The inaugural Mobey Day, organised by the bank-led Mobey Forum industry association, which also includes handset manufacturers, vendors and others, was held at CosmoCaixa in Barcelona on 21 March where more than 250 senior level technologists and industry players attempted to map out the future of mobile financial services.
Ron van Wezel, chairman of the Mobey Forum board and director of emerging payment streams at Deutsche Bank, welcomed the attendees from across Europe who had braved the unseasonal torrential rain in Barcelona to come to the first ever quarterly meeting of the Mobey Forum to be thrown open to the public. His colleague, Sirpa Nordlund, executive director of the Forum, explained that the three remaining quarterly board meetings of the Forum will remain closed for the year – the next one is planned for the end of May at the iconic new Titanic Centre opening in Belfast, northern Ireland – but Nordlund maintained that she was, “very happy with the inaugural open Mobey Day”. More than 126 separate companies attended, “showing there is a need for this type of day, which encourages senior level discussion about how to develop the mobile financial services (FS) ecosystem”.
The keynote speaker of the day was Samee Zafar, a director of consultants Edgar & Dunn, who presented on the ‘state of mobile financial services’, looking at the growth prospects and drivers of adoption across various different segments like m-commerce, loyalty and reward schemes and mobile payments, including transfers, remittances and contactless proximity payments. How the various different players, from banks to Mobile Network Operators (MNOs), to card schemes, payments processors and pure play tech companies, fit into the developing mobile FS ecosystem was discussed, but this field is of course open to many different competing players at the moment so until the standardisation work of the Mobey Forum, European Payments Council and others reaches critical mass it will remain a bit of a free-for-all with rival proprietary systems and pilots going up against each other.
The Six Pack initiative in the Netherlands, MNO-led Isis scheme in the US and Google Wallet were all referenced by Zafar but, of course, the latter has struggled to attract other participants who fear being cut out of the valuable customer data element of the m-commerce / payment chain and being merely a junior partner providing the low-value back end systems. Isis has had to open up to card scheme participants to encourage uptake, but if merchants can be attracted to such mobile wallets then they have a chance of attracting consumers. True cross-border international adoption for m-commerce or m-payment schemes, however, requires some standardisation work. As James Davlouros, vice president of mobile business development at MasterCard, admitted in a later session at 2pm entitled ‘emerging markets: mature mobile’: “M-Pesa in Kenya has been a huge success but it’s a closed loop system, which is why they – and others – want to open it up.” According to fellow panellist, Carsten Kress, a sales director at Sybase 365, “certain banks may fall away, but not forward-looking ones.” In other words, it is down to banks, merchants and corporations to ensure that they are not disintermediated by MNOs or technology firms like Google or PayPal.
La Caixa presentation
The presentation from David Urbano, director of mobile and social media, at La Caixa bank in Spain could have been dialled in to prove this point. In a session focused on innovation from 11.15-11.45, he outlined the bank’s numerous product launches as it seeks to carve out a niche for itself in mobile financial services, citing its contactless ATMs, Mobile Contactless Payment (MCP) schemes in Sitges and the Balearic islands with Visa, and its smartTV app developed with Samsung, among much else. He also discussed La Caixa’s recent announcement at the huge Mobile World Congress trade show in Barcelona organised by the GSM Association, that they would be working with the local council and various other partners to make the Catalan capital a fully contactless city, building out the acceptance infrastructure across shops, transport and museums and distributing access mechanisms on cards and mobiles to bank customers across the city.
Urbano also talked about using internal and external sources of inspiration, referring to the power of crowd sourcing and of his own bank’s FinAppsParty, which attracted 83 independent software developers to Barcelona in November last year, to compete for six prizes of EUR2,000 and a chance to have their ideas developed by the bank. “45 different ideas were generated over a 24 hour period and we are now following a number of them up,” explained Urbano. All reasons perhaps, why La Caixa, was selected as the ‘host’ for the inaugural Mobey Day, providing the CosmoCaixa science centre venue for the event and helping with the organisation (for more views from La Caixa's mobile supremo, please see our bobsguide interview with David Urbano and the gtnews interview with Mobey Forum board member Jordi Guaus, who is also head of mobile payments at La Caixa, and discusses the role of the mobile in corporate treasury).
Near Field Communication
The final session before lunch at Mobey Day 2012 was dedicated to Near Field Communication (NFC) radio frequency technology and its ability, or not, to be a disruptive technology. The moderator Zilvinas Bareisis, a senior analyst at Celent, pointed out that the session would mainly look at NFC in mobile payments, even though other uses in settling, such as with Square or iZettle, or in m-commerce transactions or transfers could equally well be discussed. “NFC is not the only technology either because SMS texts, cloud-based wallets, QR codes and augmented reality offerings can all be used,” he added, before pointing out that a Secure Element was crucial in any application, as was the need to embed any stakeholders, whether it is a multi-merchant scheme like the Google Wallet or a bank-account based scheme like iDEAL in the Netherlands.
“People on the street don’t care what NFC is,” said Jozsef Nyiri, chief innovator at IND Group, which is true but as Bent Bentsen, senior advisor on group payments and infrastructure at DNB Bank, also said during the session, “no-one worried about the intricacies of cheques or internet banking in the past”. The point being that as fellow panellist Robert Hassan, m-commerce leader at Accenture mobility services, said the consumer is “just interested in the goods” – whether that is an MCP acquired shirt in a shop or a remote mobile payment as La Caixa demonstrated at the show with a mobile ticketing and bill payment app that can use the camera on a smartphone and a bar code. NFC is just the delivery method. The important thing is that it works – and it does. Whether it takes off or not, however, depends on the innovative uses that banks, shops, tech companies, MNOs, card schemes and others find for it and how they co-operate – or not – in encouraging consumer adoption.
“The promise of the mobile channel is that it can link the online and physical world,” concluded Hassan. “It draws in Generation Y youngsters … and mobile payments [which NFC is part of] just helps develop the ecosystem.” He also laughingly joked that even though the PayPal representative had failed to turn up for the panel, his firm had still dominated the conversation as it is one of the leaders in trying to achieve this ‘linkage’.
The killer app
The notion of the killer app – PayPal on eBay for instance – was discussed in the afternoon at 2.45-3.30pm by, among others, Matt Calman, an R&D online and mobile executive with Bank of America and Kevin Faragher, head of mobile banking strategy and planning, CIBC e-channels. The latter admitted that we’ve “not seen a lot of innovation from banks” but thinks that this is changing now, which Calman agreed with in that “there is no lack of creativity or desire to launch new products and apps”, but with the proviso that banks “do require early revenue and Return on Investment (RoI) unlike some of the newcomers”. The state of the banking sector at the moment and requirement to hoard money against tougher global capital adequacy rules, such as Basel III, means getting any new innovations ‘green lighted’ is tough.
The idea of a killer app in the mobile FS arena is perhaps a misnomer, however, with banks and others better off focusing on developing the common standards and interoperable networks that could truly drive customer adoption rates. It is a thought that fellow panellist Andreas Fontao, director of product marketing at Clairmail, had some sympathy with, pointing out that SMS messaging was the only real killer app at the moment with 70-80% adoption rates. Whatever you do “try to keep it simple”, he advised. Of course, his US-based firm is seeking to move into the European mobile FS market and as part of this effort has just recently signed an agreement to provide its mobile payments software to VocaLink as part of the payment processors’ new peer-to-peer (P2P) mobile payments platform in the UK, which will allow bank and building society customers to transfer money to each other using only their mobile phone numbers. It is perhaps this deal that prompted Monitise to move in with a $173 million acquisition of Clairmail on 26 March, following the end of the Mobey Day event. The P2P mobile payments service in the UK, due to be rolled out later this year, relies on VocaLink’s existing Faster Payments Service (FPS) shared network infrastructure in the UK. It should go a long way to popularising mobile payments in the UK because all the necessary bank account numbers and identifier codes are back-ended, meaning all the consumer needs is their friend’s mobile phone number.
P2P mobile payments
Ironically the last speaker at Mobey Day was Sean Gilchrist, managing director of mobile banking at Barclays, whose bank has taken some criticism for jumping the gun and launching its own Pingit application ahead of the common UK mobile peer-to-peer (P2P) service that is due to go live later in the year. Barclays obviously got impatient with the working group at the UK Payments Council and designed its own Pingit app in-house, using the existing capabilities of the FPS as its delivery arm. “We didn’t think we could sit around and wait anymore … and realised that other [non-bank entrants] would move in if we didn’t act,” said Gilchrist. With Telefonica’s O2 applying for a banking licence in the UK and others targeting the mobile payments and banking sector you can see his point, but equally accusations of ‘stealing the glory’ do have some validity. Politics aside, the Pingit app does genuinely offer innovative capabilities to the UK public and non-Barclays customers can register and use the service by the end of March. So far, £2 million worth of payments have been made over Pingit and the app has been downloaded by 350,000 people, although no figures are available for active users.
“Some very small businesses are also using it [as they would PayPal] … we’ve seen ‘Pingit accepted here’ on a few websites,” added Gilchrist. “It’s just a beginning for us,” he went on to stress before revealing that Barclays is building developments for bigger businesses with more complex mandates in the corporate banking space.