The chief executive officer (CEO) of Weve, David Sear, an experienced payments professional who has worked at Travelex and VocaLink, and now heads up the Weve UK joint venture from Vodafone, 02 and EE, thinks that the mobile m-commerce ecosystem is finally close to hand. After many years of hype, he tells Neil Ainger, that he can at last glimpse an integrated mobile future, while also discussing the differences between the US and UK payments scenes, mobile adoption rates, integration challenges, and the contactless frictionless world to come.
There will be more than 1bn mobile phones by the end of this year that will be capable of hosting near field communication (NFC) technology, predicts David Sear, CEO of Weve, enabling mobile contactless payments (MCP) programmes to be rolled out around the world.
His own firm, a joint venture mobile wallet and marketing platform up until now, from UK mobile network operators (MNOs) Vodafone, 02 and EE, which in some ways apes the Isis project in the US, has put its money where his mouth is after recently signing a partnership agreement with MasterCard, expanding the capabilities and reach of its platform. The intention is to merge their respective mobile platform and existing bank, retailer and Point-of-Sale (PoS) infrastructures to encourage MCP payments in UK shops, utilising the 165,000 NFC-enabled MasterCard ready in-store terminals across the UK, which place the country up there with Italy and Poland in terms of contactless technology.
Weve has 22m UK customers via its MNO owners who receive marketing messages and loyalty offers and adverts on their mobile handsets, so combining this customer base and its technology platform with MasterCard’s should theoretically give its MCP project scale.
“Our aim is to simplify the interface between the mobile and the financial services industries,” says Sear, before going on to add that he thinks there will be lots and lots of usable SIM card-enabled contactless mobile phones in the UK by the start of next year.
“There have been too many niche players in the past and not enough scale or integration to achieve widespread adoption. Indeed, you’d be forgiven if you were fatigued about hearing about mobile m-commerce, MCP, loyalty and the host of other functions that make up the mobile ecosystem, because of the numerous launches in recent years.
“It’s been a long and slow development process over the last decade seeing the mobile ecosystem evolve,” continues Sear, “with many false dawns [such as the SimPay initiative -Ed] and sometimes a sense that the concept was ahead of the technology or the consumers. Certainly not all firms were previously ready to partner to achieve large-scale non-proprietary rollouts. This is now changing, however, and I am once more excited about the mobile future.”
In recognition of just how many mobile initiatives there have been over the last decade or more, Sear likes to point towards a slide that he has containing all the hundreds of names and logos of the various mobile financial services (MFS) schemes he’s seen during his time as a payments professional, having worked six years at Travelex and three years at VocaLink. His slide contains names such as Isis, with its own newfound US NFC capability, to Zapp in the UK; plus the US retailer-led Merchant Customer Exchange (MCX), to the venerable Google Wallet and the V.Me digital wallet from Visa Europe – the list is endless. This is not to mention either, the MPoS arena targeting sole traders with Square, iZettle, and the online business being garnered by PayPal, all the time contributing towards an increasingly competitive landscape.
Many of these initiatives have stalled or encountered problems, many are still going and gaining traction, but what none of them have yet done is achieve total dominance and become the single mobile platform for a country or a region, covering MCP, online m-commerce purchases, loyalty programmes and so forth under one roof. Whether any single platform can ever cover all these different spectrums has to be debatable, but that is the aim that many technology and financial companies in this space have, or at least to partner to achieve this desired holistic offering that will obtain customer uptake. There is increasingly an acceptance that partnering appropriate skills and capabilities may provide a simpler, faster and more integrated path to gaining widespread consumer adoption – after all, who wants 20 different apps on their phones?
US v UK Mobile and Payment Infrastructure Differences
The similarities between the MNO-led Isis project in the US and Weve in the UK are obvious in terms of their ownership, but Sear’s rejects a comparison of their operating models and chances of success; pointing to the differing payment infrastructures across the Atlantic.
“In the UK, for instance, we have a centralised payments capability via Bacs. The lack of this in the US contributes towards a more expensive and fragmented payments infrastructure, in my opinion. Isis, for example, has to link together many different systems, which adds to their costs. This is a problem that Weve does not have thanks to the centralised payment infrastructure in the UK, abetted by the coming shared UK-wide mobile payments platform. So I think it’s easier here in the UK to launch a successful project such as Weve.”
In addition, the US has many other major payments initiatives underway at the moment, which may distract, or at least delay, the integrated mobile ecosystem that Sear’s wants to see. With the migrations towards the EMV standard in the US and the US chip and PIN rollout taking up a lot of payment professionals’ time in America at present it is hard to see how much development work can go into knitting together the country’s payment system more fully, especially without the EMV and chip and PIN ‘base’ that is just now being installed to increase security and standardisation. This US standardisation drive is being given more urgency following the Target hack and other recent data breaches. [Globally, EMVCo is also working on a project to standardise payment tokenisation, which should ultimately help MCP programmes and many other online and m-commerce payment initiatives worldwide -Ed].
In terms of who he sees as a competitor, Sear’s discounts Isis with its American-focus, and says he is not too worried about Zapp either as he thinks this rival UK offering will largely focus on the mobile internet, rather than the PoS. “I see them more as an online offering and I think they’ve said as much themselves,” he says, placing them into competition with PayPal or even MyBank. “We’re focusing more on retailers and MCP for now,” says Sear. “Besides, how are Zapp going to get into the PoS in UK shops? The MasterCard ‘rails’ are with us.”
“We link with existing infrastructures, eliminating costs for merchants, which have already had to pay out considerable sums in the UK in recent years to support the adoption of EMV standards and chip and PIN technology [not to mention the prospect of PCI DSS 3.0 on the horizon -Ed], so Weve makes things simple, inexpensive and secure.”
Conclusions: Partnering for Success is Crucial
As to the fear of disintermediation for banks and financial institutions (FIs) Sear doesn’t think that is a real threat either, at least not from Weve. “We’ve effectively created an open standard and platform for retail PoS payments in the UK, and as such we are no threat,” he says. “Quite the contrary, Weve wants scale so we welcome bank partners, via MasterCard in the latest partnership deal we’ve announced, or however many FIs want to join us.
“The point is that Barclays who are active in the UK mobile FS scene with their Pingit app and various other launches can still keep their value-adding mobile applications, but join with us where appropriate to get scale. Weve is not the only solution out there by any means, but we have strength in the MCP PoS space and elsewhere and can help to get the widespread consumer uptake and volumes that everyone wants to see.
“That being the case, let’s get on and do this darn thing,” he concludes, referring to the need to stop the hype, the pilots and the tests, and to actually move towards the frictionless, convenient, easy and secure mobile ecosystem that has long been talked about.