of potentially fraudulent purchases, and registering to vote

by SMS, there is always scope for bad A2P messaging to creep in.

Now is the time for operators to act, but corners must not be cut. If quality isn’t prioritised, the dreaded payday loan and compensation SMS will spread like wildfire, and it will be the operator in the firing line as their customers take to social media and inundate their call centres to complain. Increased customer churn is not the answer to revenue leakage.

ANALYSIS BITCOIN

Bitcoin

AND COMMERCE

New research from Venda finds 71% of UK consumers would rather not use Bitcoin to pay when shopping online, but still many do. So what does this mean for e and m-commerce, wonders Paul Skeldon

DESPITE MEDIA HYPE around the future of Bitcoin and highprofile mobile payments providers such as Square and Stripe preparing to accept the virtual currency this year, new research from digital commerce solutions provider Venda warns of consumer distrust of the virtual currency.

The future success of Bitcoin on UK shores looks uncertain, with 71% of consumers reporting that they would not like to have the option to pay using the virtual currency. In contrast, a recent report found that global transactions of Bitcoin have increased over 10 fold over the last year1 to an average $68m per day in February 2014, making the virtual currency a hard trend to ignore for some businesses.

The main concern for 43% of consumers was that they did not trust the virtual currency, although the same number also admitted that they don’t fully understand how the currency works, which could explain the distrust.

This lack of understanding around how new virtual currencies (such as Auroracoin, Litecoin and Peercoin) work was particularly felt among women, with almost half (49%) saying they were unfamiliar, compared to 36% of men. In addition, almost a quarter (24%) of those that didn’t want to use Bitcoin reported that they were concerned that the currency is unstable, potentially meaning that they would worry about possibly paying more for items compared with other payment methods.

In contrast, the main reason UK consumers would like to have Bitcoin available while shopping online was simply that it is a valid currency, therefore should be available (8%). The anonymity that Bitcoin offers appealed to 6% of those polled, who like the fact they can make purchases without having to reveal their identity.

Consumers were also willing to use Bitcoin if retailers were to offer discounts for use of the new virtual currency (5%) or if it meant they no longer had to carry cash (5%).

Eric Abensur, Group CEO, Venda says: “The prospect of new cryptocurrencies, such as Bitcoin, adds a new meaning to ‘alternative’

ways for consumers to pay for their goods, whether online or in-store. Much has been said about these new currencies over the last 12 months, but their growth in media speculation makes them a difficult trend to ignore. However, our research warns of a fundamental mistrust of Bitcoin and need for more education on how these virtual currencies actually work if they are to truly take off. A time may come where consumers can pay in-store using Bitcoin, but for now the fact that the price of a Bitcoin is in constant flux means that it’s simply not a viable way for businesses to take money for products. Even those that are currently taking payment

by Bitcoin for products or services are, by and large, converting that to a standard currency for safe keeping and further use.”

Payment turn-ons and turn-offs The research from Venda, who commissioned YouGov to poll the views of a representative sample of 2,052 UK adults online, also finds that consumers may actually be more likely to make a purchase online if a retailer was to offer an ability to pay once the items were delivered (19%) or reserve an item and pay for it in instalments (13%). The latter is something that would make almost one in five (19%) Welsh consumers more likely to make an online purchase, as well as 17% of people based in Scotland and the North West.

Before adding Bitcoin or new payments options, however, it’s important that retailers make sure they have existing popular ways to pay available through their eCommerce site or risk consumers abandoning their purchase altogether. For example, Venda’s survey reveals that one in five (20%) UK shoppers said that they have abandoned an online purchase for an item that they wanted because the site did not allow them to pay using PayPal. In addition, 11% of those questioned said they have given up on a purchase because their preferred payment option was not supported, for example American Express or payment by instalments (a payment option commonly offered in the US, but not yet seen in the UK).

The power of two Two of the biggest topics in mobile right now are payments and gambling – and the two things are inextricably linked. Gambling firms need to offer as many and as convenient of ways to pay to play, while mobile payments delivered via the phone bill are the obvious way to fulfill these two central demands.

And so, we are bringing together in one location the long-running and highly successful mGaming Summit and the inaugural mPayments Summit so that key industry knowledge leaders from both sides can learn from each other and hopefully make contact and thrash out new designs for gaming services and payment services.

So what do these two Telemedia Power Summits have to offer?

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15TH MAY 2014 Dexter House, The Royal Mint London EC3N 4QN www.msummits.com

GAMING

Hitting a moving target

Turnover through mobile already accounts for well over 40% of the leading online betting company’s business – and it’s surely set to continue growing. As smartphones become ever more powerful – companies with the best mobile strategies will gain the biggest share.

Mobile is now an essential platform for today’s progressive high value “CONNECTED” gambling sector.

Research also suggests that mobile also attracts new, younger more sports-minded customers, whilst still driving higher yields from existing customers. Turnover through mobile already accounts for over 40% of the leading online betting company’s business – and it’ll surely grow as smartphones become ever more powerful.

The channel isn’t just about smartphones either – now revolving around four screens; mobile, tablet, laptop with TV catching up gradually.

Combined with the vast array of new payment mechanisms, direct marketing and CRM tools; companies with robust mobile strategies will gain the biggest markets share. So it’s clear that mobile now has to be a key strategic direction that needs to be proactively developed by all igaming operators. mGaming Summit provides the very best business networking environment to help develop solid revenues through the full range of mobile gambling solutions.

payments Top billing

The latest Global Mobile Payment Index from Adyen, a global provider of international and multichannel payment solutions, shows that mobile payments accounted for almost 20% of all transactions worldwide in December – growth of 55% in a year, up from 12.6% the previous December.

Already worth billions and growing exponentially, mPayments represent an undeniably lucrative opportunity. Mobile users and businesses are now faced with hundreds of different billing and payment options - all purporting to seamlessly enhance the exchange of money in new and innovative ways!

In the battle to win over consumers – who are often perfectly happy with cash and credit, too many payment service providers (PSPs) try to completely “revolutionize the industry”, whilst others pursue minor innovations that have little impact or at best, become minor features in a full-fledged product. So whether it’s mobile wallets from giants like PayPal, Google or Apple, operator billing solutions such as PayForIt and PSMS or one of the many “purpose-built” apps, gadgets and websites – it’s certainly a crowded marketplace where not everyone is going to succeed. mPayments Summit provides the very best business networking environment for PSPs to fully understand the complexity of the market, tackle the challenges, identify the most lucrative verticals and develop the right long term commercial strategies This year mPayment Summit runs alongside mGaming Summit – focusing on how mobile Payment Service Providers can provide the right billing products to the right merchants in the right vertical sectors, and then how to successfully run “compliant” services that genuinely satisfy consumer demand and client expectation.

mPayments Summit Preview 9.00 - 9.10 WELCOME From Conference Chair Paul Skeldon, Editor, Telemedia-news.com 09.10 - 10.00 The payments eco-system – and where your opportunity lies We open by taking a look at the complex world m-payments ecosystem and assess where the opportunity lie today and tomorrow for telemedia mobile payments in vertical markets.

Sharan Rattan, Three Simon Wingrove, EE Jeremy Stafford-Smith, Vodafone David Ashman, Director of Industry Affairs, AIME Mark Collins, Head of Regulatory Development, PhonePay Plus 10.05 - 10.40 Getting merchant and consumer buy in Step one of upping the use of digital payments tech is to whet the appetite of the right merchants and verticals. We take a look at how to: The technologies and mobile payment channels that already exist and how merchants can embrace them with confidence; The benefits of integrating traditional payments methods with more modern mobile engagement techniques to drive revenue via mobile; Understanding how outpayment clarity impacts merchant acquisition; Live case studies 10.05 - 10.25 PRESENTATION Building consumer and merchant trust with technology – featuring live case studies Simon Brennan, Oxygen8 10.25 - 10.40 PRESENTATION How outpayments can seal the deal Chris Newell, CEO, ImpulsePay

10.40 - 11.30 Coffee & Networking Break

15.05 - 15.45 Gaining consumer trust On-bill payments have had 11.30 - 13.00 more than their fair share of Leading by example bad publicity. They are also So who is doing a great job something of a new concept with vertical markets and what to many consumers. Here we are the secrets of their success? look at some of the key sticking We line up a range of key points and how to address players who already have them, including: digital payments services up Security; Data handling; and running and assess what Data security; Branding and they do and why it works. marketing these services – Featuring case studies from: including a look at the impact Charity Chris Cole, OpenMarket of bad affiliate marketing; will discuss how the charity What and the relevant rules sector has led the way in and regulations you need to be m-payments and what lessons aware of?; What is the best way can be learned to meet these?; The views of Retail Speaker TBC, EE will PPP, Ofcom, FSA and more that discuss how its Connected can help shape what you do?

Retail - will discuss how its Connected Retail strategy has 15.05 - 15.25 been implemented at Asda PRESENTATION What are the Gaming Ian Woodgate, Business rules and regulations Development Director, txtNation Outlining its research into explains how carrier billing and consumer trust and what the Payforit can aid gaming and rules are around m-payments gambling in all sectors, industry regulator PANEL What can other sectors PhonepayPlus sets the scene learn from these examples?

Mark Collins, Head of Regulatory Ian Woodgate, Business Development, PhonepayPlus Development, txtnation 15.25 - 15.45 Simon Wingrove, EE PRESENTATION Auditing PSMS Chris Cole, OpenMarket and Direct Billing 13.00 - 14.30 94% of PSMS billed services are Lunch & Networking pretty robust, but work goes on to make it even better. We take 14.30 - 15.00 a look at research into 2500 UK Focus on m-Gambling PSMS services and how they With the m-gambling summit perform running alongside the Jeremy Flynn, Empello mPayments Summit, we take a look at the specific demands 15.45 - 16.15 of this sector, which is ripe Coffee & Networking Break for using digital payments for 16.15 - 16.45 quick gratification. Come and hear from leading m-gambling Customer service Running digital payment providers about: What they need from payments; services for any vertical market sector requires a ever more The specific challenges of their sector; The rules and careful handling of consumers regulations of the gaming and of clients. We address some of the key issues with sector as they pertain to delivering customer service to payments both, including: Craig Marston, Cognia

Handling complaints; Handling bill shock; Strategies for mitigating refunds and charge backs; Managing data around consumers and clients alike PANEL Chris Newell, CEO, ImpulsePay Sharan Rattan, Three Simon Wingrove, EE Rory Maguire, Managing Director, AIME 16.45 - 17.30 Other payment sector tech – friend or foe?

Mobile payments is one of the hottest topics in mobile and it is a hot and crowded space. We start to wrap up the summit with a look at what kinds of technology and services your digital on-bill payments are up against and where they are likely to be winners and losers.

Including overviews of: Jon Prideuax, Chief Business Officer, Boku Speaker Name TBC Yoyo Speaker name TBC, Znap Andy Campbell, founder, Emu.me 17. 30 - 18.00 Future proofing your strategy With such a crowded and complex market – and one that is attracting such a lot of investment heat – you have to box-clever to really develop a future proof strategy for your payment tools. So where is the market going and what can you do to stop its boil-over burning your spuds? We hear from investment experts and leading mobile strategists.

PANEL Ian Woodgate, Business Development Director, txtNation Tom Broadfoot, IMI Mobile David Ashman, Director of Industry Affairs, AIME Chris Newell, ImpulsePay Mark Collins, Head of Regulatory Development, Phonepay Plus

mGaming Summit Preview 9.00 - 9.10 WELCOME From Conference Chair Michael Caselli, Editor-in-Chief, iGaming Business

of your hand.This session addresses the dominance of mobile play in the social casino-gaming space and looks at the trend of social games on the go and its implications for 09.10 - 09.40 operators and suppliers. mGaming Overview Michael Jones, Director, Illinois Snapshots, Trends, Predictions Lottery and the Numbers This session will look at the 12.15 - 13.00 current state of the mobile Mobile First: A case study from betting and gaming industry LeoVegas and will extrapolate current This is a Case Study on trends into future revenue LeoVegas; who used a mobile and growth. This session will first strategy to successfully help identify and quantify gain market share in an tomorrow’s opportunities and overly crowded and highly draw a picture of the future of competitive online gambling mobile. market despite being a late Aideen Shortt - Gambling market entrant to iGaming.

Consultant Johan Styren, CEO, Leo Vegas 09.40 - 10.40 Innovating in mobile gaming Mobile is now a standard, not an innovation; but that doesn’t mean that there can’t be radical innovation in mobile gaming. We will look at three new and disruptive innovations in motivation that may turn the industry on its head.

Andrew Hughes, CEO, Abzorba Games Alex Czajkowski, eGaming and eCommerce Marketing Director, Agencylex Leigh Nissim, Commercial Director, IGT 10.40 - 11.30 Coffee & Networking Break 11.30 - 12.15 Lottery and Mobile: The Perfect Match The future of Casino-Style Social Games is in the palm

13.00 - 14.30 Lunch & Networking 14.30 - 15.00 Mobile Payments: The groundwork being laid for your future The mobile payments landscape is rapidly changing in response to a new and unpresidented flush of mCommerce. This panel will ask some the leaders in mPayments what are the hurdles today and what they have planned for the future of mCommerce. Additionally, this panel will discuss the unique issues surrounding iGaming payments, will explore new alternative payment mechanisms including Bitcoin and will explore Pay By Mobile billing.

Ben West, Senior Product Manager - Mobile, Worldpay

Jon Prideuax, Chief Business Officer,Boku 15.00 - 15.30 PRESENTATION Keeping Your Players Engaged Through Mobile Analytics and Push Messaging Push notifications are quickly becoming the player communication method of choice for operators with published mobile apps. Look towards the latest trends to see how effective they are in order to increase player engagement and brand loyalty. Learn why it is crucial to integrate mobile analytics into your app and how to best understand your mobile audience.

Dorothy Creaven, Co-Founder & CEO, Element Software & Element Wave 15.45 - 16.15 Coffee & Networking Break 16.15 - 16.45 PRESENTATION Mobile and Social: The growth of Social Gaming on Mobile Cross-promotion can be the most effective traffic source for mobile gamers. When done correctly Cross-Promotion creates a win-win situation that will not only bring you qualified traffic, but will improve loyalty and brand awareness. On the flip side, when done wrong results will be disastrous.

Andrew Hughes, CEO, Abzorba Games Raf Kuesterman, CEO, Plumbee Simon Burrell, Bettor Group

16.45 - 17.30 Mobile Game Design, Implementation and RETHINKING EVERYTHING! Successful mobile game design is about forgetting what you think you know, and starting fresh from concept through to publication.

Hear from some of the best mobile game designers in the business about what makes good mobile content, what make good usability and what everyone is doing wrong!

Learn the practicle differences between designing for tablet and designing for smartphone, and walk away ready to make some dramatic changes in your business.

Shaz Mirza, Chief Technical Officer, Gtech Alex Cohen, Chief Product Officer, Akamon Entertainmen Liam Houghton, Chief Product Officer, Betfuze 18.00 mGaming Evening Please join us for networking drink after our mGaming Summit! This will a great chance to meet speakers, exhibitors and delegates from the day and enjoy the evening.

Open to all mSummit participants The Dickens Inn

Please note: This is a guide to what is taking place and should not be used as a show guide as timings will change between going to print and the event taking place

Telemedia Industry Directory Masvoz Spanish leading provider in Voice Services, Micropayments solutions & Sms services

Contact: Carlos Jiménez. 0034 902 500 807, carlos.jimenez@masvoz.es www.masvoz.es

Oxygen8 Global Billing, Communication & Mobile Services from Worldwide Offices

Contact: 0808 206 2062 E-mail: sales.uk@oxygen8.com www.oxygen8.com

Nord Connect Ltd International PRS Numbers, Fast Reliable Payments, Competitive Rates, Worldwide Access

Contact: sales@nordconnect.com www.nordconnect.com

Felix Telecommunications IPRN, Audiotext, Premium Rate & SMS Solutions

Contact: Ryan Darwin, sales@felixtelecom.com www. felixtelecom.com

telequest & Internet Solutions GmbH !!! Domestic Numbers Worldwide !!!

Contact: 00800 102 502 22 or info@telequest.com www.telequest.com

Triton Global Business Services Direct Carrier Billing, Premium Fixed, Voice Short Codes, Participation TV

Contact: Martin Grace: +1 403 259 7575, mgrace@tritonglobal.ca, www.tritonglobal.ca

Goodman Associates Advertising: digital/search/social, TV, Radio, Press & Outdoor – we make it happen!

Contact: +44 (0)845 225 55 55, mail@goodmanassociates.co.uk www.goodmanassociates.co.uk

Viatel Specialist for Premium Rate Number in Scandinavia Sweden • Norway • Finland

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Kwak Telecom Ltd Leading provider of International payouts numbers & domestic premium rate numbers

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Text121Chat Premium Rate Operators Services

www.text121chat.com

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Enarpee

Orca Digital

Global Regulatory/Compliance/Service Audit and support services organisation

UK’s leading provider of interactive platforms for mobile, web and TV

Contact: Neil or Paul on +44 844 357 3938 or email info@enarpee.com ww.enarpee.com

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Contact: hello@orcadigital.com // 020 8819 5710 www.orcadigital.com

Heart Communications UK 24/7 Call Centre handling inbound and outbound calls

Contact: admin@heartcommunications.co.uk, Tel 0844 745 1915 www.heartcommunications.co.uk

Telemedia Industry Directory Teslatel Srl Licensed operator offering Premium, unique and toll free numbers.

Intelligent network services.

Contact: Vincenzo di Stefano, E. vincenzo.distefano@teslatel.net T. +39 335 6289544 www.teslatel.net

Preferred Telemedia

Preferred Telemedia is a leading VoIP Solutions, providing Premium numbers, wholesale, callcenters ..

Contact: Tel (+961)-1352691, contact@preferredtelemedia.com www.preferredtelemedia.com

Sundial Telecom Voice, Fax, Web, WAP & IM integration

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International Premiums IPRN, IVR, Live Stats, Audiotext, Highest Payment, Daily Payment, Micropayment, Sierra Leone, Guinea, Somalia

Contact: info@interprems.com, Tel +961 1 795016 www.interprems.com

ImpulsePay The UK’s newest directly connected API. Payforit & Direct-to-bill technology

Contact: office@impulsepay.com, tel: +44 (0) 20 7099 2450 www.impulsepay.com

txtNation Mobile, Billing, Payments, Content, WAP, SMS, MMS, IVR, Phone, Credit Card

Contact: Michael Whelan, E. m.whelan@txtnation.com T.+44 (0) 1752 273491, www.txtnation.com

IMI mobile

Crazy4Media

The leading global specialist provider of cloud-based mobile data infrastructure and mobile technology

Mobile marketing, Mobile advertising, Online advertising, Video streaming, Mobile Databases

Contact: Tom Broadfoot, tom.broadfoot@imimobile.com Mob +44 (0)7500 700 665, www.imimobile.com

Contact: Alex Hind , Tel +34 954 98 08 48, alexhind@froggie-mm.com, www.froggie-mm.com

Digital Select Ltd

VoiceBlade

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Provider of quality wholesale & retail telephony applications

Contact: info@digital-select.com, Tel: 02071939700 www.Digital-Select.com

Contact: Tel 0800 031 9141 or email sales@globaltelecall.com www.globaltelecall.com

Core Telecom

Luv2Chat

Non Geographic Numbers, SMS Services, Call Management Solutions, BT Wholesale, Carrier Pre-select, Indirect Access

Britain’s Favourite Live Chat Provider Great Hold Times, Unbeatable Retention

Contact: t: 0844 504 0000, e:info@coretelecom.co.uk www.coretelecom.co.uk

Contact: Richard Smallbone, Tel +44 (0) 1903 884245 Email: richard@luv2chat.com, www.luv2chat.com

List your company here... contact Jarvis on Jarvis@telemedia-news.com, +44 1444 831 909