Mobile Point View by Paul Ruppert

Mobile Transactions at MWC Bharti Telesoft

Mobile Payments, Mobile Transactions, mCommerce, Pay by Mobile, Mobile Money Transfer, mMoney, however you call it is becoming a very crowded space  and it all comes down to the Mobile Financial Services Market .

I've written about  it in the past in "Mobile Payments: Top 10 Issues between Banks & Operators" and "Mobile Payments Tipping Point" and "Text M for Money" and "$1.1 Billion passed in Chinese Mobile Payments" and "Hawala Money"...well you get the picture, this is a space I'm sharpening my perspectives on. 

Clash of the Titans--and the under-card-- Rumble of the Developed & Emerging Economies

At the Mobile World Congress there was huge attention to the Mobile Payments market. The GSMA's Pay by Mobile and Mobile Money Transfer briefings were oversubscribed by 5x !  Beyond the obvious titantic clash between MNOs vs. FIs, there is the conflict between technologies such as simple SMS vs. other bearer access points such as USSD, GPRS or even IVR in the mobile transactions space. Of course the really big conflict is going to be services already becoming available in emerging markets affecting the development of mobile transactions in developed markets. Who will lead and shape this space, the unbanked or the overly banked?

Some quick data points picked up in Barcelona:

• Mobile payment usage via a mobile enabled payment mechanism is expected to be used by 1.4 billion people by 2015, or 26% of the user base
• In a survey by EDC, mobile money transfers is considered to be the most strategically important mobile financial service in the future
• By 2012 it is estimated that 12% of subs in developed markets and 9% in developing markets will  use domestic money transfers, which translates into 504 million users globally.
• SMS is viewed as the preferred channel for mobile money exchanges                                                                                                                                My friend, and emerging markets mobile payments specialist, Michele Scanlon suggested I take a look at Bharti Telesoft, so I cornered a conversation with Kresh Goomany, Vice President of Bharti Telesoft's Africa Region.

Bharti Telesoft's Mobiquity platform embraces the mobile phone as a convenient payment   and transaction medium. They have open APIs to both banking and credit card gateways enabling operator services providing a high level of security, making it highly a flexible service delivery platform utilizing a multi-bearer access utilizing SMS, USSD, GPRS or IRV platforms. The Mobiquity platform is a swiss army knife of mobile banking initiatives covering mobile banking, ticketing, money transfer, bill payments, pre-paid airtime top-up, micro-credit transactions, credit card interfaces. Seems to do it all...although from a US centric perspective, I've yet to see any of these presentations which cover the mobile as a "gift cards" mechanism.

Listen to my podcast with Bharti Telesoft's Kresh Goomany (9 mins)

The value proposition of Bharti Telesoft is their genetics and the geography they're focusing on. Bharti Telesoft is a spin off of Airtel with roughly 40 million subscribers in India, providing value added services for the Indian market for some years. Now they are moving into the high growth, low ARPU, unbanked markets in middle Asia and Africa for the mobile transactions business. They open with their "Pre Top" (pre-paid top off) services for operators, and then move up the value chain to FIs or operators offering Roaming Re-charges, Mobile Banking such as balance queries and alerts, money transfers such as domestic or international remittances as well as mobile payments covering utility bills. Clearly they have the right strategy in entering the emerging markets, especially Africa which Kresh covers their market strategy in depth in the podcast. If Bharti Telesoft is defining the development of the mobile financial services markets in developing economies, what's next?

Bharti Telesoft: Big player to follow in the Mobile Payments / Mobile Transactions space.

 What do you think of Bharti Telesoft's prospects? Why aren't any western vendors of this size so well positioned as Bharti Telesoft? Will they eventually control the mobile payments play globally or is this likely to be a market structured along regional differences? Tell me what you think.

 

MWC Slick Sightings Trifecta: 3 Winners--Inside, GestureTek and Tagattitude

I've been writing in earlier posts about some slick innovation sightings in the mobile industry which I saw at the Mobile World Congress --Inside, GestureTek, and Tagattitude.

Seems my views were shared by the powers that be, namely the GSMA Innovation Awards.  Congratulations to GestureTek (motion detection for a mobile using the on-board camera) which was the Overall winner, Inside (contactless payments chips and software) took away the  Award for Most Innovative Device Centric Technology, and Tagattitude (use of the voice channel for secure NFC transactions) won the award for Most Innovative Consumer Application.

Congratulations to all the winners.  Guess I should have stopped at Ladbrooks to place some bets before hand.

MWC Podcast: GSMA's Innovation Outpost

Last year the GSM Association launched the GSMA Mobile Innovation Marketplace to assist fledgling  companies developing innovative mobile services and products in their quest to "crack the carrier barrier" and bring their value to mobile consumers.

The purpose of this arm of the GSMA is to identify, foster and highlight innovative companies within the mobile communications ecosystem. While in Barcelona I had the chance to learn more about what I'm calling their "Innovation Outpost" (which Andy seemed to like) in an interview with Andrew McGuire, GSMA VP for Mobile Innovation, who runs the program.

Listen to my podcast with Andy McGuire of the GSMA (10 mins)

Looking to raise the profile and bring attention to the initiatives of innovative companies, the GSMA has crafted a GSMA "endorsement" process to take mobile technology, application or service ideas from concept to launch through a unique, high profile audience of Operators, Investors and Media. It's a great   idea providing a tool which enables the mobile operator community to be more of a center of influence within the mobile industry ecosystem. Something that has been lacking in the past, although some operators have corporate venture arms such as Orange FT's Innovacom or Swisscom which serve similar purposes.

Besides the Mobile Innovations Awards at the Mobile World Congress events in Macau and Barcelona, they are developing a "match-making marketplace" for innovators, investors, operators, stategic partners, and corporate interests to stimulate and facilitate research, introductions, discussions and, most importantly business development.

Mobile Innovation Market Place conference

Look out for some of the world's leading mobile innovations to be highlighted at the Mobile Innovation Marketplace conference in Atlanta, June 3 & 4, 2008.

MWC: Slick Sightings in Barcelona part 2

Tagattitude

NFC using the phone’s audio channel to transmit secure data signing transactions.

Translation: How to use the phone’s voice channel as an NFC (Near Filed Communication) device enabling mobile payments transactions. Really? What are you making a call to use the channel?  No.

Like GestureTek, Tagattitude shows combinatorial innovation where a set of seemingly unrelated component technologies can be combined for new innovative applications. It uses NSDT (Near Sound Data Transfer). Consequently any existing or future mobile phone can make a secure mobile payment transaction similar to those of specialized NFC services requiring embedded handset software, clients or other more complicated and costly NFC solutions. Time saver, money saver, means faster to market in the NFC world.

 

I like Tagattitude since it fills technology gaps and provides interoperability which are key factors in harvesting revenue from mobile technology. It provides a technical bridge until the complete, more robust deployment of NFC solutions hits the marketplace. It offers low cost contact-less services for non-NFC phones. It can be a backup for NFC services in case of temporary unavailability. It offers immediate contact-less payment solutions to begin educating the market. Great value proposition.

All these leapfrogs the need and necessity for hardware medication or software injections while awaiting for mobile phones with new technology. It uses a previously otherwise used audio channel as a cryptographic pipe to transmit secure transaction data. Very clever. This simple use of "current pipes" is ideal for established and emerging markets.

Imagine you're a street agent for a carrier in an emerging economy country and would like to have a transfer from your phone account to a subscriber's. With Tagattitude, the agent's "point of sale terminal" can be his mobile phone, and he can readily accept and make transactions. This is significant to the operators as well since they can transform all their prepaid accounts to essentially pre-paid money accounts thus offering mobile payments to all their customers. An FI (Financial Institution) can also launch mobile payment solutions independently of all telecom operators.

Founded by three French smart card and telecoms execs, Yves Eonnet, Loic Eonnet and Herve Manceron, the company is based in France and funded by Innovacom, Orange France Telecom's venture arm.

MWC: Slick Sightings in Barcelona

Trade shows of the scale of the Mobile World Congress always have constant serendipitous moments when you are standing in the canyon boulevards of four story exhibition booths frantically trying to orient yourself with thousands of people streaming by you. You forge on, look up and find yourself next to a booth and something about it catches your eye, or you run into someone you haven’t seen in a year, or even better you bump into someone you saw only two short weeks ago but 10,000 long miles away. Such are my run ins at the Mobile World Congress.

That’s how I came across GestureTek and Tagattitude.

Mobile Wii Device or Reflecting New Movement in Mobile Technology?

Gesture Tek provides computer “vision” and gesture-recognition technology for presentation, information and entertainment systems. Telefonica O2 recently announced a strategic investment in GestureTek and they were being showcased at the massive Telefonica Movistar booth.

What GestureTek does is provide motion sensor capabilities to your mobile phone-- without any additional costly chip or handset client. That’s critical since it means there is no additional cost layer to the operator nor consumer to make your phone a spectacular tool, especially for gaming. Think turning  your mobile handset into a Wii controller, and you’ve got the idea.

How they do this is even more remarkable. By engaging the camera on your phone a signal emanates from the lens and “senses” changes in the 3 dimensional topography the camera sees. Amazing. It must have some serious math processing going on somewhere in a box installed in the network.

GestureTek is a 20 year old company which has shaped ‘applied computer vision’ for computer-human interaction.  The company’s multi-patented video gesture control technology (VGC) lets users control multi-media content, access information, manipulate special effects, even immerse themselves in an interactive 3D virtual world – simply by moving their hands or body.  They deliver Wii-like gesture-control without the need to wear, hold or touch anything.

Seems the company has been way ahead of its time, and now the mobile camp has caught up with it and they’ll now become a permanent residence.  No one from GestureTek was at the Telefonica booth on Wednesday while I fought throught the crowds there, so I’ll have to learn more about them at CTIA.

Bet on them getting attention in Vegas for CTIA.

Continue reading my "Slick Sightings" at MWC part two here.

MWC Podcast: Hawala Money & Mobile Remitances

   

For the past five hundred years "mobile" money transfers in the Islamic world were accomplished through the Hawala or Hundi.

The Hawala is an informal money transfer system with a huge network of money brokers which are  primarily located in the Middle East, Africa and Asia.  The transaction takes place entirely on the honor system. The unique feature of the system is that no promissory instruments are exchanged between the hawala brokers. No records are produced of an individual's transactions, no records of individual users are kept; only a running tally of the amount owed one broker by the other. Settlements of debts between hawala brokers can take a variety of forms, and need not be direct cash transactions.

If you think mobile remittances are a modern phenomenon, think again. Modern Mobile remittances are but one of several such systems. Another well known example is the Fei Chien, meaning flying money system indigenous to China, also used around the world. These systems are often referred to as 'underground banking', which isn't entirely accurate since they operate in the open with complete legitimacy (sometimes the ends are illegal), and often these services are heavily advertised within immigrant communities.

Jumping to Mobile transactions of the 21st Century

Mi-Pay Ltd. was established in 2003 by executives who stepped out of Logica, the SMSc and messaging innovator. Originally it had a focus on outsourced pre-paid top off services for mobile operators which enables consumers to safely and securely add to their acounts from their handsets. Mi-Pay has initiated a pre-paid recharge solution for mobile operators concentrating on Europe and the Middle East.  It is looking to help modernize the traditional Hawala/flying money system by providing the mobile payments processing solutions to network operators interested in money transfer services such as remittances. Mi-Pay has been sharpening their technology over the last three years and is now bringing the solution to market focusing on the emerging markets of the Islamic crescent of central Asia, the Middle East, Africa and Latin America. They currently provide the payments switch to the new market entrant in Dubai, du.

Learn more about Mi-Pay and listen to my interview with Mi-Pay CTO, Simon Cavell at the Mobile World Congress. (8 min) 

MWC: Snap. Crash. Lost. Epilogue-Vandalized

Voyage Return: Vandalized

Recall in my earlier post this week, I illuminated some of the friction points which had emerged during my coverage of the Mobile Web Congress in Barcelona.

I thought I had put all my problems behind me when at 04:15 am on Friday when I was departing, serendipity played it’s hand while I walked out of my apartment to run into a Japanese fellow getting into a cab with an MWC knapsack. He invited me to share it to the airport, then proceeded to pay it all since he was a journalist covering the event. Great start to the day and time to bury the past week. Alas, by the day was over the Yang had overpowered the brief Ying. When I picked up my garment bag at IAD (Washington DC-Dulles) a locked compartment had been torn open and clothes, files, and my CardScan device had been pinched.

When I was in high school in Rocky River, Ohio, I was a middle distance runner on the track team competing in the mile and half mile run. I'm thankful for all those painful days running and developing a mindset of compartementalizing pain and anguish. I drew deeply on those experiences the last few days--physically given the venue is every bit a mile plus long, and elevates about 300 feet from the entrance to the palace above the exhibition areas (8 of them), and having sharp elbows in a crowd is a distinct advantage--and emotionally to just bury the barriers in my mind, and go off to execute on the day's activities. Now at 4:20 am (jet lag folks) from the perspecitve of my corner office aery, the trip was much better than last year and was quite productive.

I'll write more over the next few days.

MWC: SMS "Hardening"

Secure SMS ?

As I've been wandering through the MWC halls of the Fira at Plaza D'Espanya I've been lucky to discover some interesting companies and propositions in the mobile industry. There are also media events with some select companies available for in-depth review. Here's one which caught my eye at Showstoppers ( www.showstoppers.com )  regarding text messaging security : CellTrust. 

CellTrust provides security for SMS. Wait, you think SMS is actually "secure"? Mate, when it comes to security it is all about degrees. For you and me sending short texts to each other, that might be secure enough. Who knows you might even be lucky enough to pull a bird by sending tonight's pub meet to the wrong number.  But what about enterprises that send out alerts and notifications to its work force, customers or critical caretakers? Consumer grade security isn't "reliable" for CIOs and company IT leads or for the ever more demanding management of mobile banking and transactions. That's where CellTrust positions its proposition..

CellTrust is providing control, accountability, compliance and security to SMS in the enterprise environment. Using pubic key encryption they guarantee recipient end to end privacy and two factor authentication without the expense and complexity of a proprietary, bespoke solution. By providing the SMS gateway to the enterprise and MNOs, their encryption technology layers over the routing rules enabling CellTrust to create a secure SMS environment. It wasn't anything I had ever thought of in a consumer messaging company, which is why it caught my eye. Through the combination of their platform technology and a micro client with password protection they secure and provide an SMS hardened solution. Although they could have modified the MAP layer of the SMS as we did  at the former Mobile 365 to provide tracking capabilities through our networks. That's something they should consider as an added layer of functionality in their security "suite."

A "hardened" SMS comes with guaranteed secure delivery through their "Advanced Encryption Standard, a read and delivery confirmation to the sender, option for password protection prior to decryption and display of a message, even a remote wipe API, for when that handset is lost or stolen Mr. Phelps.  You can learn more about Celltrust at www.celltrust.com. 

I would think the natural market for this would be banking applications, as well as government authentication--although i think much of that may have already been explored and gobbled up by RIM's Blackberry. Who knows, but definitely watch CellTrust.

After all, it's 11:00 pm, do you know if your SMS is secure?

Mobile World Congress: Snap. Crash. Lost

I´ve been lucky given all the big conferences I´ve attended over the last 12 years from CTIA, CES, 3GSM and now MWC, with things going pretty smoothly but I think the ying of my conference universe has shifted to the yang. I remember three years ago in Cannes a Danish colleague of mine at the time stopped to have beer before we left town for the airport. Placed his jacket on a barstool. When he got to the airport in Nice, he noticed his passport had been pinched from his jacket. His green card was in it, and he ended up having to return to Stolkholm to have the green card re-issued from the country of us citizenship. It took him three weeks to get the card re-issued and able to return to the states.

Snap. One Fried Computer Battery

Late last week while in London, my computer battery died-it no longer is willing to hold a charge. So, the only way I can use my computer is if I have it plugged into a wall electrical outlet. Pretty inconvenient if you want to take notes or blog while in a presentation at the biggest mobile convention known to man. Argh.

Smartphone OS crashes

My smartphone, essentially a small computer with a phone, which runs an operating system just like a desktop, crashed on Sunday. I turned it off to board my flight from London, then couldn´t turn it back on. Did a hard reset, took out the battery, etc. FInally removed the SIM and the data on the phone poped up, but no connectivity with the mobile network. Spent half my day on Monday, missing the mobile payments seminar, looking for a local phone store with SIM unlocked phones. Reviewed the offerings, picked up an LG which I was planning on selling on ebay on my return to minimize my loss, and figured I would try one last time. Miraculously after 4 hours of searching for a network my phone was operational. Pain averted but a lot of time and emotional cycles lost. Avoid the Microsoft Windows for Mobile. At least the phone works for the moment.

LOST: My lifeline

I´m somewhat anal in trying to maximize my experience in these things, be punctual for meetings, get to where I´m going, etc. so I use a small three ring binder which had my briefs for meetings, my schedule and some personal inspirational quotes which keep one slogging through the challenges of life. The quotes have been with me for 16 years. Last night at an InMobile cocktail event, where I was drinking nothing stronger than original coke, I somehow lost the notebook. Major bummer since I have to recreate three days worth of meetings from memory, plus notes from 4 days of a consultancy I just started. Goes to show you that when you´re among thousands of people, moving from meeting to meeting, even the smallest and most important things can be misplaced. Kill me now.

Let´s see how I fare over the next three days. It certainly will crimp my blogging plans.

EPILOGUE

Wait there's more. Click here to learn of my return voyage.

MWC: Inside: Semi-Conductors for Contactless Payments

Inside is the company that enables contactless payments work inside your credit card and Mobile handsets.

With executive DNA drawn from sim card maker Gemplus, Inside designs and manufactures their “Micropass”, the silicon that goes into your “smart card” credit card and is the market leader in the segment. The twist is that they combine the silicon with a low power microprocessor enabling both read and writing functionality. Reflecting its French DNA, its R&D is in Aix en Provence with corporate headquarters in Boston and offices in San Francisco, Singapore and Poland. The business is split between the chips and the application development for cards. 

Why are we covering a silicon slinger? Inside is leveraging its card industry position and migrating to the mobile segment. With both the financial and mobile industry waking up to the growing opportunity in mobile transactions, Inside is well positioned to claim the mantle of market leader in the mobile NFC, especially with Visa as a strategic investor and other venture backers including

In the early days of contactless payments, novelty and limited use hindered the industry’s development. Centered in Europe, the large US market lagged in the use of smart credit cards, and innovation split. Result--high costs of card processors (the chip in the credit card), suboptimal performance and a bumpy supply chain for both since neither standing alone provided enough initial scale.  Through their partnership with Visa, Inside leapfrogged its competitors by improving quality, streamlining the distribution channels and improved the read range of their chip by boosting range and processing power. Their big innovation was combining the chip, the operating system and adding an application layer making the chip on a Visa or Master Card credit card act just like a mini PC. This was an innovation leap, and drove sales because of the simple integration of the “full stack.”

Capitalizing on their technical advances, they changed their approach to the market. Instead of just selling to the bank card issuers, Inside played on the pitch of the real decision makers in this value chain: the banks themselves. By establishing an educational relationship with the likes of Wells Fargo, Chase, and Citibank they set about to convince the end buyer of the layered value they brought, thus convincing the banks to spur the bank card manufacturers to include the chip in their selected card design. This deft sales strategy paid off. In 2006, 18 million contactless cards were issued in the US and Canada, 10 million of those contained the Inside chip. In 2007, 34 million were issued, and 24 million contained the Inside chip---71% market share.  For 2008 Inside expects over 60 million cards will be issued with the Inside processing chip. 

Why is Inside inside Mobile ?

Over the next few months, 12 mobile operators will run trials of contactless mobile payment services in Australia, France, Ireland, Korea, Malaysia, Norway, The Philippines, Singapore, Taiwan, Turkey and the U.S. as a precursor to commercial launches. The Inside MicroRead® NFC will power the critical contactless payment transactions in most of the handsets to be used in the trials under the Pay-Buy-Mobile initiative.

The trials form part of the GSM Association’s Pay-Buy-Mobile initiative, which is designed to provide a single global approach to enabling contactless payments using a mobile phone. Consumers will be able to use their handsets to quickly, easily and securely pay for goods and services in shops, restaurants and train stations. 35 mobile operators representing 1.3 billion customers are participating in the initiative.The technology implemented by INSIDE will allow the mobile operators to quickly deploy SIM-based applications, thanks to a direct link between the NFC chip and the SIM card via the standard SWP protocol.

“This is the result of several years of early investments from INSIDE Contactless, where we were able to anticipate the standards and produce the first NFC chip with a SWP interface,” said Philippe Martineau, executive vice president, NFC Business Line.

One of the characteristics of INSIDE’s MicroRead technology is the capacity to behave as a router in the phone rather than just a simple modem, establishing secure connections between different devices, and giving phone manufacturers flexibility to address various market applications and regions

Around the globe, Visa and MasterCard have mandated the contactless form for their issuers. With the increased penetration of contactless point of sale terminals and such interoperability as the Visa Mastercard initiatives moving ahead, it is expected to be a 500 million unit market by 2009. Dual interface (swipe and contactless) “open” bankcards are already prominent in the EU, UK, Turkey, Brazil, Mexico, Hong Kong, Korea and Taiwan. Over 1 billion credit cards exist in the US, with about 400 new slivers of plastic issued every year the market resembles the ATM phenomenon of the 80s, with the need of both the plastic and the reader growing slowly, steadily and inevitably. It is estimated that about 2012 dual saturation of reader and card will exist in the market, and consumer response to the power of the card, even in the US, is strong.

Inside sees the migration to mobile as a major initiative in their strategy. Given their heritage from the SIM card industry, they “get” the mobile play and plan to capitalize on the emerging mobile payments market.  Imagine a mobile phone energized by an Inside chip registering via an internal mobile web interface,  empowering applications such as  transit location, couponing, loyalty, and even non-payments information exchange. You could walk into a Starbucks, wave your mobile and the last 5 skus could be transferred to the reader and the barista could ask simply: “Café macchiato or double espresso today Mr. Ruppert?”  Pretty kewl vision, more importantly extremely plausible for that to be widely available by 2012.  Not a consumer brand, but watch out for Inside. 

Not a consumer brand, but watch out for INSIDE.

  WHAT DO YOU WANT TO SEE & HEAR ABOUT AT MWC?

 

YOUR REPORTER ORDER: Reply or send me an email and I'll look into issues and companies you readers are interested in. Just submit a response to this post or send me an email through contact on the Mobile Point View blog, or TEXT ME at plus one three zero one seven two eight seven eight one eight and I'll check into it. Don't be shy, just ask!