2013: The year of the Mobile Wallet?

2013: The year of the Mobile Wallet?

ISSUE 194 | January 2013

IN THIS ISSUE

CoNTaCTlESSNFC to account for half of Europe’s mobile payments................................................M-payMENTMobile purchases increase 81% in 2012..........................................................MobIlE MoNEy TraNSFErMobile money transactions in Nigeria hit N151 billion.......................................................M-baNkINgM-banking users to exceed 1 billion in 2017................................................M-poSround-up................................................

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Contents

Contents www.mobilepaymentsworld.com | January 20132

Address Mobile Payments World Stable Yard, Kelling Estate Kelling Norfolk NR25 7EW United Kingdom

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Mobile Payments World is owned and published by PaymentsCM LLP, proprietors of Payments Cards and Mobile www.paymentscardsandmobile.com

Mobile Payments World newsletter, published 22 times a year, is available in on-line format only, priced at £250 – $/€ prices on application. Contact Kaye Skinner for more information.

© Copyright 2013, PaymentsCM LLP

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neWS In BrIefNFC to account for half of Europe’s m-paymentsIsis ends a year of caution and achievementBranded apps integrate mobile paymentsAndroid and iPhone top fraud targetsGoogle Wallet’s tough 2012PayPal’s in-store plansWorldwide NFC launches planned Page 4/5

ContACtleSS2013: The year of the Mobile Wallet? Page 7

Leading UK payment service providers commit to PayPass WalletNFC integration continues in Poland Page 8

U.S. Bank launches “Go Mobile” using an iPhoneAussie telcos support for m-payments Swedbank pilots mobile couponing Page 9

GlobalPlatform streamlines security certification process Page 10

M-PAyMentMobile retail sites struggled to keep up with demand during busy Christmas season Page 12

txtNation roll-out UK direct billing with Payforit 4Mozido acquires PagoVisionMobile purchases increase 81% in 2012 Page 13

Contents

Contents www.mobilepaymentsworld.com | January 20133

M-BAnkIngM-banking users to exceed 1 billion in 2017Vietnam’s first aggregated m-banking serviceBMO Bank of Montreal and Monitise partner Page 15

MoBIle Money trAnSferRwanda’s fingerprint bankingMobile money transactions in Nigeria hit N151 billion Page 17

M-PoS

payleven rolls out Android across Europe

Payatrader launch first stand-alone GPRS micro-merchant terminal

SumUp launches in France, Belgium and Portugal Page 18

AnAlySISOvercoming the mobile payments adoption chasm Matt Zalubowski, First Annapolis Page 19

AnAlySISWho moved my money? Arther D. Little Page 22

oPInIon PIeCeBullGuard outlines key threats to personal security for 2013Page 24

Address Mobile Payments World Stable Yard, Kelling Estate Kelling Norfolk NR25 7EW United Kingdom

Publisher Alexander Rolfe [email protected] +44 1263 711937

Subscriptions manager Kaye Skinner [email protected] +44 1263 711800

Business development manager Wendy Sanders [email protected] +44 1263 711801

Mobile Payments World is owned and published by PaymentsCM LLP, proprietors of Payments Cards and Mobile www.paymentscardsandmobile.com

Mobile Payments World newsletter, published 22 times a year, is available in on-line format only, priced at £250 – $/€ prices on application. Contact Kaye Skinner for more information.

© Copyright 2013, PaymentsCM LLP

If you enjoy Mobile Payments World - why not visit our main site and see what other services we offer to help your business progress: www.paymentscardsandmobile.com


News in Brief

4 News in Brief www.mobilepaymentsworld.com | January 2013


NFC to account for half of Europe’s m-paymentsAbout 42.3% of mobile payments in europe in 2015 will be nfC payments, and the percentage will increase to 49.6% in 2018, when 38% of mobile phones shipped will feature nfC, according to a new frost & Sullivan report.

“The European population is moving towards prepaid, online and contactless payments for small amounts,” says Frost & Sullivan’s Jean-Noel Georges. “Numerous commercial mobile payment offerings will be launched in 2013, and by 2014-2015, greater uptake will follow.” nNFC World - Clark, Mike

Van Dyke thinks Isis’ overcautiousness may put it at a disadvantage. “I like the benefits of NFC ... but why didn’t Isis couple it with some other technologies as a better way to serve its goals?” he asks. Van Dyke also thinks Isis will have difficulty catching up to rivals such as Square because of its de-lays. He recommends that companies ap-ply a multi-pronged strategy, suggesting that they “use the cloud or [quick response] codes in the short term, while NFC is gath-ering steam for the long term.” nISO & Agent Weekly

cess multiple brands and offers, or specialist apps focusing on location information, promotional offers, and travel. nInformation Age

Isis ends a year of caution and achievement2012 has been a busy year for the Isis Mobile Wallet joint venture, with developers spending the first half of the year ensuring that its infrastructure was in place and thus delaying its planned test launches.

The effort’s pilot testing phase in Austin, Texas, and Salt Lake City opened in late Oc-tober, with nine NFC-enabled handsets to operate the Isis Mobile Wallet.

Isis’ Jim Stapleton says the plan sug-gests the test phase could last as long as nine months before a wider implementa-tion is deployed. Isis’ broader deployment will bring NFC closer to becoming the preferred technology in mobile payments, but Javelin Research & Strategy CEO Jim

About 33% of consumer brands will integrate mobile payments into their customer-facing smartphone apps by 2015, according to gartner.

“Brands need to help consumers make purchasing decisions in an effi-cient and personalized way,” says Gart-ner research director Sandy Shen.

Apple has already integrated pay-ment functionality into its mobile apps, and Starbucks also has company-branded apps that allow customers to pay for goods in-store. The Starbucks app also provides additional features such as tracking rewards and provid-ing directions to local stores.

However, branded companies’ apps will have to compete with aggregator apps in terms of richness of offering and user experience, and only those that deliver compelling value and user experience will last, Gartner says.

In addition, Gartner notes that con-sumers may prefer to use an aggrega-tor app instead of shopping directly from the merchants’ own apps to ac-

Branded apps integrate mobile payments

Android and iPhone users who use their devices to conduct mobile transac-tions are the top targets for fraudsters, according to a new Javelin Strategy & research report.

Javelin says Android is especially susceptible because of its expand-ing user base and open source plat-form, but iPhone users also are allur-ing because their average spending and shopping frequency with smart-phones tops that of their Android counterparts.

Javelin estimates that Android us-ers spend 38% more money shopping via their phone’s mobile browser than via mobile apps, spending $2.9 billion through the former and $2.1 billion through the latter. Similarly, iPhone users spend 49% more via the brows-er than via mobile apps.

In comparison, users of all other smartphones spend some $1.3 bil-lion through a mobile browser. Javelin notes that mobile browser-enabled shopping is riskier for smartphone owners because browsers have greater vulnerability to dangers such as phish-ing, Web site spoofing, and man-in-the-mobile attacks than mobile apps.

Javelin analyst Al Pascual suggests that businesses and consumers use apps for their mobile purchases to minimize risk. n

Android and iPhone top fraud targets

News in Brief

5

Google Wallet’s tough 2012

Worldwide NFC launches planned

the bumpy path that google Wallet followed this past year has shaken faith in the viability of a mobile payment system that uses nfC technology to facilitate point-of-sale payments.

A key problem for Google was persuad-ing card brands and issuers to get on board as partners, with no other issuers apart from Citigroup working with Google Wallet until Google implemented basic alterations in its relationships with such entities.

Originally, issuers were permitted to place card data securely on the mobile phone, but integration was long and ardu-ous, and in August Google cleared an op-tion to instead allow linked cards to fund a virtual MasterCard. Furthermore, Google transferred the card data from the secure element in the phone to cloud-based stor-age, and also started phasing out a Google-branded virtual prepaid account connect-ed to its wallet app.

Google is now rumored to be develop-ing a plastic card that would use Discover Financial Services’ network rails for POS transactions, and TowerGroup analyst Brian Riley considers this to be a step back for Google Wallet.

“We don’t know if they will really get it [a plastic card] out in the field, but it could just be like another PayPal prepaid card out there to function at the point of sale,” he says. All NFC-enabled mobile wallets are confronted with a dearth of available handsets with the technology built in, and Google additionally faced little support from major carriers.

“The year 2013 shapes up to be fairly in-teresting because Google and PayPal have goals to establish POS brand[s with plastic

cards] and incorporate their value-added services,” says Aite Group analyst Richard Oglesby. nAmerican Banker - Heun, David

Commercial launches of nfC technology are planned for 2013 around the world, but mobile operators and other companies spearheading the rollouts still have to prove nfC’s appeal among consumers by addressing security issues, boosting awareness, and offering more compelling nonpayment services.

GSMA’s Pierre Combelles says 2013 will be a crucial year for the future of NFC in the United States. More NFC-ready devices are expected to become available this year, but Apple’s exclusion of NFC from the iPhone 5 is seen as a setback.

Meanwhile, major European telcos are preparing for commercial rollouts of NFC-ready mobile wallets, and nearly all have forged agreements with Visa Europe or MasterCard Worldwide to embed the telcos’ own mobile payment app in the wallets.

European operators also plan to open up their NFC SIM cards to banks and other pay-ment issuers in return for rental fees. Sub-stantial Asia-Pacific region NFC launches are planned or underway, with China Mobile announcing a large NFC trial to commence in February, along with collaboration with large banks.

Japan’s deployment of proprietary NFC technology showed that a large base of phones and acceptance points for payment and transit ticketing does not necessarily translate into mass consumer adoption, but Japanese telcos’ shift to standard NFC tech-nology could give the effort a boost.

Still, supporters have signaled the need for more nonpayment-related incentives and services to promote use of digital wallets. nNFC Times - Balaban, Dan

News in Brief www.mobilepaymentsworld.com | January 2013


PayPal’s in-store plansPayPal has pilot projects under development with 16 merchants intended to ease and enhance the shopping experience for their customers at approximately 17,000 store locations.

At retail chains that include Home De-pot, Toys ‘R’ Us, and Guitar Center, PayPal is deploying payment terminals that let con-sumers pay by either inputting the same login and password they use for PayPal online, or by swiping one of three PayPal/MasterCard payment cards.

Those cards include a debit card or pre-paid card tied to a consumer’s PayPal stored-value account, or a PayPal Express Master-Card credit card issued by GE Capital Retail Bank. PayPal promises future deployments, including one effort concentrating on mak-ing PayPal the mobile phone-enabled in-store payment of choice for consumers.

PayPal is pilot testing a mobile app that allows consumers to click an icon on their mobile phone of a participating merchant before entering a store, causing their ac-count information and photos to be dis-played on a store cash register screen.

The clerk would identify customers by their photos and process their payments without customers having to present their phones. PayPal says the pilot projects will build on its mobile technology and loyalty program, let-ting customers earn electronic loyalty points they can redeem while using PayPal to com-plete a transaction at participating retailers. nInternet Retailer - Demery, Paul

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Merchant Payments Ecosystem

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...the battle for POS continues in Berlin, February 12-14, 2013

Mobile Payments AcceptanceeCommerce Payments AcceptanceInteraction Beyond Payments

PCM - in-magazine.indd 1 9/19/12 11:08 AM

Contactless

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With smartphone penetration in the Uk at 60% and rising, is the much talked about ‘Mobile Wallet’ the way we’ll pay in 2013? latest research from ICM research suggests that Mobile Wallet is very unlikely to take off this year and here’s why:

The market isn’t readyICM’s research carried out in the run up

to Christmas 2012* discovered that con-tactless payment – which many consider the entry point for Mobile Wallet – is still very much in its infancy. Whilst consumer awareness is high at 80%, only 8% of peo-ple actually make contactless transactions. The reasons for this mirror the barriers to Mobile Wallet take up.

Firstly, a lack of retailer support with few terminals and little or no in store promo-tion. Secondly, widely held consumer se-curity concerns have not been addressed. What happens if I lose my mobile? What happens when my phone runs out of bat-tery? These concerns need to be addressed if Mobile Wallet is to take off in the big way we’ve been led to expect.

Smartphone users aren’t that tech savvy

Smartphone penetration is growing yet many smartphone users aren’t tech savvy. M-commerce is certainly popular, but rela-tively few transactions happen via the mo-bile handset. The responses from consumers about security concerns, and their willing-ness to accept PIN numbers and other mea-sures that go against the somewhat casual ‘wave and pay’ ethos of contactless paying highlight that there’s more work to be done to promote Mobile Wallet than simply in-creasing smartphone penetration.

ICM also believes that brands also aren’t doing enough to connect with their custom-

2013: the year of the Mobile Wallet?ers using the mobile tools we know they are already comfortable with, particularly apps. In the run up to Christmas ICM found only one high street retailer utilising apps specifi-cally designed to help with Christmas shop-ping – a real missed opportunity.

NFC isn’t keeping upThere simply aren’t enough NFC enabled

smartphones which means many people can’t yet make contactless payments by mobile even if they wanted to. A major bar-rier to take up in 2013 is that smartphone users tend to be tied into long contracts, and people won’t break their contracts just to get an NFC enabled device.

key findings from the research:• A third (34%) of consumers would definitely or probably use their mobile as a wallet to make payments, collect vouchers, to use as event tickets and on public transport. This figure rises to 46% when asked just to smartphone owners, with younger people more likely to do so, especially 18-24 year olds at 55% and 25-34 year olds at 49%. The figure increases again when an incentive is offered - 51% would use Mobile Wallet if they got a discount for doing so.• More than half of consumers (51%) would use Mobile Wallet if their worries about security were addressed• 10% of people have lost either their wallet or purse or in the last 24 months (mainly 18-24 year olds).• 55% of us would worry more if we lost our wallet/purse than our mobile – so were all that information in one place, people’s concerns are understandable• Consumers are ready to accept a range of security measures to gain confidence in Mobile Wallet – including a bank/mobile provider guaranteeing any financial

losses (56%), to entering a PIN on every transaction (43%) or after a number of transactions (37%), being able to shut the mobile down remotely (40%), setting a daily cap on spending (34%), facial recognition (33%) and voice recognition (24%) on the mobile handset.What needs to happen in 2013 for

Mobile Wallet adoption?Jamie Belnikoff, associate director at ICM

Research who led the research concludes: “Mobile wallet is about more than just pay-ing: it allows consumers to manage their vouchers and discounts, loyalty cards, event tickets and public transport passes all in one place. Whilst people appreciate these advan-tages, they expect a range of incentives and benefits to get them to pay this way. How-ever even with this encouragement, their genuine security concerns – and as we’ve seen in our recent research into contactless payments – the lack of terminals in shops and absence of in-store promotion are also preventing broader consumer take-up.

Google Wallet, Apple’s Passbook, Oyster cards and other transport passes, as well as contactless ‘wave and pay’ cards are stepping stones that will encourage early adopters to convert to Mobile Wallet. The market needs to combine incentives with added security measures and communi-cate them widely if it is to build consumer confidence that will help drive the adop-tion of Mobile Wallet.

We also believe there is a huge oppor-tunity for brands and especially retailers to develop their mobile offer – without the need for investment in terminals, staff training and in-store promotion. We urge both brands and retailers to maximise this opportunity as a great way to engage with consumers in 2013.” n

Contactless www.mobilepaymentsworld.com | January 2013


Contactless

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LeadiNg UK paymeNt serviCe providers

MasterCard has announced that ten Uk payment service providers have committed to PayPass online by MasterCard, part of PayPass Wallet Services, dramatically increasing the number of Uk merchants able to accept wallet payments online and on mobile.

The service providers CQR, CreditCall, DataCash, MoPowered, Optimal Payments, Pensio, Sage Pay, SecureTrading, The Logic Group,and WorldPay have agreed to in-tegrate with the scheme, which enables more online and multi-channel retailers to have the tools available in order to capital-ise on the growing online and mobile com-merce market. This market is predicted to make up approximately 45% of UK retailers’ total revenue by 2014.

“With an ever increasing number of transactions being made online, mer-

Commitment to PayPass Walletchants need to cater to changing consumer lifestyles and expectations. They need to offer shoppers peace of mind that their personal details are safe, offer a wider choice of pay-ment options and quicker transaction times, which can ultimately translate into increased cus-tomer satisfaction and an uplift in sales,” comments Marion King, president UK & Ireland, MasterCard.

The service allows merchants to accept electronic payments across multiple chan-nels, whether the purchase is made online

using a computer, tablet or smartphone. By integrating PayPass Online into e-com-merce sites, merchants can speed up the checkout process, helping to reduce the number of abandoned shopping carts, and shoppers can easily access all their pay-ment and shipping information.

These services enable a consistent shop-ping experience no matter where or how consumers shop, as well as a suite of digi-tal wallet services, and developer tools to make it easier to connect other wallets into the PayPass Online acceptance network.

“Consumers are only ever one click away from a competitor’s website, and WorldPay’s priority is to help merchants to secure as many conversions as possible,” comments Phillip McGriskin, chief product officer, WorldPay. “We have partnered with PayPass Wallet Services so merchants can streamline the payment experience, and offer customers a quick, convenient and secure way to pay online.” n


NFC integration continues in Poland

NBS Technologies, a leading provider of software and equipment for card personalization is actively installing its Xpressi Trusted Service Manager (TSM) in the Polish market. The TSM works behind the scenes to make the entire process of downloading payment account information onto your phone efficient and secure. The TSM integrates banking, NFC and mobile phone security systems, to ensure that consumer’s credit card information is completely secure. “The mobile payment market in Poland is ready and rapidly expanding. NBS is uniquely positioned to enable our clients to meet the needs of their customers,” says Mike Fisher, NBS general manager. “NBS has several years of experience working with NFC and the TSM is an extension of that experience.” n


Contactless

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BaNKs iN NFC movemeNt

U.S. Bank flexPerks Visa customers in Salt lake City will be the first U.S. Bank customers invited to try a new mobile payment service called U.S. Bank go Mobile. the service allows customers to quickly and securely pay for everyday purchases with a wave of their iPhone 4 or iPhone 4S.

Newly approved customers who qualify and opt-in for the service will receive a customized U.S. Bank Go Mobile iPhone case along with their new card. The case is equipped with NFC, which allows cus-

tomers to make safe and secure purchases . The case also has an extra battery ex-tending the

U.S. Bank launches “go Mobile” phone’s charge time by more than 50%.

“We have incorporated all of the feed-back we have received from prior pilots and our customer research into this latest offer-ing and we are excited to offer U.S. Bank Go Mobile in these two markets,” comments Dominic Venturo, chief innovation officer for U.S. Bank Payment Services.

U.S. Bank is partnering with Visa, Device-Fidelity and Datacard Group to bring this payment technology to its customers. The iPhone case used for the Go Mobile pay-ment service is developed and patented by DeviceFidelity.

It incorporates a certified portable secure element embedded into the microNFC card enabling the phone for payments. This microNFC and FlexPerks smart card will be personalized with Datacard secure issu-ance solutions providing superior security and efficiency. n


Swedbank pilots mobile couponingIn Uppsala, Sweden’s fourth largest city, Swedbank is working with a number of organizations to pursue a safer Uppsala through promotion of using less cash. The Swedish bank is trialling the use of MasterCard’s mobile application Koy with high street retailers who can use the app to post deals to subscribers that can be redeemed from the user’s smartphone.

Uppsala is seen as an ideal testing ground for the application of mobile payment-related technology due to a collaborative programme between banks, retailers and the police to reduce cash usage on the high street.

Per Ericsson, the cash management project manager for Swedbank in Uppsala, says the bank has already moved to stop handling cash in its branches: “This has been in effect since May 2012, as cash has a bad effect on our environment due to transports, and with less cash, the risk of robberies decreases as well.” n


Aussie telcos support for m-payments Payments via mobile phones should gain traction in 2013 as more devices with small near field communication (NFC) chips come onto the market, according to Australian telcos.

The companies are ramping up plans to deliver contactless payments. Vodafone believes 80% of smartphones sold on its network will be NFC-enabled, and the company plans to formally launch its SmartPass app within months.

Developed in collaboration with Visa, the app will work with a system that uses the credit card firm’s existing Paywave network.

“NFC has been a slow burn, but it will likely become entrenched next year and we plan to be a big part of that,” says Telstra’s Hugh Bradlow. The technology is on the radar of all the big retailers, notes Australian National Retailers Association CEO Margy Osmond.

However, she says consumer demand will ultimately determine the pace of adopting mobile phone payment systems. n

Contactless

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gLoBaLpLatForm

globalPlatform has advanced its Composition Model, which streamlines the security evaluation of nfC contactless mobile applications. the recent enhancements will be of particular interest to mobile application and product issuers, such as mobile network operators (Mnos) and financial institutions.

A composite product consists of an open platform (such as a secure element [SEs]), with one or more secure applica-tions (known as sensitive applications), and optionally one or more basic applications (which do not need to comply with strin-gent security requirements to operate). As SEs in mobile devices begin to host mul-tiple applications, it is important that all applications perform as intended and do

Security certification process not interfere with the other services being delivered. Evaluating the security of appli-cations pre and post issuance is therefore vital, but needs to be cost and time effec-tive for all market stakeholders.

The GlobalPlatform Composition Model, which was first released in 2011, defines a relatively easy approach to certify the security of SE products that carry sensi-tive and/or basic applications and simplify post-issuance application management. The model achieves this by promoting two key concepts: re-using existing secu-rity evaluation results; and limiting security evaluation work to only test the impact of new application and SE combinations. The streamlined methodology enables the telecom and payment industries to more easily redeploy SEs and applications once

they have been certified. “Most of the applications we have on our

mobile handsets today have low security requirements. As we start to add applica-tions that connect to our bank accounts or identity, the need to protect an application is crucial,” explains Gil Bernabeu, technical director, GlobalPlatform.

“Security evaluation can be expensive and time consuming and while it is impera-tive that the industry adheres to the high-est security standards, it is important that products can be brought to market quickly. GlobalPlatform’s work in this area aims to streamline the security testing process. This will encourage application developers to validate the security of their applications appropriately without stifling innovation and product advancements.” n



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“Very valuable quality of speakers” Entercard

“Good value.” Luottokunta

NORDIC CARD MARKETSTowards payment systems convergence21 - 22 January 2013, Radisson Blu Royal Hotel, Copenhagen, Denmark

SMi present their 12th annual…

QUOTE MPW AND RECEIVE A £300 DISCOUNT OFF THE CONFERENCE

CONFERENCE CHAIR: The Nordic region is one of the most dynamic regions in Europe, with the highest levels of non cash transactions per inhabitant in Europe. Governments and the Banks in the Nordic countries have made a concerted effort to drive the adoption of new electronic payment technologies.

Join us to meet the key players, movers and shakers in the cards and payments community, and to explore the latest card trends and opportunities in the Nordic region!

Attend this conference to hear about the latest on: • The European Commission’s green paper

on an integrated European market for card, mobile and internet payments

• The shift towards banking apps and social media

• Card innovation• The latest card products in the region• Cross selling strategies• The latest card loyalty programmes• Mobile, internet and contactless payments

Francesco Burelli, Partner, Value Partners, UK

SPEAKER PANEL INCLUDES:

Rita Wezenbeek, Head of Payments Unit, DG Competition, Financial Services Directorate, European Commission

Liisa Kanniainen, Vice President Payments Infrastructure, Transaction Products, Nordea, Finland

Nils Petter Johnsen, Head of Product Development, Sparebank, Norway

Bjorn Flismark, Senior Vice President, SEB, Sweden

Michael van Doeveren, Senior Policy Advisor, De Nederlandsche Bank, Netherlands

John Moller, Head of Cards, Nordea, Denmark

Henrik Bergman, Senior Manager, Market & Infrastructure, SEB, Sweden

Bent Bentsen, Senior Advisor, Group Payments and Infrastructure, DNB Bank, Norway

Jim Bannerman, Head of Restaurant Solutions, McDonald’s, UK

Sirpa Nordlund, Chief Executive Officer, Mobey Forum, Finland

Pasi Hannonen, Senior Research Analyst, Euromonitor International, Lithuania

Tuuli Perkio, Business Leader, Debit Europe, Mastercard, Finland

PLUS TWO HALF-DAY POST-CONFERENCE WORKSHOPS - 23 JANUARY 2013

A: The (R)evolution of FraudLed by: Stefan Claeser, CEO, Paymint

8.30am - 12.30pm

B: NFC and Contactless – What’s in it for me and my Company?

Led by: Gerhard Romen, NFC Guru, GWR Consult1.00pm - 5.00pm

M-Payments

12

throughout December, keynote research has revealed that mobile retail sites were significantly slower than they have been in previous months, and collectively took an additional second and a half to load – from an average of 19.51 seconds, compared to 17.95 seconds in november. the 16 top performing sites were all slower in December than the top 16 in november.

For the Keynote Mobile Retail Index, Keynote Competitive Research, the indus-try analysis group of Keynote, tracks the mobile site performance of 24 of the top retailers across seven countries. While the UK, France and Germany continued to dominate the top 5 times to load, France’s Fnac suffered with an increase in load time from 9.92 seconds in November to 17.02 seconds in December.

In terms of availability – the chances of a site loading correctly when visited – only one mobile site had a success rate of less than 90 percent in December. On the whole, however, mobile sites were less re-liable with an average availability of 95.78 percent in December, compared to 96.91 percent in November.

“It was more important than ever this Christmas for online mobile websites to perform well, as many Christmas shoppers exclusively used online devices for shop-ping,” says Robert Castley, lead solutions consultant at Keynote Systems. “Christ-mas can be a lucrative time for retailers, but it is also a highly competitive time, and a well performing mobile retail site can make the difference between win-

Mobile retail struggle to keep up too mUCh demaNd dUriNg BUsy Christmas seasoN

ning and losing a sale.”“It is very difficult to ac-

curately predict the level of pressure mobile websites will be under, particularly given the progression of mobile since last Christ-mas, and this is why it is absolutely paramount that enterprises test and moni-tor their online presence across all three screens – websites, mobiles and tablets. It isn’t enough to rely on the knowledge that the site has held up in the past, firms must proactively make sure their mobile sites can take the strain,” advises Castley.

The mobile sites of these retailers were measured us-ing a webkit based smart-phone browser every hour from London, Nürnberg, Paris, San Francisco, New York, Stockholm, Sydney and Tokyo. 3G networks are used for monitoring which can lead to an in-crease in performance times due to the carrier latency overhead. n

To subscribe to Keynote System’s weekly perfor-mance indices please visit: http://programs.keynote.com/subscriptions/kcr_performance_indices.html

m-payments www.mobilepaymentsworld.com | January 2013


M-Payments

13

txtnation announced that Payforit 4, the latest version of Payforit, the online and mobile-web operator billing solution is now available for all clients operating in the Uk market across their platform, in full release.

Payforit is the UK mobile micro-payment scheme, created and supported by all of the UK mobile network operators (MNOs). txtNation, until recently, have been hesitant

txtnation roll-out Uk direct billing

Mobile purchases increase 81% in 2012

roUNd Up

in releasing the full range of Payforit inte-gration options. The last few months have enabled select service providers to test drive the platform until satisfied, before a full roll out.

Payforit 4 brings several new features, most of which have never before been seen in the UK mobile billing space, including the ability to bill a consumers phone bill via a ‘one-click’ action and full HTML 5 support.

Ashley Cross, txtNation COO comments, “We have had a large amount of interest for Payforit 4 over the last few months, so much so that we have committed our-selves further to making our platform the best it can be to accommodate Payforit’s technology. We are committed to pushing the envelope on client side interface inter-actions and adding enhanced accounting features into our platform.” n

m-payments www.mobilepaymentsworld.com | January 2013


the amount of money people spent on mobile payment transactions increased 81 percent year-over-year in 2012 to $25 billion, according to eMarketer.

Although this figure only comprised 11 percent of all e-commerce transactions, eMar-keter projects that mobile will account for 25 percent by 2016, for a total of $87 billion.

“Particularly in the second half of the year and in the holiday season, there were

signs that smartphones and tablets in par-ticular had made much more progress than people had previously thought we would,” notes eMarketer’s Clark Fredricksen.

In a reversal from 2011, last year more people made purchases using tablets than smartphones, with $13.9 billion spent from the former versus $9.9 billion from the latter.

However, Fredericksen acknowl-edges that many mobile storefronts have problems that complicate com-

pleting a purchase via mobile. “Even though sessions often start on

smartphones, in the end consumers end up turning to computers or retail stores or even a tablet to seal the deal,” he observes.

Fredricksen also notes that major e-com-merce players such as eBay and Amazon’s substantial mobile shopping investments are reflected in their significantly higher mobile commerce numbers compared to smaller shopping sites. n

Mozido acquires PagoVisionMozido the cloud-based integrated platform of mobile payments, commerce and marketing announced its acquisition of PagoVision, a US-based leading merchant network providing check cashing and payment services for the unbanked and underbanked.

With the acquisition, Mozido will gain access to PagoVision’s merchant network – more than 1,500 independent retailers

dedicated to serving the under banked and unbanked consumers and the immi-grant population in the US.

PagoVision merchants can generate incremental revenue by expanding their product offerings to include Mozido’s full assortment of value-priced financial solu-tions, including international and domestic remittances, international and domestic mobile minutes top-up, bill pay, stored val-ue card and remote deposit capture.

In addition, the Mozido targeted market-ing platform will enable PagoVision mer-chants to increase traffic to their stores and deepen customer relationships by delivering promotions, coupons and loyalty rewards directly to the consumers’ mobile phones.

“The strategic acquisition of PagoVision marks the beginning of Mozido’s deploy-ment of its mobile financial services, com-merce and targeted marketing platform in the US,” said Greg Corona, CEO, Mozido. n

RBTE is the show that addresses the changing needs of many vendors specialising in payments – many of which are increasingly offering solutions beyond pure payments, such as analytics and loyalty.

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Mobile Banking

m-Banking www.mobilepaymentsworld.com | January 201315

A new report from Juniper research finds that over 1 billion mobile phone users will have made use of their mobile devices for banking purposes by the end of 2017, compared to just over 590 million this year.

Whilst the forecast of 1 billion users by 2017 represents over 15% of the mobile subscriber base, it should be acknowl-edged that around half of all mobile sub-scribers remain unbanked, with limited ac-cess to traditional financial services.

The report finds that many consumers

M-banking users to exceed 1 billion

Vietnam’s first aggregated m-banking service

are already seeing the benefits of accessing banking services on their mobile phones. Mobile banking technology is proven and currently available in most regions of the world, reinforced by exceptional consumer demand, especially within the developed regions.

The report found that most banks have at least one mobile banking offering, either via messaging, mobile browser or an app-based service. Yet a number of the larger banks are now confidently deploying two or more of these technologies together,

particularly where there is significant smart-phone and tablet penetration.

“From the banks’ perspective the triple play platform is advantageous as it avoids them having to switch suppliers for differ-ent approaches as well as maximising cli-ent reach. While messaging remains highly popular and relevant in the financial sector, apps will be the dominant access mode in developed markets with banks reporting an increased number of visits per month on their mobile apps,” notes report author Nitin Bhas. n

Nokia steps up m-payments activity


tagit, a Singapore-based mobile banking solutions company, announced the launch of the first aggregated mobile banking service by leading Vietnamese payment switch operator, Smartlink.

Over 40 million domestic bankcard hold-ers and 120 million mobile users in Vietnam are expected to benefit from Tagit’s Mobeix platform when Smartlink jointly deploys mobile services with the network’s grow-

ing base of member banks across Vietnam.“More Vietnamese consumers are adopt-

ing the mobile lifestyle, so we’re putting mo-bile at the core of our strategy to ensure we keep pace with customers,” comments Mr. Nguyen Đăng Hùng, deputy CEO of business development and technology at Smartlink.

Mobile penetration rate in Vietnam is estimated at 136%, according to a study by Pricewaterhouse Coopers, while smart-phones penetration is relatively low at 11%

based on statistics from GfK Asia, leaving room for growth for smartphones and mo-bile services in the market. With Vietnam ranked 25th among 35 countries in the MasterCard’s Mobile Payments Readiness Index, Vietnam’s mobile payments sector is slated to flourish in coming years.

The first bank to launch the mobile bank-ing service in conjunction with Smartlink is Vietcombank, the largest member bank under the Smartlink network. n

BMO Bank of Montreal and Monitise partnerBMo Bank of Montreal and Monitise announced they have entered an alliance to develop new Mobile Money services, using Monitise’s market-leading technology platform that encompasses mobile banking, payment and commerce services.

The alliance will allow BMO Bank of Montreal to offer customers advanced mobile money services. The collaboration builds on an agreement formed in 2010

with Clairmail, the US-based mobile bank-ing and payments provider acquired by Monitise in 2012.

Monitise will work with the bank across its smartphone applications, mobile web offerings and SMS services, using its plat-form capabilities to provide added conve-nience for new and existing customers.

“With the size of the mobile money op-portunity growing by the day, and the en-hanced experience and convenience this

channel provides to our customers, we plan to continue to build on our success in this area to date,” says Andrew Irvine, SVP, BMO Bank of Montreal.

“We are extremely pleased with the re-sponse we’ve seen to our mobile banking and payments services so far and, with the support of Monitise and its technology platform, we look forward to delivering more innovative solutions across this space and beyond.” n

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Mobile Money Transfer

17

rwanda’s fingerprint banking

Mobile money transactions in Nigeria hit N151 billion

the rwandan government has ambitious goals, as part of its Vision 2020 plan, to bring financial services to the majority of the population.

Since 1995 the Rwandan Government has taken steps to deepen and liberalize the financial sector. Efforts are underway to improve the links between the financial system and the masses. Restructuring plans have been agreed between the BNR and the commercial banks.

A legal framework for micro finance insti-tutions has been considered and are to be restructured so as to enhance their role in providing services to rural areas and in en-couraging savings mobilization. Commercial banks are being encouraged to concentrate more on financing private sector activities in particular productive sectors including small scale projects. Government is also consider-ing directing credit to particular sectors for instance agriculture which currently only receives 2% of bank credit.

In this respect, MobiCash is supporting Rwanda in its mission and will help deliver programs and technologies that extend access to financial services for people throughout the country.

The launch of the BioCash initiative is part of national efforts to ensure the Government achieved “an optimal balance between the banked and the unbanked”. The system will lay a basis for KCB Bank to jointly deal a mas-sive and decisive blow against the financial inclusion and poverty alleviation.

The excitement on this new delivery channel is due to the promise to bring about a breakthrough of major importance into the mobile payment ecosystem. Bio-Cash offers the possibility of massive out-reach to people in locations that remain un-derserved, especially those in hard-to-reach rural areas. Some channels, including retail agents such as supermarkets, churches or drug stores that act as banking agents, may bring the industry closer to significantly

serving more Rwandan with or without a mobile phone.

This is the be-ginning of a fun-damental change in the monetary system in Rwan-da. The implementation of fingerprint-banking means that every Rwandan who is over 16 years old and has a national-ID could virtually and instantly be included in the financial space and connect fingerprint to a virtual bank account.

This method allows a safer, easier, faster and more efficient paying process. Mobi-Cash expects the rate of robberies to de-cline drastically since people don’t carry any more cash or credit cards with them.

In our opinion, Rwanda will be definitely World first country using this system to bank all of its citizens without exception. n

mobile money transfer www.mobilepaymentsworld.com | January 2013


Mobile money acceptance and remittance is gradually growing in nigeria with total transactions in 2012 reaching n228 million and is expected to increase to n151 billion by the end of 2015 according to latest statistics released by the Ministry of Communications technology.

Minister of Communications Technol-ogy, Mrs.Omobola Johnson, said the fig-ures showed that verified mobile money agents currently stand at 3,000 and is expected to increase to 50,000 by 2015. The statistics also revealed that while total volume of non-store shopping increased from N62 billion in 2011 to N77.5 billion in 2012, this figure would

increase to N658 billion by 2015.Mobile money has lagged in the coun-

try since it was officially introduced by the Central Bank of Nigeria (CBN) in Novem-ber 2011, through the issuance of licences to several companies including banks, electronic financial transaction compa-nies and microfinance banks. It has how-ever, not caught the attention of mobile phone subscribers - just like the early days of mobile phones.

Mobile money allows its users to remit money to family and friends mainly from urban to rural areas. Out of a population of 167 million people in Nigeria only 26 mil-lion Nigerians have bank accounts.

General Manager, Sales and Distribution,

MTN Nigeria, Richard Iweanoge, said in the next two years, mobile money points of service would be as ubiquitous as we cur-rently have points where airtime is sold. It would be as common as the points where you could buy airtime. “At the moment we have seen close to 20,000 people register-ing on a daily basis for the service.

It is astronomical considering that we just started and also considering that not too many people know about it and un-derstand what it is all about. To get this high number of people registering every day is significant. My view is that people are enthusiastic and they seem to want it and I think in the long run, it will be a success,” he said. n

M-POS

18

payleven has rolled out Android and launched its mobile payment app in the google Play Store in Italy, Uk and Poland. Previously, it was only available in germany.

The payleven Android app functions in the same way as the iOS application, allow-ing merchants to convert their smartphone/ tablet into a low-cost, easy-to-use debit and credit card reader with no monthly fees.

The current version fully supports a range of the most popular Android devices

payleven rolls out Android across europe

Payatrader launch stand-alone GPRS micro-merchant terminal

including Samsung Galaxy Nexus, S2 as well as S3 and HTC One. Furthermore all payleven apps are setup to process cards with both the current Swipe and Sign and the upcoming Chip & PIN solution.

“The way people pay is changing rapidly – Europe is at the moment on the cusp of a mobile payment revolution. payleven is aiming to redefine the highest standard for mobile payment applications by offer-ing a mobile Chip & PIN solution with the only fully compliant card reader to accept

all major debit and credit cards and provide users with full fraud protection,” says Ian Marsh, CEO, Payleven.

“An important preliminary step has been to expand our platform to the popular oper-ating system Android, which now accounts for 70% of all smartphone shipments glob-ally. Payleven is now set to launch its best in class mobile Chip & PIN solution in early 2013 with full compatibility of the world’s two most popular mobile operating sys-tems, iOS & Android.” n

m-pos www.mobilepaymentsworld.com | January 2013


thyron Systems’ PoSMate Smart terminal has been incorporated into Payatrader’s general release of the Uk’s first stand-alone pocket gPrS mobile payment device for the micro-merchant sector.

Unlike many solutions currently avail-able, the well-anticipated new device does not require interaction with any mobile or SmartPhone and incorporates electronic

receipting. It is the only terminal of its type live in the UK market.

Thyron’s MD, Michael Ault commentes: “We’re excited to have worked closely with the Payatrader team to deliver this bespoke solution. The ‘pay-as-you-go’ charging model for transactions makes this solution ideally suited to the micro-merchant sector and the simple sign-up process allows mer-chants to begin accepting card payments

within a matter of days. The Thyron terminal will enable Payatrader’s merchants to ben-efit from a purpose-built mobile payments solution that offers a familiar experience for their customers to use.”

Other features of the new Payatrader ser-vice include; SMS receipting for the card-holder, direct interfacing with the existing Payatrader online portal, first-touch light activation and automatic standby mode. n

SumUp launches in France, Belgium and PortugalSumUp, the company that enables merchants to take debit and credit payments with their smartphones, has launched in france, Belgium and Portugal.

Businesses in these countries will now be able to sign up to the service through the SumUp app (available on both iOS and Android) or via the SumUp website, and re-ceive native language assistance from the SumUp support team.

SumUp launched in the UK, Ireland, Ger-many and Austria, in August this year, and

expanded to Italy, Spain, and the Nether-lands in November. Today’s launches mean that SumUp’s technology is available to businesses in ten distinct European markets – more than any other mobile POS technol-ogy provider. Crucially, SumUp is capable of processing MasterCard and VISA payments in all of the countries it operates in.

Daniel Klein, CEO of SumUp, comment-es: “Our technology is both incredibly flex-ible and incredibly portable. However, ex-tending the secure and reliable payments infrastructure we have developed into

new markets is not at all easy – although it is certainly just as crucial. We have now brought pay-as-you-go card payments to the ten central European economies – and will continue to innovate to ensure that we maintain our position as the mobile point-of-sale company with the largest interna-tional footprint.” n

Analysis

19

matt ZaLUBowsKi, First aNNapoLis

Are mobile payments here to stay? Considering ISIS has launched, Square has established itself and its mobile solutions through its relationship with Starbucks, google Wallet is accepted in over 150 unique merchants in the United States, and the Merchant Customer exchange (MCX) is in the process of developing its own mobile payment solution, it would appear as though the answer is yes.

All signs indicate the future of mobile payments is bright. Despite these strong headwinds, a great deal of uncertainty remains regarding consumer adoption. This uncertainty has been reinforced by recent rumours that Google intends to introduce a plastic card that would al-low a consumer without NFC chip-en-abled phone, to make purchases linked to Google Wallet.

While merchants have taken steps to help facilitate mobile payments adoption (e.g. mobile shopping), further action is required to bolster the business case for mobile payments solution investment.

Retailers need to demonstrate how mobile functionality improves upon the current credit card purchase process. In-tegrating a company’s loyalty program, whether tender neutral or proprietary card specific, with mobile technologies is just such an example that is detailed below. Without this foundational justi-fication, mobile payments will have an even more difficult time overcoming the adoption chasm that all disruptive tech-nologies face.

For those unfamiliar with the tech-nology adoption chasm, it is the gap between Early Adopters and the Early

overcoming the mobile payments adoption chasm

Majority as found in the Everett Rog-ers’ Technology Innovation Adoption Lifecycle (see Figure 1). There are five consumer categorizations: Innovators, Early Adopters, the Early Majority, the Late Majority and Laggards. The prem-ise behind Rogers’ lifecycle: the actions of one group have a marked impact on whether the subsequent groups adopt a new technology.

Innovators and Early Adopters, both of which have begun testing mobile wallet solutions, will play a critical role in mobile payments diffusion. Given the small per-centage (15%) of consumers that make up these two categories, merchants must look to target Innovators and Early Adopters and provide real incentives for using mobile payments that will attract the attention of the Early Majority.

Examining the process by which most consumers decide whether to adopt a new technology will help determine what actions merchants should take, and in what order, to convince Innova-

tors and Early Adopters to advocate the adoption of mobile payments.

The Stages in the Innovation-Decision Process, developed by Rogers to further explain the Adoption Lifecycle (see Fig-ure 2), outlines the five stages a con-sumer goes through when determining whether to adopt an innovative tech-nology. The process begins by gaining Knowledge as to what the product or idea does. During the Persuasion stage, the consumer seeks out, or is provided, information to aid in evaluating the product. Third, the consumer makes a Decision to try the product. Four, Imple-mentation occurs and the consumer ex-periences the technology. Finally, Con-firmation occurs and one’s experience dictates adoption or discontinued use.

Initial retailer efforts, given Early Adopters have already moved through the first two stages of the Innovation-Decision Process, should focus on the third stage, Decision. Continued on p.20

analysis www.mobilepaymentsworld.com | January 2013


source: diffusion of innovations, Fifth edition – everett m. rogers – august 5, 2003.

Figure 1- technology innovation adoption Lifecycle

Secondary heading

Nokia steps up m-payments activity

Box text. n

Analysis

20

matt ZaLUBowsKi, First aNNapoLis

Continued from p.19Providing an incentive for an Early

Adopter to utilize a given mobile payment solution can begin by blending existing loyalty programs with location-based smart phone / application identification (a practice which is in its infancy). For ex-ample, a consumer enters a retailer outlet with the intention of making a purchase.

The store’s systems identify the con-sumer as having installed the retailer’s mobile shopping application on her smart phone and as a member of the loyalty program. The systems then query the company’s loyalty database, deter-mine the consumer is redemption eligi-ble, and send the consumer’s phone an instant message indicating she can re-deem her rewards on her next purchase. This one-to-one loyalty communication provides a tangible call to action that the consumer otherwise would not have been made aware.

This ‘surprise and delight’ commu-nication demonstrates how a mobile solution can improve upon the tradi-tional credit card payment process. This positive interaction addresses steps four and five in the Decision Process (Imple-mentation and Confirmation), and helps to solidify repeat use. The customized treatment provides a compelling story the Early Adopter will want to share with her friends. Per Rogers’ Technology

overcoming the mobile payments adoption chasm

Innovation Lifecycle, the positive word-of-mouth ‘buzz’ will influence the Early Majority to more seriously contemplate mobile payments adoption.

Despite the media attention that mobile payments have received, Knowledge, the first step in determin-ing consumer adoption, should not be overlooked as it relates to the Early and Late Majority. Retailers should build simple communications demonstrating what the technology is, how to obtain it, and how to use it in their stores. With-out establishing this foundation of how mobile payments work, Early Adopter loyalty integration efforts, as well as any other efforts targeting the subsequent steps in the decision making process, will become irrelevant.

Loyalty integration should not be viewed as a mobile payments panacea. Given the complex mobile payments landscape, financial institutions, card networks, technology providers and retailers all must work together to fa-cilitate mobile payments adoption. The recommendations outlined above are intended to demonstrate one example of how retailers can contribute to this effort. While integrating a retailer’s loy-alty program with mobile and in-store technologies alone requires resources, it does so in order to provide a stronger foundation from which to justify further investment in and accelerate the adop-tion of mobile payments.



source: diffusion of innovations, Fifth edition – everett m. rogers – august 5, 2003.

Figure 2- stages in the innovation-decision process

EXPERIENCED COMMITTED OBJECTIVE

Founded in 1991, First Annapolis is a

coverage is international in scope with

Annapolis is headquartered in the

Partnership FinanceStrategic Sourcing

M & A Advisory Services

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Commercial PaymentsMobile Commerce &

SERVICES

PRACTICE AREAS

Analysis

22

ABHISHek SRIvASTAvA, HARIPRASAD PICHAI, THOMAS kuRuvILLA, ARTHuR D. LITTLe

By 2015 the volume of mobile money transactions will reach $1 trillion. global companies must tackle five key challenges to make the most of this opportunity or wonder who moved their money.

Mobile money – beyond the hype and now a lasting trend

The arrival and pervasive use of mo-bile money has been heralded many times over the last decade, yet there have been few successful implementations across markets. With widespread use of smartphones, increased data access and a favourable regulatory environment, we believe conditions are now ripe for dis-ruption not only in transactions (i.e. who takes a cut while moving money) but also in where the value is stored (e.g. a “wallet with benefits”).

Financial intermediaries, banks, telecom

Who moved my money?

operators, mobile platform owners, retail-ers, online giants and niche players are all trying to grab a piece of this mobile money pie. We believe that their current offerings are partial solutions and that they must tackle five key challenges for success.

Five challenges to tackleThe five key challenges to tackle are

user experience, context awareness, universality, security and regulation. The mobile money solution that addresses these best within the time/cost/quality constraints will succeed.

User experience Growth in mobile transactions will be

driven by switching customers and mer-chants from traditional instruments such as cash and card. Mobile money has the opportunity to switch customers both from physical-world transactions and from online transactions. Improved user experi-ence that is compelling, convenient and

cost-effective is a key lever to achieve this switch.

The partnership between Square and Starbucks (“Squarebucks”) is a recent solu-tion that has disrupted an entrenched pay-ment method (card). This was achieved by delivering a superior user experience where a customer is able to conclude a purchase through a mobile phone without even pre-senting it at the POS.

Context awarenessIn a world where data is the “new oil”, de-

vice platforms facilitate granular informa-tion about the customer that was hitherto unavailable. Players like Amazon, Google and Apple have acquired a large number of customers and have successfully used granular information in predicting pur-chase behaviour.

When the value is stored with non-tradi-tional players, traditional guardians of cus-tomer data - primarily banks, financial in-termediaries and telecom operators - lose the granularity of transactional information generated by customers. They thus face the risk of lowered ability to understand their customers. A solution that makes “context awareness” integral to the value proposition stands to gain against compet-ing platforms.

Universality/ InteroperabilityA mobile solution giving access to digital

money through the device has to match the universality and interoperability of money itself. We therefore believe that merchant-specific, platform-specific or location-specific solutions will not succeed in the long run. Continued on p.23



Analysis

23

Continued from p.22M-Pesa is an example of a universal

mobile money solution enabling any two parties having a handset to transact, thus facilitating B2C, B2B, local and even inter-national remittances. Similarly, PayPal is bringing universality into its mobile money offering by expanding in-store payments through the same online account.

SecurityProliferation and growth of PC-based

e-commerce has ensured standardised se-curity measures for “digital” money in both developed and developing markets. While e-commerce fraud remains a concern for consumers, the idea of transacting in the digital world is well established. However, the same idea has not yet trickled down to paying through the device that usually has at least access to the stored value.

Thus, one of the main challenges to tackle is not so much of securing “digital money” but securing the device. How do we make sure that money is safe even when the customer loses a mobile phone? More importantly, will the customer feel that it is as safe as carrying a credit card in a regular wallet? An ideal solution balanc-

ing the trade-offs between security and convenience is yet to emerge.

regulationRegulations make or break mobile mon-

ey offerings in the market as much as tech-nology and innovation. Mobile platforms can inherently provide complete traceabil-ity of all transactions, thereby ensuring se-curity, authentication and compliance. One could argue that this will suffice for most regulatory requirements. However, this has not been the case.

While pragmatic ex-post regulations evolve to accommodate these offerings, the pace of such regulatory conducive-ness varies by market. In certain instances, it has emerged that it is not the proactive actions of the regulators that are blocking mobile money proliferation, but inaction. For example, M-Pesa is as applicable in rural India (with a cost of cash as high as 10 per cent) as in Kenya and yet a solution has not reached fruition because of a lack of regulatory clarity.

Insights for the executiveMobile money is a growing market with

significant revenue potential. The ecosys-tem is nascent, with no complete solution

and no dominant player. This pres-ents an opportu-nity for both the traditional players – telecom operators, banks, card issuers, intermediaries and retailers – as well as new entrants such as mobile platform

providers, social networks and others.Financial intermediaries such as Visa

and MasterCard are strong on security and regulations and are improving user experi-ence through PayPass and V.me, while in-vesting in hardware for merchants to make their solutions more universal. To succeed they need to complete their solutions by including context awareness in their value proposition.

Banks and telecom operators are in a position of strength on universal-ity, security and regulations. They have leveraged these successfully to bring “banking to the unbanked” solutions to underdeveloped markets. To suc-ceed in developed markets they need to innovate/acquire/partner to create a compelling user experience.

Mobile platform owners and online gi-ants such as Google, Apple and Amazon have the right ingredients for success but have not yet solved the trade-off between on-device security and user experience. Niche players like Square through “Square-bucks” provide examples of how to switch customers from traditional payment instru-ments and methods, disrupting the busi-ness of moving money.

We believe that the winning model in mobile money will create a compelling context-aware user experience providing a relevant set of secure financial services. Once the solution is in place its prolifera-tion and adoption in different markets will be driven or impeded by regulations. n

AuthorsAbhishek Srivastava, Hariprasad Pichai,

Thomas Kuruvilla, Arthur D. Little



ABHISHek SRIvASTAvA, HARIPRASAD PICHAI, THOMAS kuRuvILLA, ARTHuR D. LITTLe

Who moved my money?

Opinions

24

seCUrity 2013

Bullguard outlines key threats to personal security

Internet and mobile security expert Bullguard advises that malicious attacks could be even more prevalent and certainly more varied in 2013, and urges users to stay one step ahead by knowing how third parties are changing their methods of attack to more effectively target personal data.

With devices such as smartphones and tablets becoming ever more prevalent, ma-licious parties now have more ways to steal data, and with many users slow to adopt security measures for their new devices, it’s more important than ever to be aware of the nature of new threats.

Looking back at 2012’s tech develop-ments, threat evolution and statistics on consumer behaviour, BullGuard presents its top five threats for 2013 to help users stay ahead of the game.

prediction #1: More mobile malware than ever before, android the main

targetWith Android’s popularity booming - it is

now globally the most popular operating system for smartphones and tablets with

over 1 million new devices ac-tivated daily - we can expect to see it being targeted in in-creasing numbers in 2013.

Due to Android’s open-source nature it’s easier for cybercriminals to find and ex-ploit platform flaws, and at the same time Android apps can be put up for download on third-party stores that are poor at screening apps for suspicious behaviour. Google Play, the official Android app store, has struggled with security issues in the past and recent research shows that Google’s App Verifica-tion Service in the latest Android version, Jelly Bean, detects just 15.32% of known malware compared to existing third-party apps from dedicated mobile security companies.

As Android users will look for more apps to download and make their mobile lives

easier and more fun, in 2013 they are more likely to run into malicious software and to get infected if they only rely on Google’s se-curity measures.

prediction # 2: Mobile adware will become more

aggressiveSmartphone and

tablet users love “free” apps, but in order to produce them, developers often turn to adware in order to raise the necessary funds.

Around 90% of all free Android apps come bundled with adware, which often sends pop-up ads to the notification bar. The more aggressive kind can add icons, change browser settings and even legitimately (since an app requires certain permissions to be granted by the users before installing them) collect private information such as: email ad-dresses, device IDs, your location, browsing habits, and even phone numbers.

This information can then be sent to re-mote servers belonging to ad networks who can use this data for targeting purposes. While not necessarily malicious, this ad be-haviour is highly invasive and next year we expect advertising companies to push even more in-app ads while trying to find ways to counter any privacy-related complaints.Continued on p.25

opinions www.mobilepaymentsworld.com | January 2013


Opinions

25

seCUrity 2013

Bullguard outlines key threats to personal security

Continued from p.24

prediction # 3: Malware privacy breaches will make headlines

2012 saw a new type of malware enter the stage of data-snatching - the image-snaffling Trojan, which uploads .jpg, .jpeg and .dmp files from infected systems to a remote FTP server.

Stolen images can be used in targeted at-tacks on important individuals for purposes such as blackmail and identity theft. If, up to now, privacy advocates have been advising web users to be careful about the photos they share on social networks, in 2013 users should also be mindful of the images they have stored on their machines and look for ways to properly secure them.

In particular, apps that allow photos to be automatically uploaded to online ac-counts such as Facebook should be treated with particular care. Additionally, expect to see private data-harvesting social apps

such as Facebook and Instagram, stealthy automated man-in-the-middle attacks and targeted attacks based on user information (IP, location, language, personal interests) gathered from various online media.

prediction # 4: online fraud remains rampant

All types of real-life fraud have moved to the online world. Clairvoyant scams, charity donations, fake auctions, lottery scams, fake work-from-home job offers and fake freebies are all ways for cyber-criminals to con people by exploiting emotional weaknesses.

In 2013 we’re expecting to see more of one particular type of online fraud - ransom-ware, which combines malicious code cre-ation with scaremongering. Usually a Trojan, ransomware is designed to restrict access to an infected system and demand that a ran-som be paid to the creator of the malware in order for the restriction to be removed.

Some forms encrypt files on the system’s

hard drive, while others may simply lock the system and display messages to coax the user into paying via Ukash, PaySafe or other payment methods. We’re also expecting Social Media to become the main channel to deliver most of the online fraud, phishing attempts and viruses. With more and more people joining social networks, the pool of potential victims only gets larger.

prediction #5: Mobile shopping on the rise, but not risk-free

Smartphones have become indispens-able items with a multitude of useful func-tions and features. One of these is online shopping, and it’s easy and convenient to use your phone as an e-wallet to pay for things or go online and buy a gift for a friend and immediately have it shipped to them. As convenient as that may sound, mobile shopping is not risk-free. In 2013 mobile hacks will be rampant, mobile pay-ment systems compromised and more Wi-fi networks exploited by criminals.

While the threats described above may sound alarming, it’s fairly straightforward for users to ensure that they are protected from these types of attacks. Being aware of the threats that exist is a good start, but this must be combined with vigilance on the part of the user in terms of protecting their personal information, and of course investment in a good mobile security suite for a handheld will prevent many of these attacks from manifesting in the first place.

And if there is any doubt over the true nature of a message or the behavior of an app or website, ignore it or contact the au-thority in question or your internet security provider to clear up the issue. n

opinions www.mobilepaymentsworld.com | January 2013


types of malware targeting mobvile devices

Documents

2013: The year of the Mobile Wallet?