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QUARTERLY eBULLETIN - Mobile Ecosystem Forum
QUARTERLY eBULLETIN
Your essential guide to the latest Mobile Money news and innovations

ISSUE 4
SUPPORTED BY

FEATURING
QUARTERLY
INDUSTRY REVIEW
BY MOBILE MONEY
REVOLUTION’S TIM GREEN

mPOS: THE INTERSECTION OF
PAYMENTS CUSTOMER SERVICE
AND ENGAGEMENT

QUARTERLY UPDATE:
GLOBAL MOBILE MONEY LANDSCAPE

MARKET STATS & FACTS
QUARTERLY eBULLETIN - Mobile Ecosystem Forum
3 FOREWORD

     4 mPOS: THE INTERSECTION OF PAYMENTS
          CUSTOMER SERVICE AND ENGAGEMENT
          INSIGHT FROM BRIJESH ARORA, AVP, STRATEGY AND
          NEW PRODUCT DEVELOPMENT, MOBILE FINANCIAL SOLUTIONS AT MAHINDRA COMVIVA
          MAHINDRA COMVIVA
     6 THE WORLD OF MOBILE MONEY (PART 1)
          mPOS & MOBILE INSTORE, WEB & APP PAYMENTS

     8 INFOGRAPHIC: GLOBAL MOBILE MONEY LANDSCAPE

     10 THE WORLD OF MOBILE MONEY (PART 2)
          P2P MOBILE TRANSFERS & DIRECT OPERATOR BILLING

     12 INDUSTRY STATS & FACTS

MEF MOBILE MONEY eBULLETIN #4                                                       2
QUARTERLY eBULLETIN - Mobile Ecosystem Forum
FOREWORD
     RIMMA PERELMUTER
     CEO, MEF

                                W
                                                  elcome to the fourth edition of MEF’s Mobile
                                                  Money Bulletin, a comprehensive round-up of the
                                                  news, industry analysis and insights that are
                                                  helping to shape the mobile money sector. In this
                                latest edition, we take a closer look at how mobile point-of-sale
                                (mPOS) has evolved from a convenient payment option for small
                                merchants to enabling whole new levels of customer engagement.

                                Mobile Money continues to be a key focus for MEF not least as it
                                exemplifies how the mobile ecosystem is embracing new sectors
                                and geographies whilst fueling FinTech innovation. Some great
                                examples of this diversity can be seen with the 2015 Meffys
                                finalists in the Mobile Money and FinTech categories, recognising
                                leading innovators from India, Brazil, the Netherlands and the
                                Philippines across banking, P2P transfers, NFC and cashless
                                payment solutions.

                                MEF’s Mobile Money Working Group is currently addressing the
                                pending PSD2 EU regulation as it applies to retail payments and
                                authentication. MEF guidelines on these essential regulations and
                                what they mean for different stakeholder groups has been
                                commissioned by MEF and are currently being advanced with
                                mobile financial services experts Mondato. It forms part of a full
                                programme of Mobile Money focused activities including
                                dedicated workshop and panel sessions at Apps World Europe and
                                South Africa which will highlight the strategies and innovations
                                across the industry that are accelerating mobile payments.

                                Please contact the editorial team if you’d like to be featured in the
                                next edition of this eBulletin. The news round-up is an essential guide
                                to what’s happening and together with MEF’s Global Mobile Money
                                Landscape provides a holistic snapshot into this thriving sector.

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mPOS
                                                                                                             THE INTERSECTION OF
                                                                                                             PAYMENTS, CUSTOMER
                                                                                                           SERVICE AND CONSUMER
                                                                                                                     ENGAGEMENT

                                                                                                                      BY BRIJESH ARORA
                                                                                   AVP, STRATEGY AND NEW PRODUCT DEVELOPMENT,
                                                                                                           MOBILE FINANCIAL SOLUTIONS AT

   M
                  obile-point-of-sale (mPOS) is disrupting the way payments
                  are accepted and opening up new levels of customer
                  engagement. Initially conceived as a low cost and
                  convenient solution for small businesses (that traditionally
                  weren’t able to process card transactions), larger
   enterprises from high-street retailers to healthcare businesses are
   experimenting with innovative use cases as the space matures.                 CUSTOMER ENGAGEMENT
                                                                                 The rapid growth of Internet retailing has posed challenges for many
   Here, Brijesh Arora, AVP, Strategy and New Product Development, Mobile
                                                                                 traditional stores. Savvy shoppers have become more selective,
   Financial Solutions at Mahindra Comviva discusses the growth of mPOS
                                                                                 comparing prices in high street stores with online deals for similar
   and its crucial role in the mobile payment process.
                                                                                 goods. Many retail outlets have become victims of so-called
                                                                                 show-rooming and in-store purchase volume has stalled as a result.
   As early as 2009, when mobile start-up, Square, launched arguably
                                                                                 In response, retailers are embracing omnichannel retailing and taking
   the first mobile-point-of-sale system, the electronic payment
                                                                                 a holistic view across their entire businesses, and mPOS can be a
   industry had its card marked as a sector
                                                                                                               central plank in this strategy.
   ripe for mobile disruption. Although still
   in its infancy, the mPOS space has
   moved beyond a convenient payment                “…FROM CHECKING                                          Perhaps the most significant benefit is
                                                                                                             that mPOS allows the point of sale to
   option for small merchants that had
   previously been unable to process card
                                                    INVENTORY LEVELS AND                                     become free roaming, playing to the
   payments to enabling new levels of not           ORDERING AN                                              strengths and flexibility of the mobile
                                                                                                             device. And that mobility allows staff to
   just payments but customer
   engagement from the market stall to the
                                                    UNAVAILABLE ITEM                                         engage with customers completely
                                                                                                             differently, not only outside the store,
   aisle and beyond.                                IN-SITU, TO OFFERING                                     but also around the store, from checking
   Today the mPOS space is characterised            CONTEXT-DRIVEN                                           inventory levels and ordering an
                                                                                                             unavailable item in-situ, to offering
   by a mix of start-ups and incumbent              OFFERS, TAKING                                           context-driven offers, taking payments
   point-of-sale providers alongside other
   major players such as PayPal whom                PAYMENTS AND                                             and delivering an electronic receipt via
                                                                                                             email - bringing the point of sale to the
   have made the transition to offering
   mPOS by captialising on their own
                                                    DELIVERING AN                                            point of need.
   substantial user-bases.                          ELECTRONIC RECEIPT VIA                                   Payment becomes just one part of a
   It is estimated that mPOS accounts for
                                                    EMAIL - BRINGING THE                                     range of services all capable of being
                                                                                                             delivered through the same device.
   at least 10 per cent of consumer                 POINT OF SALE TO THE                                     mPOS services lie at the heart of these
   physical transactions which implies that
   the incumbent hardware vendors sold              POINT OF NEED.”                                                 initiatives, integrating the
                                                                                                                     payment facility with an
   some 2.5 million mPOS devices in 2014.
                                                                                                                      improved shopping experience
   But that figure excludes many of the
                                                                                                                     for the customer, forming a key
   mPOS specialists that pioneered the
                                                                                                                  component amongst a variety of
   channel in the first place, such as Square and iZettle. Factoring in
                                                                                                                   technologies that, in combination,
   these companies and their many peers around the world indicates
                                                                                                                             can radically transform the
   that total sales of mPOS hardware in 2014 amounted to some 10
                                                                                                                              retail outlet and shopping
   million devices.
                                                                                                                             experience.
   Crucially mPOS card readers can be attached to any smartphone,
   tablet or phablet and it is the ubiquity of mobile that has driven the
   connected hardware side of this growth.

   The way payment is accepted is changing in parallel, from
   card to cloud-based services. This move is stimulated by
   the wave of investment in mobile-device-based payment,
   developments in NFC contactless technology, and the
   emergence of host card emulation and tokenization technologies.
   Next generation POS services will be increasingly cloud-enabled,
   easing the transition from card initiated to smartphone-initiated
   payments.

MEF MOBILE MONEY eBULLETIN #4                                                                                                                              4
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As the market matures, mPOS providers are seeking additional             Looking at the numbers, card transaction volume in established
    sources of income through the provision of further services. This        economies has continued to show strong growth from 2009 onward.
    might come via a range of software applications that help merchants      Forecasts indicate that, in the 22 countries reported by the Bank for
    run their businesses more effectively, whether it helps streamline       International Settlements, cards will account for 273 billion
    back office operations, improve front office tasks or engage with        transactions at a combined value of some US$30 trillion by 2018.
    customers better in the physical as well as digital space. Tools
    include product catalogues, inventory management, linked                 Cards will remain the most important payment instrument for many
    accounting software, customer relationship management and data           years to come, their role supported and enhanced by mPOS.
    analysis and reporting all aimed at various legs of the commerce
    transaction rather than just focussing on payments.                      It will take time for mobile transactions to rival card transactions in
                                                                             volume. Aite Group research indicates that from 2015 to 2018,
    BEYOND RETAIL                                                            contactless mobile transactions have the potential to reach 4 to 5 per
                                                                             cent of retail payments, with growth in transaction volume
    Beyond retailing, mPOS is being enthusiastically adopted by a range      accelerating after 2020.
    of new industry verticals in the mobile ecosystem that had little need
    for payment terminals in the past. Healthcare business, Insurance,       Whilst much attention is placed on new mobile payment solutions
    home-servicing companies (e.g., food deliveries, heating engineers,      like Apple Pay and Android Pay, the balance is clearly in favour of
    air conditioning service companies) and businesses that use              cards in the short to medium term.
    home-sales personnel find these services useful, eliminating the
    need for agents to carry large amounts of cash or checks and bringing
                                             the benefit of immediate        The key business intelligence
                                             electronic payment.             lies in the mobile application,
 “THE COMPANIES USING                                                        which not only provides a           “WHILST MUCH
                                           Ruggedised mPOS devices           rich user experience, but also
  mPOS ARE EXTREMELY                       are also proving popular in                                           ATTENTION IS PLACED
                                                                             is an effective channel to
       VARIED, BUT THE                     sectors such as
                                           transportation, allowing
                                                                             render the various business         ON NEW MOBILE
       ATTRIBUTE THEY                                                        applications. Their flexibility
                                           at-seat sales by airlines,        allows the mobile app to be         PAYMENT SOLUTIONS
   SHARE IS THE ABILITY                    trains, and long-distance bus     reconfigured over time to
                                           operators. Courier and            adapt to changing
                                                                                                                 LIKE APPLE PAY AND
         TO USE MOBILE                     delivery firms use such
   PAYMENT DEVICES TO                      terminals to receive payment
                                                                             circumstances, payment              ANDROID PAY, THE
                                                                             methods, form factors and
                                           upon delivery — still an          this is another powerful            BALANCE IS CLEARLY
     TRANSFORM THEIR                       important service in many         aspect of the new generation
   RELATIONSHIPS WITH                      countries. mPOS devices can       of mobile payment
                                                                                                                 IN FAVOUR OF CARDS
                                           even be found in use for
    THEIR END USERS OR                     payment of on-the-spot
                                                                             acceptance. The flexibility of      IN THE SHORT TO
                                                                             mPOS mobile applications in
           CUSTOMERS.”                     speeding fines by police          an increasingly digital,            MEDIUM TERM.”
                                           forces.                           omnichannel payment
                                                                             environment is a key
    In all examples and more, security of payment is improved, with cash     strength.
    removed from the equation, and most transactions (such as many of
    the transportation examples) are made with online rather than offline    From its beginning as a single stand-alone service for small
    authorization. This encourages efficiency, opens up new channels,        businesses, mPOS has quickly evolved into a transformative set of
    and removes or reduces certain categories of risk.                       technologies that will drive change across the entire payments value
                                                                             chain. In the process, it is bringing new players into the market and
    The companies using mPOS are extremely varied, but the attribute         forcing incumbents to re-evaluate their methods of operation. The
    they share is the ability to use mobile payment devices to transform     world of payments is at the start of a process of change more
    their relationships with their end users or customers.                                  fundamental than it has experienced before. New
                                                                                                business models, much deeper customer
    mPOS AS A CATALYST FOR MOBILE                                                                       engagement and more flexible solutions with
    PAYMENTS GROWTH                                                                                           payment acceptance at their heart are
    Credit and debit cards, which are regarded by some as out-dated by                                           the order of the day, but the key
    smartphones (and their ability to make mobile payments), are in fact                                         ingredient that weaves through the
    central to the emergence of mPOS, and their importance is in turn                                            rapidly evolving landscape is
    reinforced by it. But as mPOS grows it will enable new forms of                                              mobility; the ability to accept
    payment to flourish, including via NFC-enabled mobile wallets and                                            payments at the customer’s
    devices. Newer mPOS devices have NFC capability, allowing                                                    convenience and at greater variety
    contactless tap-and-go transactions from card or phone.                                                      of locations than ever before. mPOS
                                                                                                                 is moving from a niche service into
    Much analysis focuses on the mobile phone’s potential to transform                                           the mainstream of modern
    payments and replace the plastic card, but within an mPOS                                                    commerce.
    environment, both forms of payment can be accommodated, bringing
    greater flexibility to the act of payment acceptance.

    Mobile commerce developers gain meaningful traction with mobile
    wallet services or in-app payments while merchants benefit from the
    ability to capture a variety of payment methods without limiting the
    options available to their customers.

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THE WORLD OF MOBILE MONEY
                                                                                                                        (PART ONE)

                                                                                                                             TIM GREEN
                                         TIM GREEN IS AN ACCLAIMED INDUSTRY COMMENTATOR ON MOBILE MONEY AND PAYMENTS
                                         AND THE EDITOR OF MOBILE MONEY REVOLUTION INDUSTRY. HERE HE SUMS UP THE NEWS
                                              THAT HAS BEEN SHAPING THE MOBILE PAYMENTS SPACE IN THE LAST THREE MONTHS
                                                                      ACROSS MPOS, IN-STORE AND ONLINE MOBILE CHANNELS.

    mPOS

    The big news of the quarter in mPOS was mostly
    financial. Sweden’s iZettle brought lifetime funding to
    $168 million after a new round, eclipsing its rival
    SumUp’s €10m fund raise.

    Meanwhile Square resurrected rumours of an IPO again
    a year after a previous mission to go public collapsed. It
    all indicates enduring investor support for a sector that
    is frequently doubted.

    iZETTLE BAGS ANOTHER €60M AND MOVES INTO
    SMALL BUSINESS LOANS

    Sweden’s mPOS giant iZettle has raised €60 million to bring lifetime
    funding to $168 million. The newest round values the firm at an
    estimated $500m. The company plans to use the investment case to
                                       expand into new areas – and it’s
                                       already revealed one: small             FLINT LAUNCHES mPOS APP THAT USES THE
                                       business loans.
                                                                               CAMERA RATHER THAN A PLUG-IN DONGLE
                                         Its new Advance service gives
    merchants access to cash advances, which they can pay back in small
    increments based on a percentage of daily sales through credit cards.      All over the world, micro merchants are signing up to use readers that
    The advance comes with a fixed fee that is payable over a specified        let them take card payments on a phone.
    period, but rates are set on a case by case basis. The loan is be paid
    back by increasing the fee taken on future transactions using the          Typically, they require a dongle that either plugs into the phone or
    iZettle terminal.                                                          links to it via Bluetooth. Now, Flint has launched something a bit
                                                                               different. Its app uses optimal character recognition to read card
                                                                               details. In other words the merchant scans your card to capture the
                                                                               number. It only works on Android.
    MEANWHILE INDIA’S ANSWER TO iZETTLE BAGS
                                                                               The processing fee is 1.95 per cent for each debit card transaction
    A $25M ROUND                                                               and 2.95 per cent per credit card transaction. It’s a nice and
                                                                               convenient option, but one wonders how many customers would be
                                                                               freaked at a vendor taking a photo of their cards.
    Mumbai-based mPOS specialist Mswipe has announced Series C
    funding of $25 million from Falcon Edge Capital, Ola Cabs and Meru
    Capital as well as existing investors. The firm, which launched in India
    in 2012, offers merchants a card reader and app combo for taking           SUMUP RAISES A FURTHER €10M
    payments on a phone. The card reading dongle attaches to the
    phone’s audio jack.
                                                                               One of Europe’s bigger mPOS players, SumUp, has closed a €10m
    Mswipe is operating in a market in which just a small percentage of        funding round. Investors includes BBVA Ventures, Groupon and
    the population uses bank cards. But it’s a huge population, so the firm    American Express. It’s only weeks since the firm bagged a Series D
    reckons 12 to 15 million SMEs could benefit from mobile POS. Today         investment, and it brings total cash raised to €50m.
    fewer than 500,000 SMEs have any type of POS. Mswipe’s solution is         SumUp says it will use the funds to add support for contactless
    already in use with more than 25,000 merchants across India.               payments to its dongles, and to extend into new countries.

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PAYPAL LAUNCHES A CONTACTLESS mPOS                                        MOBILE IN-STORE PAYMENTS
    READER IN THE UK
                                                                              And then there were three. One year ago, Apple set the
    PayPal has been live with its PayPal Here dongle for two years now.       template for the handset being the ‘home’ of the mobile
    And in the UK it’s just upgraded the device to accept contactless         wallet. Now Google and Samsung are in the process of
    payments from Visa, Maestro and MasterCard as well as Apple Pay.          rolling out similar services.
    This is in addition to standard Chip and PIN payments.

    In the UK, its main rivals already offer contactless support, while the   Android Pay and Samsung Pay – in slightly different
    option is just starting to appear in the US where PayAnywhere             ways – let phone owners safely ‘de-materialise’ their
    recently launched a new NFC integrated reader.                            bank cards into software on a phone. They’re contactless
                                                                              so users can tap to pay in shops. But, as with Apple Pay,
                                                                              the greater impact may be in-app, where users can
    THIS TIME SQUARE REALLY WILL TRY FOR AN                                   check out with a fingerprint.
    IPO. MAYBE.

    Jack Dorsey’s mPOS pioneer Square is to go public, say people who
                                                                              ANDROID PAY GOES LIVE AT MORE THAN 1M US
    have the inside track from investment banks. Reports say Square,          LOCATIONS
    which processed $30 billion in payments in 2014, is ready to file for
    an IPO.
                                                                              Two months after formally announcing Android Pay system, Google
    The news comes after a tricky period for Square, which                                                  launched the service across the US.
    was supposed to IPO last year but didn’t because of                                                     Android Pay will work on any
    poor results. Square has been criticised in the past for                                                NFC-enabled Android device running
    not having sustainable business model (taking a cut of                                                  KitKat 4.4 on all US mobile carriers.
    ever-decreasing card fees) while various efforts to offer                                               It also works across the four major
    other services - like Pay By Square - have been                                                         payment networks: American
    unsuccessful.                                                                                           Express, Discover, MasterCard and
                                                                                                            Visa.
    But it’s still a huge business with loads of customers.
    And its Square Capital business-lending program is said                                                      The concept is, of course, pretty
    to have advanced almost $25 million in capital in April alone.            similar to Apple Pay in that in-store transactions are made via NFC
                                                                              and the actual card number isn’t shared with merchants. Instead, it
                                                                              transfers tokens. The crucial difference with Apple Pay is in the
                                                                              storage of the ‘secure element’. While Apple keeps all the sensitive
                                                                              data in a secure enclave inside the device, Android Pay puts some of
                                                                              it in the cloud (using host card emulation).

                                                                              UK CONTACTLESS PAYMENTS UP 560%

                                                                              New stats from Barclaycard and MasterCard say contactless
                                                                              payments tripled in the last year in the UK. Transactions were up 457
                                                                              per cent. MasterCard said spending by British consumers on its cards
                                                                              rose by five – up 560 per cent year-on-year. Barclaycard said its
                                                                              users raised their spending by 150 per cent by value and 134 per cent
                                                                              by volume. The average purchase amount has also risen dramatically,
                                                                              reaching £7.29 by July.

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MOBILE PAYMENTS CAN GENERATE $1TRN BY 2017                                 SAMSUNG PAY LAUNCHES IN KOREA; DAYS
                                                                               FROM LAUNCH IN US AND EUROPE

    Here it is: the first 12 zero estimate for the mobile payments space.
    Yes, IDC says the market will be worth one trillion dollars by 2017.       South Koreans have begun using Samsung Pay, while Europeans and
    That’s 1,000,000,000,000.                                                  Americans will get their hands on the service imminently. The launch
                                                                               comes as Google gets ready to launch Android Pay, and Apple Pay
    Asia Pacific markets will drive the rise as emerging nations come          looks to consolidate in the UK and US where it is live.
    online for the first time and do their ecommerce via smartphones.
                                                                                                                             Samsung Pay, like
    That and the lack of credit/debit card adoption, which will shift                                                        Apple Pay and Android
    transactions to bank account linked mobile wallets.                                                                      Pay, will let users
                                                                                                                             assign a credit card to
                                                                                                                             an app, store tokenised
                                                                                                                             account details inside
    SHELL AND PAYPAL BRING MOBILE PAY AT                                                                                     the phone and then
                                                                                                                             pay with a tap in
    PUMP TO MOTORISTS
                                                                                                                             stores. The crucial
                                                                                                                             difference is that,
                                                                               thanks to tech Samsung acquired from LoopPay, users can tap to pay
    Shell and PayPal have announced Fill-Up & Go, which lets drivers use       even at stores with old-fashioned mag stripe terminals.
    a QR code, mobile app and smartphone to refuel. Users can download
    the app and link it to a PayPal account. Then they select they amount      This is because LoopPay created a proprietary technology called
    of fuel they need, enter it into the app, then scan the code by the        Magnetic Secure Transmission (MST), which supports contactless on
                                                                               any reader – there’s no need for merchants to change their systems.

                                                                               ONE IN FIVE STARBUCKS TRANSACTIONS IS
                                                                               NOW MOBILE
    pump. The scan turns on the pump and fills the tank to that sum.
    Funds are deducted from the PayPal balance or linked account.                                 Coffee chain Starbucks processes more than 9
                                                                                                      million mobile transactions a week. That’s 20
                                                                                                        per cent of all in-store payments. The
                                                                                                          company is often cited as the US leader in
    SMARTWATCHES AND WRISTBANDS COULD                                                                      mobile payments, and its CEO Howard
    DRIVE MORE THAN $500 BILLION IN                                                                         Schultz says there’s no sign of that
    TRANSACTIONS BY 2020                                                                                    changing.

                                                                                                          Now, Starbuck’s is moving into order-ahead
                                                                                                       services by mobile. Its Mobile Order & Pay is
    A report by Tractica predicts that wearable payments could grow
                                                                                                     available at more than 4,000 US stores.
    from $3.1bn in 2015 to a staggering $501.1bn by 2020. That will be
                            20 per cent of all mobile proximity transac-
                            tions and one per cent of all cashless
                            transactions in retail. Quite a claim given that
                            there’s a question mark over mobile                TD BANK USERS ARE TESTING ‘PAY BY
                            payments in store and the wearable device          HEARTBEAT’
                            market full stop.

                            But Tractica believes Apple Pay in a smart
                                                                               Canada’s TD bank is working with biometrics firm Nymi on securing
                            watch offers a good indication of how things
                                                                               payments using customer heartbeat patterns. The scheme in
                            will go. And it’s also mindful of projects such
                                                                               Toronto, Ottawa and
                            as Barclays contactless payment bands.
                                                                               Regina will gauge the
                                                                               feasibility of using the
                                                                               Nymi Band to ID users.
    US MICRO-MERCHANTS GET THE OPTION TO                                       The band uses ECG
    ACCEPT APPLE PAY                                                           sensors to pick up the
                                                                               wearer’s unique heart
                                                                               rhythm. It then verifies
    Apple has teamed up with North American Bancard to launch a new            the user is authorised
    version of the latter’s PayAnywhere card reader. It means that small       and sends a message
    merchants taking magnetic stripe card payments on one of these             by Bluetooth to the
    mPOS dongles can now do Apple Pay transactions too. There are no           users phone to open
    monthly or setup fees. The dongle will cost $39.95, while the              the connected banking
    PayAnywhere Mobile app is free in the App Store.

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MCX TO START TESTING CURRENTC WITH                                           MOBILE WEB AND APP PAYMENTS
    PUBLIC IN WEEKS?
                                                                                 Ever since the dawn of mobile web and app commerce,
    The Wall Street Journal reported that MCX’s CurrentC service will            the fundamental challenge has been exactly the same:
    begin its first public tests in September. MCX is the consortium             how to make buying as easy on a small screen as it is on
    comprising Wal-Mart, Target and other giants. It was founded to              the desktop?
    provide a closed mobile payment solution based around convenience
                                                and rewards. Significantly, it
                                                links to checking accounts       Even today, it’s far from solved. But the market’s big
                                                and thereby avoids the fees      players keep trying. In the last few weeks, Stripe and
                                                these retailers have to pay      Google have each launched services to give consumers
                                                to credit card giants.
                                                                                 easier ways to buy on mobile.
                                            It was unveiled in 2013, but
                                            has been hampered by                 Stripe’s Relay lets merchants embed a checkout in third
                                            resignations, tech hiccups           party apps (notably Twitter) so shoppers can buy
                                            and internal wrangling.              without interrupting the session. Meanwhile Google is
    Famously, it mandated its members should not use rival payment
    systems like Apple Pay, but many have done so anyway.                        experimenting with buy buttons in mobile banner ads.

                                                                                 STRIPE’S RELAY SERVICE PUTS ‘BUY’ BUTTONS
    BILL-SPLITTING APP – PAID EASY – GETS                                        INTO THIRD PARTY APPS
    FUNDING
                                                                                                                          US firm Stripe is well known
    New York’s PaidEasy                                                                                                   for giving developers card
    has just bagged $2m                                                                                                   payment API they can drop
    to help acquire new                                                                                                   into their apps. It means they
    merchants, fund tech                                                                                                  don’t have to bother with the
    and add people. The                                                                                                   hassle of dealing with payment
    app lets users open,                                                                                                  processors.
    view, split, tip and pay
    their bills in real time. Apparently, no new hardware is needed, just a      And the checkouts are modified for mobile so they’re quick and easy
    software upgrade to the merchant’s existing POS.                             for consumers to use too. This is great when consumers are coming
                                                                                 to your app. But what about when they’re interacting with your brand
    Still, there are so many other ‘bill splitting’ firms out there. They        somewhere else?
    include TabbedOut, Cover, Zapper, Dash, Mycheck, FlyPay, Settle,
    QikServe, Cake and more.                                                     That’s what Stripe Relay is trying to solve. The new service gives
                                                                                 merchants an API they can use to put buy buttons into third party
                                                                                 apps. At launch they are: Twitter, ShopStyle, Spring and InMobi.

                                                                                 It means that instead of clicking on a link in the Twitter app and going
                                                                                 off to an e-commerce site, you just click to buy inside Twitter. Of
    DROPLET SIGNS UP 25 RETAILERS IN LEEDS UK                                    course, Twitter doesn’t have your credit card info and neither does
    TO ITS M-PAYMENT APP                                                         the merchant. Stripe does. And the more merchants sign up to it, the
                                                                                 easier it will be to shop this way.

    UK startup Droplet is slowly rolling out its app-based in-store
    payments system across the country. Its latest target is Leeds, where
    Café 164, Tall Boys and BangWok are testing it out.
                                                                                 INDIA’S MOMOE BRINGS PAY-BY-APP FOR
    These merchants will get the chance to accept fee-free payments              TAXI RIDES
    and create their own loyalty schemes for a low cost. The move
                                                   represents a big push
                                                   on rewards for                Bangalore-based Momoe is targeting taxi drivers in its home town
                                                   Droplet: the firm             with its card-based mobile payment system. Its app lets users load
                                                   always wanted to              up a credit or debit card, then
                                                   make the payments             enter the mobile number of a
                                                   free and charge for           participating merchant to connect
                                                   added-value services          to it. They can then enter the cash
                                                   on top. More than             amount to pay.
                                                   1000 merchants
                                                   across the UK do              It started out as a bill-splitting app
                                                   accept Droplet, with          for restaurants but is now
                                                   150 offering rewards          expanding into other sectors.

MEF MOBILE MONEY eBULLETIN #4                                                                                                                               7
QUARTERLY eBULLETIN - Mobile Ecosystem Forum
KASHING! USES CROWDCUBE TO FUND                                         WIRECARD UNVEILS NEW MOBILE CHECKOUT
    ‘PAYMENTS ANYWHERE’ IDEA                                                PLATFORM FOR RETAILERS

                        UK startup Kashing has turned to crowd funding                                     Retailers can dramatically improve the
                        to launch a platform that gives micro-merchants                                    capabilities of their apps thanks to a
                        one platform for all their payments                                                new offering from Wirecard. Its
                                                                                                           platform gives merchants the option to
                        It reckons they need a pain-free way to move        add contactless payments, peer-to-peer gifting and loyalty offers.
                        from cash and old-school card readers to            Several European retailers are already piloting closed-loop payment
                        properly synchronised system that takes any         services built on it.
                        kind of payment: mPOS, mobile site, mobile app,
    and even voice over the phone. The firm signed up 300 merchants in      Traditionally the issue around these kinds of extras was integrating
    its first month.                                                        them with a retailer's existing loyalty programs. But this is what
                                                                            Wirecard says it can do. The platform can also take payments via
                                                                            QR-code, NFC/HCE, NFC/SIM card.

    GOOGLE TO LET MOBILE WEB USERS PAY
    DIRECT FROM BANNER AD
                                                                            EX-GOOGLER LAUNCHES SHOPPING-ENABLED
                                                                            APP STARTUP, PREDICTSPRING
    The search giant has begun testing mobile banner ads with check-
    outs embedded inside. The concept lets viewers see a ‘pay now’
    button on an online ad, click on it, buy it, then go back to their                             Nitin Mangtani, former manager of Google
    browsing.                                                                                      Shopping, has raised $2 million to start
                                                                                                   PredictSpring, a firm that lets people create
    Google will let users store credit card info to make the payment                               shopping-enabled apps without writing any
    process smooth and fast. The merchants will still handle the                                   code. He says he launched the firm because -
    fulfilment, but the checkout page will be hosted by Google (though                             even today - a huge number of mobile
    with merchant’s branding).                                                                     shoppers have to switch to the desktop or
                                                                                                   mobile site when they want to pay.

                                                                                                    Thus PredictSpring will enable retailers to
    AMEX LAUNCHES ITS OWN DIGITAL                                                                   build apps that incorporate buy buttons. The
    CHECKOUT WALLET                                                         firm says it’s already working with brands like Cole Haan, Eddie
                                                                            Bauer, Bluefly and Woodcraft.

    Card network American Express has joined the race to dramatically
    simplify online payments. It’s unveiled a wallet that users can sign
    into once. Then when they check out at a compatible merchant, they      STRIPE ADDS SUPPORT FOR ALIPAY ACCOUNTS
    can do so with just a PIN while Amex auto-fills the checkout fields.

                            The information is transferred to the           Merchants using Stripe’s payment API
                            merchant via a token, so it’s safe as well as   may now have access to 300m new
                            speedy. The wallet is available at BarkBox,     customers because of a deal with Alipay.
                            Burberry, Ledbury, Newegg, Sabon,
                            Ticketmaster, Warby Parker and The Wall         San Francisco-based Stripe lets mobile
                            Street Journal.                                 merchants take credit card payments just with a simple API. And then
                                                                            it embeds a friendly checkout UI to increase the rate of conversions.

                                                                            It’s been testing the payment platform on Alipay for well over a year.
                                                                            Now, it’s officially launched. Thus, western merchants using Stripe
                                                                            could quickly extend the buy buttons to Alipay’s 300 million users.
    ZAPP SIGNS FIVE YEAR DEAL WITH
    FEATURESPACE ON FRAUD DETECTION

                                                                            INMOBI UNVEILS MIIP SHOPPING PLATFORM
                   UK firm Zapp - the VocaLink-developed service that
                   lets mobile web and app users pay for their purchas-
                   es direct from their own bank app will use behaviour-    India’s InMobi is a giant in mobile advertising, but with Miip it’s
                   al analytics to spot fraudulent users when it launches   moved closer to m-commerce. Miip sits inside thousands of native
                   its ‘pay by bank app’ services in a few weeks.           apps and uses big data to present shopping options for users. InMobi
                                                                            has already announced a partnership with Amazon.in, India’s largest
                   It’s signed a five-year agreement with Featurespace,     online store, to start pilots on the platform. It’s also working with
                   whose machine learning adaptive algorithms spot          Paytm, the largest mobile wallet in India to launch a “Buy with
                   subtle changes at individual account level. Following    Paytm” button to enable it.
                   launch, the system will process thousands of events
                   every second.

MEF MOBILE MONEY eBULLETIN #4                                                                                                                        8
THE WORLD OF MOBILE MONEY
                                                                                                                     (PART TWO)

    P2P MOBILE TRANSFERS
                                                                             YES BANK AND TAISYS INVENT A NEW WAY OF
                                                                             DOING M-PAYMENTS: STICK-ON SIMS
    While people remain a little suspicious of using mobile
    wallets to pay in shops, they seem very happy to pay
    their contacts by phone. Juniper Research says there will                                               YES Bank, India’s fifth largest private
    be more than 13bn mobile P2P transactions in 2015 –                                                     sector bank, is working with chip
    thanks to the growing influence of chat apps like WeChat                                                specialist Taisys on a new kind of
                                                                                                            payments idea. The two firms will
    in the east and Venmo in the west.                                                                      issue an ultra-thin mobile payments
                                                                                                 wafer SIM, which the user attaches to his or her
    The stats reflect a dynamic market and a multiplicity of                                      existing SIM Card. The sticker installs the
    options for consumers. This quarter, for example, saw                                         bank’s mobile wallet application on the phone
    the emergence of a new bank-backed service for Swiss                                            in the SIM tool kit.
    consumers: Paymit.                                                                                    Once done, the user can make secure
                                                                                                         (encrypted SMS at the back end) mobile
                                                                                                      payments from anywhere, anytime without
                                                                                                    internet connectivity. They can do so no
    KENYA’S MOBILE PAYMENT VOLUMES JUMP                                                          matter what kind of phone they use or which
    18% IN A YEAR                                                                              operator they are with. YES Bank reckons the
                                                                                             service will be used to transfer money, pay bills,
                                                                                           check balances and see transaction history.
                           The world’s mobile money powerhouse -
                           Kenya - is showing no sign of slowing down.
                           New stats from the Central Bank of Kenya
                           revealed that the value of mobile payments        MOBILE MONEY TRANSFERS SET TO RISE BY 150 %
                           hit Sh1.3 trillion ($12.3bn (in 1H2015). That’s   THIS YEAR
                           up 18.2 percent year on year.

                           Customers make 21.5 per cent more                 There will be more than 13bn mobile P2P transactions in 2015, says
                           transactions though the average value per         Juniper Research. The market watcher claims the push by social media
                           transaction reduced by 2.5 per cent to            firms into the sector is powering growth in this relatively new space.
                           Sh2,500.
                                                                             Among the stats backing the assertion were that Venmo moves
                                                                             nearly $1 billion per quarter, while WeChat and Alipay powered more
                                                                             than 3.3 billion P2P transactions in just 6 days over the Chinese New
                                                                             Year period.
    PAYPAL LAUNCHES PERSONALISED URLS FOR
    REQUESTING MONEY

                                                                             ING UPDATES ITS APP WITH VOICE BANKING
    E-commerce giant PayPal has launched PayPal.me, which lets users
    ask for money by sending a web link. Users in 18 countries can sign
    up for a unique username and are then given a paypal.me ID. They
    can then add the amount to the link (i.e. paypal.me/username/10)         Mobile banking in the Netherlands just went hands-free. Local giant
    and share it with anyone that owes them.                                 ING has added voice control to its
                                                                             mobile banking app, so now
                                The idea is that they can drop the link in   selected customers can transfer
                                a message or email or whatever. They         money just by speaking.
                                never have to open a P2P app. There’s no
                                fee to use it domestically.                  The firm reckons 1.9 million
                                                                             customers currently use the
                                Supported countries are US, UK,              app, logging in on average six
                                Germany, Australia, Canada, Russia,          times a week. In a new pilot,
                                Turkey, France, Italy, Spain, Poland,        trial users can use voice to
                                Sweden, Belgium, Norway, Denmark,            check bank balances or make
                                Netherlands, Austria and Switzerland.        payment orders. Logging on

MEF MOBILE MONEY eBULLETIN #4                                                                                                                         10
SIX BANKS SIGN UP TO SWITZERLAND’S P2P                                   DAOPAY ACQUIRES BOKU’S ’PAY BY CALL’
    PAYMENT APP: PAYMIT                                                      DIVISION

    Major Swiss banks have signed up to a single collective P2P payment      Austria’s DaoPay has added Boku’s pay buy call business for an
    app. They are UBS, Zürcher Kantonalbank, Banque Cantonale de             undisclosed fee. The firm reckons this makes it the largest processor
    Genève, Banque Cantonale Vaudoise, Luzerner Kantonalbank and             for pay by call payments worldwide.
    Raiffeisen.                                                              DaoPay’s historic strength is in in-app virtual transactions. Its clients
                                                                             include Facebook, IMVU, Innogames, Nexxon, Gameforge and others.
    Paymit (created by SIX) lets users make payments without knowing
    the recipient’s banking details - they only need the phone number. In
    that sense it’s just like the many others in the space right now:
    Venmo, Pingit, PayM, MobilePay, Swish, Facebook etc.                     3 ITALIA TO OFFER CARRIER BILLING FOR APPS
                                                                             ON GOOGLE PLAY AND WINDOWS PHONE
                                                                             STORE
    DIRECT OPERATOR BILLING
                                                                             Over 10 million 3 Italia
    The proponents of carrier billing want to see ‘pay by                    subscribers can now buy
    mobile’ extend to a wide variety of product in mature                    games, music, videos and
    markets. But in recent weeks the biggest news has been                   apps direct from the phone
                                                                             bill. 3 Italia worked with
    made by those extending it into developing economies.
                                                                             Germany’s net-mobile to
                                                                             make the option available. The
    Two of the market’s pioneers Bango and Fortumo each                      MNO already offers the
    made announcements along these lines. Bango brought                      payment method in Austria,
    carrier billing to Google Play in South Africa for the first             Hong Kong, Ireland,
                                                                             Sweden, and the UK.
    time, while Fortumo tied up with Huawei.
                                                                             The deal represents a
                                                                             further extension of the
                                                                             carrier billing option to
    TELKOM AND BANGO BRING OPERATOR BILLING                                  Google Play users. But it’s far
    TO SOUTH AFRICA FOR THE FIRST TIME                                       from universal. Google seems to
                                                                             work with individual operators on the
                                                                             option, rather than opening it up for all to use.
    Android users in South Africa can now pay for apps on Google Play
    using their phone bills. It’s thanks to a tie-up between local MNO
    Telkom and the UK aggregator Bango.

    In Africa, Android represents 89 per cent of the smartphone market,
    according to IDC, but card ownership is low. Carrier billing therefore
    represents the best way to monetise apps. Bango already connected
    hundreds of operators to app stores from Amazon, Samsung,
    BlackBerry, Mozilla and Microsoft as well as Google.

MEF MOBILE MONEY eBULLETIN #4                                                                                                                            11
INDUSTRY TRENDS & STATISTICS

       IDC FORECASTS WORLDWIDE MOBILE PAYMENTS WILL
   1   ACCOUNT FOR $1 TRILLION USD IN VALUE IN 2017, UP
     124% FROM THE LESS THAN $500 BILLION USD
    EXPECTED IN 2015. ASIA/PACIFIC MARKETS WILL
    CONTRIBUTE TO THIS GROWTH GREATLY AS MOBILE
    COMMERCE TRANSACTIONS WITH REMOTE PAYMENTS
    TAKE OFF ACROSS THE REGION.

       RESEARCH FROM LLOYDS BANK SHOWS THAT 43% OF
  2    BRITS SEE CONTACTLESS PAYMENTS AS THE PAYMENT
     METHOD OF THE FUTURE, WHILST ONE IN THREE (34%)
    EXPECT TO BE USING A MOBILE DEVICE ON A DAY-TO-DAY
    BASIS TO MAKE PAYMENTS WITHIN THE NEXT FIVE YEARS.

       CONTACTLESS MOBILE PAYMENTS WILL REACH 200               AND ACCORDING TO MARKETSANDMARKETS, THE ENTIRE
  3    MILLION BY 2016 AS APPLE PAY BOOSTS AWARENESS,     9     AFRICAN MOBILE MONEY MARKET IS SET TO GROW FROM
      EQUAL TO GROWTH OF MORE THAN 100% FROM THE              $2.73 BILLION IN 2015 TO $14.27 BILLION BY 2020.
    END OF 2014 – JUNIPER.
                                                              MOBILE PAYMENTS IN INDIA ARE PREDICTED TO GROW
       STARBUCKS CONTINUES TO BE THE POSTER BOY FOR       10   200 TIMES OVER THE NEXT SEVEN YEARS TO $3
  4    IN-STORE MOBILE TRANSACTIONS. ON ITS LAST             TRILLION OR A FULL 10% OF THE TOTAL PAYMENTS IN THE
     EARNINGS CALL (JULY 2015) CHIEF EXECUTIVE HOWARD     COUNTRY, WHICH WAS JUST 0.1% IN FINANCIAL YEAR 2015.
    SCHULTZ REVEALED THAT THE COFFEE CHAIN IS
    PROCESSING NEARLY NINE MILLION MOBILE PAYMENTS A           P2P MOBILE MONEY TRANSFERS WILL RISE BY 150%
    WEEK ACROSS ITS US LOCATIONS, REPRESENTING 20% OF     11    THIS YEAR TO 13BN TRANSACTIONS BY THE END OF
    ALL IN-STORE TRANSACTIONS.                                2015. THAT’S ACCORDING TO JUNIPER RESEARCH
                                                          INDICATING THAT SOCIAL MEDIA AND MESSAGING FIRMS LIKE
       SMARTWATCHES AND OTHER WEARABLES ARE JUST          SNAPCHAT, WECHAT AND FACEBOOK THAT ARE PUSHING IN
  5    GETTING STARTED. TRACTICA PREDICTS THAT            TO THE SPACE ARE DRIVING THIS GROWTH.
     WEARABLE PAYMENTS COULD GROW FROM $3.1BN IN
    2015 TO $501.1BN BY 2020.                                  APP STORES ARE ON BOARD – MOZILLA, GOOGLE PLAY,
                                                          12   AMAZON AND MICROSOFT APP STORES (THOUGH
       THIS STUDY BY VISTA RETAIL INDICATES THAT 72% OF      NOTABLY NOT IN APPLE’S) ALL OFFER CARRIER BILLING
  6    CONSUMERS SURVEYED BELIEVE WEARABLE                AS A WAY TO PURCHASE APPS AND THEIR RELATED
      TECHNOLOGY IS THE FUTURE OF IN-STORE SHOPPING,      CONTENT. THERE ARE 65 TELECOMS OPERATORS IN 32
    MAKING IT EASIER TO ACCESS PRODUCT INFORMATION,       COUNTRIES LISTED IN THE GOOGLE PLAY ALONE.
    RECEIVE OFFERS AND NAVIGATE AROUND A STORE. A
    FURTHER 81% CITE SPEED AT THE CHECKOUT AS THE MAIN         GLOBAL CARRIER BILLING REVENUE IS EXPECTED TO
    ADVANTAGE.                                            13    INCREASE TO $24.7 BILLION IN 2019 FROM THE $14.5
                                                              BILLION THE INDUSTRY SAW IN 2014, DRIVEN BY
        THE WATCH WINS. 80% OF APPLE WATCH OWNERS IN      INTEGRATION WITH APPS STORES ACCORDING TO THIS
   7    THIS STUDY FROM WRISTLY HAVE USED THEIR WATCH     STUDY FROM NEOMOBILE AND OVUM.
      TO PAY FOR SOMETHING, WHILST JUST 20% HAVE USED
    AN iPHONE 6.

       MOBILE FIRST COUNTRIES CONTINUE TO LEAPFROG
  8     ESTABLISHED ECONOMIES. STATISTICS FROM THE
      CENTRAL BANK OF KENYA INDICATE THAT KENYANS USED
    MOBILE DEVICES TO TRANSFER OVER KSHS 1 TRILLION
    ($9.5BN) BETWEEN JANUARY AND JUNE THIS YEAR.

MEF MOBILE MONEY eBULLETIN #4                                                                                      12
ABOUT MAHINDRA COMVIVA

                                Mahindra Comviva is the global leader in providing mobility solutions. It is a subsidiary of
                                    Tech Mahindra and a part of the USD 16.5 billion Mahindra Group. With an extensive
                                   portfolio spanning mobile finance, content, infotainment, messaging and mobile data
                                solutions, Mahindra Comviva enables service providers to enhance customer experience,
                                  rationalize costs and accelerate revenue growth. Its mobility solutions are deployed by
                                        over 130 mobile service providers and financial institutions in over 90 countries,
                                                          transforming the lives of over a billion people across the world.

                                                          For more information, please visit www.mahindracomviva.com

MEF MOBILE MONEY eBULLETIN #4                                                                                                  13
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MEF MOBILE MONEY eBULLETIN #4                                              14
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