It may be a burgeoning opportunity, but carriers looking to capitalize on m-finance should remember four important keys to adoption: multiple billing methods, usability, security and carrier business models.
“We have a state of fragmentation in device type, carrier networks and country regulations,” says Anil Malhotra, vice president of alliances and marketing at platform provider Bango Inc., which recently launched Bango2Go, an all-in-one online service for mobile Web site building, hosting, traffic generation, monitoring and global payments. “Therefore you need to implement a generic platform that makes it simple for the consumer to use across those fragmentations.”
First priority should go to enabling multiple billing formats. A number of platforms allow charges from a merchant to appear on the cell phone bill, but Malhotra says that’s not enough. “If you’re purchasing a large-ticket item in an m-wallet scenario, that puts the carrier on the hook for collecting for that money, turning them into financial services companies,” he explains. “Therefore in the future, as the purchase of hard goods rolls out, there will be a need for more traditional billers like credit card companies and PayPal and so on to become involved, and the carrier needs to present those options to the consumer.”
Another way to urge adoption is by focusing on usability — in other words, making the interface intuitive and simple. A carrier should think about how to specify bank details and credit card information on the phone. One idea is to implement a bar code-type strategy, where each user is assigned a code. If that user has a previous payment history, the phone can store the information according to the code, and simply send the code to the merchant who then can correlate it with payment details. Or, if the phone stores the financial information, have a hot-key + security code process for entering that information for payment where needed, thus saving the user from typing in long credit card or bank numbers. And other concerns, such as age restrictions, should be built in and transparent. “For m-finance to really take off, it has to be simple, and simpler than it is today,” says Malhotra. “You might be prepared to sit in front of a PC on Expedia and page through several screens to finally buy an airplane ticket, but on a cell phone, the payment process has to be much shorter and easier.”
Security is a third area crucial to adoption. Perceptions are what really matter; consider the number of people in the world who still are not comfortable with online commerce at Amazon.com, say — let alone cell phone banking. Triangulating the device, user and network information to verify user identity, authentication and authorization processes, and of course device security in the form of “kill pills” if lost or stolen and the like, are all critical pieces of the puzzle. And, user education on the part of carriers as to the intrinsic security measures they’ve implemented will be the linchpin to acceptance.
Finally, carriers and service providers need to figure out their business models, says Malhotra. There is a fragmentation of approaches — some carriers bill for everything via the bill, others already are partnering with banks, some are working with banks and Visa, and so on. “In Japan and Korea, banking companies and carriers are owned by the same parent corporation, making it much easier to shake out everyone’s role,” he explains. “Not so here. It’s extremely important that carriers and banks identify the appropriate role for themselves and implement them, preferably in an industry-standard way.”
For more on mobile banking, read "Banking on the Go" in the June issue of xchange.
Bango Inc. www.bango.com
