mCommerce and Mobile Banking_Michael Hanley

Mobile Commerce and Payments

mCommerce & Mobile Banking: How the Smartphone Is Changing Retail and Mobile Payments

Class 13


SMS

MMSEmail

A Mobile Campaign(Mobile, Mobile Enabled)

ImageRecognition IVR

Internet

Mobile Web

BluetoothTalk

Ways to Interact With a Mobile Phone and

Distribute Mobile Content GPS

Talk to Text

6

Location/GPSApps


What is mCommerce?

The Mobile Marketing Association definition of mobile commerce (mCommerce): “Mobile Commerce is the one- or two-way exchange of value facilitated by a mobile consumer electronic device (e.g. mobile handset) which is enabled by wireless technologies and communication networks.”


What is mCommerce?

The Exchanges of Value can be for:• Purchase of goods or services (Digital Content, Physical Goods, etc.)

• Perishable goods (Tickets, Vouchers, etc.) Services (Remittances, Bill Payment, etc.)

• Transfer of value or money (e.g. Person to Person, Donations, Other)


mCommerce Uses

Online goods and servicesStreaming mediaElectronic booksSoftwareRetail servicesBankingFood orderingOnline flower deliveryOnline pharmacyDVD-by-mail

TravelMarketplace servicesTrading communitiesAuctions • Online walletAdvertisingPrice comparison serviceSocial commerceMobile commercePayment · TicketingBanking


What is mCommerce?

Types of Consumer uses may include:• Credit Account (Credit Card, Bill Me Later, Carrier Statement)

• Bank Account (Debit Card, Person to Person, Automated Clearinghouse)

• Stored Value (Gift Card, Prepaid, Airtime, Points, Reward Programs)

• Discounts (Coupons, Rebates, Pricing)• Promotional/free (Samples, Test Drives)


What is mCommerce?

Types of Mobile Technologies used:• Messaging unique to Mobile (SMS, IM, MMS)

• Mobile Client Applications (iPhone, Android, Brew, Java)

• Proximity Communication Technologies (Bluetooth, RFID/NFC)

• Mobile Voice (Interactive Voice Response)• Mobile Display (2D Barcode, QR Code)


mCommerce Issues

Copyright issuesTrademarksPrivacyData sharing/data setsMobile paymentsOpen source softwareFTC complianceUse of mobile in the workplace:

Bring your own devicesElectronic publishingOwnership of dataPrivacyOther restrictions

Automobile as a mobile device:What does it mean?Tracking devicesInsurance coverageLegal consequences


What Are Mobile Payments?

Mobile payment is an alternative payment method. Instead of paying with cash, check, or credit cards, a consumer can use a mobile phone to pay for a wide range of services and digital or hard goods such as:Music, videos, ringtones, online game subscription or items, wallpapers and other digital goods.Transportation fare (bus, subway or train), parking meters and other servicesBooks, magazines, tickets and other hard goods.


Types of Mobile Payments

There are four primary models for mobile payments:• Premium SMS based transactional

payments• Direct Mobile Billing• Mobile web payments (WAP)• Contactless NFC


Mobile Payment Issues

What are Premium SMS payments?Some companies, like Venmo, allow users to create profiles tied to bank accounts. Users can then pay with text commands like "Pay 555-555-5555 4.75 for a sandwich," after the trusted, two-way relationship has been established.

Other SMS payment systems work by adding the charge to a carrier bill.



What is Direct Mobile Billing?The consumer uses the mobile billing option during checkout at an eCommerce site—such as an online gaming site—to make a payment.

After two-factor authentication involving a PIN and one-time password, the consumer's mobile account is charged for the purchase.

It is an alternative payment method that does not require the use of credit/debit cards or pre-registration at an online payment solution such as PayPal, thus bypassing banks and credit card companies altogether.



What is NFC?Near-field communication is a technology with a corresponding set of industry standards that allows two objects in close proximity to wirelessly exchange information via radio waves.

NFC chips, found in newer phones, can read and transmit data. Plus, NFC tags can be encoded with static information to be read by NFC-enabled devices. Payments are just one application of the technology. MasterCard and Intel just partnered to bring NFC to laptops.



Digital wallets vs. mobile payments A digital wallet is a program by which users can securely store multiple credit card data, allowing for one-click-style online shopping.

Mobile payments rely on a phone instead of a credit card, using technologies like near-field communication (NFC) or QR codes.

Many mobile payment solutions are being designed with the aim of using some sort of mobile wallet, which like the digital wallet, can house numerous credit, debit and loyalty card information.


Mobile Retailing Issues

• 45 million U.S. smartphone owners used an application from the shopping/commerce category in June 2012

• 73 percent of smartphone owners say they have used their mobile phone in a store

• 42% of smartphone owners use mobile banking• 44% of mobile banking users are 18-29 years old• 74% of shoppers that visit a mobile site or app for a

retailer or brand make a purchase


LBS Technologies


Types of LBS• GPS - Global Positioning System. Consists of 24 earth-

orbiting satellites. User must have a mobile phone with a GPS receiver.

• E911 – Enhanced 911 is a North American telephone network that automatically determines a location of the caller seeking emergency services like fire, accident, kidnapping and others where communicating to your place is impossible. E911 is one of the most widely used location services in North America and Canada.

• RFID - Radio Frequency Identification (RFID) method used to transmit identity of an object wirelessly. The identity displays in the form of a serial number. Used to store and retrieve data by using two devices like tags and transponder in a mobile phone.


Mobile Payments Providers• Visa V.me - Visa’s digital payments service• PayPass Wallet – MasterCard service. An

extension to MasterCard’s PayPass brand, of tap-and-go, NFC-enabled payments that work via PayPass-enabled (NFC) phones, cards, key fobs, or mobile tags at over 441,000 locations worldwide.

• Isis, the mobile-payment joint venture backed by AT&T, Verizon Wireless and T-Mobile USA launched in September.


Mobile Payments Providers• Square – Credit card reader for everyone

• Bango on Facebook – Facebook has partnered with Bango, a provider of billing and analytics for app stores, mobile apps and sites. Bango will provide payment services to Facebook.

•

http://bango.com/


Mobile Payments Providers• Square – A “white label” mobile payments

provider based in Germany

• mFoundry – a provider of mobile solutions for financial institutions and retailers

• GrouponPayments, a payments service backed by a guarantee to be the lowest cost option for the company’s merchants to accept credit cards.


Mobile Payments Providers• PayPal Here – a smartphone credit card

payment app

• mFoundry – a provider of mobile solutions for financial institutions and retailers

• GrouponPayments, a payments service backed by a guarantee to be the lowest cost option for the company’s merchants to accept credit cards.


tCommerce• By 2014, 208 million tablets worldwide• 72% of tablet owners make purchases from their

devices on a weekly basis


5 mCommerce Opportunities


mCommerce examplesSephora

7

American Eagle

Costco Crate&Barrel


Home Shopping Network• Mobile sales during the first

half of 2012 were higher than for all of last year

• “We are really focused on providing an optimized transactional experience. We know that customers are using mobile for speed and simplicity.

• “Customers are sitting on a couch and have their device in hand using it to find what they are currently watching and to get additional information that isn’t on screen. It has really become the remote control as they are watching live.”

Education

mCommerce and Mobile Banking_Michael Hanley