Telemedia Magazine

making interactive media pay

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IN THIS ISSUE

ISSUE 38 | £4.99

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Striking a balance

In an exclusive interview with Telemedia magazine, PPP head Joanne Prowse talks about the changing role of the regulator

19

Regeneration game

FEATURING

Paul Skeldon assesses what’s in store for TV as interaction gets ever more sophisticated

PAYMENTS

20% of UK shoppers will spend £9.3bn shopping on mobile while they commute

E-commerce, second screens and social all drive m-payments

More than a fifth of all UK online shopping sales now take place during people’s daily commutes, according to new data released by Zapp and the Centre for Economics and Business Research (Cebr).

MEF study shows where the key places charge to mobile can thrive in the digital world

‘Commuter Commerce’ now accounts for £9.3bn each year, as consumers take advantage of faster mobile browsing speeds, and the increasing availability of WIFI on public transport, to shop between stops on their smartphones and tablets.

Each commuter spends £36/week on average, rising to £44/week for London commuters. Overall, the amount spent by commuters in the capital accounts for nearly two-thirds (£5.9 billion) of the total spend.

Clothing tops the shopping lists of most commuters: almost three quarters of Brits (71%) commuting via public transport report that they purchase clothing online

>> 11 PAYMENTS

Emerging Payments Association launches m-pay incubator during their commute in an average week.

Entertainment media are the next two most popular items, with 68% paying for digital downloads during their commute on an average week, and 65% spending on other entertainment media (such as DVDs, CDs, books etc.). Groceries (62%) and takeaways (60%) also featured highly.

The most popular reason for shopping >> 4 MESSAGING

Traffic from mobile & online messaging to reach 438 billion per day by 2019 New data from Juniper Research has shown that mobile and online messaging traffic will reach 160 trillion per annum by 2019, up from 94.2 trillion this year – equating to approximately 438 billion messages sent and received by users on a daily basis by 2019. These figures incorporate SMS, MMS, IM (Instant Messaging), Social Media and Email.

PAYMENTS

Last year, email accounted for the largest share of traffic, at around 35 trillion messages per year – although almost 80% of this figure (28 trillion) can be categorised as spam.

However, within the next 12 months IM will overtake email generating almost 43 trillion messages annually.

The research – Mobile & Online Messaging: SMS, RCS & IM Markets 2015-2019 >> 4

Payments trade body backs m-payments with the launch of incubator for new payment tech companies

>> 11

PAYMENTS

Death of cash greatly exaggerated But change is coming… survey shows that m-payments won’t replace good hard cash, but they will help augment it

>> 12 PAYMENTS

Where do we go from here?

Paul Skeldon takes a look at where charge to mobile goes next and how to get it there >> 17 PAYMENTS

The Interview John BaRoss is looking to set up a global ‘carrier commerce’ association to champion the industry worldwide. Find out why and how you can help >> 18

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learn more at www.premium-rates.com

REGULATION

13th Phonepay Plus Code of Practice comes into force with some substantial changes and more to come Phonepay Plus has published its long awaited 13th Code of Practice and has enshrined a number of key changes to the code that signal ever-more willingness from the regulator to work with the industry to allow for innovation and growth while protecting consumers.

Key changes in the code include: • A new rule requiring providers to possess any qualifications and/or licences necessary in law before operating a PRS. • An updated rule on the requirement not to take advantage of vulnerable consumers.

• The removal of any spending caps currently contained within the Code or prior permission regimes – with the amounts and actions associated with them to be set outside the Code.

• The raising of the “forced release” cap on live chat and

sexual entertainment services from £30 to £45 per call (incl.

VAT) – with new requirements to inform consumers clearly when they have spent £15 (incl. VAT) and require them to clearly opt in to continue when they have spent £30 (incl. VAT).

• The raising of the single purchase cap, and monthly subscription cap, on Children’s Services from £3 to £5 (incl.

VAT), and a new purchase cap for Children’s Services of £20 (incl. VAT) per service in any given billing cycle.

• The removal of a universal requirement for all PRS to supply and promote a non-PRS UK phone number for consumer enquiries (but to maintain appropriate and effective free or low-cost complaints processes).

• The introduction of Special Conditions to apply to defined higher risk service types – these will replace existing

“prior permissions” regimes.

The removal of spending caps and other amounts and actions previously found in the body of the Code has been made possible by a new framework for imposing such caps, thresholds and actions as required. This is set out at section 3.12 of the Code.

PhonepayPlus published the first Notice of caps, thresholds and actions on 26 March 2015 and the requirements set out in that Notice take effect as of today.

The changes to the Code also led to a full consultation on new Special Conditions for a range of service types that PhonepayPlus considered to pose a higher level of risk. The framework for Special Conditions is found in section 3.11 of the Code, and the introduction of Special Conditions is to make sure those risks are managed and achieve high compliance standards.

The full collection of Guid-

ance includes both those items consulted upon earlier this year and the existing Guidance which continues to offer effective advice for compliance with the 13th Code. Those items of Guidance that have been transferred across to continue to support the 13th Code have had minor factual amendments to present correct information and clear paragraph numbering from the new Code.

Industry body AIME has welcomed the new code, but warns that “The PhonepayPlus 13th Code of practice becomes effective today, and it is important that you are familiar with the changes. The largest change was to introduce Special Conditions as an alternative to existing Prior Permissions but this is not a direct swap in-out and some new conditions have been added to the service types and outdated conditions removed.”

ADULT

Adult video use to grow to 136bn views globally in 2015 The demise of adult might have been called wrong, with new data from Juniper Research predicting that use of video – to watch and to chat – is set to grow, however revenues are going to edge up rather than explode.

The new data from Juniper suggests that more than 136 billion adult videos will be watched in 2015 alone, with this set to grow to 193 billion by 2020. On a global scale, each smartphone user of adult content is expected to watch an average of 348 videos this year.

Overall, video views are forecast to grow by almost 55% by 2020. While there will be a marked increase in usage levels in developing markets, net growth will be greatest in the US, with other mature markets – such as Western Europe, seeing a more modest increase. In developing regions, service uptake will be

rapid, driven by increasing availability of 4G and Wi-Fi, as well as increases in smartphone and tablet ownership.

Juniper’s latest research, Digital Adult Content: Market Trends, Forecasts & Revenue Opportunities 2015-2020, found revenue growth to be steady rather than spectacular over the next five years, but specific niches such as videochat and web cam offerings will outperform the overall sector.

The research observed that such services were being monetised on a subscription rather than pay per view basis. It cited that a significant proportion of users preferred to revisit the same

hostess as a rationale underpinning this trend.

Meanwhile, the research noted that in both developed and developing markets, the number of customers taking out ‘solus’ mobile subscriptions would increase. However, it cautioned that subscription revenues would begin to decline by 2020 due to the continued prevalence and accessibility of free content.

The report also finds that Adult SMS will continue to see a severe

decline in revenues, with the majority of usage occurring in the Indian Subcontinent. Content delivered as augmented reality will see growth across the period, although usage will remain the preserve of a niche user base.

The whitepaper, Digital Adult Content ~ For Your Viewing Pleasure, is available to download from the Juniper Research website together with details of the new research and interactive dataset.

Making interactive media pay

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COMMERCE

MESSAGING

Beacons on buses will fill empty commuting hours with ads to drive m-commerce 500 London buses have been fitted out with beacon technology to deliver information and entertainment to 300,000+ London bus-riders every day.

The solution, developed by Exterion Media, Europe’s largest privately held Out-of-Home advertising business, in collaboration with Proxama, an international mobile proximity marketing company, uses Bluetooth Low Energy (BLE) beacon technology to send targeted in-app messages to London commuters’ mobile devices.

This creates an opportunity to deliver highly contextualised messages at moments when they’re most receptive, which, when combined with Out-ofHome (OOH) advertising, can prompt immediate action.

This announcement comes after a successful six month beacon trial on 110 buses in Norwich, which saw 30% of users clicking through from receipt of notification and 2,000 app downloads.

The average journey on a bus in London is estimated to be between 17-19 minutes – with some journeys taking considerably longer. This provides passen-

gers with the time and opportunity needed to respond, interact, view or redeem offers delivered direct to their mobile phones.

This mobile popularity and the lengthy journeys makes beacons on London buses an attractive channel to deliver extended consumer engagement to audiences on the move.

“The trial in Norwich and our partnership with Exterion Media showed us that consumers are open to receiving content via their mobile devices while they travel, so we expect to experience a similar level of success once we roll out across London.

By ensuring that content pushed to users is relevant, personal and received at the right time, beacons are set to enhance Londoners’ commuting experiences.” says John Worley, CEO of Proxama Marketing Division.

by £1.5 billion annually and tipping the national total over £10 billion.

Commenting on the research findings, Peter Keenan, CEO of Zapp says: “From doing the weekly shop to buying tickets for a gig, commuters are becoming increasingly comfortable with shopping on their mobile devices wherever they are. But fishing out your credit or debit card and then tapping in a long sequence of numbers does not represent the ideal checkout experience on a packed train. If commuter commerce is to continue to flourish we need faster, safer mobile payment methods.”

Rob Harbron, Managing Economist explains, “People in Britain spend more online per head than any other nation, and it seems our love affair with online shopping

now extends to the morning rush hour. The data shows that commuter commerce is booming in the UK as savvy commuters use their time efficiently to make the purchases they normally don’t have time for.

We estimate that making the mobile checkout experience faster and safer could boost spending by £30m each week.”

Later this year, Zapp is launching ‘Pay by Bank app’, which lets consumers make instant mobile payments to retailers directly from a bank app. Banks that have already announced their support for Pay by Bank app include HSBC, first direct, Nationwide, Santander and Metro Bank.

Zapp is also being supported by some of the UK’s biggest retailers such as Sainsbury’s, Asda, House of Fraser, Thomas Cook and Shop Direct.

PAYMENTS

UK shoppers << 1 online while commuting is ‘just to pass the time’, followed by it being the most convenient time to shop. Many busy professionals are also taking advantage of ‘click and collect’ services, which allow them to pick up their goods later.

The peak morning rush (from 7am until 9am) sees the biggest spike in shopping, when 1.5 million commuters are estimated to be shopping.

If you got on the 7:32 from Brighton to London this morning, it is likely that almost a third of your train would have been using their mobile device to shop.

The Cebr report concludes that quicker and safer ways to pay could persuade 730,000 people to shop online during commute for their first time, helping boost overall spending

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More news, views and analysis at www.telemedia-news.com

Mobile messaging << 1

– observed that the negligible cost of IM services had led to significant migration from SMS. It noted that service providers such as Tencent’s QQ, WhatsApp and WeChat now had more than 400 million active users, with WhatsApp reporting in excess of 30bn messages sent per day.

Meanwhile, social media sites such as Facebook, Twitter and Instagram are continuing to experience sharp uplifts in usage, with Facebook alone now seeing more than 5.8bn posts, likes and comments per day.

However, the research found that enterprises continued to regard A2P SMS as more reliable and secure than IM for services such as verification and notification, driving A2P revenues to more than $70bn by 2019, up from $62.8bn this year.

The report also finds that Many OTT messaging players are in the process of diversifying their offerings across markets as diverse as food ordering, taxi bookings and payments. Examples would include Snapchat with their ‘Snapcash’ service, and LINE’s LINE Pay. MNOs have been slow to implement RCS (Rich Communications Services), which will enable the provision of enhanced messaging services, although the recent availability of joynenabled smartphones allied to greater commercial deployments should significantly boost traffic in the medium term.

The whitepaper, Sending Out An SMS…, is available to download from the Juniper Research website together with further details of the research and Interactive Dataset.

FROM THE EDITOR

THE BIG GUY Paul Skeldon paul@telemedia-news.com ART DIRECTOR Victoria Wren victoria@wr3n.com CONTRIBUTORS & CONSULTANTS Rory Maguire, Toby Padgham, Chris Newell, Edward Boddington, John Strand, Peggy Ann Salz, Bruce Pharoah, Paul Dunone, Jarvis Todd, Sheldon Johns, Mark Birkett, Eric Feltin, Tim Green SALES & MARKETING info@telemedia-news.com PRODUCTION DIRECTOR Annika Micheli annika@telemedia-news.com PUBLISHER Jarvis Todd jarvis@telemedia-news.com TO SUBSCRIBE www.telemedia-news.com CIRCULATION ENQUIRIES Ellie Gold ellie@telemedia-news.com WHAT WE’VE BEEN LISTENING TO Dr Hellier, James Grab Your Life, Viki Vortex & the Cumshots WHAT WE’VE BEEN AMUSED BY Kingsmen WHO WE’VE BEEN FOLLOWING @WindsorJohnHolden WHAT WE’VE BEEN READING ABOUT Sapiens, Yuval Noah Harari AUGUST 2015 WILL BRING...

Talks to change Part 4 of the Code TELEMEDIA MAGAZINE is published five times a year and circulated in print to qualified readers and downloaded in digital format to 12,000+ requested readers.

BUSINESS ADDRESS: Ground Floor, Virginia Cottage, Nash Lane, Scaynes Hill, West Sussex, RH17 7NJ, UK. Web: www.telemedia-news.com Overseas subscriptions and non qualified readers can obtain Telemedia Magazine with an annual subscription rate of £15 / 20. Refunds on cancelled subscriptions will be provided at the publisher’s discretion, unless specifically guaranteed within the term of subscription. © World Telemedia Ltd. All rights reserved. No part of Telemedia Magazine may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording on any information storage or retrieval system without the written consent of the publisher. The contents of Telemedia Magazine are subject to reproduction in information storage and retrieval systems. Repro and Print by Trio Offset

The journey is the (payments) trip As we all look forward to our summer holidays, the last thing many of us want to consider is how our daily commute may change: for the next few weeks we don’t need to worry about that. But the daily commute is where it’s at in mobile commerce, mobile advertising and mobile payments.

In fact, the daily grind of my train or bus is actually shaping up to be the nexus of mobile advertising, commerce and payments.

As our lead story in this issue shows, consumers are going to be spending more on their phones as they shop on their way to and from work. In fact, they are going to be doing this to the tune of £9.3billion this year according to the Cebr.

Much of this is prompted

by the now 70% penetration of smartphones, better network connections – and of course the fact that commuting is really boring and, if you are like me, usually delayed.

But this commerce is only part of the picture. Until now, most commuters would use their commuting time on mobile to browse, often then buying – or forgetting to buy – things they saw once they were in front of a PC at the office or at home.

However, we are seeing an increase in the use advertising on trains and buses to get them looking. And now, thanks to a deal with London Transport, buses in the capital are going to start to push messages to consumers using beacons.

This is the crucial closing of the circle: now there is an immediate

call to action on the device and there is likely to be an upsurge in m-commerce on buses. It is going to be so immediate that, so the theory goes, more people will simply buy there and then.

But this all hinges on the payment mechanisms available to them. There has been a lot of talk in the US in the past few weeks about buy buttons and whether or not consumers want them. They are, in my mind, an essential part of the process. Message them, direct them and give them an easy way to pay. Job done.

Paul Skeldon. editor

Making interactive media pay

5

REGULATION

2015 is a big year for PRS: regulation is hitting it from all sides. And the industry has to rise to the challenge and play its part to make sure it gets the regulation it needs, not what is forced upon it. Toby Padgham, Director, Monitoring Compliance Partners (MCP) and Executive Director, AIME, explains

Rules, rules and more rules Every few years the premium rate services (PRS) industry seems to reach a cross roads and 2015 appears to be just such a year. Things usually come to a head when technology convergence and commercial opportunity create space for the keen business to grab market share, only for regulation to catch up ‘with appropriate and proportionate regulation’.

And 2015 is a big year because there’s unprecedented regulatory change in the number, speed and nature of regulatory forces touching PRS – their complexity and interplay - PSD 2, E-Money 2, CCR, Ofcom NGCS, PPP Code etc. Technically, implementation of some of these rules are preand post-2015, but they remain a conscious business consideration now, and to many an absolute headache of acronyms.

In addition, premium rate as a payment mechanic is increasingly becoming detached from the traditional service designed around the handset, to compete alongside other micropayment mechanics which serve a broader content/service space.

This creates a debate around who regulates – FCA (financial) or Ofcom/PPP (Comms)? We should have a new Comms Act now but all has gone quiet since the shelving of the DCMS Green Paper in 2012. Should we even be discussing a ‘Premium Rate Industry’, isn’t it purely a payment mechanic? To a certain extent we’re in limbo waiting for someone else to lead.

So, back to my question and what you should do to ensure

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money is invested wisely in regulation and your interests are protected.

Macro-Regulation As a single business, you can’t hope to carry significant influence over how European and national regulations are implemented and what may trickle down to PRS regulations. You should be aware of any impact – including unintentional impact – at a drafting stage and lobby with a collective to ensure they are appropriate, proportionate and can create the necessary framework for business growth.

A great example of limited network/‘digital’ exemption success, is the collective membership influence brought to bear by AIME, liaising with Mobile Broadband Group and PhonepayPlus, and lobbying multiple European trade bodies and regulators to understand the potential impact of the withdrawal or narrowing of the limited network exemption (essentially exempting PRS) from full financial regulation.

Then working closely with the UK Treasury to continue the lobby, it looks like a good result with how the exemptions are now drafted. If this hadn’t been the case, we could be closing the door on most of the PRS infrastructure and services very soon.

In the UK there are 7 regulatory bodies whose rules have a bearing on PRS. As previously stated, financial (FCA) and communications (Ofcom) regulation are at a cross roads on who takes the lead on micropayments – both sets likely to be

updated under the new parliament. This may have a massive impact on your business but of a more immediate need is strong representation at a more local PRS level where rule making seems to be becoming even more complex. So, if the collective market doesn’t join together and invest in its future – you may as well pack up and go home.

Micro-Regulation We all talk about how regulation needs to be tech neutral, principles based, outcome etc, but the reality appears to be that, as PPP moves further towards outcome, MNO Rules become more detailed and complex, overlapping between themselves (MNO Codes, Payforit, Subs Code).

MNOs have a tricky job of balancing their bigger corporate customer satisfaction objectives with maintaining revenues.

We are at a point where traditional PRS revenues have shrunk, but yet in an age where consumers love a good bet and also love a good rant afterwards, the comms channels today throw their doors open to more complaints from customers not entirely satisfied (some with good reason, others not). Not good when forward thinking Industry looks to the future of charge to mobile as a significant opportunity for convenience / low cost purchases alongside other mainstream payment mechanics.

The call here is for principleled rules, with a core build upon basics such as Consumer

More news, views and analysis at www.telemedia-news.com

Contract Regulations (CCR).

The consideration for MNOs is whether they split services and how they’re regulated – new charge to mobile services based on principles and more prescriptive rules for traditional services, where the potential for consumer risk may be deemed higher.

Whatever the best way ahead, market players need to invest and have their voice heard, not just through AIME membership or other counsel, but with their own time to respond to PPP and MNO consultation on rules. We need proportionate rules, well thought out, not rushed through – but most importantly consistently applied. It also requires good ethics and responsibilities from merchants to follow principles, rather than working around rules.

In summary, whether it is tackling more local PRS Rules or the macro regulations that shape the regulatory framework to do business in, we need a level of investment from companies and individuals. No longer can a company just focus on making money, but with some investment in regulation and representation they can alleviate some of the rules safe in the knowledge that they have a good support structure for doing business. Every company has a part to play.

With the right rule framework and with some of your time, and a limited amount of money, we will have a better platform for market growth and can focus on wider issues to create a sustainable business environment.

photo: comedy_nose on flickr

REGULATION

A hot day for regulatory change July 1st was both the hottest day in the UK thanks to the warm air coming up from Europe (see, not everything from Europe is bad), but it was also the hottest day in the regulatory calendar for changes to non-Geographic numbering thanks to Ofcom, premium rate regulatory requirements thanks to PhonepayPlus and the changing consumer face of the regulator thanks to collaborative efforts between AIME and PhonepayPlus.

Up to June 30th, if you were a consumer trying to link the information on your phone bill with a transaction you may have conducted (see my other article for the real immediate reaction), you may have a hard job without the relevant tools. After all, most services are billed using a long 11 digit number, short code (5 digits), long shortcode (7 or more digits) or a combination of a very short description and a phone number (if you recognise it as such). If you get

to PhonepayPlus web site, to use their number checker, right next to the results was a big red “Complain” button. Consumer behaviour predictably errs towards the complain button (we do as a nation complain about being too hot, too cold, too wet etc) but if consumers spoke to the person who provided the service, a lot of memory gaps can be completed and consumer satisfaction increased.

On July 1st, out went the Complain button and in came “How can we help?” Click on this and there are a series of information sections that explain how you may have used a premium rate service and that you must speak to the provider of the service first before contacting PPP. Call them and you get the same response, you must speak to the provider first.

On the same site is an FAQ section and a Solution Centre designed to help consumers understand even more the potential reason for charges to their

phone account. And they are the real-truth opposite of every possible premium rate myth that you can find on the internet that in themselves, mislead consumers. Search for Payforit on the internet and you may get some misleading information that other consumers have blogged to say “it’s a scam”.

Look for Payforit on PhonepayPlus solution centre and you get the facts. One day, the facts will rank higher on search engines than the myths.

Read the facts in the PhonepayPlus website, they make very interesting reading. Check out the new PhonepayPlus web site and call centre, there is a sea change going on and it’s all good.

Now the most interesting part? Most of it was written by the providers of the services and AIME. As a public demonstrator of industry and regulator working collaboratively to improve the industry and consumers environment, it stands tall.

July saw the hottest weather of the year so far – and it saw a cyclone of regulatory changes that have huge impact on the charge to mobile space. Rory Maguire, Managing Director of AIME explains what happened and forecasts where it could lead

Making interactive media pay

7

REGULATION

Striking a balance Following the judicial review last year and changes at the top there have been calls for telemedia regulator Phonepay Plus to change or to go, But can it change, or will a radically altered PRS market force it to change or die anyway? Paul Skeldon meets Acting Chief Exec Jo Prowse (pictured left) to find out

PPP’s Prowse: Changing the culture?

On the face of it, the music business and the premium rate regulation wouldn’t seem to have much in common. I alone probably turned down being a rockstar to work in it. However, Jo Prowse’s background in music royalty collection has stood her in good stead for her role as Acting Chief Executive at Phonepay Plus.

The ways of dealing with musicians are much the same as handling telemedia companies: some are small, sensitive singer-songwriters and others are massive multinational corporations. Striking a balance between all their needs and getting the job done is the same in both industries.

And Phonepay Plus is, so Prowse tells Telemedia magazine when we meet in her office, all about striking a balance these days. “Consumer outcomes are at our heart, but consumers have shown that they want PRS and that they value the service, so the balance is helping industry introduce innovative new services.

We have to strike that balance,” she says, adding: “There has

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been a shift in customer behaviour which is seeing PRS compete in new ways so promoting innovation is key.”

In other markets, regulators are often much more championing of the industry they oversea, driving innovation and then making sure that it fits with the regulations. There has been a tendency at PPP to perhaps often do it the other way round.

But Prowse asserts that, post the judicial review, there is a growing level of mutual trust between the industry and the regulator, and that processes and procedures are changing to make the relationship between regulator and industry more productive, rather than one that sees PPP acting as over zealous headmistress to a class of unruly school boys.

“There are lessons to learn from the judicial review and I like to look at it as an opportunity to make it work better,” Prowse says. “Some of the issues had been identified before the case and work was underway to address certain aspects of our procedures and processes, but lessons have definitely been learned.”

Prowse points out how the 13th Code, published and put into practice on 2 July this year, encompasses some of these changes, but that, rather than rush things, “[PPP] is now going to start looking in more detail at Part 4 of the code: the investigations and adjudications part as this needs an overhaul.”

Part 4 is the key part of the

code that was effectively at the heart of the judicial review sparked by Ordanduu back in 2014 and ruled on at the start of the year. There is a real and pressing need to take a look at how emergency procedures are applied – and when – and how cases are judged. The High Court was quite scathing about this and an overhaul is overdue.

“This should be ready by 2016,” says Prowse. “We need to ensure transparency and independence in adjudications, but we also need to look more closely at advice and help to people if they are being investigated and adjudicated; we need clear and accessible routes through tribunals and so on and their rights need to be made clear. We are trying to take a holistic view of this and at the moment everything is on the table.”

A Change in Culture This marks a significant shift in the culture of Phonepay Plus, at least outwardly. There seems to have been a shift at the regulator. The arrival of Prowse – who wasn’t part of PPP when the issues that resulted in the judicial review occurred –and the departure of the Chairman, Andrew Pinder, have neatly drawn a line under ‘the old order’ and there is now a golden opportunity to change things for the better for all concerned.

And there seems to be a real willingness to work with the industry to not only try and help drive innovation and help propel PRS into new sectors,

More news, views and analysis at www.telemedia-news.com

but also to address some of the issues of old with how regulation works. A good working relationship with industry body AIME has been part of this process, Prowse notes, but also working more closely with other regulators is also having an impact.

“We work closely with Ofcom, but we are also talking a lot to FSA, ASA, PSR, CMA, ICO and many others – not to mention the MNOs – to try and understand where who’s regulatory remit begins and ends and how to make it all work together,” says Prowse.

“We want to be all be complimentary to each other and not make it a regulatory nightmare to work with.

Is there too much regulation? There is regulation in place for a good reason: the industry needs regulation – any industry does – and the market needs good regulation. Everyone recognises that and we are trying to make it targeted, focussed and light touch.”

Whatever cultural changes are needed at Phonepay Plus, it is likely that changes in the very market that they regulate will also force the regulator to change how it operates. We have already seen this with the trial of targeted exceptions around Google, where PPP didn’t require individual app devel-

REGULATION

opers in the Google Play store to register with PPP to use PRS for in-app billing. The theory is that Google already vets them so the checks and balances are in place.

“It worked well and we have now made it a permanent measure,” explains Prowse.

New World Order This is symptomatic of the new world that PPP is increasingly finding itself in. While there is a strong interest in PRS for some things, the likes of directory services and voice are in decline. Instead, users are turning more to voting and to apps and in-app purchasing. And then there is charge to mobile.

“We are increasingly going to have to work with big platforms such as Google and Microsoft and PRS is going to see real

growth across the three Gs: Gaming, Gambling and Giving [Charity donations],” says Prowse, “so we have to be flexible – and strike that balance between consumer outcomes and innovation – to tap into this growth.”

Prowse also sees that Phonepay Plus has a vital role to play in promoting the industry, especially around how it moves into charge to mobile in new vertical sectors. “We need to promote how robust the regulatory regime is around these services, so that anyone looking to start to use them can have confidence that we are there to deal with any issues that may arise, in a proportionate way,” she expounds. “This assurance is good for everyone: from industry’s view they know they can innovate and have flexibility to create, and consumers and PRS clients can get the

sorts of services they need. It is not for us to stand in the way only to make sure it works.”

It is a noble sentiment and a prudent one too. The world is changing rapidly and we stand on the brink of some of these PRS offerings making it big in new markets. Phonepay Plus will be 30 next year – if you count its previous iteration as ICSTIS – and it has managed to

There has been a shift in customer behaviour which is seeing PRS compete in new ways so promoting innovation is key

stay relevant despite some of the most enormous changes in telecoms technology and consumer user habits over that time.

As it enters its fourth decade many wonder if it is still relevant. “Working with Google is quite different, but we have to be flexible and we have to adapt what we do as the market changes,” says Prowse.

“This isn’t because its Google, but because the market is changing. We still have a role to play.”

And she’s probably right.

Deloitte predicts that PRS in the UK would still be worth £500million in 2019 – down from the heady days of it being a billion pound market., but still none-too-shabby – and there will be a need to regulate it.

Personally, I think that it will be worth more than that: it will become the fabric of mobile micropayments for all sorts of things, including physical goods, and that is going to be the real battle for PPP in the coming years: what does it regulate?

While right now it is, much like the music business, all about ‘the balance’, the next few years are going to see PPP juggling how to regulate PRS when PRS is no longer PRS, but a payment service as well as a set of content services.

The question then is can that balance be struck?

Making interactive media pay

9

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Direct Operator Billing in Motion

Going for gold

As more people use Charge to mobile do we need to gold plate opt in or is does that make it too hard?

16

Where do we go from here?

The Interview

Paul Skeldon takes a look at where charge to mobile goes next and how to get it there

17

John BaRoss is looking to set up a global ‘carrier commerce’ association to champion the industry worldwide.

Find out why and how you can help

18

PAYMENTS

E-commerce, second screening and social media leading places where consumers want to use m-payments, finds MEF E-commerce, second screening and social media are the biggest potential areas in developed markets for m-payments, according to the 2015 Global Mobile Money report published by the MEF. The report, based on a study of 15,000 mobile media users across 15 countries, shows that e-commerce via mobile is gaining traction, particularly in mature markets, with 43% of those

surveyed having bought a product on their mobile either by using a credit or debit card, an online payment service or a retailer’s branded scheme.

In the US, 29% have inputted debit or credit

card information into their device to make a payment versus the global average of 18%. In the UK, 15% have used a retailer’s online payment service – the global aver>> 12 PAYMENTS

The Emerging Payments Association launches the world’s first dedicated payments incubator: the Catalyst The Emerging Payments Association (EPA) – a dedicated industry trade body built by payment practitioners – has launched an incubator for early stage payments companies.

founder-owned and with a combined investment and revenue between £0.5m and £2m in the last twelve months. Six payment companies have already been selected for the programme.

“With the rapid growth of fintech, many entreCalled the Catalyst, it preneurs have recognised aims to provide access that at the core of their to investors, workspace, business model lies paymentors and commercial ments. But the emerging partners in association payments industry is with MasterCard and The highly complex, rapidly Bancorp. The Catalyst ben- changing, difficult to enter eficiaries – its ‘Rising Stars’ and it’s easy to get it wrong,” says David Hunter, – are new entrants to the Advisory Board member fintech industry, mostly

the UK: • Cashwave, an international remittance company • Cubits, a mobile wallet and Bitcoin business • DigiSeq, an NFC wearables business • Pannovate, an augmentof the EPA. “So we are ed reality company minded payments profesnow helping the Rising • Peak Financial Services, sionals and a fee-free Stars of the industry to get package that takes the risk a programme manager it right. These are the early – and angst – out of being • W2 Global Data, online stage companies that have a fintech payments entrescreening tools. strong propositions and In its first year, the preneur is a winner for our ambitious leaders who Catalyst aims to help 25 Rising Stars,” concluded need help from the com- Hunter.

Rising Stars to innovate munity.”

The first six Rising Stars more effectively and scale “Access to an estabtheir businesses. As well come from Bulgaria, lished network of like>> 12 Germany, Hungary and Direct Operator Billing in Motion

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PAYMENTS

PAYMENTS

The death of cash is greatly exaggerated – but change is a-comin’ The results of this year’s annual BRC Payments Survey, released today, confirm that cash remains the preferred payment method in the majority of transactions. Despite a slight decline cash continued to account for over 52 per cent of all transactions.

However, the average value of transactions across all payment methods has fallen again this year.

This provides yet more evidence of the continuing structural change in the retail industry. Shoppers have become less reliant on large weekly shops and instead prefer to make more frequent visits to a wider variety of stores.

This has increasingly become the norm for many customers and has been supported by continued innovation, including the

growth in contactless payment cards being issued and used for lower value purchases.

The survey also reveals that UK customers are increasingly embracing nontraditional methods to pay for their shopping. Noncard replacement product (payment via app etc.) use has expanded six-fold over the last five years. This method still only represents a small proportion of the payments landscape, but with improvements in technology and constant innovation from retailers and payments providers, these methods of payment will likely increase their prevalence over the coming years.

Retailers recognise that as new ways to pay will become more prolific, customers will increasingly expect to be able to pay in the way that suits them best.

Just as loyalty has been won or lost in the past

PAYMENTS

M-payments << 11 age is just 9%.

By contrast, the study found that uptake of proximity payments was still in its infancy. Only 20% have used a mobile wallet, plug & pay device or mobile loyalty scheme which shows consumers are not yet convinced by mobile wallets. A third of people either haven’t heard of them (18%) or don’t see the point (15%).

Social media emerges as

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a key opportunity for mobile payments, especially in growth markets where feature phones are still dominant. 25% of feature phone users say that a social media page is their number one destination for mobile commerce ahead of 15% of smartphone users.

Second screening is also having an impact. Of the 94% of mobile media users who use another form of media while browsing

Emerging payments << 11 as receiving help with raising funds and guidance from mentors, Rising Stars will also showcase their products, receive online over whether or not a “Cash remains the cheap- and social media expostore accepts card payest method of payment sure, and meet prospecments, so too will custom- for retailers to process tive partners and clients ers make positive choices and, for the moment, through the EPA network. to use retailers who meet it remains the most “We have been supportexpectations, and offer frequently used method ers of the EPA right from a wide choice of ways to of payment too. We’re the very start,” says Scott pay. This will require con- entering an exciting time Abrahams, Group Head siderable investment from for retail as technology Acceptance and Emergretailers, but meeting the continues to have a major ing Payments, Masterever changing needs of impact on everything we Card. “The launch of the increasingly tech-savvy Catalyst marks a new do – this is just as true customers will be a key milestone in supporting for methods of payment issue in the years ahead. the payments industry’s as it is for how products Despite these technonewest innovators. We are sold. Meeting new logical challenges and look forward to supporting demands from consumchanges in customer ers, be it how and where them with opportunities behaviour, the survey also they want to shop or how for members to visit our shows that the cost to UK they wish to pay, retailoffices, see our products retailers of handling card and solutions and beners will need to innovate payments is still too high. in order to continue to efit from our mentoring.

They have therefore wel- meet customer demand. Moreover, it is a two-way Unnecessary financial dialogue, and the Catalyst comed the changes that burdens will only make members will also be ofwill take place at the end this work harder. In order fered the chance to presof the year through the introduction and enforce- to remain a world leader ent to us and showcase ment of the new EU inter- in retail innovation, we their own products/servicall need to work together es and solutions. Indeed, change arrangements. to make sure that these BRC Director General, MasterCard can also learn burdens are removed.”

Helen Dickinson, said: and discover from new entrants and this will be a big part of our continuing innovation efforts.”

“The Bancorp is both on their phones, 14% Nigeria 85% and Kenya an delighted and honoured said they use their mobile incredible 93%. to be a Benefactor of device for ‘shopping or However, trust – or the Catalyst alongside commerce’ whilst 32% rather a lack of it – reMasterCard. Delivering say they search for infor- mains the single largest excellence in payments mation about the content obstacle to growth. 34% innovation and supportthey’re engaging with. of people named it as the ing partners to create Mobile banking contin- reason why they don’t successful payments ues to engage consumers carry out more transacbusinesses is core to our – especially in mobile first tions on their phone strategy and fits perfectly markets. 69% of mobile – far outweighing other with the goals of the media users globally car- concerns like bandwidth Catalyst. We look forward ried out a banking activity and network speed. This to being involved in this via mobile in 2015, up 3% increases to 36% when it excellent initiative,” adds year-on-year; in Indonesia comes to mobile walKriya Patel, Managing the figure was 80%, in lets.

Director, The Bancorp.

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CASE STUDY TRANSPORT

On the road again: Charge to mobile solves Irish road toll issue One of the key areas where Charge to mobile can make its mark is in transport.

Ticketing and paying tolls are two areas where the ease, convenience and speed of charge to mobile set it apart.

And its has started to see some trials that showcase just how good it can be.

Charge to mobile provider Oxygen8 teamed up with Easytrip, Ireland’s leading provider of electronic tolling payment services, to provide a Charge2Mobile toll payment service, in partnership with O2.

The first of its kind, the service provides a more convenient channel for paying tolls on the M50 – Dublin’s major motorway bypass ring road – for car drivers who currently pay by cash. Available to O2 customers in the Republic of Ireland, Oxygen8 and Easytrip hope to rollout the Charge2Mobile tolls offering across other networks over the coming months.

The Charge2Mobile solution, which involves the provision of a toll tag from Easytrip to O2 customers that register for the service, allows them to have their M50 and all other national road toll charges deducted from their prepaid or postpaid O2 mobile phone account.

The Charge2Mobile innovation is primarily aimed at more occasional and unregistered M50 users that currently pay by

lem of penalties and fines for more occasional M50 users, bringing them into the tag world for national tolling routes using their mobile phone through a simple registration process, without the need for a credit card registration or up front toll payments.

We believe demand for this service will be highest cash, online or call centre, this niche product to meet among prepay mobile usbut frequently forget to it. M50 users can now ers around the M50 corripay their tolls, thereby have tolls charged directly dor in the GDA, especially incurring additional to their mobile phone ac- when unregistered toll uspenalties and fines. This count and they no longer ers realise it’s the best way new payment concept have to worry about fines to avoid fines, saving them will enable more Irish car or next day deadlines, plus money quite quickly. It drivers to avoid M50 fines it applies to all toll roads does not stop here, as we and to stay in control of nationwide. It’s just one expect other mobile nettoll charges. less thing for motorists to works to follow O2’s lead “The inherent value think about in their busy for this service, with more of our new service is its lives.” and more clients seeing convenience,” explains Oxygen8 Group Ireland’s the wider value of C2M as Dermot MacEvilly, Chief Sales Director, David Wal- a payment platform.”

Executive Officer at Easyton, adds: “This product Commenting on the trip. “We identified a cus- is a winner for mobile introduction of the new tomer need for the 10,000 payments and consumer service Eugene Mitchell, or so users of the M50 convenience, it cleverly Marketing and Innovaevery day and developed eliminates a major probtion Director at Telefónica

Ireland, which operates the O2 brand, said: “The application of this innovative Charge2Mobile Tolls service represents a credible example of how innovations in mobile services can make customers’ lives easier. It is a perfect fit for our current charge-to-mobile strategy at O2 where we believe mobile payments has a very strong future. To-date we have enabled over 90 merchants with a wide range of Charge to Mobile services, including: Facebook, DoneDeal.ie and Blackberry App World.

Working with Easytrip and Oxygen8 to be first to market with a solution that brings benefits to our customers has been very rewarding.”

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As more people buy things via their phone bill, do we need to gold plate opt-in for the buyer or is this going to lend charge to mobile too much friction? Rory Maguire, Managing Director AIME – and fluent speaker of ‘teenager’ – explains “Oh my God, I’ve been a victim of fraud” I exclaimed as I poured over the credit card bill and spotted the obvious unrecognised transaction in amongst the regular ones. I use my credit card a lot (one of the few cards that earn loyalty points so it is to be expected) and the regular transactions are train, coffee shops, restaurants and, in rare occasions, clothing. I am, after all, a man.

The fraud was easy to spot, the transaction taking place in Glasgow, where I have not been for several years, stood out from the London and Buckinghamshire transactions. How do I find out if it is fraud? Search the internet? Speak to the Credit Card company? Or just fill in the form to say I did not authorise the charge?

Fortunately, I discovered that my local petrol station processed its transactions through its Glasgow head office, but that was only by going through my receipts – not normal consumer behaviour. A quick trawl of the internet

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Going for gold with the company name and “fraud” added to the search, found other people in the same situation, but they had blogged about their first reaction – and never updated the blog to say “silly me”.

Needless to say, the company now has a bad internet reputation through no fault of its own.

It is no surprise then that a mobile consumer, seeing a charge to their bill several weeks after the event from either a shortcode or a direct-tobill transaction may have the same reaction. Suspect fraud and research the Internet to see if their suspicions are true. The internet can either be a deep font of knowledge or it can be the cliff edge that lemmings use to follow the one before.

The gap between the transaction and the bill where so many memory cells are lost, is shorted by text receipting. “Thank you for buying our widgets” is a nice gesture at the time but not so valuable several weeks later when the bill arrives.

But what if you, the bill

payer, are not the one making the transaction?

I can imagine the family conversation between Dad and the teenager who has the smartphone under dad’s contract.

“Do you know what this charge is?” “No Dad, it must be fraud. Check the internet (if you know how to).” By the way, that was a translation from a series of shoulder shrugs and grunts: I have two teenagers so I know the lingo.

Similar conversations also occur between bill payer and spouse, to be fair to teenagers.

The issue of phone users committing bill payer’s money is one that has grown up with the desirability of smartphones. Up to five years ago, parents gave their kids low cost phones and a prepay SIM card with enough money to call home. Now parents have to supply the latest smartphone for their kids to be able to leave the front door and the way to spread the cost is to get one on contract. Gone is the one protection that prevented your children from spending your hard

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earned.

And so this leads me to the recent phenomenon. Digital Premium rate services in the UK are compliant with the need to inform the consumer of all the relevant information –including price –that would affect the consumers’ decision to purchase.

If the service is not running under Payforit scheme that guarantees that relevant information will be available to the consumer at the time of purchase, then they are running with independent “witnessing” of the screen that the consumer saw as they pressed the commitment button.

With this compliant environment, calls (or complaints) to Mobile Operators and to PhonepayPlus are going up, not down, and no one can really put their finger on why.

The problem is that it needs several fingers, as many items are at play.

Consumers may not be reading the information in front of them, they don’t care as it’s not their phone bill, they did

not think they could buy anything with a mobile account, they knowingly used a service, but in the cold light of day (and without the alcoholic haze) have “buyer’s remorse.” There were many items to choose from and the consumer thought that the charge was to cover everything not each item or the service (and importantly the marketing of the service), which was too attractive to resist.

So does this mean there is now a need to “gold plate” the payment opt-in so that the consumer has to positively agree to be charged to their mobile account? Is this the time to add “friction” to this “frictionless payment” facility and make it harder to transact? The industry is pondering these and many other questions as the environment is evolving from protecting the consumers from bad practice to protecting some consumers from themselves.

Rory Maguire Managing Director AIME www.aimelink.org

Where do we go from here?

Charge to mobile has huge potential to revolutionise all sorts of markets – and all without any sort of change to regulations or competing with existing payment tools. Paul Skeldon takes a look at where it could succeed and why Kids today: their music is just noise and they have no respect for their elders any more. Plus they spend all their time with their heads buried in their smartphones, tablets and laptops. They are a lost generation. I’m joking of course; in reality they are the generation that are going to save telemedia and the ones that make charge to mobile such an imperative.

In the UK alone, according to an Ofcom study, 62% of 12-15 year olds own a smartphone. “As a result, more content is being developed to cater for that demographic, who are legally excluded from card ownership in nearly all markets, and thus the acquisition of paid content via credit card billing is beyond them,” explains Dr Windsor Holden, chief analyst at Juniper Research and author of several carrier billing reports.

This is why charge to mobile is going to be so important: the kids who are tomorrow’s big customers are coming along wanting to buy via mobile and can’t. As they grow up – hopefully using charge to mobile – they will demand that this is how they pay in future – for everything.

“The implementation of a direct carrier billing solution allows storefronts and content providers the opportunity not merely to facilitate payment by this demographic, but to develop more billable content targeted at them,

where previously such content may have had to have been monetised by advertising alone,” says Dr Holden.

And he’s right: but this is only the start. Kids are clearly going to drive this, but it’s not limited to youngsters alone. There is some lag with older demographics taking up the carrier billing challenge – the spectre of scams and ‘premium rats’ still taint it in some minds – but overall, research shows that where there is a carrier billing option, conversion goes up.

“When direct carrier billing is added as a content billing option, conversion rates are markedly higher for both first-time users and for repeat purchasers,” says Dr Holden. “Bango told Juniper that it was seeing first-time conversion rates for operator billing of 70%, compared to typical conversion rates

them to use their phone to buy tickets, food and content. And that is just one sector.”

Media consumption is another key area: paywalls don’t really work do they and advertising – especially on mobile – doesn’t really deliver as, if nothing else, it gets in the way of the experience.

Charge to mobile is the obvious choice to allow for very rapid micropayments on the device for content to consume on the device.

In this instance it offers click and access content almost instantly and with for first-time users of a huge potential market, virtually no pain points credit cards of 10-12%. but it requires changes for the consumer.

This implies that for credit to regulations and, of And there are many card billing for low level course, puts it in direct more potential areas purchases, no more than competition with all the where charge to mobile 3% of would-be initial other kinds of mobile can work without having purchasers subsequently payment tools such as to get into the sticky area purchase products 2 or PayPal and Apple Pay. of having to buy physimore times, whereas the But there are many cal goods or compete equivalent figure for diother opportunities for with the big players. “In rect carrier billing is 18-31 charge to mobile. The Germany, for instance, times this level.” most obvious is ticketing. the post office lets you So there is certainly a This offers the chance to use PSMS to get a 12 digit great argument for adopt- buy on the phone and use code to write on letters ing charge to mobile as on the phone and covers in lieu of a stamp,” says a payment tool: not as a everything from sports to Beurschgens. “This is replacement for any of concerts to travel , trans- clearly something that your others, but as a very port and tolls: in fact it is could be sold to every valuable new revenue a huge potential market post office in the world, stream. where the convenience of but also to every couBut where does it go charge to mobile comes rier firm in the world. from here: its ok to have into its own.

That alone is a massive it as an add on to the “Football alone is a market.” basic ways to pay for low massive charge to moThe only thing holding value digital goods, but bile opportunity,” says this back is getting the what about giving it a big- Andrew Beurschgens, likes of football clubs and ger future?

Head, Market Intelligence live events, post offices The obvious scenario Insight & Strategy at EE. and couriers and everythat most in the industry “In the UK alone, 19milone else thinking about are banking or is the use lion fans visit premiercharge to mobile. It’s reof charge to mobile being ship games for 19 weeks ally a no brainer. And the extended into physical across the season: this is kids love it. goods. And this is indeed a huge opportunity to get Direct Operator Billing in Motion

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THE INTERVIEW

A noble cause John BaRoss, who at one time was the head of e-commerce at ClickAT&T, has a vision for a global advocacy organization for direct carrier billing and mobile money services – and to big up charge to mobile and financial inclusion. We meet him While sitting at a payments conference at Harvard, John BaRoss had something of a payments epiphany: for all the talk about wallets and NFC and every other kind of mobile payment service out there, no one was talking about carrier billing. Soon he began to realise that not only was it not on anyone’s agenda, it should be because it was not only a neat way to pay for things, but it was the much needed entry point for the many millions of people who are shut out of the digital economy because they are unbanked or live in developing countries.

Something had to be done: this was a noble cause.

And so BaRoss is in the process of setting up a global charge to mobile advocacy group to get the message spread far and wide about the advantages of carrier billing.

“We need a key voice to advocate carrier commerce,” he tells Charge to Mobile Review. “Google Play has opened the door to carrier payments across

Carrier commerce is a noble cause as it is the key to financial and digital inclusion for millions of people and someone needs to advocate that the world, and M-Pesa and Orange Money and others have shown how it can transform the lives of people. But here in the US and in the UK, the likes of Softcard (formerly ISIS: stop sniggering) and Weve not only failed, but very publically surrendered what they did.”

This attitude that charge to mobile is somehow inferior to other payment tools is rife at the carrier level across many markets and really shouldn’t be.

“Carrier commerce is a noble cause as it is the key to financial and digital inclusion for millions of people and someone needs to advocate that.”

But rather than major on being yet another body that advocates this or conferences that, BaRoss’s vision is to create a body that can pull together the brightest and the best people from the sector to not only promote what it does, but to also learn from all

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More news, views and analysis at www.telemedia-news.com/c2m

regions what works and what doesn’t and to fly to the aid of companies, groups or even countries when they face charge to mobile challenges.

BaRoss cites the example of Uganda. Last month a Ugandan judge ruled that mobile money operations are illegal in the country because the carriers who offer such services are not licensed by the state bank to provide financial services.

“This illustrates how the new industry association could be designed to tap the eventual aggregate member base in a timely manner to help industry colleagues – in this case, five MNOs in Uganda – overcome challenges like that Ugandan judicial ruling,” BaRoss says. “Since carrier mobile money operates today in about 60 countries, the probability of this similar issue being encountered already could be high, so the membership could conceivably help colleagues in Uganda.”

While the case was overturned in Uganda within a matter of weeks, it is important that the industry acts together where ever these issues arise – not just to jump to its defence, but to share best practice and to lobby to make sure the rules and regulations everywhere are conducive to it being a successful business.

“We will work with government and regulatory bodies worldwide to push carrier commerce, because it is the solution to so many problems in the world,” he says. “For instances, we need to tell governments and regulators that setting arbitrary limits on what people can spend is strange: why not let the market decide? Why not let people themselves decide? Some may want to use charge to mobile to pay for everything, others won’t, but someone needs to push these arguments and get this on the agenda.”

And BaRoss wants the industry to work together on this and is calling on everyone involved in charge to mobile and ‘carrier commere’ to help create this body. The ground work has been done and the word is out that this body is going to be formed. Now its telemedia’s turn to look at how to get involved. So head to the LinkedIn group and get involved.

Why use mobile payments?

Mobile payments have arrived… well sort of. How do you know whether your customers want them or not? Here Martin Cox, Global Head of Sales, Bell ID, outlines some reasons why consumers may embrace m-payments and how you can capitalise on it Technological developments are often greeted with a mixture of excitement and cynicism.

Mobile payments are no different. Amongst all the hype and bluster, however, a fundamental question seems to be largely overlooked – why use mobile payments?

Here are just a few reasons why your customers are likely to leave cash and card at home, and pay with their mobile.

highlighting the importance of moving to more secure EMV chip cards.

The cryptographic keys used in EMV make hacking the card too complicated and costly for most fraudsters.

The new wave of mobile payments solutions such as Apple Pay, Android Pay and Samsung Pay build on this technology and are very secure.

This is because they are based on EMV and use tokenization.

This process removes MOBILE PAYMENTS the funding card details, ARE SECURE 57% of consumers cite se- such as the card accurity as the main reason count number, from the transaction; they are not for not using mobile payments. While it is true that stored on the phone or shared with the retailer. nothing is 100% secure, This means that even some payment methods if a transaction is comare far more secure than others. For example, mag- promised, the details obtained have very little netic stripe swipe cards are not at all secure. They value and cannot, for example, be used to make are easy to replicate and only require a signature as an eCommerce transaction. authentication.

In addition to these Mag stripe cards are the reason that half of the tokenization solutions, mobile payments softworld’s credit card fraud ware also incorporates is focused on the US,

extra layers of security, such as a PIN or biometric authentication. Apple Pay and Android Pay, for example, have the option to require a fingerprint to confirm a transaction and, when launched, so too will Samsung Pay. Put simply, if you are worried about the security of mobile payments – and worried your customers are worried – and you have used a magnetic stripe swipe card in the last six months, you are worrying about the wrong thing.

MOBILE WALLETS, NOT BULGING WALLETS

Sometimes it is simply not practical to carry a wallet bursting with plastic cards – particularly if you’re partial to skinny jeans or a small handbag.

79% of people, however, have their phones on their person for 22 hours a day.

Mobile wallets are therefore both convenient and practical as your stack of plastic can be loaded into

a device that you have with you at all times. Is this the death knell for full pockets and overflowing handbags?

MOBILE PAYMENTS – QUICK AND EASY TO SET UP

When opening a bank account, it can take days for your plastic card to arrive in the post, assuming it hasn’t been stolen enroute. This is only a minor inconvenience when you have just opened the account, but can become a major issue when replacing a lost or stolen card, particularly if you are abroad. In contrast, adding a card to a mobile phone takes less than a minute, and can be done just as easily from your sofa or on the beach.

THE DYNAMIC DUO - MOBILE PAYMENTS AND VALUE ADDED SERVICES

If security, speed and convenience are not enough for your customers, then value added services may

win them over. Loyalty schemes are a great example. Soon, the days of wading through countless plastic loyalty cards at the checkout may be over.

Simply link the customer’s loyalty accounts to a particular payment card in theirt mobile wallet, earning points and rewards with a single tap.

In the future, we will also see a blurring of in-store, online, in-app mCommerce and eCommerce transactions, giving consumers greater flexibility. Just picture the weekly trip to the supermarket, wouldn’t it be great to avoid the queues? Scanning items with a smartphone on the way round would allow shoppers to pay for them either at a contactless terminal, or using a dedicated in-app payment button, with a receipt sent directly to the phone. Simple and convenient.

There are, of course, many more examples, but this highlights the value that mobile payments could bring to the customer experience.

ARE MOBILE PAYMENTS FOR YOU?

After considering the advantages of mobile payments, you may still find that cash and plastic are right for you and your customers. No problem. New technologies complement the old and paying with a mobile phone won’t be for everyone. It is important, however, for consumers to be able to make an informed decision on why they decide to use, or not use, a particular technology. Mobile payments have finally arrived, will you and your customers be an early adopter?

Direct Operator Billing in Motion

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BROADCAST

The regeneration game Interacting with TV is very much back on the agenda, but in a market where the interaction is free, where is there money to be made? Paul Skeldon hears from some of the leading thinkers in TV In 1894, the Daily Mail decreed that within 50 years London would be swamped in horse manure given the alarming rate at which horse-drawn traffic and trade was increasing.

Civilization as we knew it was doomed.

Then again, in 1902 Henry Ford rolled out the car and suddenly everything was alright again (if you now ignore global warming and all our many oilfired wars).

The point is, things change and often for the better. And a similar ‘manure moment’ faces TV as we know it and the putative interactive TV model that still struggles to create money.

TV is far from dead: millions of people in the UK watch it, in its linear, timetable dictated fashion, every day and its is still

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the shared experience we all crave now that we no longer live in tribes and hunt horses. And the advent of second screening has seen some amazing things happen around getting people to join it.

Fear that TV is being killed

– especially for the youth market – by mobile technology is pretty much wrong. Some 4% of 16-24 year olds do watch TV not on a TV and out of time, and 7% watch clips and TV shows on Youtube. But 65% watch actual TV and enjoy it. By contrast,

Back when there were issues with telephone voting, we changed how we did it to make this balance. The risks are big, but the rewards are bigger

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85% of those over 24 – adults – watch TV: nothing has really changed.

This is why there are such staggering numbers around the interaction services for TV shows that have cracked it.

For instance, the last series of the X-Factor on ITV attracted 2.7million app downloads and saw 10% of its audience interact regularly with the show. 10 million unique entries are seen to its competition and 40 million unique votes were received – that is more than were cast in the last general election.

Given the right programme format and the right sorts of interaction channels – second screen, follow up extra content and so on – then consumers lap it up.

The only problem is that it has achieved this level of success by being free to use.

“The biggest challenge we face now in TV is proving com-

mercial side of interaction to advertiser,” says Ann Cook, controller of interactive and ITV. com at ITV. “We have made our two biggest rating shows free to interact with and we have paid for it through sponsors, but people don’t always see the advantage in that.”

Andy Shaw, award winning CEO of Tectonic Interaction, a technology firm that has developed an interactivity platform for TV companies, agrees and is keen to see this consumer love of interaction pushed to make adverts richer – in every sense.

According to Shaw, there are many ways that advertisers could look at making the ads more interactive and perhaps either drive incremental revenue from simply having better ads or from the data they collect. TV companies could similarly charge more per slot for interactive ads in really interactive shows an share data. Let’s not forget, data is the new oil.

“There are so many ways you can create better adverts that use interaction that fit so well with TV shows,” he says (see panel). But advertisers are still being slow to look at this.”

Ways to make advertising pay With free voting and social interaction increasingly the norm around TV shows, how can the technology – and the customer buy in – be used to actually generate some revenue?

Andy Shaw, CEO and founder of interaction technology firm Tectonic Interaction has a few ideas.

• Sponsorship – the tried and trusted method is to get someone to sponsor the interaction around the show, much as Dominos has done with X-Factor and Britains Got Talent. This has been so successful it gets mentioned in Dominos annual report each year as it drives so much revenue. This form of monetisation should be a no brainer for the right brands.

• Engaged adverts – With so many people happily entering competitions and the audience already feeling engaged, why aren’t advertisers doing more to add competitions to their adverts? They would generate more data and have direct access. This could be done in conjunction with the broadcaster so that risk can be minimised and reward shared.

• Sync ads to apps – Shazam is starting to become the norm for firing up some form of ad interaction around some ads, so why not use it to spur some sort of advertiser based interaction via the show app? The chances are the user already has the app open if they are engaged with the show, so use sound recognition to keep them engaged during the ad breaks and make the ads more valueable?

• Appointment to view ads – Why not tell people to watch an advert at a particular time and interact to win something? So for example, you could use the advert to fire up the app (as above) and let the user try and win a car. The show can then plug that this ad is coming up and drive some hype around the ads.

• Live competitions – similar to the idea for appointment to view ads, but why not make the ads interactive with live competitions in the ads themselves?

In part that is because no one wants to be the first. Many see that there are so many risks around adding such interaction, that they don’t want to be the one to put their head above the parapet. But they needn’t worry, thinks ITV’s cook.

“We also need to now educate advertisers about how we have mitigate risks in our own shows and so we can mitigate risk in making their adverts interactive,” she says. “Most of my job involved not coming up with great new ways to inter-

act, but looking at how these ideas balance with keeping the content and the consumer protected. Back when there were issues with telephone voting, we changed how we did it to make this balance. The risks are big, but the rewards are bigger. “ And talking of phone voting, don’t be under any misapprehension that free to enter methods such as apps and other online content are at the expense of the cash cow that is voice calls, these have held up very well.

“In truth, the landscape is a mix of app interaction and free voting, however not, everyone has a smartphone or tablet and not every show needs an app or website, many shows still need a monetised route to entry,” says Cook. “Voice short code voting is still very big despite free voting on app.”

VCS-based voting could have a bigger role yet to play within the world of interactivity, but the telemedia industry has to be more evangelical about telling people about it,” says Cook.

Making interactive media pay

21

BROADCAST

Ten things you need to know about your engaged audience With engagement around TV shows growing and the game on to try and monetise it, Simon Miller and Juliet Otterburn-Hill from Beamly outline ten things you need to know about engaged TV audiences to help you work out how to monetise them TV audiences are increasingly engaged through all sorts of channels – the TV, smartphones, tablets, laptops and social media – and understanding who they are, what they are doing and how you can leverage that data is becoming the holy grail of TV. So what do we know about them and what can it tell us?

Go to them – you have to go to your audience, as they won’t come to you. So you need to create great content and get it out there through social media. But make sure you create content that is designed for social: don’t spend £100,000 on a great short movie hoping it’ll go viral, spend £1000 on 100 great bits and see which ones go viral.

The conversation never stops – the TV show may only be on for 30 minutes once a week, but the social media conversation never stops so follow the time line: Read -> Post -> Plan -> Watch ->Chat From morning on the left to night on the right.

Make it snackable – as said the content has to be snackable and ideally laid out like a

breadcrumb trail that makes the viewer come to the show when its on to watch it. But the images and the language you use have to be like the stuff the viewers use: so make the language chatty and the images rough. Make it look like you are just one of them.

Optimise for devices – any content you put out there has to work on mobiles, smartphones, tablets, laptops, Macs, PCs and even games consoles, not to mention Facebook, Twitter and the other main social network players. There have to be no barriers to access and sharing.

Join the conversation – you have little hope of engaging anyone if you start the conversation off yourself, so research what is popular in chat streams already and work your content and message into that. And create a lot of versions so you can live A/B test what you are doing and constantly refine.

Keep testing – keep looking at what you live A/B testing is telling you and adjust as you go along. This is vital.

Put OMG words in – It is scientifically proven that OMG words such as OMG, Wow, WTF etc get people clicking. Also people actually love spoilers.

Aim for the ladies – Its actually much cheaper to get women engaged on social than it is men, so tailor your content to the ladies. Also the older they are the harder they are to reach so don’t try and target 46 year old men.

Fun and frictionless – sounds simple, but you have to make any call to action fun and you have to make it totally frictionless so go for one click wherever you can. Don’t look for sign ins or anything complicated just a one click vote or share or whatever it is and that’s it.

Get the content right for brands – broadcasters have it relatively easy as they have great content, but most brands don’t so you have to help them create basic content that they can start to use to drive engagement. And try and add celeb power where you can: even Charlotte from TOWIE can give you as much as a 46% uplift in clicks.

22

More news, views and analysis at www.telemedia-news.com

DEVICES

Are you wearables-ready?

The Apple Watch is going to change how some people use mobile devices and that will effect your business – but how? And how will it impact merchants and retailers? Martin Dinham, Director, Barracuda offers some thoughts With the Apple Watch selling more units in its opening 24 hours than its rival Android Wear has sold in a year and Google Glass 2.0 reportedly due for release ‘soon’, it seems like the wearables market might finally be gathering some momentum.

We’ve recently seen mobile usurp desktop as the platform through which most searches are now conducted. The way we search on desktop is very different to mobile. Whereas desktop searches tend to be keyboard and keyword driven, like “sheds Brighton sale”, on mobile search terms are much more conversational, with location playing an increasingly important role, for example “Where are the cheapest sheds in Brighton?”

With wearables, voice is the only realistic input method that makes sense, as having to type in your search terms in on a tiny screen while stood on a busy High Street just isn’t practical, and Google knows it. In 2013 we saw the release of Hummingbird, Google’s ambitious ‘wearablesready’ algorithm developed with voice-search in mind as its primary user-interaction method. With voice searches, the structure becomes even more linguistic and conversational, so unless your SEO campaign is optimised with much deeper, richer key

phrases then it’s likely your page rankings are going to be effected once wearables become more commonplace.

With the first wave of Apple Watches making their way to a High Street near you, it’s vital that you ensure that your online business is fully optimised and ready for wearables.

There are three keys areas where retailers need to focus on which are: 1 Product descriptions must be unique and informative Google’s recent Panda algorithm update was the latest move in the search giants ongoing bid to make the internet as useful and unique an experience as possible for users. As a result, sites which feature unique content offering as much utility as possible are going to be looked on much more favourably by Google and ranked higher accordingly.

For online retailers with thousands of product lines it can often be tempting to simply go with the product description provided by the merchant, but as this copy is likely to be replicated numerous times across the web, its going to score poorly for originality.

Instead, take time to make your descriptions as in-depth and useful as possible.

Make them longer and

try to incorporate user-generated content like user reviews, which will really help to amplify your search signals. Adding images, or even better an instructional video would also have an extremely positive effect on your rankings.

2 Local SEO is gold When users search for goods and services via mobile or tablet they are often looking for results within a few miles of their current location. However, with devices like the Apple Watch, that search radius is going to be dramatically reduced with users searching for things that are within feet of them. This could be somewhere to eat, somewhere to sleep or perhaps somewhere selling a specific product, but the search results are going to need to have an immediate benefit to the user, so if you haven’t optimised your site for local SEO then you’re going to have problems.

In addition, with Apple Watch a lot of searches are likely to come directly from the map function, where Apple uses a number of third party directories like Yelp, TomTom, etc to locate businesses. Ensuring your details are up to date on these sites will also pay dividends and also try to encourage happy customers to leave reviews at these sites.

As Apple Watch also uses Bing as its default engine, make sure you also optimise for local SEO on there as well.

This is also largely a function of how your site is represented in the major local services, including Bing Places and Google+, but also ensuring that your site is correctly represented (with consistent Name, Address, Postcode and Opening Hours or NAPO data) in the major local directory services such as Yell, 118.com

etc. It can be a tedious task, but it’s worthwhile ensuring that you appear correctly in these services and have ownership of your accounts, this will enhance your local search presence generally as well as specifically for wearables.

3 Bing becomes a whole lot more important With 90% of the UK’s total search volumes coming through Google, its dominance in the search market would appear unassailable, but then you might have said the same about Nokia’s handset business before the brand was recently dissolved into Microsoft.

Interestingly, 30% of US searches now take place on non-Google properties (principally Bing and Yahoo!

Apple has been making every to move to oust Google as the default search engine for its operating systems, but while you can easily go into the settings and choose to make Google your default choice for browser searches, with Siri, it’s not so straight forward.

Therefore, if Apple Watch goes on to have the same kind of impact that the iPad had before it, we could see a huge amount of search volume being conducted via Siri and not through the browser. In addition, if Siri ever makes the leap from mobile to Mac, we could see Google losing even more volume.

As a result, retailers should be across all the search engines and their services – don’t put all your eggs in the Google market, make sure that you take advantage of the opportunities that engines such as Bing offer, not just in terms of optimisation, but also where channels such as their local and paid search services are concerned.

Making interactive media pay

23

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Making interactive media pay

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13/05/2015 08:34

Number cruncher Each issue we take a look at some of the interesting stats floating around in the telemedia space and associated areas to get a snap shot of what is going on out there. This month we take a look at consumer trends in device use habits (left) and mobile payments (right) from In DigitasLBi’s fourth in-depth survey of the global retail ecosystem

oppingShopping by deviceby device oppingShopping by deviceby device

58% 58%

59% 58% 59% 58%

Mobile payments Mobile payments - intention - intention Mobile payments Mobile payments - intention - intention

59% 59%

33% 33%

62% 62% 34% 33% 34% 33%

62% 62% 40% 38% 40% 40% 38% 40% 22% 22% 22% 22%

34% 34% 15% 15%

15% 15%

Connected Tablet TV

Connected TV

Total Yes

Yes, definitely Total Yes

Yes,Yes, probably definitely

Yes, Totalprobably No

e purchasing is nowpurchasing a Desktop basic is nowSmartphone ainbasic all countries, behaviour although in Tablet all countries, some although Desktop Online Laptopbehaviour Laptop Smartphone Connected Tabletsome TV Connected TV ets are differentiated markets by aretheir differentiated maturity. The by their datamaturity. also suggests The data thatalso consumers suggests that consumers eore purchasing is Online now purchasing a beyond basic behaviour is now basic all countries, behaviour although intraditional all countries, somedesktop some to also than happy are to more go than happy the more to goaintraditional beyond the desktop more experience toalthough alsoexperience ets differentiated markets by are their differentiated maturity.

The by data their also suggests The data thatalso consumers suggests that consumers aceare m-commerce embrace (mobile) m-commerce and t-commerce (mobile) (tablet). andmaturity. t-commerce (tablet). ore than happy aretomore go beyond than happy the more to go traditional beyond the desktop more traditional experiencedesktop to also experience to also ace m-commerce embrace (mobile) m-commerce and t-commerce (mobile)(tablet). and t-commerce (tablet).

Total Yes

Yes, definitely Total Yes Yes, Yes, probably definitely

Total Yes, probably No

Desktop

Desktop Laptop

Smartphone Laptop

Smartphone Tablet

rsonalisation Personalisation as a key as driver a key driver rsonalisation Personalisation as a key driver as a key driver

62% 62%

62% 62% 52% 52%

52% 51% 52% 51%

51% 50% 51% 50%

At least one I buy more often At least Ione buy more often

Our research foundOur 62% research of smartphone found 62% users of smartphone would use their users smartphone would usetotheir paysmartphone in-store. to pay in-store.

51% 51%

50% 50%

I buy I buy more more often products I buyI buy more more often products

ndents saying respondents they buy more saying and/or they more buy more oftenand/or when met morewith often tailored whenretail met experiences. with tailored retail experiences. nalising the shopping Personalising experience the shopping is the surest experience way toisthe theconsumer’s surest way pocket, to the consumer’s with 62% ofpocket, with 62% of ndents sayingrespondents they buy more saying and/or theymore buy more oftenand/or when met morewith often tailored whenretail met experiences. with tailored retail experiences.

26

No, definitely not No, definitely not

Mobile payments Mobile payments - current- current Mobile payments Mobile payments - current - current

II buy buy products I buy products moreI would products not have I would not have before bought before Ibought buy products I buy products more I would products not have I would not have nalising the shopping Personalising experience the shopping is the surest experience way to is the the consumer’s surest way to pocket, the consumer’s with 62% of pocket, 62% of bought before boughtwith before At least one

No, Total No No, No, probably not definitely probably not not No, Total No No, No, probably not definitely probably not not

Our research foundOur 62% research of smartphone found 62% users of smartphone would use their users smartphone would use to their paysmartphone in-store. to pay in-store.

52% 52% At least one

38% 38% 26% 26% 26% 26% 12% 12% 12% 12%

52% 52%

51% 51% 50% 50%

50% 50%

Yes, I have already done Yes, I ithave already No, but done myit mobile device No, but my mobile No, my device mobile phone No, my mobile phone enables me to enables me does to not enable medoes not enable me Yes, I have already done Yes, Iithave already No, but done myitmobile device No, but my mobile No, my device mobile phone No, my mobile phone enables me to enables me does to not enable medoes not enable me

Our research foundOur 21% research of smartphone found 21% users of smartphone have used their usersdevice have as used an their in-store device as an in-store payment device. payment device.

Our research foundOur 21% research of smartphone found 21% users of smartphone have used their users device haveas used an in-store their device as an in-store payment device. payment device.

More news, views and analysis at www.telemedia-news.com

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