Ria Digital – Innovation in remittances within the Euronet group

Today I am speaking to Darren Bruce, who set up Ria Digital at Ria Financial Services, the third largest money transfer operator in the world. Darren shares with us what it means for remittances to go digital, the trends he observes and the outlook for 2015. Enjoy!

 

Darren, it is a pleasure to speak to you today. Could you please tell us a bit about yourself and your role at Ria Digital?

RMT-Mobile-Nav-in-Android-PhoneI joined Ria two years ago as Vice President and General Manager to create Ria Digital as a startup within Ria Financial Services, the money transfer division of Euronet. I oversee Ria’s digital business including the ground-up development and expansion of Ria’s digital products and services across the globe.

Prior to joining Ria I spent 4 years with the Western Union Company in Denver, Colorado, as Head of Global Emerging Product Operations. In this capacity, as you know Charmaine, I oversaw the strategic management and operational direction of the company’s new/emerging products consisting of e-commerce, account based money transfer, prepaid cards and mobile money transfer. Prior to Western Union, I lived in the Netherlands for 10 years where I worked for Canon, Cambridge Technology Partners, and Nike mainly focussed on web/e-commerce capacities.

I started Ria Digital to lead the company into the fast-paced world of customer needs in the digital age including linking the physical world, which Ria is already very strong, to digital world where the opportunities are endless.

 

 

Please could you give us some background about Ria Financial Services and how Ria Digital fits in, as well as how HiFX which you just acquired fits in. As a Group how do you work? I understand Euronet has become a big prepaid issuer in Europe

rialogoSince opening our first storefront in 1987, we have grown into the third largest money transfer service in the world. Ria has over 240,000 locations in more than 130 countries—and growing very quickly—as well as connections to over 50k banks across 100 countries.

In addition to money transfer services, Ria also offers bill payment, mobile top-ups, prepaid debit cards, and check cashing. In every service that we provide, we work hard to ensure a clear, simple and valuable experience.

 

In April this year imageWalmart and Ria launched a retail industry first – Walmart-2-Walmart Money Transfer Service. Walmart-2-Walmart offers a clear fee structure with just two pricing tiers: customers can transfer up to $50 for $4.50 and up to $900 for $9.50. This leverages Walmart’s existing footprint and technology, with Ria being the licensed money transfer operator for all Walmart-2-Walmart transactions, and Walmart the authorized agent of Ria.

 

imageIn May this year Euronet acquired HiFX, this has been a great addition and very complementary to our core business. It is a UK-based mainly online initiated international payments and foreign exchange services provider that enables us to extend towards delivering an account-to-account international payment service to high-income individuals and small-to-medium sized businesses. HiFX transferred over $15bn for customers in the UK, Australia, New Zealand and Europe during 2013.

 

imageLooking at the Euronet level, our global payment network is extensive and it now includes over 19,000 ATMs, approximately 72,000 EFT POS terminals and a growing portfolio of outsourced debit and credit card services which are under management in 47 countries. We have card software solutions, a prepaid processing network of over 600,000 POS terminals at approximately 295,000 retailer locations in 33 countries. So in short, we have a lot of great products and capabilities as a group as you can see.

 

How much of Ria business is cash-to-cash and how much is digital?

As far as Ria Digital goes, we celebrated 2 years in October this year, so we are still quite new and have been focused on building the foundational elements needed to compete in the digital space. The vast majority of Ria’s business is still cash from the send side, delivered into accounts or as cash around the world.

As you can see, Ria has a robust set of products and capabilities, and at Ria Digital we are “digitizing” these products and services so we can offer our customers more convenience and choice. We are very complementary to our core business. Digital builds on the values and tradition of our core business while looking to target customers that have become accustomed to an easy, efficient online consumer experience. We get to innovate and push for change in this industry while standing on Ria’s solid foundation which is a big advantage—we have the network and the experience behind us.

It is also important to note that “customers” are not only end consumers, they are also our key partners, those who are looking for a company to help power their financial services in an easy, simplistic way, and can move quickly to deliver – this is a very important part of our strategy.

 

What are some of the key trends you observed in the remittances industry over the last year?

Well, I guess sending money using the digital channel is old news now, and the mobile trend has also been obvious for years, but specifically around “digital”, it is the experience within the channel that has continued to evolve. There are so many new technologies that remove, or at least improve, the friction at various points throughout the customer experience. It has made sending money online a lot easier and safer than in the past.

I mentioned key partners already, and the truth is there are more and more companies looking to add money remittance to their current offerings or product sets. Companies that have not been involved in remittance are jumping into the mix, a lot of them up the game from a user experience or brand perspective, but money remittance is not an easy business to enter, therefore these companies look to partner with companies like Ria who know how to do it, we’ve been talking to immigrant remitters for 30 years.

At Ria Digital we move at the pace of a startup, within days rather than months and years!

 

How do you see the recent entrants such as Apple Pay and Google Wallet and what this may mean to MTO business?

There is a lot of talk about these new entrants recently and I see this really reaffirming and validating digital payments. People have been mainly taking about what’s happening at the POS but there is a lot happening in the online experience as well by removing friction, for instance, on-boarding of new customers is becoming easier.

Anyone who has anything to do with commerce or financial services on the handset and pushes the envelope on the experience really helps all of us get better.

 

How are people taking to digital channels around the world – are there some interesting regional differences?

There are definitely regional differences when it comes to money transfer in the digital channels, no two global markets are identical; each is driven by local conditions of environment (economic, technological, and demographic elements such as a market’s average income, and access to the Internet), infrastructure (broadband and/or mobile phone penetration), regulation (legal and governmental areas such as compliance and eKYC), financial services (the accessibility of financial services, the options for paying online), and most important of all – consumer readiness (their familiarity with, and willingness to use digital channels).

 

How has the advent of smartphones affected how people transfer money?

Today, out of the seven billion people in the world, approximately six billion are cell phone subscribers. Not all of these own a “smartphone”, but smartphone penetration is growing very quickly. For many people, the phone is the primary or sole internet connection, no need for a PC. The point is that these connected devices put a lot of power in the hands of the consumer and provide them a great deal of choice and convenience.

Aside from sending an actual money transfer, customers can easily check exchange rates, compare service providers, view the status of their transaction, and even find a physical location where they can send or pick up a transaction, which is a great example of how smartphones are connecting the physical world to the digital world.

Another obvious area related to phones is stored value / Prepaid debit cards and mobile wallets which empower the “un” or “under” banked, and allow these customers to take part in the ecommerce and/or digital financial services world. Specifically in regards to money transfer, these customers had no other choice in the past but to travel to a physical location with cash in order to send money to loved ones back home, now they can send from the palm of their hand easily and securely.

 

Are there some key opportunities you see in the evolution of money transfer?

Specifically when it comes to money transfer in the digital channels I think there are many opportunities in terms of taking more costs out of the process. Performing electronic verification, taking payments online, and mitigating fraud are all necessary but add cost to the process.

At Ria we pride ourselves on providing a fair price to consumers, it is very important to us, and the more costs that can be reduced in a transaction, the more savings that can be passed on to the customer.

 

What are some of the challenges faced by providers?

As you know Charmaine, we are in a highly regulated industry, and therefore we have some very important responsibilities to ensure we provide safe, reliable, and compliant services for our customers. There is a lot of work, and skill required to ensure this, and at Ria compliance is number 1, we have a great team of people who focus on this day in and day out, and that extends far beyond our Compliance team.

Everyone at Ria is responsible for compliance, it is in our DNA. So I would say compliance is both a challenge and an opportunity.

 

What is your vision for 2015?

That’s just around the corner isn’t it!

Over the past 2 years we have built the foundational elements, and developed the key capabilities that are required in the Digital space, in 2015 we will start to capitalize on these efforts as we accelerate our current US business, expand our service globally, and deliver on our Partner Program, which as I mentioned earlier is an important part of our strategy. We are in a very exciting time, the space is buzzing.

 

It has been a real pleasure to speak with you Darren, thanks for sharing your thoughts with us and wish you the very best for the ambitious plans you have going forward.


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Darren Bruce is Vice President and General Manager of Ria Digital for Ria Financial Services, the money transfer division of Euronet Worldwide, Inc. He has held this position since October 2012. Darren oversees Ria’s digital business including the ground-up development and expansion of Ria’s digital products and services across the globe. Darren has a Bachelor of Science Degree (Physics, Math, and Engineering) from Mount Allison University in Sackville, Canada. He also has a Diploma in Applied Information Technology from the Information Technology Institute in Halifax, Canada.

Ria Digital Website : https://www.riamoneytransfer.com


Charmaine Oak is Author of The Digital Money Game, co-author Virtual Currencies – From Secrecy to Safety

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http://www.linkedin.com/in/charmaineoak

Join me on Twitter @ShiftThoughtDM and The Digital Money Group on LinkedIn

Thank you for reading, and thanks in advance for sharing about us to your network!

 

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Insights on how to succeed in Mobile Money from Gemalto, a world leader in digital security

 

Today I have great pleasure in speaking with Naomi Lurie, Director of Marketing for Mobile Financial Services (MFS) at Gemalto. From this key position at the world’s leader in digital security, Naomi is very well placed to share with us about GMPP (Gemalto’s mobile payments platform) and the work Gemalto is doing around the world in the extremely fast moving payments arena, both in developed and developing countries. Naomi shares with us some of the key initiatives in which Gemalto has been involved, and explains the importance of perseverance in achieving mobile money adoption goals.

 

Naomi could you kindly set the context for us, with a bit background on Gemalto and your leadership position in mobile financial services?

Gemalto OfficeGemalto is a leader in digital security, and a technology enabler for mobile network operators, banks, governments, enterprises and retailers. We work behind the scenes to ensure that each time their customers, employees and citizens want to transact, connect or identify themselves, they can do it safely and easily. You may not realise it, but if you put your hand in your pocket and take out your wallet or mobile phone, chances are it has a Gemalto security component – in your SIM card, your bank card, your driver’s license or your government ID.

One of our important growth areas is mobile payment services, and I look after Marketing for these solutions. Specifically I’m responsible for our Mobile Money and Cloud Based Payments offers. In our Mobile Financial Services marketing team we also offer Trusted Services solutions, including TSM and a Trusted Services Hub business service, and we are NFC experts. It’s exciting work in exciting times, especially as we are a global player with 44 sites and customers in 190 countries.

And with the coming of tokenisation there is yet more work for you?

Yes, certainly. As the leading TSM provider, we’ve been provisioning credit cards onto the mobile device for the largest mobile payments initiatives in the world. Emerging standards for cloud-based payments and tokenization require secure provisioning services for cards, tokens and keys. So, our assets and expertise in provisioning, mobile security, and authentication all come into play.

We’ve recently announced our Trusted Services Hub, a turnkey business service that enables issuers, enterprises, transport operators and digital service providers to easily deploy their value-added and mobile payment services across smartphones and mobile networks around the world. So with one connection to the Hub they gain access to over 1.5 billion mobile users worldwide already covered by our solutions.

Please give us some background on the Gemalto Mobile Payment Platform (GMPP)

GMPP is our comprehensive, field-proven, secure, flexible platform for issuers, mobile operators, retailers and banks that wish to launch mobile payment services. It supports emerging market use cases including stored value accounts, agent networks, P2P transfers, bill payment, airtime top-up, merchant payments, government payments and more. GMPP also powers developed and semi-developed market use cases relating to payments, usually from smartphone devices, such as in-store and online payments, loyalty and couponing.

We work across many different channels: USSD, STK, mobile apps, web and more, and we offer strong security across all these. We authenticate customers and manage risks relating to repudiation, fraud and more. We integrate into mobile operator, issuer and retailer environments and manage diverse requirements based on the nature of the ecosystem, which ranges from simple to very complex.

How has GMPP been used around the world?

Our platform is deployed around the globe. In Europe we work with Telefonica Spain and Telecom Italia.

India Post

India PostThe Gemalto Mobile Payment Platform is running in India with India Post for domestic remittance, since November 2012. India Post’s domestic money transfer service was a traditional paper-based service that took around 5 days to arrive at the destination. India Post wanted to modernise the service, to compete with the new mobile money systems coming from new entrants such as mobile operators. Since India Post has close to 90% of their branches in rural areas, they decided to modernize their money transfer service using mobile. It’s an interesting over-the-counter service. The agents at the post office are equipped with a mobile device that runs an app that collects information about the sender and recipient, amount and pickup location. Immediately both sender and receiver get SMS notifications about the transfer and how to pick it up. And the transfer happens in minutes!

 

Transfer in Mexico

Transfer1In Mexico, the GMPP is at the heart of the Transfer Service, which is brought to market by Banamex (Citi’s Mexican subsidiary), Telcel (America Movil’s Mexican mobile phone subsidiary) and Banco Inbursa. Telcel provides the channels: SMS, USSD and CRM. The banks hold the accounts and create the use cases, as well as manage network integration with Point of Sale and ATM networks. In Transfer users can get a companion card as well, to access the balance in the prepaid stored value account for POS payments. GMPP hosts all transactions and the customer wallet. The service went live in April 2012.

GMPP is also installed with NetOne in Zimbabwe, for their OneWallet mobile money service. This is your classic service, with P2P, cash in, cash out, airtime top-up and bill payment.

Gemalto provides the SIM Toolkit (STK) and Secure Access Gateway for MTN Group in Africa, Vodafone Qatar and elsewhere.

GMPP obviously solves some key needs for the unbanked. Could you please tell us what makes your implementation uniquely compelling?

I think what’s unique is the way we can address a very broad spectrum of use cases in a highly secure manner.

If we rewind to 5 years ago we thought we knew the recipe for mobile money. Just provide the standard set of expected services, follow the formula and deploy. However services have gotten more diverse. There are specific needs and requirements when we deploy in semi-developed markets. And emerging markets also have diverse customers – some with smartphones and others with very basic phones. Take Mexico for instance, the aspiration is to bank the unbanked and offer a new kind of account to the masses, but they must also appeal to urban users. There is a need for a combination of scenarios. We therefore feel well placed as we can offer the limitless combinations, while maintaining security across all the channels. That’s the strength Gemalto has.

Also we build our platforms to scale. We see mobile money as mission-critical services and can affordably scale up and ramp up as the usage grows.

What do you see as some of the challenges faced in bringing services to market?

There is no magic. You can’t just deploy technology and expect the service to be a success. It has to have all the right elements – in go-to-market, organization, and budget. You really must do your homework and take care of buyer personas, marketing strategy and back office support. You need a lot of CXO attention and need to continuously attract investment and management attention.

I think it is really important to be able to correct yourself. Of the over two hundred mobile money deployments, only a few have reached scale. If you give up and just let the offer die down, that is a waste. As in case of any product launch, it’s important to be able to correct yourself.

Another challenge can be regulation, meaning what type of services the regulator allows and what kind of limiting factors will the regulator impose. Often you need a strong lobby on both aspects.

When you look at mobile driven and bank driven initiatives which of these have a better chance of succeeding?

It seems that mobile operators (MNOs) have been more successful, but this is quite dependant on the region. MNOs seem to have the lion’s share of deployments quantitatively, but we do observe a trend for more issuer-led services.

MNOs seem to have an advantage on the marketing side; they know how to market to the unbanked masses, while banks are more comfortable marketing to their traditional clients. To launch a service for the unbanked requires a real transformation for the banks. However, in semi-developed and developed markets where most of the population is banked, the banks are at an advantage.

What are the major changes you’ve seen in the last year?

One change in the emerging market space is the launch of more consortium-led initiatives, and also Central Bank led initiatives. There are some new models coming up along these lines, with an attempt to put the entire set of domestic transactions on a single platform. Within that setup, individual service providers can offer branded services and compete with each other. These types of initiatives aim to address the question of interoperability from day one.

We also observe a much higher interest in enabling payments – in-store and POS payments in addition to mobile P2P between buyer and seller.

What major goals do you look forward to in terms of 2015?

Our goal is to continue to be the trusted partner of our clients and to help them operate successful mobile payment services. We aim to help our clients bring their mobile business strategy to life, while providing all parties confidence in the robustness and security of the service. It promises to be quite an exciting year with the advent of emerging tokenization standards, the new Gemalto Trusted Services Hub, the launch of major new initiatives, and the evolution of existing services.

Naomi thanks for sharing the very interesting work you do around the world and I wish you and Gemalto the very best of success for the future!

 

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Naomi has a proven record of driving product and market excellence for products in the mobile, financial, retail and enterprise sectors.

Naomi joined Gemalto in 2010, where she drives marketing and strategy for the company’s mobile payment and mobile wallet solutions. She is an expert on the mobile money use cases emerging across the globe and is involved in some of the most ambitious and large-scale mCommerce services in both developed and developing markets.

Previously, Naomi was a product manager at Verint, which specializes in enterprise and security intelligence. Naomi was responsible for the global introduction of analytic software solutions for workforce-enterprise optimization, as well as the execution of product launch and rollout plans to sales, support and professional services.

Disruptions in the smartphone market take a toll on Samsung results

 

Samsung announced their Q3 2014 earnings shows a substantial Q-on-Q decrease due to decline in their mobile business caused by intense competition in the smartphone market. Further to my post on How Apple play affects the Digital Money Game, as China Mobile starts to eliminate $2 billion smartphone subsidies, the cost of high-end devices is impacted and affects both Samsung and Apple, benefiting low-cost manufacturers like Xiaomi.

 

Headquartered in South Korea, The Samsung Group operates through over 150 subsidiaries, including 73 domestic affiliates as of June 2014, having been first established through Samsung Electronics Industry Co. Ltd back in January 1969. The company manages 3 divisions: CE (Consumer Electronics), IM (Information Technology & Mobile Communications) and DS (Device Solutions.

 

Anticipating consumer desire to interact with the Internet, Samsung focused early on smart TV sales, leading the market in 2011 with the launch of smart TVs and hub-based apps.

 

In 2014 the mobile phone market is expected to reach 1.8 billion units, with 1.2 billion of them being smartphones – this represents a growth of 7% since 2013. However Fitch Rating expects Samsung shipments during the period to remain flat.

 

Samsung has maintained a No. 1 position in the smartphone global market, with strong take up of the Galaxy S series and the Galaxy Note. However with Apple’s release of iPhone 6 (4.7”) and iPhone 6 Plus (5.5”) compared to the previous 4” models, these phones now represent a substantial threat. Low cost Xiaomi (low-cost devices) was already resulting in tough competition, especially across the Asia Pacific region. The figure below shows the impact on first half performance in 2014.

 

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Samsung’s share in the global smartphone market dropped from 31% in 2013 to 25% in H1 2014. They announced mid to low-end shipments were down due to weak demand in the EU and lower 3G demand coupled with intensified price competition in China.

 

Samsung expect that in the second half of 2014, strong seasonality will help to boost smartphone and tablet demand. At the high-end, they expect growth to be led by TD-LTE expansion in China and lower inventory level in Europe. At the mid to low end they expect growth led by emerging markets, and this is where we are likely to see the competition heating up with new product launches expected.

 

Meanwhile Samsung Electronics plans to build a $14.7 billion semiconductor plant south of Seoul, in an attempt to make up for touch competitive pressure on its smartphones with new growth in its most profitable semiconductor division.

How Apple play affects The Digital Money Game

Now that Apple Pay is here, how does it affect the projects in your pipeline? Which should you drop, where should you invest more and who should you look to partner next? We are at the cusp of the creation of a new ecosystem. But will Apple Pay fare better than Google Wallet did when it first launched in May 2011? There is a feeling of Déjà vu and Let’s Wait and See. For Apple as well, Apple Watch was No. 1 – payments was No. 2.

So is this going to ignite NFC payments? How will things change? The short answer is I don’t think anyone knows yet. We’ll what are the mobile operators thinking now – we all know Verizon was not a cheer leader for the Google Wallet. What is PayPal thinking? What if Walmart does not come around?

Why is this important?

applepay

The major factor for any new payment service is adoption. So far adoption of NFC has been a 10-year war between the banks and the mobile operators and has struggled to gain traction.

Then in 2011 we had the entry of the Google wallet, and each of the card schemes with their own wallets. Still consumers and merchants failed to adopt. While contactless cards have gradually crept into use, paying by phone continues to prove elusive, for a variety of reasons, with one of the main ones claimed to be lack of handsets, customer security concerns and business model.

Apple has 800 million customers as “card on file”. Additionally the API will be available to developers. Merchant support has already been announced: Integration with Uber, a food app from Panera, Major League Baseball's app to order tickets from your phone, and Open Table to pay your bill from your iPhone 6 or iPhone 6 Plus. Apple API to be offered in iOS 8 to allow app developers to integrate Apple Pay into their applications.

Apple has a following, so is not dependant on mobile operators to push their phones, however operator subsidies that could be as high as $500 help make them affordable. The rapid adoption of smartphones across the world has changed the balance of power. Certainly in the US, Apple is Top Dog as a smartphone manufacturer, with 42.1% OEM market share as of June 2014 according to comScore reports.

However while in the US and Europe Samsung and Apple dominate, the share of both providers has been dropping in emerging markets where we see a fragmentation emerging. In urban China, Xiaomi with its affordable RedMi model continues to go from strength to strength, securing a 27% share of smartphone sales in the second quarter of 2014, compared with 21.1% for Samsung. And payments by watch + iPhone cannot be a top priority for the masses in emerging markets.

Too little too late?

So far Apple was a late starter where contactless payments are concerned. Like a swan, the movement seemed to be more “under-water”, as news of patents obtained for motion based payments got out in January 2013. Apple obtained a US Patent for a digital wallet and virtual currency. It described a system of managing credits via mobile device. Mobile users would be able to receive credits or coupons stored in their account. Check out Patently Apple for the whole background.

Back in June 2013 Apple released its first mobile commerce platform, called the iCloud Keychain: consumers could an store a variety of information, such as passwords and financial details for use across several Apple devices (Mac, iPhone or iPad) to log into websites or make purchases online. The platform did not support NFC and existed as an application rather than a physical device.

Earlier in June 2012, the Apple bar-code-based Passbook mobile wallet was launched, as a basic mobile wallet without payment functions, using barcodes to store and represent multiple boarding passes, store cards, and movie tickets. It had location-enabled alerts, and real-time updates and it displayed passes based on a specific time or location. When consumers walk into a participating shop the loyalty card appears and can be scanned to pay or check balance. It was expected that this could evolve into a mobile payment service by linking the Passbook to customer credit cards and iTunes accounts.

Effect on the Digital Money Game

Contactless payments that Apple Pay now propose to offer comes as a reinforcement

Why don’t we let our youth manage bank accounts?

In my recent interview of Brian Richardson, co-founder of WIZZIT in South Africa, he asked a question: Why should a 16 year old be expected to look after a family, but not have access to a bank account?

I have been unable to forget that question – hence this post. I thought I should check with you – is it that we are underestimating both the capabilities and the needs of our youth, who must cope with the tremendous fallout of the world financial crisis (not of their making, I should add), and who are the architects of the world’s future.

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Take what is happening in India, Indonesia, Vietnam and elsewhere in Asia. I was recently in some Asian countries to conduct research on the way people pay and was pretty amazed at what I saw. It is the youth who are leading trends in paying online. Who orders on Flipkart in India, to cover the needs of the whole family – for their grandparents and parents alike? Who buys pizzas from Domino Pizzas using their iPads? In fact, I found it was often the teenager in the household who was actually in charge of the families new payments card and trusted to buy on behalf of everyone. As they also manage the families Wi-Fi and are the most computer literate, little wonder this is the case.

 

This got me thinking. Was this just an emerging country phenomenon? Is it confined to urban areas? I’m concluding it is not. I see similar behaviour in households here in the UK. Across the world, and across income groups, there is a section of trusted young people who need access to financial services of all kinds, indeed it is fairly critical to consider their needs, not as exceptions but as well-designed, mainstream services.

Remember, a 50 year-old saw the Internet invented in their lifetime, as also mobile phones. Our kids on the other hand grow up taking these things for granted. As money goes digital, digital wallets and mobile phones offer new capabilities to design in checks and balances, while more effectively supporting what young people need.

So what would happen if we ignore this issue? Could we be driving the youth into the fast growing informal digital economy and could this create problems for the future? Unregulated digital financial services have little or no restrictions – surely using these would be worse, not better.

 

Business-savvy youngsters are not a new phenomenon, but the technology revolution of the past years has greatly empowered their ambitions. The recent BBC show Million Dollar Intern, which I much enjoyed, had Rich Martell, Gary Martin, Ross Bailey, Juliette Brindak, Suleman Sacranie and Fraser Doherty who run million dollar enterprises to go in and give some pointers to established, struggling businesses. Fraser Doherty started age 14 and made a million before the age of 20. Each of the others has a similarly inspiring story. Do we really feel that at age 16 these entrepreneurs were incapable of managing their own bank account?

 

You might argue that the million dollar interns are the exception and not the norm. Left to themselves youth may have less control over themselves than adults do. Or they may earn small amounts that are unprofitable for banks to support. Or they are not accountable for their actions. However many trends are creating valuable market segments: international students studying abroad, music and gaming users and more.

 

Today however, in the new branchless banking and mobile money scenarios there are ways to address each one of these concerns. Yet the new services invariably continue to have the same restrictions: You must be 18 and over to be entitled to use them.

 

In the absence of mainstream financial services a variety of prepaid cards are offered. However the cost and inconvenience (limits, difficulty of topping up), restrict their use as a way to manage business or household needs.

I believe this may be an idea whose time has come. Why don’t we investigate the great new features digital money services offer - Double sign off to protect youth from using illegal substances or falling for scams (though I may add, some adults may need to have a similar sign-off from a youngster as well!).

 

Similarly the retail industry needs to consider some changes. Secure certification systems and better universal and global standards for classification for products online can restrict purchase of certain products rather than remove capability to buy.

 

Just as there is a fortune at the bottom of the pyramid, there is a goldmine of the architects of tomorrow, waiting to climb the banking ladder – or a non-banking ladder. Our decisions and actions will determine which it will be.

The Digital Money Game as affected by the newly launched Twitter payments

As the world waits with bated breath to hear from Apple, I thought we should take a moment to consider Twitter today. With so much in their favour, and so much already clear about what to do and what not to do, will they get payments right this time?

 

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This morning, while contemplating what the Apple mobile payment announcement holds for us today (will it change mobile payments forever?), I found a Twitter policy update in my inbox. So I thought we could pass the time until we learn the REAL TRUTH about Apple by contemplating what Twitter Payments may mean to mobile operator PSMS revenues and indeed to other providers in the vibrant new digital money ecosystem as described in my recently published book, The Digital Money Game.

Back in the early 2000s I worked with the company that invented SMS. later, as product manager at one of the leading mobile operator groups in the world, I had a lot to do with generating revenue from premium SMS. This remained our “Killer App” for many years, despite the best efforts to generate revenue from so many other payments initiatives.

Naturally therefore Twitter’s email this morning piqued my interest, to say the least:

“We've updated our Terms of Service and Privacy Policy to reflect new features we're testing (starting in the U.S.) to allow you to buy merchandise from some of the most popular names on Twitter, without leaving the Twitter experience.”

Twitter’s new policy covers the use of their commerce offering, that they are currently rolling out in the US. As people will now provide payment details, shipping address and more, the privacy policy has changed as well.

The privacy policies are also affected as they relate to personal data regarding location and individual and aggregate data that we share on twitter.

Over the next few blogs I will investigate what this may mean and how it relates to other newly launched initiatives from around the world. Will it fizzle out, like some services launched by Facebook and Twitter have done in the past? Or this time, is it a real threat that can take a bite out of providers revenue and steal your partners away.

  • Will Twitter payments deliver a blow to the payments revenue generated by mobile operators?
  • How does Twitter’s strategy fit in to The Digital Money Game?
  • Where does it leave the other players in the ecosystem
  • How does it affect projects you have on the boil – should you abandon them or invest more?

The Digital Money Game is growing more complex and exciting by the day, and with the Apple announcement expected today, by the hour I would add. If you’ve bought our books you may notice they are packed with very recent analysis and references, literally to the day they were published. Additionally we have a splendid ability to roll out updates to our books. And with so much changing I expect we will have plenty to discuss. Do join us to explore ideas at The Digital Money Group on LinkedIn.

f you’d like to be notified of updates and additional resources specially created for readers of our books, please drop us a note at contact@shiftthought.com mentioning the book title, date of purchase and country of purchase.

Author of The Digital Money Game, co-author Virtual Currencies – From Secrecy to Safety

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Want to read our books but cannot get a copy? Let us know and we will do our best to help.

Why I wrote The Digital Money Game

Thanks for the outpouring of support to me, on the publishing of my first book, The Digital Money Game, now available on Amazon sites around the world. After I last shared about it, A number of you asked me what made me want to write this book, so I’d like to say a bit about this today.

DMGCoverWhen I strayed into the world of payments, after being in Telecoms for many years, it opened my eyes to so many new possibilities. This was around 2005 and it seemed to be a no-brainer for a telecoms operator to build new revenue streams from payments.

This proved elusive though. Firstly it was a personal challenge to try to understand so many new areas all at once, and then be able to position the business case to top management in a way that communicated both opportunities and risks. All of us had spent our lives in Telecoms, IT and non-Payments functions, and we had to rapidly understand Payments, E-Money, Regulations, Prepaid, Cash Networks and all this across multiple geographies.

Regulations did not help. At the time I blamed myself, thinking there was something more I could do. Ten years later, having worked with a world leading bank and the largest money transfer operator in the world, I got to understand regulations so much better. Now I KNOW there was little else I could do: One depends on regulators, who themselves have such a difficult time coping with the large number of changes, with a heavy burden of responsibility on their shoulders.

The truth is, this is all new. We are all learning. But that doesn’t take away the stress of not knowing, as so many of you across the world would agree! I wish I had had someone to tell me what was happening, how it would affect me and what I needed to know to stay ahead. I wanted practical cases I could learn from, and reassurance that this was an exciting space to build a new career.

This is my chance to make that wish a reality for others, by sharing the lessons I learnt and offering some tips from over 10 years I have spent launching services of the different kinds discussed in this book. I hope it will help you in some small way, to reinforce decisions you have to make, to help you to put your case forward to management and most of all to feel good about yourself and what you are achieving in this highly competitive and changing space.

I would love to hear your feedback. Did this book help you? What further questions did it raise?

Click here to go to the Amazon site. To your right you will see a green panel suggesting the most convenient online store for you. Do let me know if you face any difficulty getting access.

The Digital Money Game– a multi-trillion dollar industry emerges

 

DMGCover

I have great pleasure in announcing the launch of my new book, The Digital Money Game. I describe the multi-trillion dollar emerging industry I term “Digital Money” from the perspective of very many different industries. It is not just meant for payment experts in large organisations, but for anyone who wants to understand how people pay, and how this is changing in each part of the world.

 

The penetration of mobile phones and smartphones is transforming the way in which consumers interact with brands and greatly facilitates a move towards non-cash payments around the world. To play the game properly though, one needs to understand the changes in a much wider set of fundamentals - identity, security, authentication, regulations, technologies and more, so as to create appropriate vision that goes across channels, services and market segments. That way you have a more effective roadmap with respect to new entrants, and a better chance that what you plan now will still be relevant when your projects go live. I share more about why I wrote The Digital Money Game here.

 

The book is based on Shift Thought research in markets around the world, and my interviews with experts from all the different industries that now participate in payments and financial services. I did my first set of interviews in July 2011. Four years later, the wisdom that they, and countless others shared with me has helped to shape this book. This is the first book in The Digital Money Series and we are currently working on others in the series.

Since then I have learnt so much from so many conversations that unfortunately it is impossible to thank each one of you by name – I hope you will recognize your contributions when you read the book!

 

The book is designed to help you to spot opportunities and gain confidence and insights to channel your work in a way that benefits you, and the markets you serve. It addresses multiple functional areas and levels: Chief Executives, Technologists, Business Development, Market Development and Product Development executives from Banking, Cards, Money Transfer, Telecoms, Payments, Technology, Retail, and Venture Financing Industries.

The digital money approach described in this book can help you create products and services that are secure, convenient and empowering to a whole range of consumers and merchants, across a variety of channels. The goal is to create a shift in thinking – from merely addressing the new opportunity provided by mobile phones, to launching holistic services that build solid brands.

 

My book is available on Amazon stores around the world, priced in local currency and immediately accessible as an  Amazon Kindle download that works across Kindle for PC and a host of commonly used devices. In case it says “Pricing information not available” just look to the right of the screen to select the Amazon site in your country.

In the first 2 days that the book has been available I am delighted to say that it has already been bought from many countries around the world. Thank you so very much for your support and kind words.

 

Have you bought my book? I would love to have your feedback and can direct you to further resources that may be of interest. Do drop me a line at contact@shiftthought.com.

Digital Money in Retail –3 years on, where are the digital wallets now?–Blog 1

In mid 2011 we saw the launch/announcements regarding digital wallets from Google, Visa, MasterCard, American Express and many more. Would this mean the end of PayPal’s 10 year domination of this space? 3 years down the line let’s take a look at how these digital wallets fared.

 

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In Mid-2011, led by Google Wallet, digital wallets became the new kid on the block. Shift Thought defines these as customer accounts that can hold stored value and allow users to make electronic commerce transactions.

It was recently reported that Google has no intention of giving up on its slow-growing wallet service or mobile payments, and amusingly it was reported “We have been doing this for a while ..And we’ll continue to keep doing this for a long while.”. By “this” I am sure they do not mean growing the wallet slowly. This piqued my curiosity. Where are the digital wallets now? What are the gains and losses?

In March 2014 Eat24, a restaurant delivery app which integrated with Google end November 2013, reported customers spend an average of 11% more when paying with Google Wallet. Subway was one of the first to accept the Google Wallet, offering the option in 5 markets since 2011. Jack in the Box also started testing Google Wallet in 35 of its restaurants in the Los Angeles and San Francisco markets in November 2011.

Now Google is reportedly changing the way they support contactless payments on the newest versions of Androids. This seems a good time to share our research on how each of the different digital wallets announced in mid-2011 have fared since then.

I’d like to share a bit about the landscape at the time when they launched, as a backdrop for discussing how this has changed, and the main initiatives we see today. In 2011, I created the figure below to explain in one page what the Digital Money ecosystem looked like then.image

There were 7 billion consumers making payments in the world at the time, which included payments between each other (P2P), to and from governments (P2G/G2P) and corporates (P2B/B2P). The figure shows the main industries and players that supported such payments.

In that year banks and money transfer operators were joined by new entrants to create a vastly different competitive market for payments. Alipay and Paypal led the world at the time, but expectations were high for the new Google wallet which offered a business model based on ‘Google Offers’, a targeted sales mechanism that sent promotions to smartphones. This was a scheme by which consumers and merchants benefited, but it raised concerns about personal data.

In the next blog posts I will look in more detail at each of the industries in this figure to see how they have moved on since 2011.

RBS – the role for digital banking in establishing the most trusted bank in UK

 

As Ross McEwan (Chief Executive of RBS since October 2013) sets out to cut 1 billion pounds of cost this year, this post sheds light on how digital channels are likely to support this plan. The plan involves removal of duplication and complexity by rationalising functions currently duplicated across divisions.

With the backdrop of these plans, and the context of the UK launch of Paym last week, Charmaine Oak (CO) caught up with Terry Cordeiro (TC), Head of Mobile, RBS, to understand how his vision plays out in terms of mobile banking and payments. He shares with us his expert insights into the UK payments market, and how he hopes to create a seamless consumer interface that hides implementation details and simply solves the consumer needs.

But first there is the imperative to sort out the systems behind recent high-profile outages. RBS reportedly plans to reduce technology platforms by over 50%, slashing the number of core banking systems from 50 to 10 and the number of payment systems from 80 to 10.

imageCO: Terry, what services do RBS/NatWest customers currently enjoy with respect to mobile banking and payments services?

TC: Our mobile app supports a range of everyday banking needs including statement history for the last 90 days across all accounts, payments and transfer services. Our award-winning NatWest and RBS GetCash service has evolved from an emergency cash service to much more casual, every-day use, “money for treats without your wallet”.

SMS services have been around for a while, and can sometimes be taken for granted, yet we find increasing numbers of our customers signing up for these. From their use as alerts and notifications regarding payments, they have evolved into ways in which we can help our customers save money, by reminding them about upcoming thresholds beyond which they may incur penalty charges.

CO: How about contactless payments? Do you plan a follow-up on your TouchPay trial of 2012-2013 that allowed consumers to pay for £20 or less from their current accounts?

TC: The TouchPay trial proved to be a useful learning exercise for us. Customers told us they want more than just going from paying with plastic to paying with mobile. We’re currently in the process of designing that “something extra” experience which will incentivise customers to overcome the inertia of changing their habit of paying with a card. This could include location awareness, loyalty points and incentives that come from the new data points such services can provide.

CO: What about domestic transfers? Why is RBS not in the first tranche of banks supporting Paym?

TC: We’ve supported payment to mobile phone number for the last 12 months, via our Pay your contacts service and it has been incredibly successful. This is a P2P service that runs on our internal systems for on-us payments, and leverages Visa Europe Personal Payment services for payments to anyone holding a valid UK to Visa card and UK mobile number. We expect to first manage some of the rationalisation projects, recently announced by Ross McEwan, before we implement Paym later this year.

CO: Talking about rationalisation, it seems UK customers are now spoilt for choice with respect to mobile payment services. Your own bank services have now been joined by those from the schemes, and now interoperable services such as Paym and Zapp, not to mention operator based services from Weve and individual mobile operators. Don’t you think there is a danger of confusing the consumer into an “analysis paralysis” almost?

TC: That is exactly where we come in. Our goal is to simplify the experience for the consumer – just give them increasingly easier ways to pay. As the alternatives become available they just provide more options for the 2.5 million to 3 million UK consumers who currently use our mobile banking services. It’s great that these new services are helping to increase the awareness of new ways to pay.

CO: Terry, thanks so much for sharing your vision and these insights with us. I wish you the very best in taking your strategy forward, and hope to learn more about it as it evolves further.

 

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