NEW LOOK Telemedia Magazine by annika micheli

ISSUE 37 | £4.99

making interactive media pay

featuring

in this issue

www.telemedia-news.com

mPayments Summit preview

The mPayment Summit on 9 June 2015 in London will showcase Charge to Mobile in all its glory. Here is what to look forward to

The Internet of Cha-Chings

Oisin Lunny asks the experts what impact new connected devices will have on telemedia and commerce

Microsoft adds charge to mobile to Windows 10 Microsoft is to bring carrier billing to all Windows 10 devices, opening up charge to mobile to millions

payments

Merchants reach 47% more UK customers with charge to mobile, study finds

payments

Online payments via mobile boom worldwide, UK leads the way

New research from ImpulsePay reveals that Charge to Mobile reaches one and a half times as many consumers as credit cards and over four times as many as PayPal. The research proves that with over 85 million active mobile subscriptions in the UK

alone, Charge to Mobile – known globally as Direct Carrier Billing – has the largest share of users of any mobile payment option in the UK. Online merchants have the potential to reach 93% of all adults in the UK by including a Charge to Mobile option at check>> 4 marketing

Marketers gamble on Apple Watch app success As the Apple Watch goes on sale, new research from digital marketing agency Greenlight reveals that one in three marketers (32%) are thinking about building an app for the Apple Watch this year, while almost one in ten (8%) are already making plans to do so. Greenlight found that one in five marketers (19%) have ordered or plan to order a smart watch, while over half (57%) have no plans to buy one.

Marketers expect consumers to use the Apple Watch to receive notifications (62%), make contactless payments (56%), access email or messaging apps (48%), and remotely control functions on their smartphone, such as music (40%). Less than a third (29%) think consumers will use smart watches to shop online, while just one in four (26%) expect consumers to speak into watches to search the web. >> 4

When it comes to paying for online transactions using mobile, the UK is way out in front, according to figures from the latest quarterly Mobile Payments Index from payment technology company Adyen. >> 12 payments

The Interview To find out more about what is happening with Charge to Mobile we asked ImpulsePay’s Commercial Director, Paul Paterson, to answer a few of our questions >> 15 payments

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marketing

Brands spend a record $200bn on digital marketing as shoppers migrate to mobile and tablets New research from Juniper Research has found that global brand and retail spend on digital marketing activities will reach $200bn this year, up by 15% on 2014 levels. The research suite, Digital Retail Marketing: Loyalty, Promotions, Coupons & Advertising 20152019, observed that nearly 70% of the net increase on digital marketing spend this year would be concentrated on mobile and tablet devices, as brand strategies evolve to deliver campaigns within an omnichannel digital environment. According to the research, factors behind the migration to smartphones and tablets include their capabilities to enable timely, targeted, personalised campaigns, to enhance customer engagement and to

analyse the relative success of campaigns. It noted that, in the case of mobile coupons, redemption rates were typically significantly higher and costs per redemption much lower than for traditional mechanisms

ing predictive analytics on the wealth of online data generated through consumer activities on websites and social media. It observed that predictive analytics was increasingly being used in real time, with retail-

such as direct mail or newspaper coupons. Additionally, the report highlighted the potential for us-

ers able to tailor advertising and product promotion while a customer is browsing their websites.

However, the research claimed that brands need to develop marketing strategies to cater for an audience which increasingly media meshes or media stacks: that is, uses multiple screens simultaneously for digital activities which are either related or unrelated. It also stressed the importance of maximising the potential of digital media throughout the entire retail lifecycle rather than purely to drive product awareness and/or one-off footfall to stores. According to research author Dr Windsor Holden, “The beauty of mobile and online marketing channels is that they can play an active role throughout the retail lifecycle, from product discovery to product purchase, enhancing customer value through personalised promotions.” messaging

Messaging key to customer service, sales and workforce, finds survey Mobile messaging significantly enhances customer relations, sales and marketing and customer insight – and can help employee relations – yet many companies aren’t really embracing it yet. So finds a study by IDC sponsored by OpenMarket titled “Exploring the Impact of Mobile Messaging on Customers, Employees and Operations” which reveals results from 600 technology decision makers representing global enterprises. The newest findings reveal key insights into how mobile messaging is being used in the following industries: Automotive, Consumer Packaged Goods (CPG), Education, Financial Services, Healthcare, High Tech, Media & Entertainment, Transportation & Logistics, Travel &

Hospitality, and Utilities. Many organizations in these industries have failed to adopt holistic mobile messaging strategies that support company-wide use cases, as 62% have at least two messaging platforms deployed, and 78.5% have more than one active initiative. According to the research, the greatest benefit of mobile messaging across these industries is its ability to improve customer experience and employee relations. As one type of solution does not fit all, these organizations tailor their mobile

messaging implementations to meet requirements within their industry segments. Top takeaways from this cross-industry analysis reveal that business leaders in these sectors are driving new investments in mobile messaging and are closely involved in specification, selection, and deployment. These businesses are also finding that maximizing investments requires integrating mobile messaging into structured business workflows,

and that it is easiest to do this if IT can utilize a workflow engine from a trusted vendor to quickly create services and address functional needs. “Although use cases can differ in terms of how global enterprises are utilizing mobile messaging, these findings revealed that no matter what sector, businesses need to take a longterm, purpose-led approach to their mobile messaging investment,” says Robert Parker, Group VP, IDC Insights.

Making interactive media pay

payments

marketing

Carrier billing is number one payment channel for digital content in Germany, finds DIMOCO With 112.6 million mobile subscribers, carrier billing is the number one digital content payment method with the widest potential reach in Germany. While mobile handset penetration is 139.2%, with many people having two mobile devices, only 35% of the population owns a credit card. So finds the latest DIMOCO Carrier Billing market special, produced in cooperation with Juniper Research and Price Waterhouse Coopers. The study also finds that the digital content market in Germany will increase to €4.623 billion revenue in 2018 Leading the way is the e-book, e-magazine and e-newspaper market, likely to account for €1.684 billion of the total by 2018. E-games comes second at €1.569 billion in 2018. Home videos will hit €761 million and digital music €609 million. “Digital content is being increasingly consumed on mobile devices, as the number of smartphones in Germany has gone up by 20% in just the last 2 years,”

says Gerald Tauchner, DIMOCO Co-Founder and CEO, comparing figures from DIMOCOs’ Germany Carrier Billing market specials 2014 and 2015. The German mobile network market is operated by Telekom Germany (35% market share), Vodafone (28% market share) and Telefónica Germany (37% market share including the brands O2 and e-plus). Integrating Carrier Billing into the checkout process lets digital content providers as well as consumers benefit from a number of aspects, says DIMOCO. While consumers prefer Carrier Billing if the payment method is available, and are more likely to purchase digital content due to its simplicity, convenience and security, companies profit from higher conversion rates and a bill-

ing method available on multiple screens. Conversion rates, measured in Europe, go up to 70% for first time transactions (credit card billing: only 10 %) and up to 80-88% at repeat digital content purchases (credit card billing: only 20 %). On the German market, available via DIMOCO, services, transitional goods and digital content on all digital channels can be monetized as one-off or subscription service transactions within a price range of €0.19 and €30, depending on the mobile network operator. The entire digital content market in Europe is expected to be worth €37 billion in 2018, approximately €7.2 billion of that amount will be billed via Carrier Billing in Europe.

payments

Merchants reach more customers << 1 out – an additional 47% when compared to a stand-alone credit card option at checkout, or an additional 325% more than PayPal. The figures are compared to the 58 million credit cards that were in circulation in the UK in early 2014, of which only 66% were active, and the number of UK registered PayPal accounts, of which there are 20 million. The comparison also takes into account similar smartphone apps that allow users to pay for goods direct from their mobiles such as Barclays’ Pingit,

which in 2014 had been downloaded just 2.5 million times (equivalent to only 3% of active mobile subscriptions). Charge to Mobile is the term for the technology that allows a customer to make a purchase via their phone, in a quick transaction without entering their credit card data. The cost is then charged to the customers’ mobile phone account, or taken from the available credit if they are on a pay as you go tariff. Fees for mobile payments are now comparable to the fees charged for credit card or PayPal transactions and have

moved a long way from the 30% transaction fee charged by app stores. “The goal for Charge to Mobile has always been to reduce the rates enough in order to compete head to head with credit cards as a payment method,” adds Paul Paterson, Commercial Director of ImpulsePay. “A great deal of work has been done by the Charge to Mobile providers and the network operators, and as a result new transaction fees of only 9.9% were introduced last year, alongside simpler payment flows.”

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

Apple watch << 1 The research makes a stark comparison to marketers’ adoption of mobile. Despite this week’s ‘Mobilegeddon’, which saw Google alter its search algorithm to favour sites that are “mobile-friendly,” less than twothirds (65%) of marketers have already optimised their website to cater for mobile users, while just over a fifth (22%) have built a mobile web app. Following Google’s action, brands with poorly optimised mobile sites may see steep dives in their visibility that could push them into relative obscurity for their key target terms. Despite pressure to maintain SEO visibility, just over half (51%) of marketers who don’t have a mobile website, plan to build one this year. “The Apple Watch may be shiny and new, but it’s also completely unproven. There’s no telling how consumers will use it or if it will even take off. Building apps for it may pay off, but it’s a massive gamble; and one that most marketers aren’t willing to take,” said Andreas Pouros, COO and Co-founder at Greenlight. “By comparison, Google estimates that around 50% of searches are conducted from mobile devices, through mobile browsers and its own search apps. Despite this, less than a fifth (18%) of marketers plan to optimise their website this year. With so much at risk, even marketers who have already developed a mobile website would be better off putting their money into improving the user experience and targeting mobile users than building a smart watch app that could be dead in the water within months.

from the editor

Giving consumers what they want – and need THE BIG GUY Paul Skeldon paul@telemedia-news.com Art Director Victoria Wren victoria@wr3n.com Contributors & Consultants Matthew Leach, Aideen Shortt, Sheldon Johns, Andrew Darling, Peggy Ann Salz, Ritesh Gupta, Alexandra Franklin, Paul Dunone, Bruce Pharoah, Christabel Farrah, John Strand, Melvin de Vere, Victoria Hawes, Peter Welburn 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 What we’ve been listening to Hey Ma, James Drink You Pretty, DragSTER What we’ve been amused by Just how wrong the pollsters were WHO we’ve been following The Payment Services Regulator What we’ve been reading about The strange accents in Game of Thrones summer 2015 will bring... The M-payments summit 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 Circulation enquiries to: Ellie Gold ellie@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

Well here it is: the new look, bi-monthly Telemedia magazine, incorporating Charge to Mobile Review. And it looks great. It also serves a higher purpose: it is here to get the message about mobile payments and charge to mobile out there to the merchant community that can benefit from what is on offer. But let’s not get bogged down in payments. What telemedia really offers to the world is payments combined with engagement and data and it is already being widely used in the broadcast and media industries. The opportunity lies in extending this messaging to other verticals and showcasing how it all works together. Part of the battle is already being done. As the lead story in Charge to Mobile review on

page 11 shows, Mirosoft is building charge to mobile into how users can purchase Windows 10 related stuff. This really does put carrier billing – the other name for Charge to Mobile – on the public’s radar. The move by Microsoft will see potentially hundreds of millions of people worldwide start to use carrier billing routinely to pay for software and content. It will be a boon to users in the developing world, where mobile technology has surpassed all other forms of connectivity and indeed payments. It will also be a boon to the many millions of Windows users in the developed world. For the charge to mobile industry, it puts the technology front and centre in consumer minds. Actually that’s wrong. It doesn’t. It actually makes the payment pro-

cess something that consumers don’t think about, just something they do. And that is way more important. In fact, we don’t want consumers to think about it. They shouldn’t even notice it. They should just click and pay and all is well. And that is what the Microsoft deal offers. And it is what the new look Telemedia magazine is also offering. We want to get the telemedia industry properly represented to vertical markets across the world so that they too can deliver the ease and simplicity of carrier billing to their consumers. That journey starts here. Enjoy. Paul Skeldon. editor commerce

Mobile purchases to account for a third of 2015 UK retail e-commerce sales Across 2015, a third of all online sales in the UK will take place via smartphones and tablets, predicts eMarketer. By 2019, that figure will rise to over 40%. eMarketer estimates that UK retail e-commerce sales will rise 14.5% this year to reach £60.36 billion ($99.39 billion), driven by an improving economy, shoppers’ increasing usage of mobile devices for making purchases and expanded options for purchase delivery. Indeed, digital will be the main driver of overall retail sales growth, and as a consequence, its share of total retail sales will increase to 14.4% in 2015. This will place the UK atop the global rankings when it comes to ecommerce’s portion of total retail sales, No. 2 on the list will

be China, with a 12.0% share, while the US will be well back at 7.1%. Meanwhile, the growth trajectory for mcommerce sales is particularly steep, with a rise of 30.3% forecast this year. eMarketer predicts UK retail mcommerce sales will reach £19.92 billion ($32.80 billion) in 2015, and by 2019, that figure will climb to almost £37 billion ($60.93 billion). “That mobile is playing an in-

creasingly important role in the retail shopping habits of UK consumers is without question, be that via smartphone, phablet or tablet. What this demonstrates, though, is that digital shopping and buying long ago entered the mainstream for most UK consumers, and buying via mobile is just the next step. Indeed, device-agnostic buying, thanks to users’ familiarity with these various device types, is becoming the norm,” commented Bill Fisher, analyst at eMarketer. Tablets are particularly significant for UK mcommerce sales growth. As more consumers have embraced these devices for lean-back browsing of potential purchases, retailers have made greater efforts to make sure their tablet retail sites and apps are particularly rich and responsive.

Making interactive media pay

show preview

mPayments Summit preview Charge to mobile – or direct operator billing – is a well kept secret. But one that needs to be told. Research by Juniper Research shows that carrier billing allows vendors to profit from 60% higher conversion rates for first time transactions and 70% higher conversion rates for second transactions compared with credit card billing – if they use carrier billing. And 75% of European users prefer carrier billing if the payment option is available for digital content purchases. sponsors

The mPayment Summit on 9 June 2015 in London aims to blow the lid off the cause of Charge to Mobile. Here is what to look forward to.

payments; How to turn engagement into payments and payments into relationships Featuring: OpenMarket, mGage, TxtNation, IMI Mobile

OPENING KEYNOTE: What is Charge to Mobile and what is the opportunity?

GETTING CONSUMER BUY-IN AND DELIVERING CUSTOMER SERVICE

A look at how to create consumer awareness, gain consumer buy in and gain consumer trust. media partners This session will cover: Marketing of services; Customer acquisition; Working with merchants to reach MORE THAN JUST PAYMENTS – MAKE IT ENGAGING consumers; Branding of services; Service flow; RegulaCharge to mobile is more than just about how to offer tion of services – and what is there to protect consumpayments to consumers, it is all about how to use mobile ers; Handling complaints & bill shock; Strategies for to engage and connect with consumers and lead them to mitigating refunds and charge backs; Managing data the payment. around consumers and clients alike This session will cover: How to use SMS, apps and mobile Featuring: EE, Three, Vodafone, AIME, ImpulsePay in association with messaging to engage consumers; New revenue models for using content charging rather than ad-funding; How THE M-PAYMENT LANDSCAPE to gather and use data from mobile engagement and Tim Green, Editor, mobilemoneyrevolution.com puts charge to mobile in some context, we take a wry romp through the complex mobile payments landscape asUK sessing what else is out there, what it offers and where charge to mobile fits in. As a taster for World Telemedia Prague in November – and while the industry is gathered in one place – we take a look at next steps in service development LEADING BY EXAMPLE and industry advancement. Sessions include: So who is doing a great job within vertical markets and What the merchants want what are the secrets of their success? We line up a range We hear what key end user sectors want from telemedia companies. Featurof key players who already have digital payments services ing: Retailers; Broadcasters; Media companies; Charities; Publishers; Gaming up and running and assess what they do and why it & Gambling providers works. Rules, regulations and developments – and their impact Featuring case studies from: Charity; Media; Gaming & From PSD2 to the eMoney licences and beyond, what is the industry facing Gambling; TV; Travel & Transport; and more and how does it impact delivering engaging p-pay solutions? Dr Windsor Holden, head of forecasting & consultancy at Juniper Research outlines what that charge to mobile is and what it means for merchants

Where does regulation go now?

Following the judicial review of PPP what is the regulatory landscape like and what does it mean for NGNs, affiliate marketing and co-reg issues?

AIME industry updates

With the industry gathered in London for the M-Payment summit, AIME will be running three workshops: • What does 13th Code Mean for you? • What does new guidance mean for you? • What does special conditions mean to you?

PLUS mGaming Summit 2015

Covering: Where charge to mobile fits into the gaming landscape; How to combine engagement with payments; Chargebacks; Outpayments; Rules and regulations; Mobile marketing; Text engagement; Text based reengagement; Payments as a UX and engagement tool; The next steps in mobile gaming

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

BREAKOUTS: HOW CAN IT WORK FOR YOU?

Following on from our wealth of case studies, the audience gets to break out with leading experts from the Charge to Mobile industry to discuss how what they have just heard can be applied to their businesses and business sectors. Featuring: TxtNation, IMI Mobile, ImpulsePay, Fonix, OpenMarket, mGage

NEXT STEPS AND FUTURE STRATEGIES

So where is the market going and what can you do to stop it boiling over and burning your spuds? Panel discussion featuring: Claire McLaughlin, BBC; Dr Windsor Holden, Juniper Research; Mark Challinor, Future Media Inc; Tim Green, mobilemoneyrevolution

www.msummits.com

REgulation

What is next for PhonepayPlus? Anyone attending the PhonepayPlus forum on 30th April who had missed the last forum would be forgiven for thinking that someone had kidnapped their senior management and sent in body doubles, as the opening presentations from Jo Prowse and Andrew Pinder reflected a sea change in the stance towards the broad industry and indicated strongly and positively, their post-Judicial Review tactical direction that stunned the 150 strong industry audience into silence. Certainly a humble PhonepayPlus with a lot of lessons learnt recently and a lot of industry pressure for reform in many areas – not least from AIME – but a wiser, stronger and more collaborative regulator is emerging as a result. Regulatory reform has been clearly needed since 2013 and we have witnessed operational changes – mainly occurring in the background – under the leadership of Prowse. We have also received in private, verbal commitments for changes to come, but the future direction was really made public for the first time at the Forum, nearly two years on since the moment in time in 2013 after the use of emergency procedures against multiple companies, that became the catalyst for change.

Central to the announced direction are a full review of Part 4 (Investigations, Procedures and Sanctions) of the PhonepayPlus Code of Practice, a review of the independence of the Code Compliance Panel (plus other areas such as more legally robust procedures and reliance on skilled resources) and a review of the sanctions guide and administrative charges. All of this with industry input and collaboration. The reviews should ensure that while the regulatory role is not undermined, investigations into services that are causing (or may cause) consumer detriment is treated proportionally, fairly and with the rights (human and legal) of the providers businesses as well as the consumers taken into consideration. There is no doubt that premium rate regulation is more complex than most. This is the only regulatory area that the promotion, payment, product and post-sales support fall under the same umbrella and thus the rule set feels complex for a merchant currently using credit or debit card payments and wishing to utilise Charge to Mobile as an addition. To grow the opportunities, we need to assure digital and voice merchants that they have business surety of predictable outcomes if the

Following the judicial review of the regulator, things are going to have to change at PhonePay Plus (PPP) – but what is that change likely to look like? Rory Maguire offers his view

complex rule set is inadvertently breached. After all, 3000 other companies use premium rate successfully. Industry also needs the assurance that damaging practices applied by a small subset of companies and individuals are dealt with swiftly and effectively to ensure continuation of a level competitive playing field and to remove the reputational damage that can be caused by deliberate scams infrequent though they are. The operating environment for digital content and services is also complex. The rapid adoption by active consumers of smartphones and internet access moved consumer services into the internet where they are discovered through an alternative ecosystem of advertising and promotional markets. While providers adapt to new and emerging marketing techniques they also need to gain a rapid understanding of the risks created by rogue affiliates, underhand advertising practices deployed by others and consumer journeys that commence in the dark corners of the internet. This complexity requires a fleet-of-foot understanding by the regulator that can only come from working closely with the industry that is experienced with the opportunities and the

potential issues. The tests of the new industry collaborative approach by PhonepayPlus was the recent exercise of an AIME initiative to create a rapid response team of relevant expertise who can gather to discuss emerging issues. Consumers were being forced off their chosen mobile website onto inappropriate promotions by advertising intermediaries acting without the advertiser’s authority. The issue, once identified and a resolution plan agreed, has been placed back into the hands of the advertisers to work with the agencies and bar the practice. This did not need a regulatory response, but set in motion a resolution for an emerging consumer issue. We believe that PhonepayPlus is now on a path that is committed to working closer with the industry, while still maintaining its consumer protection role and without compromising its independence. Reform requires a huge amount of activity and we hope that both the outgoing and incoming chairs provide the moral support to the Executive to achieve this. Regulating on an even keel is a tough nut to crack. Rory Maguire is Managing Director of AIME

Making interactive media pay

messaging

Most business have been forced into adopting a ‘mobile first’ strategy, because that is where the consumers increasingly are these days. But mobile first doesn’t mean replicating existing marketing and promotion models just on a smaller screen, it is forcing a rethink of how brands engage consumers. And increasingly, this engagement is something that spans more than just the old school model of advertising-responsesale-repeat and one of building relationships and using every touchpoint to engage with consumers, through every channel at every point of the sales cycle. This is perhaps what is so interesting about mobile payments: not that it can just be a new way to pay, but that the payment process itself can be part of the engagement and relationship model. And telemedia is one of the key technologies for delivering this. While telemedia is the key technology behind charge to mobile as a payment model (see p11-18 for our new magazine Charge to Mobile Review), it is also a messaging tech-

nology. And messaging means engagement. According to research by IDC for OpenMarket, 82% of the high-tech companies surveyed consider SMS to be effective for customer alerts. “Businesses in all industries are adopting a ‘mobile first’ strategy to engage mobile customers, through customer promotions and offers, alerts, and surveys to increase the relevance and immediacy of a ‘call to action’,” says Jay Emmet,

than pays for itself – through the data it generates. “The greatest value for mobile messaging to sales and marketing departments is its ability to gain deeper customer insights, enhance multichannel delivery capability, and differentiate or improve the customer experience,” says OpenMarket’s Emmet. Nowhere is this more likely to succeed than in the broadcast sector. As more shoppers turn to digital devices for shopping

By taking this opportunity to engage with consumers, retailers would be able crack a whole new audience and revenue General Manager of OpenMarket. Indeed, 87% of travel and hospitality respondents are currently piloting or in production with mobile messaging programmes that include customer promotions. Not only does messaging and engagement help build brand loyalty and repeat business, it serves a higher purpose – and more

Mobile payments may grab all the headlines, but as a channel it is so much more powerful because it is, at heart, a messaging channel. So what can be done with telemedia based messaging and how can it work with payments? Paul Skeldon takes a look

and spend their time constantly plugged in, it is time for broadcasters to engage these consumers with smart advertising technology before they become left behind by the digital world. Dan Wagner, CEO and Founder of Powa Technologies, believes that smart advertising is crucial when trying to engage customers today. “Smart advertising is the key to broadcasters avoiding obsolescence, enabling viewers to immediately interact with adverts in real time directly, unlocking rich customer engagement opportunities as the ad is playing, rather than leaving it to chance that they will remember later,” he says. “Brands are flocking to digital advertising because it offers a level of interaction and accountability not seen in other more passive mediums. Broadcast has long guaranteed a huge mass audience, but businesses are effectively walking in the dark, with only the loose correlation of viewing

Rules of engagement 8

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

figures and sales uplift to go by when judging ROI.” To meet this need, Powa Technologies’ mobile commerce platform PowaTag enables brands to transform advertising in any medium into an instant transaction point that can be engaged through a smartphone. Users can scan the screen or simply hold their phones up to recognise specialised audio tags, allowing them to instantly complete anything from purchases and donations to entering competitions and requesting product information. Television is still the biggest advertising sector globally and this year the UK will spend around £3.8bn (almost a quarter) on television ads, compared to £2.5bn on print, £910m on outdoor and £492m on radio. Cinema is the second fastest growing ad format in the UK, but only accounts for one per cent of the total market. Digital ad growth will be driven predominately by mobile (23 per cent), social media and video (both 18 per cent). The total UK advertising market is expected to grow by 5.5 per cent to £15.8bn, almost twothirds faster than in the US and the rest of Western Europe. With UK smartphone penetration at 62 per cent, the majority of viewers will now have a smart device close at hand providing the ideal opportunity for retailers to actively connect with them through broadcast. By taking this opportunity to engage with consumers, retailers would be able crack a whole new audience and revenue. Wagner adds: “Brands are no longer willing to spend millions of dollars on advertising campaigns if they are unable to effectively measure the results. By creating interactive smart ads, broadcasters will be able to combine their huge reach with the visibility of digital campaigns, enabling the medium to retain its spot as the leading platform.”

commerce

It started with a click Mobile payments are on the rise, but it is how they are used alongside other telemedia technologies that is the key. Here Juan Ageitos takes a look at how mobile and mobile payments are the key to click and collect This year the amount of time UK adults spend daily with mobile devices will surpass the amount of time spent online via desktop and laptop computers. Indeed research from insights provider eMarketer indicates that UK adults will spend an average of 2 hours, 26 minutes each day with mobile devices. Brands can no longer afford to ignore mobile, especially those in the retail industry. Mobile payments look set to hit the tipping point we’ve long been waiting for in the coming months, with Apple Pay expected to do a lot to raise consumer awareness and trust of paying via their phones. However, the real challenge for retailers will be to integrate mobile into another of the retail sector’s hottest topics – click and collect. Click and collect as a whole is on the rise and smartphones and tablets provide almost infinite access to stores from practically every sofa all over the country. Once exposed to this unprecedented level of convenience, today’s increasingly time-poor consumers are unlikely to revert to their pretech habits.

The perfect partner

At a recent event, we heard how Hummus Bros is already using mobile to enable consumers to pre-order and pay for their lunch so that they can avoid the queues and spend more of their lunchtime enjoying their lunch. And it’s not just them that have jumped on this trend. Many other brands are now rolling out click and collect

platforms – Debenhams, O2, KFC, Gourmet Burger Kitchen and Starbucks are just a few who are continuing to push digital innovation as part of their mass personalisation and customer convenience strategy. By ramping up their mobile offerings through mobile ordering or payment services, consumers can order and pay for their product and collect it at a time and place that suits and this is something we expect to see a lot more of over the coming months. With consumers now spending more time on mobile, being able to pay through a mobile device has become more popular than ever. All of the major retailers are now looking at this as it plays well to the convenience trends consumers are demanding. The business model for retailers will be improved as they don’t have to factor in delivery costs, giving click and collect the perfect platform to expand, not just instore but also in remote locations like train stations, as well as through partnerships with eBay, Argos and Café Nero. Deloitte forecasts a 20% increase in click and collect locations across Europe to around 500,000 as this becomes ‘a fundamental part of ecommerce’. With home delivery unable to cope with the volume of ecommerce, click and collect will spread, with more lockers being set up for example, and more partnerships such as that between eBay and catalogue store Argos which allows consumers to purchase items on

the online retailer’s and have them delivered to the catalogue store for pick-up.

Death of the card

This is an exciting time for mobile payments – it is an opportunity for marketers to grab with both hands and enhance their customers’ experience with mobile. With the anticipated launch of Apple Pay and Samsung Pay attracting many customers, there is a lot more focus on m-commerce and mobile payments. As more people adopt mobile payment services, they will see how easy and convenient the process is. The momentum is rapidly building so brands need to move quickly or risk the very real possibility of being left behind. Juan Ageitos is Senior Marketing Manager, mGage Making interactive media pay

Your trusted partner for Direct Carrier Billing, Payforit and PSMS. IMImobile is an industry leading provider of mobile payment, messaging and billing solutions. We provide international connections and direct routes to all UK mobile operators at the most competitive rates in the market. We offer solutions for any device, supporting Web, Native Apps and HTML5 based applications and services. Our dedicated support team helps you streamline the setup and integration process, making IMImobile the ideal partner for launching and growing your mobile services.

Direct Carrier Billing (DCB)

Payforit (incl. Swift Payment & Double Opt-in Flow)

Messaging and PSMS

Tom Broadfoot Head of Payments Phone: +44 7500 700 665 Email: tom.broadfoot@imimobile.com

www.imimobile.com

Direct Operator Billing in Motion

The Interview

To find out more about what is happening with Charge to Mobile we asked ImpulsePay’s Commercial Director, Paul Paterson, to answer a few of our questions

Out with the old

Oliver Ripley takes a look at where wallets fit into the m-payment landscape and what they mean for charge to mobile

Blurring the lines?

Simon Lord discusses the rise of digital payments and the impact they are having on the ongoing struggle between high street and ecommerce retailers

payments

Microsoft adds charge to mobile to all Windows 10 devices Microsoft is to bring carrier billing to all Windows devices, so that users can buy software and services for all their devices in one simple quick way via their mobile phone bill in the US – something that could supercharge the carrier billing marketplace. Announced at the Microsoft Build 2015 event, the computer giant shared its plans to expand carrier billing support to all Windows

devices, including tablets and desktop computers. Currently, it is only available on cell phones, but soon, you’ll be able to charge all

digital purchases from Microsoft’s Marketplace to your cell phone bill. As long as your carrier allows you to, that is. >> 12 payments

Mobile payment adopters driving ‘sharing economy’ trend, finds Paym People who use mobile banking are four times more likely to be happy sharing money with friends and family, according to new research from Paym, the payment tool that uses a mobile number. Marking the first anniversary of its launch on 29th April 2014, Paym has already processed nearly £44 million of payments. Paym is available through 16 banks and building societies covering more than 90% of UK current accounts, with 2.25 million customers’ mobile numbers now registered to receive payments through the service. The Paym service is growing further still – Nationwide Building Society will join in May. Attitudes to sharing

money with friends and family are shifting. At launch, Paym revealed reluctance among UK consumers to selfidentify as a borrower of money from others, with only one in eight (12%) people willing to do so. This figure has increased 33% in the last year, with one in six (16%) now happy to say they use IOUs with friends and family as an easy way to share costs. The most recent survey also revealed that users of mobile payment ser-

vices are far more open to sharing money with others – 58% are happy to, compared with 15% of all adults. The growth of Paym and increased willingness to share money with friends and family comes against the backdrop of the rise of the sharing economy. Internet-based companies enabling services such as car sharing, house rental and even pet sharing are starting to take off – a report for innovation charity Nesta1 found 25% of

UK adults used internet technologies to share assets/resources over the last year. Craig Tillotson, Managing Director of Paym explains: “Advances in technology are making sharing easier than ever – Paym means you can pay back friends and family using just their mobile number. We’re using our mobiles more than ever – and not just for phone calls. When

you add this trend to the wider growth in the sharing economy, mobile payments look set to be a real growth area over coming years.” Paym found 18 to 24-year-olds are most likely to borrow and lend money among friends and family as a regular part of managing their money. They transfer money every few weeks for drinks (51%), food >> 12

Direct Operator Billing in Motion

payments

Online payments via mobile boom worldwide, UK leads the way When it comes to paying for online transactions using mobile, the UK is way out in front, according to figures from the latest latest quarterly Mobile Payments Index from payment technology company Adyen.

traditionally high online spending period of Q4 and up a massive 39% on the corresponding period last year. The average transaction value (ATV) of digital goods purchased via tablets In Q1 2015, 44.4% of has suronline payments in the passed UK were made using a the mobile device up from 36.9% for the correspond- figure ing period in 2014 – with for desksmartphones accounting tops/ laptops for 66% of that figure for the first compared with 64.9% in time since 2014. Online payments made Adyen began publishing the Mousing mobile devices continues to rise globally bile Payments Index in June 2013. accounting for 27.2% of The US market showed the total online payimpressive growth in Q1, ments made in Q1 2015 with 26.7% of payments – up from 25.8% on the

online being made on mobile, an increase of nearly five percentage

points over the past six months. This rate of growth compared

favorably with Europe, which increased only two percentage points in the same period. However, Europe led the way overall, with 28.6% of payments online made with mobile. Meanwhile, Asian markets have for the first time broken the 20% barrier for online mobile payments. The Index shows that the average transaction value (ATV) for the digital goods industry has risen across all platforms over

payments

Microsoft adds charge to mobile to Windows 10 << 11 The move has taken many by surprise, but isn’t that hard to fathom. Microsoft boasts the largest carrier billing footprint of any ecosystem. The number of mobile operators the company has partnered with stands at 90, and we won’t be surprised to see the number grow higher in the future. Microsoft is also widely used all over the world and, while this is only US at the moment, it makes sense that it will be rolled out across developing markets to allow the vast numbers of Windows users who have

the past 12 months. Digital spend online increased 28% and 30% respectively for desktops/laptops and tablets, but the greatest leap was over mobile devices, where the ATV rose 37% year-on-year to €28.27. While smartphones are growing fastest, the quarter saw tablets with an ATV of €32.66 surpass desktops/ laptops (with an ATV of €31.19) for the first time. “The UK’s position as the world’s number one in mobile payments speaks volumes for the country’s payments infrastructure, its highly competitive mobile network landscape and the general populations’ continued willingness to exploit new payment channels,” adds Myles Dawson, UK Country Manager, Adyen.

no credit card of bank account – but have a cell phone – to enter the digital and app economy. “Last week’s announcement from our partner Microsoft, is huge,” says Ray Anderson, CEO of mobile payment company Bango. “Microsoft expects to have 1 billion devices running Windows 10 in three years’ time, unifying the entire device range, including PCs, tablets, smartphones and Xbox. This makes for a compelling platform for developers: much larger than any previous Windows, iOS and Android proposition alone. Microsoft’s Windows Store

promise a huge range of software, games, apps and other content, including those written for .Net, Win32 and crucially, iOS and Android. The store also includes subscription payments for the first time.” Anderson continues: “I was delighted to see Microsoft introduce carrier billing as standard across all of these devices, even those without mobile network capabilities, like the PC or Xbox. Microsoft has stated that carrier billing increases total payments by 8x per month in emerging markets and 3x in developed markets. This presents

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mobile operators with a massive revenue opportunity.” The global carrier billing market has been growing year on year, largely based on sales of app content on smartphones. With this single move, Microsoft will supercharge the global carrier billing market. Google Play has been the biggest market opportunity to date. Now Microsoft’s commitment to carrier billing for all Windows 10 devices will further excite the world’s mobile network operators and supercharge the global carrier billing market.

Sharing economy << 11 (40%) or transport costs (31%). Over half (51%) of workers and colleagues collate IOUs purchasing coffees and lunch for each other. There is an agreed etiquette about sharing money, with £100 deemed the largest amount most people feel comfortable sharing. Three quarters (74%) say that the reason for borrowing money should always be explained and they also have the right to turn down a request for money if they do not approve of what it is for (77%).

CASE STUDies retail

O2 Germany to offer carrier billing for German Amazon purchases One of the most startling early forays into using charge to mobile has come from Amazon in Germany, which has leapt on the technology to make it easier than ever to purchase from Amazon on mobile.

tent services in Germany. The partnership establishes Bango as a strategic partner, powering Deutsche Telekom’s payments across the range of popular app and content stores, including BlackBerry World, Facebook and Mozilla’s Firefox Marketplace. The partnership Recognising that eis significant in its huge commerce is increasreach, and in opening-up ingly becoming mobile, several of Deutsche TeleAmazon in Germany has kom’s European markets taken some early steps through a single point of integration. into allowing the use of The partnership encarrier billing for users of ables Deutsche Telesome Android devices in kom to accelerate DOB the country. deployment, bringing The move comes off frictionless ‘one click’ the back of a deal struck payment for apps, music, Telefonica Deutschland games and other digital and UK billing company Bango and comes as part content, to its subscribof a thrust by the German ers across Germany and other European markets. operator to offer charge DOB enables consumto mobile across a range of apps stores and coners to charge the cost of

digital purchases to their mobile bill, in one click, without the need for credit/debit cards, or to register personal details. DOB has emerged as the fast path to monetization for mobile content developers, and most of the world’s leading content ecosystems are racing to adopt it as widely as possible. Bango has emerged as the de facto global leader in DOB, powering many of the world’s largest app stores, including Amazon, BlackBerry World, Facebook, Firefox Marketplace, Google Play, Windows Phone store and with more than 130 live operator connections. Today Bango fulfills a vital strategic role in the app store payments space, connecting an ever-widening group of app stores and Mobile

Network Operators (MNOs) to one-click operator billing. Deutsche Telekom selected Bango because of this leadership in powering payment for app stores, and the partnership is a further endorsement of Bango’s platform approach. As the company that has partnered with most of the giants of mobile, driving operator billing forward on a global basis, Bango is the natural partner as large MNOs seek to harness their billing capabilities in order to drive revenue from digital goods. Bango CEO Ray Ander-

son also explains: “Bango is proud to build on our long-established partnership with Deutsche Telekom. This agreement reaffirms Deutsche Telekom’s commitment to providing the very best, frictionless payment experience, for the largest possible number of subscribers.” Bango has also launched one-click carrier billing for Etisalat across 19 countries in the Middle East and Africa, has introduced carrier billing solutions to Indonesia and have brought Facebook into the Payforit community. GAMING

Boku drives PlayStation top ups via carrier billing Since 2013, Sony Network Entertainment and Sony Computer Entertainment have been working with payment provider Boku to provide PlayStation users the ability to charge up their Sony Wallet using their phone bill so that they can buy content – such as downloadable games, add-ons, themes, movies and TV shows, as well as subscriptions to the Music Unlimited service – from the PlayStation Store.

Launched in July 2013 in the UK, the process, carrying the Payforit branding, makes it easier for users to obtain PlayStation Store and Sony Entertainment Network content and wallet top-ups with mobile operator billing can be made through the Sony Entertainment Network Account Management website and PlayStation®Store on PlayStation3. Mobile operator billing works in conjunction with all major UK mobile network operators and is one of several choices

offered to the consumer when they are looking to buy content, and runs alongside PayPal and card payment. Once the user has picked Charge to Mobile as the option they want to use, they enter the amount they want to top up and their mobile number. They then get a text from Sony to which they reply “Y” to confirm the ‘purchase’ payment. Payment is then confirmed on screen. The Wallet has now been topped up and can used to make purchases.

After a first launch in the UK, the service was opened in Germany in October 2013. In the US, the integration came ahead of September 17th releasedate of GTA V, perhaps the most anticipated PS3 game launch of the year. Vice president at Sony Network Entertainment Europe, Gordon Thornton, said in a statement, “We are always looking at new ways to give our customers more choice in terms of content, accessibility and payment methods, and are pleased to be able to

offer the option of mobile operator billing, which is becoming more and more popular.” His colleague Eric Lempel, Vice President, Sony Network Entertainment International, adds: “Offering customers the best entertainment content across the PlayStation Store and Sony Entertainment Network is our top priority. Mobile billing is another secure and convenient way for users to fund their wallet for immediate access to the content they want.”

Direct Operator Billing in Motion

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the interview

Leading the charge To find out more about what is happening with Charge to Mobile, we asked ImpulsePay’s Commercial Director, Paul Paterson, to answer a few of our questions Telemedia Mag: What does the current situation look like for Charge to Mobile? Paul Paterson: Charge to Mobile has always been a strong payment mechanism due to the support from the network operators and the industry as a whole. For the first few years after its inception, Charge to Mobile was seen as just an alternative to Premium SMS. Now, with much wider adoption, Charge to Mobile is a far superior offering and we’re finally starting to see uptake in new sectors. A lot of work is being done, especially here at ImpulsePay, to update the user experience and to allow merchants to offer a wider range of services that can be paid for using Charge to Mobile.

payment screens which are also fully compliant with the rules. Payment Page is a different way of approaching mobile payments and caters for a wider range of service types, whilst addressing the significant compliance challenges of launching a new service. Our new Payment Page editor allows merchants to design their own Payment Pages quickly and easily, through an online interface. Each page is then checked and approved for compliance, vastly reducing the regulatory uncertainty of running a Charge to Mobile service. There are also other new features, such as automated split testing of Payment Pages, to find out which one performs best. It’s really easy to compare different payment pages using the new Payment Pages platform. Just create your A and B sites and we’ll serve each one alternatively to let you see how each one is performing.

TM: Payout rates always used to be a sticking point for Charge to Mobile, how has that changed? PP: Originally, when Charge to Mobile was seen as just an alternative to PSMS the payout rates reflected that. Now however, for any business that is new to premium rate payments, the fee can be as low as 9.9% TM: Who should use Charge to Mobile? - close to credit card rates for the £5 - £30 transactions PP: We believe that the barrier to entry for Charge that Charge to Mobile is ideally suited for. to Mobile has now been significantly reduced with the combination of increased payout rates and TM: So, do you see many new merchants signing up? ImpulsePay’s new Payment Page. Any merchant that PP: As an industry we still have to work hard to sells digital content should now be looking seriously at get interest from the massive community of digital Charge to Mobile. merchants that don’t already know about Charge to If you want to add a mobile billing option to your Mobile. The increase in payout rates has done a huge checkout to increase your audience, then Charge to amount to improve that, but educating these new Mobile is the perfect solution and with ImpulsePay merchants is key to growing the Charge to Mobile you can be up and running in a matter of days. market. One of the biggest challenges is removing the TM: What does the future hold for Charge to Mobile? technical and regulatory barriers to entry for Charge PP: The introduction of the more competitive payout to Mobile, especially if a merchant is not used to the rates, combined with the innovative processes that complexities of dealing with mobile. At ImpulsePay make it even easier to launch services, mean that the we’re working hard to make life easier for new merCharge to Mobile will go from strength to strength. chants and grow the industry. We’re seeing more and more new services launched using Charge to Mobile and I suspect there are many TM: What has ImpulsePay been working on recently? that we can’t even predict at the moment. If you think PP: Our focus has been to make it as easy as possible that Charge to Mobile might be right for your business for merchants to get started with mobile billing. To it almost certainly is – so get in touch. help with that we’re launching our new Payment Page, a solution that allows merchants to have branded Direct Operator Billing in Motion

Could there be a better business case? In the increasingly digital world – and in a world where advertising on mobile is a challenge – charge to mobile offers merchants not only a new way to get consumers to pay, but also the potential for new revenue streams and engagement. Rory Maguire tells you how If you are in the business of producing digital content – either text, images or video – or are providing digital services such as etickets, or entering the new world of Cloud Gaming, then you may have one of several methods of funding your content production, services or gaming: it’s a brand strategy cost, relies on ads or you have a paywall. If your company is funding the content as part of its brand strategy and you want many consumers to access it for free, for example a bike shop that pays for the video production of its staff reviewing bikes and providing repair tips, you may have some interests in selling premium services but it’s not top of your agenda. If your company is reliant on advertising to fund the content, for example a reviewer of laptop computers that consumers visit before they buy elsewhere, then bad news, your consumers are now accessing your content via their smartphones and either there is no space for advertising inventory

or your consumers are abandoning your site due to advertising clutter. Read on. If your company has a Paywall using credit cards and other payment facilities, for example a daily news service, good news, your company has a great forward looking strategy, but bad news, you are not getting the 47% of consumers who abandon purchases due to the information being requested or the 26% of the population that don’t have access to digital currency. Read on. And if you are a cloud gaming provider and are using either intrusive advertising or your traditional app store monetary facilities to charge your consumers, bad news, you are only getting 70% of your revenue and your advertisers are not getting the click-throughs. Read on as Charge to Mobile is a new concept that you may have missed. Charge to Mobile is the ability to charge the supply of digital content, ticketing, gaming and services to the mobile account of the consumer. Consumers love it as it democratises digital currency for them (who does not have a mobile phone?) and allows for spontaneous

purchases often, with a single button press to commit the charge. Do not confuse this term with ‘Mobile Payments’ which is a phrase that will get retailers panicking that they have not yet cracked this particular nut with their consumers as they abandon their desktop purchasing habits for mobile. Charge to Mobile is different. How? One provider of digital services – videos, games, music etc – who originally enabled its store through credit card and eMoney experienced a threefold jump in usage and a doubling of revenue when they enabled Charge to Mobile in the first month. Some consumers substituted usage

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of their credit cards and e-money to avoid the account verification barrier, providing greater choice for the stores consumers and together with the net upside in revenue meant no going back for that provider. Conversion - the scary term held over the heads of the Sales Director jumps from 40% at best to 77% once Charge to Mobile is enabled alongside other payment options. Additionally, an engagement strategy is immediately enabled using B2C messaging that can will (if performed with skill) create repeat sales and build consumer loyalty. The ability to charge small values for your content overcomes the nightmare scenario exercised by one fairly well known branded web service recently. Desperate to plug the declining advertising revenue as the users migrated from their large screen laptops to smartphones with diminished ad inventory, the ad manager enabled a random forced redirect of its consumers to its advertisers sites. Neither the advertiser nor the consumer were happy about this and it created brand damage as a result. If only they had read this

article beforehand! Charge to Mobile is available from every large mobile network in the UK and some smaller virtual mobile networks and has been standardised to enable swift implementation through the networks contracted intermediaries. Payout rates are favourable compared with other payment mechanics and together with the increased usage by enabling all consumers, the financial justification becomes a breeze. Consumers do not need to preregister or enable the payment facility. It exists by default to a majority of consumers and in most cases, where the consumer is accessing your content across 3G or 4G mobile internet, the consumer does not even need to pass over any sensitive personal data. All they need to do is agree to purchase your content, service, ticket or game by pressing the big green ‘Buy Now’ button! Rory Maguire is Managing Director of AIME

Out with the old The way that consumers pay for goods and services is set for exponential change. Smartphone use is increasing across the globe, bringing with it a revolutionary change in the payments ecosystem. Not only are there charges to mobile options, but also wallets and, soon, Apple Pay. But there is more to it than ‘build it and they will come’ with payments, as Oliver Ripley explains Mobile payments are expected to increase by more than 1000% worldwide in 2015 according to research published in the Deloitte, Technology, Media & Telecommunications (TMT) Predictions report. Retailers and e-stores must act now to take advantage of this radical shift in buying behaviour. Ensuring that a compelling mobile payment service is in place, will increasingly be seen as a key differentiator, with merchants and retailers championing this new era of digital commerce set to reap the rewards. The mobile payment industry is clearly growing fast and is now seen as a means for providing customer value, rather than just a transactionenabling platform. The consumer wants to interact with any retailer at any time, through any

device and from any location. They also expect to be able to pay for products in a seamless consistent manner, which is where the mobile wallet excels (see box), but where also charge to mobile solutions and their related engagement technologies such as SMS come in. The general consensus in relation to all types of m-payments, but particularly mobile wallets, is that the market is still waiting for ‘The One’ – a killer mobile payments solution that provides measurable value to both the users and to the merchants who invest in it. To reach this nirvana of mobile payments will mean striking a pragmatic balance between what is possible,

technologically speaking, and what modern consumers will actually use. These consumers have to have a perceived value in any new payment system or they will continue to use their credit and debit cards in shops and online. Consumers are habitual creatures and they need to be coaxed into shifting their payment behaviours. Simply telling them there is another payment service available is just not good enough. They need to understand how it will benefit them or they will continue to use the payment enablers

2015 will see additional key players in tech entering the mobile payments space, most notably with the launch Samsung Pay and Apple Pay. These launches are expected to further revolutionise the mobile payment market and many are looking at this as the trigger that will accelerate the adoption of mobile payments in the UK. For any mercahnt to succeed in the crowded mobile payments space, they will need to identify the correct solution for both its business and customers, deliver the right technology and be set up to monitor and assess

Where’s wallets? A simplistic view of the mobile wallet can be split into 3 basic categories Remote Only Mobile Wallets

Accessible from any mobile device regardless of how smart they are or what operating system they use. PayPal currently has almost 160 million registered users

Proximity Based Wallets

Used at an in store point of sale POS terminal. Typically the mobile devices use contactless technology (NFC) or barcode/QR code readers.

Omnichannel Wallets

These wallets support both remote payments and proximity payments. In other words, they are a combination of both of the previous wallets and are following the current trend for e-tailing known as omnichannel commerce.

they have been using for many years. Many initial mobile wallet vendors – including Google Wallet – made the mistake of assuming user acceptance would happen automatically after launch. When users failed to adopt the new service, they were left scratching their heads and wondering why nobody was using it.

the complete process post launch. Oliver Ripley is senior solutions consultant at Xoomworks Digital and the author of a white paper ‘From Lydian Coins to Mobile Payments’ Direct Operator Billing in Motion

Simon Lord discusses the rise of digital payments and the impact they are having on the ongoing struggle between high street and ecommerce retailers With the recent news around mobile devices in UK shops reaching £54bn a year within the next decade, the scope for mobile payments is huge. The latest statistics reveal an estimated 1.7 billion desktop users in 2014, compared to 1.9 billion mobile devices this year. The need to capitalise on this growing market is high, so we are seeing businesses look at adopting more mobile-friendly strategies. E-commerce represents an estimated 15.2 per cent of all UK purchases. While this figure still seems low, it is worth noting that the UK remains ahead of the rest of Europe. We are now seeing the consistent move of internet traffic going to mobile and tablet, with devices in many cases accounting for more than 50 per cent of all site visits. With this in mind, it is worth noting that conversion rates from browsing are still very low versus desktop. One of the reasons behind this is down to the perceived levels of

Blurring the lines? risk when purchasing goods from a tablet or mobile. With nearly eight out of 10 people not feeling their details are adequately protected when shopping online, mobile payments still have a way to go to capitalise on the market. There is a greater level of trust in the security of desktops rather than mobile payments. In order to increase conversion rates, we are likely to see an emphasis on making mobile payments increasingly safe and simplistic. In 2013, PayPal launched a new mobilebased application called ‘PayPal Here’, aimed at bridging this gap between browsing and purchasing. The new system, which provides a secure way of paying for goods over mobile, has enjoyed success, with $27bn of mobile payments being generated in 2013. Perhaps the biggest mobile payment launch was by tech-giants Apple. The ‘Apple Pay’ service, which uses NFC (nearfield communication),

launched at the end of last year, offers the consumer a simple way to pay by simply scanning their phone. Despite it being in the early stages, it has enjoyed some success, with the payment method being accepted in nearly 700,000 locations. However, it is worth noting that these forms

experience the product before purchasing, these physical stores are vital for maximising sales. The success of this has resulted in the retailer pursuing a wider strategy, looking to open six strategic flagship stores to increase its coverage of the UK population. With this in mind, it is likely that the most suc-

being forced to wait for delivery, the process is now far more convenient and flexible for the consumer. Amazon and Asos have been particularly dominant in this trend, operating hundreds of click and collect locations throughout the UK. Mobile payments will likely change the landscape of purchasing goods both online and on the high-street as they With nearly eight out of 10 people become more popular. not feeling their details are adequately Whilst we are still seeing protected shopping online, mobile many consumers shy payments still have a way to go away from purchasing goods via mobile devices, of mobile payments are cessful businesses will be this will likely change, still in their infancy, and those that best integrate as payment becomes with the recent news of this new model in the easier and safer. Retailers Amazon pulling the plug coming years. Online that operate in certain on its mobile wallet apsales are increasing by 18 markets will blend both plication in January 2015, per cent year on year in paying for goods online there is still a long way the UK. Online spendand using physical locato go. ing is estimated to grow tions to take advantage The business model from £132.05bn in 2014 of this, recognising the for high street retail to £156.67bn in 2015, need for flexibility from businesses is adapting. reaching a potential the consumer. One thing We are now starting to £185.44bn in 2016. is for sure: e-commerce see a blurring of both eAnother example of is open for business. commerce and the high how online purchases street, with sofa.com an are evolving is the rise in Simon Lord is managing director at Altium, a corearly adopter of an onclick and collect. As cusporate finance and M&A line business model that tomers can now collect uses traditional retail. their products from local specialist As consumers want to destinations, rather than

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Bloomua / Shutterstock.com

News media has long been a user of telemedia technology, but now they need to bring it together with IoT, m-payments and more. They need TLC – time, location, context, says Mark Challinor media

Time to deliver some TLC to news media It is true to say that news and news media organisations have been slow to adopt and adapt to new technology, but it is tough to know how to. The Internet of Things (IoT) and smart watches is set to confuse things still further. But growing interest in mobile payments and charge to mobile is going to accelerate how news media does react and adapt to – and adopt – technology as they won’t be able to not do so. Juniper Research already predicts that there will be 200billion mobile transactions by 2020, up from a pretty impressive 72billion today and micropayments for things like in-app purchases will explode, driven by better carrier billing payouts and general acceptance of the technology. With this now so plain, news media knows that it has to embrace this. The sector has always used ‘telemedia’ technology, such as

PSMS and IVR to great effect, so it isn’t a massive step to look at how the technology companies that supply these and have done for years can help with a wider digital strategy and payments. But there is more to it than just delivering micropayments

of m-commerce app, such as Uber and the idea that everything needs to be e-commerce enabled to make clicking and buying really easy. This is all creating an environment where m-payments works and is understood and adopted by consumers and that media

It is about developing the right experience for the consumer, so that the payment part is a seamless and easy part of the overall experience for content and services. According to research by Enders, the closer [organisations] get to consumers, the better the opportunity. It is about understanding consumers and delivering TLC: time, location, context relevant engagement – and that includes payments. The closer they get to ‘me’ the more willing the consumer is to spend. There is also the growing range of a new breed

groups also need to get to grips with understanding. It is early days and there is a lot of education still to be done among news media companies and to some extent agencies. Paywalls have been adopted as a way of monetising content, but that is just the very first step. Really it is about developing the right experience for the consumer, so that the payment part is a seamless and easy part

of the overall experience. Consumers certainly get it. But they are demanding and want a great customer experience every time and they don’t always get it. As everyone has tried to keep pace with the demands from technology, the customer experience has sometimes suffered. There is way more to it than just ‘going mobile’. As the Daily Telegraph learned, people arrive at your site not just by picking up their iPad and opening your app, but from adverts, search and even things like Flipboard and other media apps and social media sites. All this puts a real strain in getting the UX right – and adding payments is just part of that tall order. Mark Challinor is CEO of Media Futures and Vice President of The International News Media Association (INMA)

Making interactive media pay

commerce

The Internet of Cha-Chings Why mobile is the future of shopping

With the launch of the Apple Watch, Oisin Lunny asks a panel of experts how new forms of connected mobile devices will revolutionize our relationship with retail

To paraphrase the mighty Derek Zoolander, the Internet of Things (IoT) is So Hot Right Now. If Zoolander was investing in startups, he might well be funding a ‘Magnum’ bandana that speaks to the tiniest mobile phone, ever. A further wave of connected mobile devices will soon be saturating the mass market. We can peek into this next wave of human behavior by looking at current changes to one of our fundamental activities as consumers, shopping. UK retail industry body IMRG’s eRetail Index guide showed a staggering 45% Year on Year (YoY) growth in the use of mobile devices for retail, while their mCommerce Index showed that smartphones now account for 1 in 4 of the UK mobile commerce sales, with 39% YoY growth compared to 21% for tablets. Tina Spooner, CIO at IMRG explains: “Put simply, mo-

bile and tablet devices are now part of our retail DNA. Consumers are looking for high quality, cross-channel experiences, and engagement from brands at each stage of their journey – and mobile devices form a key part of how that engagement occurs.” Consumers have an expectation that their interactions with a brand can pivot around mobile devices. Simone Williams, Head of e-Commerce at East, explains how they are responding, “Our demographic is slightly older than the smartphone obsessed millennial, so we are seeing the strongest growth from tablet traffic, 160% YoY. We have undertaken a fundamental redesign of all of our systems to offer streamlined multi-channel access to our products. From an optimized email platform, to in-store tablets for staff and customers, mobile devices are

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at the heart of our new retail experience. We have also upgraded our ERP technology so that any one of our stores and warehouses can supply stock for any customer in any location. We are completely challenging the idea of separating retail and ecommerce into silos. Consumer behavior and new technology means it’s all merging into one.” For a brand this silo-smashing trend is disruptive and transformative. Ken Kralick, the Head of Ecommerce Europe for Puma explains, “We partner with wholesale vendors, stores and ecommerce outlets, which are all very different customer touchpoints. Customers are noticing the web is open 24/7, so although our retail partners get more sales, our ecommerce gets the customer support queries in the evening. The larger a company gets with its ecommerce reach, the more interest-

commerce

ing the multi-channel customer experience gets. Customers talk less about the website and more about the brand. The web store is now the store that is in between all of the retail locations.” Puma also have an innovative response to showrooming, consumers using their mobile devices to order online while in store. “Showrooming is being flipped. People are now untethered to retail via their mobile devices, but we can incentivize these sales because we can track the multi channel user journey.” Jonathan Ranger, Chief Revenue Officer at voice of the customer platform Kampyle, has access to millions of customer insights. He can see a mobile future: “UK online sales from mobile doubled in 2014. Brands are having trouble keeping up with that.” Jonathan warns against investing in new tech without first understanding what customers want, “Brands tend to replace consumer intimacy with technology online. Putting a lot of tech in front of shoppers creates greater distance from the consumer which is the opposite of the intent to improved experience.” He added, “The best websites actually lessen their dependence on technology and instead focus on actively listening to online consumers. Listening helps online brands prioritize technology choices based on what customers want, improving both customer experience and the agility in which brands can optimise for results.” Aside from the high street, how do online-only innovators reach a multi-channel audience? Nish Kukadia, CEO of Secret Sales explains, “Mobile adoption is a massive shift in terms of customer acquisition. We can see the ROI from reaching mobile shoppers almost instantly. Our ad campaigns get a better Cost Per Acquisition (CPA) from TV than any

other channel largely because people are watching TV with their smartphones to hand. We see a bump in web traffic within 3-8 seconds of our adverts. Once we have acquired a new customer we ensure they receive communications that are relevant. There are 70,000 different variations of our daily emailout. With 60% of our sales coming from mobile devices, a smooth user journey is fundamental to our success as a business.” Eva Pascoe is something of a legend in technology circles, she co-founded Cyberia, the world’s first Internet café, and was MD of Europe’s first online fashion store. Now at The Retail Practice, an analyst firm hired by big brands to deep dive into the future, she is ever the evangelist for innovation. “Mobile is the answer to retail’s prayers in terms of customer engagement and loyalty, and helps retailers achieve what I call the “minimum viable utopia” for shoppers. With innovations such as

Apple Pay, what happens on an EPOS can happen on a mobile device. Every employee is a cashier and every point in the shop is a money taking point. This solves the biggest customer satisfaction issue, long queues. This is a fundamental change in our retail behavior of the past 100 years. The transformation won’t be painless, but it will be worth it, and it’s the future. Every retail strategy should be a multi channel strategy.” So with brands, retailers and ecommerce providers riding the wave of consumer mobile adoption, what’s next for the multi-channel high street? Eva continues, “Technology will naturally extend beyond the purchase and change how we interact with brands afterwards. Algorithms and 2-way SMS notifications are being used to ensure the optimal delivery experience. We are seeing exquisite IoT enabled packaging that can control its own recycling lifecycle. The

Customers are noticing the web is open 24/7, so although our retail partners get more sales, our ecommerce gets the customer support queries in the evening. Ken Kralick, the Head of Ecommerce Europe for Puma

customer doesn’t want to be bothered with the technical details; they just want persistency of experience and excellence of experience.” As people are connecting to brands via their mobile devices, an expectation for frictionless interactions is becoming the norm, and there is little tolerance for anything less. 86% of customers will quit doing business with a company because of a bad customer experience; this is up from 59% just four years ago. Sienne Veit, Director, Online Product at John Lewis, elaborates: “Customers want to be able to shop seamlessly across all channels and mobile is now the go-to choice alongside visiting our shops. Today, over half of the traffic to johnlewis.com comes from mobile and tablet devices and we’ve also seen an increase in the conversion rate of traffic to sales. We’ve placed a significant focus on developing our mobile strategy and have more enhancements planned for our app later this year.” Regardless of the channel, mobile devices are smashing the siloes between advertising, acquisition, purchase, customer service and even packaging recycling. With the launch of new kinds of connected devices such as the Apple Watch, with payment and marketing ecosystems in place from launch, I think we are going to see a complete blurring of the retail customer experience. Connected mobile devices will become the stores between the retail locations, and the glue across the entire customer experience. As we can see, smart brands and retailers are already embracing the mobile powered revolution. Oisin Lunny is the Senior Market Development Manager at enterprise mobile engagement specialists OpenMarket

Making interactive media pay

Products and services marketing

Rapidly deploy rich creative across all channels with ZMags Creator Content marketing technology specialists, Zmags, has launched its Creator platform, giving in-house marketing professionals the tools to rapidly deploy attention-grabbing digital experiences without the need for complex coding. At launch, Creator is live with early retail adopters: highfashion handbags and accessories retailer Brahmin, fashion retailer New York & Company and luxury department store Neiman Marcus. Early adopters of Creator are already seeing significant uplifts in engagement rates and a rapid return on investment: 50 percent increase in page views during the critical first ten seconds, 10x increase in page view times and double digit improve-

ments in conversion rates. Creator is based on an intuitive experience canvas that includes drag-and-drop tools, asset libraries and widgets; it dramatically reduces the time and complexity from ideation to publishing content on a website. While typically a substantial e-commerce build or update might take a month, updates can be live within minutes with Creator. Creator effectively removes IT or agency resource costs from any given omni-channel deployment or Web campaign by allowing even the technical novice to create and publish rich content. By delivering a drag-and-drop user experience analogous to PowerPoint for digital content marketing,

Creator users have the freedom to add animation or video to a Web experience in seconds or experiment with digital offers and make online pricing updates, on the fly. “Sixty-nine per cent of modern marketing professionals feel hampered by a lack of time,” says Brian Rigney, CEO of Zmags. “They are all too often locked in to over-reliance on either IT departments or third-party agencies to create and code Web experiences. The process and cost of deploying rich immersive e-commerce experiences is often prohibitive. Creator helps marketers overcome those hurdles by empowering them with the self-service tools they need to make an instant impact.”

And its early customers are very impressed. “Creator has made me rethink how I design and create content for the web,” says Paul S. Carroll, vice president, Digital and E-commerce Creative at New York & Company. “It’s amazing — like taking a straitjacket off. And the results? User engagement has been comparable to some of the biggest weekends in the retail calendar.” Alison Katz, director of Direct-to-Consumer at Brahmin, shared the handbag retailers’ success: “By using Zmags’ Creator solution, Brahmin has more than doubled its clickthrough rate and is driving more online revenue as a result. We are earning a 20:1 return on our investment.”

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