MEETING DEBRIEF: PAYMENTS DEEP DIVE
Author: Terry Young, Telecom Council
The mobile payments industry is ripe for disruption, yet adoption challenges still remain – so agreed six start-ups and four panelists and over 80 attendees at the Telecom Council Deep Dive meeting on Payments. In the last few years, the market has shifted from a fight for dominance by carriers, equipment manufacturers, credit card companies and other to a more reasoned cooperative strategy with other ecosystem players that address the complexity of changing the existing merchant network and shifting long established credit card habits of consumers. Additionally, the opportunity to provide lower cost alternatives for the unbanked and under-banked in the US (80M+), Brazil (65M) and many developing economies was highlighted with a number of novel solutions offered by start-ups in the rapid fire presentations.
Panelists from Visa, Vantiv, ARM and EBANX represented a cross-section of the ecosystem and identified these challenges to broad adoption:
- Today payments via mobile phone are not significantly more convenient than credit cards. Unless there are 5X more convenience, that is, a “one click” type experience that eliminates waiting in line or eases after sales interactions, consumers are unlikely to be moved to switch to mobile payments.
- Stronger and easier user authentication methods are needed. Mobile phones are easily hacked. Today, most people do not even apply screen lock to their phones. Lack of trust will make users less likely to transform the phone into their digital wallet and merchants more reluctant to accept the liability. More biometric authentication solutions are needed.
- In economies like Brazil and India, mobile phones far outnumber consumer bank accounts and digital remittance alternatives can be costly. There is great opportunity to provide lower cost commerce with basic mobile phones and simple transaction capabilities.
The Rapid Fire startups and Spotlight sponsors showed how underserved segments can be addressed:
- PayActiv “makes payroll real-time” and provides the 50% of US workers who live paycheck to paycheck with real-time access to the funds they have already earned. Challenging current practices on the timing of payments, PayActiv hopes to cut into the high transaction fees, overdraft fees and payroll loans that charge those least able to pay with the highest rates and denies them real-time access to their earned wages.
- Mobetize sees telcos as an ideal channel for mobile payments as they have an established trust relationship, serve the entire population (both banked and unbanked) and have existing global platforms. Mobetize provides a white label financial services solution that easily integrates with mobile carrier infrastructure for mobile transactions, remittances, and top-up.
- 37Coins provides an international mobile money system that eliminates carrier interoperability issues, provides a trusted transaction, and streamlines the bulky sign-up process in typical mobile transactions. 37Coins enables users to send and receive Bitcoin via SMS using a simple feature phone.
In other rapid fire presentations, ItsOn presented a novel alternative to standard data plans, enabling carriers to charge incrementally for data access and potentially bundle access with the delivered content. BlackICE Payments provides smart, secure, and simple APIs that authenticate both buyer and seller through an escrow system to deliver secure, encrypted messages and payments. And finally, Sensory provides a dual biometric product that enhances security, adapts to changing conditions, and enables user to choose the level of security needed.
For more information or to download the presentations, Telecom Council members should visit the library.
Many thanks go to the panelists, spotlight sponsors and rapid fire presenters who provided attendees at this event with truly informative insights into this rapidly growing industry.