MomoLondon: Mobile Payments

I arrived a few minutes late and missed the beginning of Dave Birch’s introduction, but I gather it involved Star Trek and early Visa commercials…

Dave has posted his own summary of his introduction which was all about needing a better story to tell about mobile payments. He reckons we don’t have a really good narrative to get people excited about the subject, and that makes it harder to get the future technologies more widespread.

Some other points he raised were:

• Keuffel & Esser (world’s largest manufacturer of slide rules) commissioned a report about the future in 1967. It was amazingly accurate apart for the bit where they went out of business 5 years later due to the invention of the calculator…
• Facebook have money transmitter licenses in 38 out of 50 states — a good start, but not really useful if you need to pay someone and they go on holiday to a state that’s not covered…
• In EU there was a regulatory barrier and now there isn’t — arrival of non-banks will be a big game change
• UK Universal Credit system — payments won’t be by cheque any more
  • going for prepaid accounts
  • £2bn per month will be going through the new system
  • a big opportunity…

He then challenged the panel to come up with some good narratives for digital, mobile money. My usual summarised notes are below. Dave did a good job of making the evening interesting to listen to, but we didn’t really come away with any new stories to tell. As Margaret Gold tweeted later, the most we talked about was buying coffee…

Panel

• Dave Birch, Director, Consult Hyperion @dgwbirch
• Jennifer Payne, Ponti’s Group @pontisgroup
• Russell Sheffield, paythru @russsheffield
• Iain Herd, PayPal Mobile @iainherd
• Nathan Cushnie, O2 Money @gncushnie

Nathan Cushnie: O2’s Mobile Money

• what is the user case?
• just payment as utility is not very exciting
• discovering deals, then paying directly
• consolidating payments with other financial things — the rest of the wallet

Iain Herd: PayPal

• what is the value for the merchants?

Russell Sheffield: paythru

• has to be seamless, global & ubiquitous
• fit the nuances of different cultures
• Turkey have 10-12 merchant accounts for each merchant — they choose which to use
  • in Turkey, terminals are provided by the banks for free so this is possible

Jennifer Payne: Ponti’s (retailer)

• not enough benefits for the retailer
• want the experience to be user friendly, social, tie in to marketing
• want a little hub and want it to be handed to us

Masabi - train tickets

• merchants are terrified that they’ll install the wrong hardware (betamax)
• masabi trying to provide several different versions all the time
• what about a platform that will support multiple systems?

Are we just waiting to clear the logjams before Apple tells us what to do?

• RS: it is complex - have to make sure it’s secure and keeps customer confidence
  • better not to let the consumer decide
• IH: most players not looking at the whole journey
  • Apple good at making things work end to end
  • good at simplicity
• JP: so many people creating different wallets
  • do I wait for them? do I make my own app?
• NC: don’t want the consumer to have to choose technology

Audience experiences of purchasing on a phone?

• used an SMS to buy using a local currency (Brixton pounds)
  • strong community narrative which was nothing to do with payment
• starbucks app — did what it needed to do
  • very simple
• been in a shop and got pissed off: used Amazon to buy direct
• IH: used Pizza Express payment app
  • audience: fairly simple
  • retailer had no difficulty using it
• audience: bought something in Macy’s
  • frustrated that had to take the phone out of his pocket
• audience: paid with NFC on iPhone at Starbucks
• RS: all down to the customer — the moment they have to think about the transaction, the interruption can stop the payment
• DGW: the goal with the phone is to make things better
• DGW: no good experiences involved PayPal, Barclays, etc
• IH: need big companies involved to get reach — all previous mentions were small scale

Wandering through the building and paying

Do we even need to get our phone out of our pocket? Is it better just to walk around and have things credited to our account automatically?

• Ben Whitaker, Masabi: femto cells on trains/buses… could just pick up people on the journey by being there
  • what about people on the bus stop?
  • track people across the journey…
• PayPal Here/Square: check in to a merchant
  • next time you’re in the shop, the POS terminal shows your face
  • you can pay just by walking up to the till and talking
  • loyalty scheme — offers targeted at retail customers
  • POS machine shows how many times you’ve been in the store, what your last purchase was…
• what does the mobile channel deliver?
• is just leaving your wallet behind enough of a change?
• JP: people go to a restaurant for the customer experience
  • just ordering on your phone is a lonely experience…
  • want engagement as opposed to payment
  • if it comes to payment later then that’s good

mobile should do more

• payments going through to expenses automatically?
• want someone to help me budget & track my spending…
• NC: narrative needs to be bigger than just a transaction
  • accounts departments won’t accept electronic receipts at the moment…
• RS: NatWest doing moneyless accounts in last couple of months
  • been that way for 15 years in South Africa because banks & mobile operators working together
• DGW: Orange & NatWest did a trial in 1996… unfortunately not much has happened since then

Is it really just a squabble about who owns the customer?

• IH: when working at a mobile operator, looking far too much at the commercial model than at what the consumer actually wanted

Risk - mobile payments should be more secure, and therefore cheaper?

• IH: very large percentage of PayPal is risk management
  • when talking with partners, that’s one of the main things they bring to the table
• however, PayPal’s risk management seems to involve offloading a load of risk onto the merchant — see the various articles about PayPal seizing and freezing accounts

What about identity on mobile?

• RS: single sign-on
• NC: not really looked at identity
• IH: PayPal has less accounts than Facebook, but they’re all verified
• DGW: if you figure out identity, then payment falls out in the wash…

What about payment with non-currency, e.g. selling personal information?

• despite the promise of a new idea, this question didn’t get much of an answer…

Why can’t I take the phone round a supermarket and scan products as I go myself?

• NC: O2 Wallet does include a bar-code scanner
  • can scan a virtual/digital barcode poster shop
  • next step would be paying for real things

Don’t want Starbucks & McDonalds — I want independent merchants

• Not just taking the payment utility, want community and local interest

Replicating existing stories hasn’t worked - successes are those that create new markets

• “What frustrates me is that those electronic, mobile transactions don’t appear any different in my bank statement”

Working backwards from the future

• NC: consumer makes a gesture; consolidate offer & loyalty points; merchant gathers data

Payment of medium sized amounts between people (e.g. £600 for doing something)

• PayPal is not legal tender — cannot force someone to be paid by PayPal…
• the revolution is on the customer acquisition side, never on the usage
• IH: PayPal focused on getting to Facebook size
• it’s only a matter of time until you can send money via Facebook
• audience: if you get a parking ticket, pay it by PayPal — it totally confuses them!
• want to pay a builder, who pays his contractors, who use the money immediately to go down to the pub — cash is the only accepted mechanism right now
• DGW: refuses to pay cash as he refuses to take part in the black economy!
  • part of the story could be that you’ll pay less tax if you pay by mobile :-)
• IH: can give people prepaid PayPal credit cards — they can withdraw cash from an ATM

What about beggars? Small transactions to unknown people

• DGW: contactless terminals by busker pitches in the underground set at £1
• DGW: Not a problem he’s trying to solve…

Should I have the right to make an anonymous payment?

• IH: that’s where PayPal came from
• Data that goes with the payment that seems to the root of the business models we were talking about earlier…

Would it be good for Ponti’s to get rid of cash?

• JP: it’s not on our radar — all that matters is that we get paid and the customer is happy

What is the market asking PayPal for?

• in UK fashion group pay by barcode
• all German shops close on a Sunday, but can put panels (with QR codes) in windows so people can shop online when you’re closed

Is showrooming a problem for retail (comparison shop and then buy online)?

• JP: Not particularly true in a restaurant…

Wrap up:

• need to look bigger than just replicating credit cards
• In 1967 the USA banks thought it would take at least until the 1980s to get rid of cheques… Money changes very slowly

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