mPay Connect Mobile Payments Blog

Battle of the Mobile Wallets – Who will Win?

Menekse — Sun, 24 Jul 2011 18:36:06 +0000

A few days ago, Isis announced they inked deals with Visa, MC, and Amex in addition to their previous deal with Discover. This announcement could finally break the impasse in the U.S. market.

So, now we have essentially 4 major plays at stake here…

1. Mobile wallets controlled by the device makers/disrupters: Apple, Google
2. Mobile wallets controlled by the MNOs/ISIS + Sprint
3. Mobile wallets controlled by the retailers / stored value (CorFire + Incomm)
4. Mobile wallets controlled by the banks/networks

I’ll make a few assumptions here… First, I am discounting bar codes as a viable long term alternative to NFC since NFC is a much more secure technology. Second, I don’t believe that micro-SD is a commercially viable alternative for distribution of the Secure Element as the consumer experience doesn’t work. Assuming both of these points, without partnerships with the MNOs or device manufacturers, the banks/networks and the retailers will not be able to control the secure element.

So the next question is: will the device manufacturers or the MNOs be more bank-friendly?

Apple – no one knows much. Whoever is working on the wallet must be locked up in the basement somewhere.
Google – Google has said they don’t care about the transaction revenues anymore (This is not too generous since neither do the payments providers with the Durbin Act.) Everyone knows that the money will be in the ads/offers/promotions, etc. so now the question is… Will Google play ball with the banks in this area? If not, they may be out of luck.
ISIS / Sprint – After much ado and many years of tribulations, the MNOs have finally realized they will not create a new network, but will leverage the existing rails and bank infrastructure. This is a smart move. With the latest announcement regarding Amex, MC, Visa in addition to Discover, their strategy finally sounds like it’s a sound one to pull the right ecosystem together.

So, now the big question now is… who will ultimately control the secure element in the U.S.? …the device manufacturers or the mobile network operators? Given the changing power dynamics in the US market, the answer to this question is not as obvious as it once was.

One thing is for certain, however — without thinking about the perspective of your partner sitting across the table, this ecosystem is not going to come together. Those who learn this quickly, will get the critical mass of players to be successful. Those who take a hard stance in the market will likely be left in the dust.

ISIS Retrenches Efforts in Mobile Payments

Menekse — Wed, 04 May 2011 17:15:28 +0000

On May 4, 2011, news articles indicated that the JV that was started by AT&T (NYSE:T), Verizon (NYSE:VZ), and T-Mobile will be scaling back their efforts around mobile payments with a less aggressive approach to the market. This should not be a surprise given customer behaviors and market dynamics.

ISIS (NASDAQ:ISIS)’s strategy to date has not been well-defined publicly. Many believed that the three MNOs were teaming up to create a new mobile payments rail, but their announcements with Discover and Barclays (NYSE:BCS) suggested that they would be riding the “4th” rail in the US market and teaming with Barclays for issuance. While this approach made sense for trailing Discover to try to gain some market share, the question remained how the least adopted rail by merchants would overcome adoption hurdles it has had in the past and what additional value the MNOs would bring to the table… both for the merchants and the consumers.

Given all this, today’s announcement of the “scale back” to be simply a mobile wallet that holds existing cards of the consumers is not a surprise. However, the question still remains what additional value add ISIS will bring to merchants and consumers. Meanwhile, other very disruptive partnerships are being put into place. It will not be surprising if new announcements are made in the very near future that could create a further setback for the ISIS efforts.

-Menekse Gencer
Former Director of Mobile Payments, PayPal
CEO, mPay Connect – a mobile payments consulting service
www.mpayconnect.com

“The REAL Ladies of CTIA/Wireless”

Menekse — Fri, 08 Apr 2011 16:05:09 +0000

I haven’t written in a while, but today I was inspired to do so. As I was skimming my daily tweets, I ran into a blog entitled “The Ladies of CTIA 2011.” I was there this year and, as always, women were extremely under-represented, as always. I knew there was a women’s professional meet up at the conference, so I clicked on the article to see who may have been highlighted. Instead, the article was about the “Booth Babes” with a series of sexy pictures.
I’ve worked specifically in mobile financial services field now for six years and have been asked increasingly to discuss the role mobile plays in closing the gender gap in emerging markets by The Government, The World Economic Forum, the UN, universities, The Inter-American Development Bank, and other development agencies. Meanwhile here, in the US, it is sad and ironic that the most prominent “Ladies of CTIA” highlighted in an article revolves around objectification. Really?
Marc, I’m sure it’s easier to get eyeballs to your site by posting scantily clad pictures of women. If, however, you want to provide real news on a subject, I would suggest that you begin researching what women are actually involved in wireless and what they’re doing…. and perhaps, why these women aren’t attending CTIA?
I belong to a global women’s network of wireless professionals who work on the use of mobile worldwide to increase access to communications, education, healthcare, financial services, and disaster relief. Most of the women in this group have multiple degrees and PhDs. They hold senior positions at worldwide organizations and they are making a difference in the lives of those who need it the most. Perhaps they are the “REAL” women of Wireless? But then again, I guess it’s easier to go your route than to do the research. Bravo.

The Mobile Money Movement(TM): Catalyst to Jumpstart Emerging Markets

Menekse — Mon, 03 Jan 2011 01:39:19 +0000

In the spring of 2010, I was asked to speak at Columbia’s Center for Tele-Information on the economic impact that Mobile Money will have in emerging markets. This presentation was the genesis for a whitepaper which I recently published with The Innovations Journal by the MIT Press.
To download the whitepaper.
If you are interested in hearing the original presentation that was given at Columbia University, fast forward to 22:30 on this video.

Latest Blog posted by UN Foundation’s mHealth Alliance

Menekse — Fri, 17 Dec 2010 17:51:57 +0000

For a preview of the upcoming whitepaper to be published by The World Economic Forum, please click here.

When Mobile Money meets mHealth: Why we need to connect the dots NOW

Menekse — Thu, 11 Nov 2010 19:29:57 +0000

I recently finished a white paper for The World Economic Forum and the mHealth Alliance where I identified the intersection points between mHealth (or Health, in general) and Mobile Financial Services. This past week, I did an East Coast tour where I began to present the results of the research I did (at Columbia University’s School of International and Public Policy, Columbia’s Institute for Tele-Information as well as the mHealth Summit.) There appears to be considerable interest on this topic. As a guest to the Health Industry, I was struck by the power that mobile money can bring in bolstering health outcomes for the poor. Yet, within organizations, mobile payments and mHealth are still siloed. Often times, they don’t even know one another.

We mobile money people don’t often have the opportunity to understand what our efforts ultimately can do in our adjacent industries. I knew that mobile money is a keystone to delivering better health services and making a greater impact. We can address this from an academic standpoint and list how, but here’s the bottom line…

Kenya is the leading country in the world when it comes to mobile money. The world looks at Kenya as the model country which is having not only the greatest uptake in usage (Today over 60% of Kenyan adults now use mPesa), but has the potential to change the economic development of the country in an unprecedented manner. New research from Billy Jack and Tuneet Suri indicates that it may be reducing the income irregularity and risk that the poor face daily. Over $400 million worth of volume goes through the system MONTHLY. To put this in perspective, last year, PayPal mobile had $600 million in volume for the entire year globally. The number of transactions passing through the mPesa system (in a country with a population of 38 million with per capita GDP of less than $1,000) is greater than all of the transactions Western Union had globally.

And, despite this home run, 56% of the women in Kenya give birth at home, leading to very high maternal and natal mortality rates. I knew this statistic before last week, but I didn’t understand the gravity of why this was happening. Of course, access to clinics is still a challenge, but there is one other egregious situation happening. Women (and other patients at hospitals) are literally imprisoned in the hospitals if they cannot to pay their hospital bills: http://www.guardian.co.uk/world/2009/aug/13/kenya-maternity-poverty-detained-hospital

Only 3% of the population has access to public insurance. 11 million people go without. A pregnant mother could go into a hospital, require a C-section, and then be unable to leave because of the medical emergency that she could not afford. I point this out not because Kenya is unique. Certainly, this type of issue persists globally. I point this out because it is incomprehensible that one industry (mobile money) can be working as a model to the rest of the world, and still, people face issues of not being able to pay their hospital bills due to lack of remittance, savings, insurance, or credit.

We can do better than this.

We have to do better than this.

We need to connect the dots now.

This white paper is not an academic exercise. My hope is that it acts as a catalyst to help these two industries connect the dots. For those of you interested in getting this paper once it’s published, please write to me at: mgencer@arcspringgroup.com. It will be published for the Davos World Economic Forum end of January.

Meanwhile, I’ve launched a new business with my mHealth colleague Ali Bloch to begin to connect these dots between these critical industries in developing markets: www.arcspringgroup.com

Tech@State – Mobile Money Public and Private Partnerships

Menekse — Fri, 06 Aug 2010 18:49:28 +0000

I recently had the honor to present at The State Department’s Tech@State event for Mobile Money on the intersection of Mobile Money with Food Security. It was great to see the level of interest and momentum that the government has behind this, recognizing the mobile money will be the key to financial inclusion world-wide. I was joined by a number of other mobile money experts. The recap can be found here.
The Food Security/Mobile Money presentation can be accessed on slideshare. Two critical videos to watch to gain a better understanding of the use of mobile money for food security are:
Mobile Money Vouchers by Mobile Transactions
Mobile Micro-Insurance by Syngenta Foundation
At the end of the event, I joined my colleagues to discuss the opportunities and challenges that lie ahead and reiterated that I hope this is just the beginning of a dialog between private-public sectors to help advance this industry. The video can be found here.
Stay tuned on a number of items…
1. Working on the intersections of mobile money and mHealth for the mHealth Alliance (United Nations Foundation) and The World Economic Forum
2. Upcoming event on September 13, 2010 in San Francisco as a Bay Area recap of Tech@State and “Around the World in 80 Minutes” to demonstrate some mobile payments systems from around the globe. Registration for this event will be announced on my LinkedIn Group: Mobile Payments Series – mPay Connect

MNOs and Retailers: Clash of the Titans in the US on prepaid wireless topup

Menekse — Thu, 24 Jun 2010 22:14:57 +0000

What happens when one of the highest revenue areas of prepaid cards disappears? In Kenya, this has been the evolving conflict between the scratch guard agents whose commissions depend on selling prepaid topup and the desire for MNOs to save commissions by providing an application for customers to remotely topup their accounts over the mobile phone. The situation becomes further complicated by the fact that these agents act as human ATMs into Safaricom’s mPesa payment system. So, for now, it appears Safaricom is less likely to exacerbate this agent conflict situation.

But… just when you thought there were few analogies between the US and Kenya as it relates to mobile payments… Watch this…

If you replace “scratch card” with “prepaid wireless card”… and replace Safaricom kiosk agent with Walmart… and replace Safaricom with AT&T, what begins to unfold?

The movement of prepaid topup from card to mobile changes the revenue structures of the retailers.

Mark my words: the clash of the titans is yet to begin…

Menekse Gencer

Comparing Volumes of mPesa Kenya vs. PayPal Mobile in 2009 (monthly estimate)

Menekse — Thu, 27 May 2010 17:49:20 +0000

PayPal reported that their global mobile payments volumes in 2009 was $600 million, or roughly $50 million/month. Let’s assume most of this came from the U.S. In contrast, Safaricom reported their monthly mPesa volumes at $300 million at September of 2009. PayPal Mobile launched one year before mPesa Kenya, and yet the volumes are vastly different. This chart compares relative populations, average income, and monthly volumes of mobile payments for US. PayPal Mobile (largest mobile money transfer system) vs. Kenya’s mPesa (largest mobile money transfer system.) These results are further exaggerated if we normalize by population (let alone if we normalized by income.) Clearly, something vastly different is transpiring in these two markets. My belief lies in the difference of the consumer value proposition mobile payments provides in markets with no other alternatives to cash vs. sophisticated financial services markets like the U.S. whose populations have access to cards and computers.

Internet in “The Real World”: PayPal payments off-PC?

Menekse — Thu, 20 May 2010 18:42:37 +0000

The distinction delineating online and offline payments is blurring as the world becomes more Internet-connected outside of the home or office. This mash-up of technology begins to create new opportunities for alternative online payments companies to play “in the real world.” In a recent conference in Canada, Scott Thompson, President of PayPal, spoke of the new ways people will pay in the future based on immediate consumption rather than intended future usage, citing the ability to pay directly to a journalist rather than subscribe to magazine or newspaper. From that discussion, CTV writes, “PayPal plans to have a presence on virtually anything that’s connected to the Internet – starting with smart phones and moving to Web-enabled TVs and other connected gadgets…”
As vending machines, parking meters, televisions, and mobile phones become increasingly Internet-enabled, PayPal’s 84 million consumer accounts and 8 million business accounts may be leveraged in the “real world” as a potential closed-loop payment rail. Those accounts, which have emails and passwords and some which have mobile numbers and PINs, become an interesting method to enable such payments for various Internet-connected devices. Many of these channels today leverage cash, which suggests a green-field opportunity in payments. Some of these devices are increasingly accepting cards, which begins to question how Visa (NYSE: V), MasterCard (NYSE: MA), and American Express (NYSE: AMEX) may react.

As more devices become Internet-enabled, the existing rails of off-line payments players may not be able to maintain the market dominance seen in the past. The battle of connectivity and payments rails will become an interesting one.
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Menekse Gencer founded mPay Connect, a consulting service for clients seeking to launch mobile payments. Her consulting service advises banks, mobile network operators, and third parties on go-to-market-strategy, product design, and business development. Her market expertise extends from North America to emerging markets such as Bangladesh and sub-Saharan Africa. Prior to founding mPay Connect, Menekse led PayPal Mobile’s Business Development efforts in North America during which time she closed PayPal’s first mobile network operator deal to launch PayPal Send Money on Sprint.

Menekse has an MBA from Wharton and a B.A. in Macroeconomics from Harvard University and was previously featured on the cover of Fortune Small Business Magazine for her innovative startup in emerging technology. She is the founder of the Mobile Payments Series(TM) initiative which hosts panel discussions and networking events for professionals in the mobile money industry and has over 400 members in her LinkedIn Group: Mobile Payments Series – mPay Connect. She is a recognized expert in this field and has lectured on mobile money at events for Harvard Business School, Wharton MBA, and Columbia Business School. She is active in assisting organizations such as The World Economic Forum, mHealth Alliance, and IntraHealth on the intersection of Mobile Finance with industries such as Agriculture, mHealth, and Off-Grid Energy. She is a frequent guest speaker at mobile money conferences in Africa, South Asia, and The Middle East. Menekse is a board advisor to several startups in this space and has advised angel investors, venture capitalists, and hedge funds on the mobile money industry. She has 17 years of experience as a consultant and industry leader in high tech, mobile, and financial services.

To learn more about her consulting services, contact her at: mgencer@mpayconnect.com.