Cornering the m-payments market

Payments is very much the top of the agenda this week, with not only news that txtnation will be presenting Transactional SMS (TSMS) at World Telemedia Amsterdam (12-14 October), but that the world and his wife are all getting their mobile payments products lined up and ready for the build up towards Christmas.

Forget NFC and, I think, we can also try and forget the O2-Vodafone-Everything Everywhere tie up to develop cross platform payments and marketing offerings (we can forget that for now, unlike 3 UK which is trying to take the big three to court for leaving them out. Aww, bless). What we have on our hands is a radical rethink in payout rates on PSMS – dressed up as TSMS and direct operator billing – sweeping the US, Europe and Ireland (and coming to the UK real soon).

The move to put PSMS on a 90% payout rate and hide it behind a one click payment button is just what the world needs and will be the thing that makes mobile a mass market payment tool.

Direct operator billing is going to corner the market in mobile payments for digital goods, while TSMS is going to see PSMS essentially being used to buy real things like cans of drink from vending machines and tickets from ticket machines (which are then virtualised and put on the phone, but they are then used in the real world, which makes them tangible enough for me).

This is a magnificent step forward and I think places telemedia right at the heart of m-commerce, where it should be.

And that is reflected in the seminar programme for World Telmedia Amstedam, which while it seeks to uncover the best in interactive media, marketing and commerce, always circles back to payments. Mobile payments is going to be the cornerstone of the m-commerce and m-media worlds once it gets going as it encompasses everything that you want consumers to do.

Getting them to your site, store or service is essential, and this can be done by offering special offers and money of if they use mobile to pay. Once they are engaged with you, you can again get them to do things that require micropayments and you get them to use mobile to pay. While they are chatting, or on social networks or interacting, voting or doing anything else around TV you upsell them and use mobile to pay. If they are in a shop and want to buy something – use mobile to pay.

You see mobile payments is the core of m-commerce in all its forms, and the telemedia industry owns microbilling – you know that together these things are awesomely powerful. So get yourself along to World Telemedia Amsterdam and get the inside track on where m-payments is going.

Will my TV vote go to Facebook?

In a no-shit-Sherlock moment of clarity, MIG has proved that people want to interact with TV using mobile. And there was me thinking that is what they had built their business around – shows how much I know. Anyway, the findings of MIG’s study are interesting in that they show that much of this mobile interaction with TV will be carried out through social media portals (for which you can read Facebook).

MIG believes that interactive events run via Facebook will generate $51.7 million (£32.04 million) in the UK by 2012 and $2.9 billion globally by 2016. All very good and I am sure there is something in this. But the findings seem to be at odds with what is actually happening on the ground with businesses and social media.

Retailers – who I know are not TV companies, but I am sure there are parallels in terms of how a commercial business looks to using social media – are flailing and failing to leverage the power of social media right now. Research by One iota finds that of the top 100 UK retailers, only one – ASOS – offers a fully transactional facebook site. On mobile, the study finds that a third of retailers now do have a transactional mobile site.

This disparity between mobile and mobile social shows that there is still a very long way to go within businesses to create a proper social commerce eco-system.

Now you could argue that its because retailers just don’t get it and those stubbly, retro-spectacled ‘dudes’ in TV really understand social media. Or you could look at it that usually canny retailers are simply not embracing social media because they don’t need to and don’t see the point.

On the fifth birthday of microblogging social site Twitter last week a study by Virgin Business Media found that only 9% of the UK’s top 500 businesses had used Twitter in a business context.

Why not? Well there are many reasons: there is no real business case for using Twitter (and only a very limited one for Facebook, I believe – its just a website that hosts you); there is a distinct flattening off of Twitter, Facebook and other social network use amongst consumers; and there simply is no need to run things over these services. Yet.

To my mind, no one is using Facebook or Twitter commercially because there isn’t the need to: the consumers are there, but there are many other ways of buying – not least through transactional mobile sites and apps – and so social media is not there yet.

I think the same applies to TV interaction and events. However, they do lend themselves more to social interaction. If I am watching TV – mainly the news about News International’s slow unravelling – I like to shout at the TV and my family and friends. Facebook lets me do this both quietly and remotely. So I can see that there is a role for mobile social interaction around TV; I just don’t get how it will be monetised. And that is what will ultimately bring all this in to question. If its free and easy then great for consumers, but bad for everyone in the value chain. I am watching and waiting keenly to see how this pans out in second half of the year when the massive interactive shows return to out TV screens for their autumn runs. Will my vote go to Facebook?

We don't need such a smart world

So the sales of smartphones in the UK are slowing down? Can’t say I am surprised. When the iPhone launched it was a luxury item and penetration was – as every old skool mobile company wouldn’t stop telling me in 2007/8/9 and even 10 – tiny. But Android came along and made them cheaper. Nokia had a stab at smartening up and prices fell (and user experience) still further. Operators now bundle even the lesser-spotted white iPhone into £40 a month bundles.

But for many people, a £40 a month bundle is still too expensive and so, naturally, given the price point we are at, smartphone penetration has slowed and might even plateau – until of course iPhone 5 suddenly makes all other iPhones all but worthless.

This slowing in smartphone penetration is being trumpeted as being really bad news for m-commerce, as it means we are at the limit of users and so what we have now is what we will be stuck with in terms of m-commerce use and revenues.

Au contraire! You don't need widespread smartphone penetration for m-commerce to grow. All you need are the simple things such as text and voice shortcodes, some basic banner ads and Payforit and you have the perfect 100% m-commerce penetration rate.

As our lead story about Orca Digital points outs, voice shortcodes are a force to be reckoned with, offering a great alternative to 08 and 09 numbers on mobile – and giving consumers clear pricing – so that things can be sold and billed for via mobile without having to have web-enabled smartphones and tablets. And Orca should know: it leads the pack in revenues generated in telemedia from voice shortcodes.

Of course, as smartphones do slowly become the norm (the Nokia-Microsoft tie up is likely to create a raft of cheap smartphones) then perhaps other forms of mobile payments – which is really the essence of mobile commerce – will come to the fore, but for now you need nothing more than text and shortcodes to create a thriving marketplace that everyone can join in.

I think that, after something of a false start, we are going to start to see a lot more of Payforit across the spectrum of mobile devices as it becomes an easy to use payment tool. There is even research out there that the Payforit brand isn’t even that important – so long as people trust that the micropayment will be successfully completed. So am I bothered that smartphone penetration is stuck at 35%? Not really. Are you?

Selfridges charity network clears up a cloudy issue

News that Oxygen8 is helping to build a bespoke network in Selfridges so that consumers in the store can text charity donations to the store’s Project Ocean campaign is great news for the world’s fishes, plankton, sea cucumbers and whales. It is also good news for everyone smart enough to look at how to monetize in store mobile action.

While much attention has been focused on how mobile is a tool for retailers to sell stuff via transactional mobile sites and apps, the real benefit mobile technology brings to retailers is in what it can do in store. And what retailers manage to cook up around in store mobile services is also something that other organisations that have groups of people all in one place at the same time – shopping malls, sports arenas, airports, clubs, music festivals and even schools and colleges – can also look to turn to their commercial advantage.

Mobile’s real strength lies in the ability to bring the internet to where the mobile user is. It makes the web personal, rather than just mobile and that personal touch extends to where a person is and what they are doing.

The simple examples so far have been things such as bar code scanning in stores to get more information about products and services, see videos and read reviews. There are also examples of how, at sports events, users can find out more information about players, stats about the team, purchase merchandise and so on. At music festivals, there is a growing move to sell content over the air while bands are playing – rather smashing the ‘sticking it to the man’ ethos of Glasto, but there you go, that’s progress.

The more forward thinking out there see mobile as bringing all of this and much more to the bricks and mortar commercial world (and the muddy fields of the music festival circuit). Adding the idea of augmented reality and the like to all this – so that you can add the web to the real world to enhance one’s experience of it – means that many things are possible.

Each of these things adds huge potential commercial opportunities. Directly selling things using all this tech is just the tip of the iceberg. The potential to revolutionise marketing and the whole ‘consumer journey’ is huge. And it all hinges on the idea not of the mobile web, the web or any other hyperbole doing the rounds but on the personal web.

And that is all brilliant, but…. There is always a but and here it is a big one. Networks. Mobile networks – both those run by operators and public wifi – are, to be blunt, shot to shit. They are stuffed with traffic, poorly powered and frustratingly slow if you do manage to connect. Oh and they drop out half way through doing things. In short, they aren’t fit for purpose.

This is why the Oxygen8-Selfridges network is significant: while it is all being done for “charadee, mate” it is a proving ground for building in store networks and seeing how consumers use them. Taking this technology – and the inherent investment – forward will yield a much richer in store experience that will, in short, let retailers sell more. Rolling it out at other events will increase this personal web engagement and sell more stuff – which is good for us all.

Oh, and while we wait for iCloud and marvel at the new range of Google Chrome netbooks, only this sort of investment will make this cloud idea for consumers take flight. If any of you have tried cloud computing recently you will know what I mean.

Care to take a punt on the mobile future?

This week saw the inaugural mobile gambling summit, organised by your intrepid Telemedia360 team and the lovely people at iGaming Business and what a triumph. A whole day of thought provoking presentations, intense questioning and a palpable air of learning at the Kings Fund in Mayfair.

As opening keynote speaker Dr Windsor Holden, principle analyst at Juniper Research suggested, there have been a number of false dawns with mobile and gambling, but the iPhone and subsequent smartphone penetration that we see today makes it highly likely that mgambling is going to boom this year.

“The JRA in Japan and the huge boom in mobile gambling in China are set to make mobile gambling commonplace in 2011,” Dr Holden told delegates. “And UK gamblers are already voting with their thumbs and playing gambling games. Brands have to sit up and take note of this.”

Backing this up, Darren Mark Noyce, founder and MD of mobile tracking company SKOPOS, told the conference that consumers are already expressing a hunger for mobile gambling products, with 24% of those surveyed by SKOPOS saying that they were ‘accepting of’ m-gambling. While this means that three quarters aren’t, it indicates that a very sizeable chunk of the market – around 15million mobile phone users in the UK alone – are keen.

“And this number is growing,” says Noyce. “We are already starting to see that more people are interested in mobile gambling in the first six months of 2011 than they were at the end of 2010. We expect our next set of data for the end of 2011 to show that this percentage of acceptors of mobile gambling will have risen.”

Dr Holden also suggested that in many people’s minds ‘mobile gambling’ means casino games, slots and sports bets, while a huge number of people – more than half the population – would be happy to play the lottery on mobile and not consider it gambling.

SKOPOS went on to point out the demographics of the consumers that do gamble on mobile as being 70%, 50% 16 to 30 years old, and 71% fully employed. “These are typical smartphone users and comfortably off,” Noyce said. “They are also the same demographic that uses social media extensively and are not typically people who use betting shops.”

Talk at the show’s after party, however, centred very much on how to use mobile more adaptably to try and cover as many people who want to gamble as possible, looking at how to use apps and mobile web for high end casual gamers, simple text  based services to cater to the other end of the gambling community. “After all,” as one anonymous source said, “poor people who don’t have iPhones gamble to get rich so they can afford iPhones”, showing that the gambling and telemedia industries have to work together to look at how to fully exploit all facets of mobile technology to deliver mobile gambling products and to mobilise existing online and bricks and mortar gambling offerings.

The interesting thing is that, as with many other sectors – such as retail, travel, banking, payments to name just a few – the gambling industry (both online and bricks and mortar based) knows it needs to use mobile. The issue is how. The general perception of people walking through the doors at the summit was that “we probably need to learn how to build an app or m-website”, but I hope that by the end of the day they were all thinking much more holistically than that.

Mobile in gambling, retail, travel, payments or any other vertical market isn’t an end in itself, but rather part of the whole. Gambling companies should just think about how they can directly mobilise what they do, rather look at how they can use mobile in its many forms to make what they already do better.

It makes perfect sense for an online slots company to build a lovely looking iPad app that delivers the beans on screen for slots players. It is also great that sports betting companies are looking at how to use mobile to take live bets. But that is just a very small part of what mobile offers the world.

For instance, a betting shop on the high street of Rotherham is not going to be full of people with iPhones and iPads. Its typical clientel don’t fit into that demographic at all, and nor do they want to (even if they win big, they probably won’t become Apple Heads). But that doesn’t mean that there is nothing mobile can bring to that group of people. They will all have mobile phones and so you need to look at how you can use what those phones can do to get those gamers more engaged with you and spending more money.

And the key, as with all things mobile I believe, is text. While those of us in the industry look to all the advanced stuff we can do with our phones, most people out there in the real world know how to use text and, more importantly, can afford to use text. So suddenly the mobile becomes not the gambling tool (or retail tool or payment tool), but a piece of marketing and communications collateral.

This serves to get mobile established as a something non-mobile savvy gamblers and consumers will trust and with this ground work done, you can then develop more mobile-based versions of what you do.

But again, this needn’t be anything more sophisticated than text services if you don’t need or want it to be. Look at The International Sports Betting Company, who spoke at the event in London. Its business is centred around Latin America and Africa and it uses just text to get people betting on sports matches. It is simple, effective and easy to use. It also has the added advantage that it gets black market cash into the official money system, but that’s another story.

What I am trying to say is that simple may be the way forward with all this. Let’s revisit text and see how we can reapply it to services to engage consumers in all channels and give brands in whatever market they operate in a simple and easy way to start on the mobile telemedia journey and then build on that.

A Defining Moment

When the current Communications Act in the UK came into force in 2003, it was already old and pretty much not fit for purpose. Sure, it cleared up a lot of confusion by bringing together a number of, until then, disparate regulatory bodies under one roof, but by the time it came into force, things had moved on. That’s what happens with what I now call the digital industry: it develops and changes very rapidly.

Look at what is happening in the microcosm of the strange legal wrangles in the UK over celebrities with superinjunctions that are being breached by ordinary people on social networks. This has thrown the government, judiciary, media and social media into a tailspin: there simply are no laws, rules or regulations governing what is happening.

So the fact that the government is now proposing bringing in new communications regulations (see my EXCLUSIVE STORY HERE) – and for communications, read digital industry – seems apt. I think the social media/superinjunction debacle is timely, but unconnected to the Department of Culture, Media & Sport (DCMS) issuing an open letter to the ‘communications’ industry stressing that, in the interests of growth, the regulatory regime around all things content needs to be rethought.

And yes it does. But, do they really realise what they are seeking to do? The open letter is heavily focussed on content – across many platforms – but really what they are getting into is a total rethink on the regulation of, for want of a better word, ‘digital commerce’. And this is a very broad brief.

I am the first to admit that the regulatory framework we have in place currently is no longer up to the job. Look at PRS: we have a very clear and, now with the new PPP Code, pretty effective and fair way of regulating PRS. But, while all this has been happening, many new ways of doing microbilling have popped up, which aren’t covered by the code and so we have a situation where we have great regs for one thing, but not for another.

The same applies across all facets of the connected digital industry, especially as it all starts to meld into one multiplatform consumer eco-system. This throws up massive issues with anyone seeking to apply old, or indeed create new, regulations to tame its worst excesses. You have now the chance to find something you want to buy on one platform that you pay for on another and consume on a third or in the real world. You have potential situations where people are using mobile to interact with advertising on TV to buy something that will be delivered to their home. How do you regulate that?

What I suspect will happen will be that ‘self regulation’ plays a key role in this. To me it is the only sensible way you can regulate such complex interconnected interactions and future proof those regulations for the ten years that the UK government wants any new rules to apply for.

At least the powers that be seem to recognise the enormity of the task at hand and have put out a request for feedback at a very early stage. But many people may have missed the open letter sent on 16 May and may not have made the 30 June deadline for submissions. And you MUST take part. This will change everything globally and there is everything to play for.  As the MEF’s Suhail Bhat tells us: “This is probably the most important and significant change to most people’s business they will see in their business lifetime. You have to make sure you have your say.”

Beware: new billing kids on the block

With another Telemedia360 event under our belts, many of you who were there will have got a great insight into where the business is going. There are many new kids on the block and the world of content interaction and billing has changed. There is still plenty of room for IVR and pSMS billing services, but as media companies evolve what they are doing with mobile – particularly with tablets – then these old ways of doing things face growing threats from other payment tools.

Print media companies love tablets as a tablet app suddenly gives them something they can legitimately charge for to make up for all that free stuff that is on the web. With this comes the huge opportunity for billing for these services. But, while pSMS and WAP billing play a role in getting money into the system, most consumers these days don’t trust operator billing (a recent Kony survey finds that only 25% of people do) because operators are not known for getting their ‘normal’ bills right, let alone handling any other billing on top.

So what’s happening? Well services where cards are registered at leisure on line then used as part of a one click on mobile, tablet, or in-app are pretty popular in the UK, but these models don’t scale in Europe and further afield where cards are not so well used. Here pSMS and traditional billing tools do have a role to play, but they are then not used as the front line payment brand. That is handled by the new breed of payment companies.

In the retail and m-commerce space, things are tougher still for telemedia billing. There is a huge opportunity for mobile as a payment tool for both in-store and m-retail purchases, but that opportunity is slipping away from operators and telemedia companies on a daily basis. Orange and Barclaycard have rolled out a trial for NFC based mobile micropayments in store, but frankly who needs the hassle of an NFC enabled phone, chipped with bank chip and limited only to stores that can afford the redemption equipment and POS integration?

Like media companies, though, retailers are even more reluctant to use operating based billing as the operators want too big a cut of the transaction to make it viable, they don’t see them as reliable enough and operators still slave under the misapprehension that their brand owns the customer and so are reluctant to give ground to retailers.

So where does that leave us? Well, it leaves us once again with the likes of SagePay, MGt, Boku, Zong, OpenMarket, MIG, Google and Facebook – not to mention banks and card companies – delivering the payment tools that people will use in the retail space: people trust these brands and retailers trust them too.

There is, of course, a very viable marketing for operator-based billing solutions and they are not going to go away in a hurry – not everyone has a smartphone, so pSMS is pretty much all they have to pay with – but my argument is that we are already seeing a shift in how mobile as a payment tool works and what the brands, media companies and retailers want from it. It poses a massive opportunity to the telemedia sector, but one that to my mind no one is really grasping.

One area where there is still huge opportunity for telemedia billing lies in mobile gambling services. Those of you at Telemedia360 last week will have noticed that mgambling was conspicuous by its absence. Well, that’s because we are running a dedicated show on mGambling – the mGaming Summit – on 15 June at the King’s Fund, in Central London, in partnership with iGamingBusiness. Details are here and it promises to be a fascinating event at the nexus of gambling and mobile.  See you there.