The Mobile Wallet

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Mobile Ticketing

What is mobile ticketing, and why is it so important? Mobile ticketing allows consumers to purchase and receive tickets for anything from their daily commute, secure parking to concert seats, special deal vouchers and so on, right from their phone or PDA.

Once a ticket has been purchased (via any one of the common payment types) a barcode, password or other identifiable piece of data is sent to the phone via SMS or MMS, and presented at the ticketing station.

Mobile barcodes can be scanned quickly, making this paperless administration (especially for frequent use) a lot easier, cheaper and accessible.

The Oyster Card for the bus, train and tram services in the UK is a great example of a frictionless electronic ticketing system. Containing an RFID chip, the card is swiped by the commuter across a receiver, improving the flow of both ticket queues and ultimately, the transportation service.

The cards can be purchased from vending machines around the country and topped up at the many participating retailers, by telephone or online, but have yet to be implemented into mobile devices.

The Osaifu-Keitai, or mobile-wallet, however, is a mobile phone for Japan’s NTT docomo mobile network, doubling up as an NFC tool for the country’s many commuters.

Using Sony’s FeliCa RFID chip, Japan’s Suica card provides a service on the East Japan Railway Network, similar to Oyster cards in the UK, but are currently leading in the mass-mobile ticketing arena.

Micro-Payments

The need for new payment systems online, mobile or otherwise, is being addressed by many companies, challenging our current payment principles.

What are micro-payments? While the exact threshold might differ between countries and industries, the idea is that the processes for smaller transactions be simplified, making online buying and selling much easier.

While these micro-payments, or nano-payments, may have a maximum value, the platforms popping up are allowing for advanced functions such as transaction histories, pre-paid accounts and other added value services.

  • Boku: Designed for retail, gaming and social networking sites, users can make use of their mobile number, rather than a credit card number - requiring no credit card or even registration.
  • Spare Change: A subsidiary of PayPal, deposits into a Spare Change account can be made from any other type of account, and spent all over the Internet; “…think iTunes on social networks.”

Micro-payments aim to increase the number of smaller payments, promote return business and improve total profit. Daily news broadcasts, for instance, may soon be available with a few strokes of the keypad.
 
It is estimated that 10% of Facebook’s revenue is generated from applications.

With in-application micro-payments on the iPhone, developers can create a steady income, and not just profit from the initial sale of the application and advertising. Elements within the applications can be sold, such as additional stages or characters for games.

Security

Security is one of the biggest concerns of both consumers and financial service providers. This is especially true in the mobile sphere where the financial stability of a user can be compromised if their handset lands up in the wrong hands.

When establishing security, it’s tricky to maintain control through the implementation of PIN numbers, passwords and unique verification codes without shutting out the legitimate user.

These security processes need to be thorough, yet hospitable. Keeping the text input and number of clicks down to a minimum is essential for both m-commerce and banking.

The ISO 8583 is a standard set by the International Organization for Standardization, setting the communication protocols between devices for improved transaction administration. After submission by the user, the transaction data goes from the sales terminal (typically the credit card reader), to an authorisation centre.

The authorisation centre checks the account details of both the consumer and the merchant, and sends the appropriate response back to the terminal. Encryption is used to keep transaction data between nodes in the chain of process, but also for residual data which is left on the mobile device.

Case study: Banque Nationale de Paris & Atrait

 mBloxAtraitBNP

With limited access to financial services in rural areas, the low number of bank accounts in Morocco meant that a firm grasp of finances were almost impossible for millions of citizens.

Even online banking was a problem due to the lack of traditional connectivity, but with 20 million mobile subscribers (over half the population of Morocco) there was a window to create an accessible service to the community.

There was a definite need for a simple banking solution for the mobile public,  while also improving the communication channels for bank staff. Banque Nationale de Paris (BNP) and Atrait mobile solutions provider joined forces to create m-banking opportunities.

With the new mobile system, users had the freedom to create accounts and perform advanced financial functions like transfer funds without having to step foot in a bank. SMS alerts also allowed users to keep on top of their account status (low funds, suspected fraud etc).

In order to improve the transfer speeds and reliability of the messages, Atrait employed the services of mBlox, the world's largest transaction network. The mBlox partnership complemented the financial services, allowing for better communication and ultimately improved security.

The communication protocols in place also streamlined internal processes. Not only was there less congestion inside the physical branches, but automated alerts were set up to warn of low funds in ATMS, network faults and so on.

Atrait now serves over a dozen banks in the North African country of Morocco and surrounding areas - and, with the added security from mBlox, experienced a 40% increase in mobile bank accounts in 2007.

Further Discussion

  • Discuss how micro-payments and Location Based Services (LBS) can work together.
  • How can multiple platforms work together to drive sales?
  • What are the advantages of direct mobile billing for the consumer?
  • How can mobile NFC services make our daily lives easier?
  • What market advantages does a 'young' m-banking establishment have over a traditional financial service provider?

What’s Up Next?

Chapter 10
iPhones & Smartphones

Of all mobile devices worldwide, iPhones are of the most sought after smartphones. A lifestyle choice or necessity, these and other top-tier devices are breaking ground in the mobile industry.

Chapter 10 of the Mobile Marketing 101 series addresses the nuts and bolts of development and marketing specifically for smartphones.

References

Arrington, Michael [January 2 2009] iPhone, MySpace, Facebook Race To Micropayments In 2009
http://www.techcrunch.com/2009/01/02/iphone-myspace-facebook-race-to-micropayments-in-2009/
[Accessed on July 6]

a2zss.com [Date Unknown] ISO-8583 SDK for Java and Microsoft.NET
http://www.a2zss.com/cms/iso8583sdk.html
[Accessed on July 8]

Boku.com [Date Unknown] Home
http://www.boku.com/
[Accessed on July 7]

CardTechnology.com [Date Unknown] Home
http://www.cardtechnology.com/
[Accessed on July 6]

Cellular-News.com [May 28 2009] Mobile Payment Users Worldwide to Increase 70 Percent in 2009
http://www.cellular-news.com/story/37722.php
[Accessed on July 6]

CheXplit [Date Unknown] Home
http://www.chexplit.com/
[Accessed on July 8]

Fundamo.com [Date Unknown]
http://www.fundamo.com/mobile_banking.html
[Accessed on July 7]

Kaplan, Dan [August 26 2008] Mob Wars, the million-dollar-a-month independent Facebook app, may legally belong to SGN
http://deals.venturebeat.com/2008/08/26/mob-wars-the-million-dollar-a-month-independent-facebook-app-may-legally-belong-to-sgn/
[Accessed on July 8]

Kimani, Mary [Date Unknown] A bank in every African pocket?
http://www.un.org/ecosocdev/geninfo/afrec//newrels/214-cell-phone-banking.html
[Accessed on July 7]

Malbon, Tim [June 22 2009] The Micropayments Are Coming
http://www.madebymany.co.uk/the-micropayments-are-coming-001406
[Accessed on July 6]

McCarthy, Caroline [June 16 2009] Here come the mobile payment wars
http://news.cnet.com/8301-13577_3-10265243-36.html
[Accessed on July 6]

mPoria.com [Date Unknown] Home
http://www.mporia.com/
[Accessed on July 6]

MTN.co.za [Date Unknown] Banking
http://www.mtn.co.za/MTNServices/MoneyServices/Pages/default.aspx
[Accessed on July 7]

payments.amazon.com [Date Unknown] Amazon TextPayMe
https://payments.amazon.com/sdui/sdui/productsServices?sn=textpayme/o
[Accessed on July 6]

PlaySpan.com [Date Unknown] Home
http://corp.playspan.com/
[Accessed on July 6]

Rocherolle, Narendra [November 12 2008] Apple’s iPhone Offers the Ideal Micropayments Platform
http://gigaom.com/2008/11/12/apples-iphone-offers-the-ideal-micropayments-platform/
[Accessed on July 6]

Rosenberg, Dave [May 6 2009] Biggest sellers in the virtual world
http://news.cnet.com/8301-13846_3-10234933-62.html
[Accessed on July 8]

Rosenberg, Dave [September 2 2008] $34.5 million spent on Facebook virtual goods?
http://news.cnet.com/8301-13846_3-10030354-62.html?tag=mncol;txt
[Accessed on July 8]

SpareChangeInc.com [Date Unknown] How it works
http://www.sparechangeinc.com/developer.php
[Accessed on July 9]


TelecomPk.net [April 15 2007] Mobile Wallets: Case Study of M-Commerce From Japan
http://telecompk.wordpress.com/2007/04/15/mobile-wallets-case-study-of-m-commerce-from-japan/
[Accessed on July 8]

Vodafone Foundation [November 7 2006] Report on Mobile Banking for World's Poor
http://www.vodafone.com/start/foundation/news/report_on_mobile_banking.html
[Accessed on July 6]

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