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Archive for January 2010

NokiaMoney/Obopay – The Wallet

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January 19, 2010 

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My quote of the day is from a good friend now running all financial services and mcommerce for one of the major telcos in India: “[reaching the unbanked is a] goldrush with not a spec of gold dust in sight yet”.

The question most asked by MNOs and start ups: “what on earth is Obopay doing w/ $126M?”. Obopay and Nokia (Obopay’s largest shareholder) seem to be putting much emphasis on an embedded wallet application which will be an essential part of Nokia’s larger services strategy (Ovi) and Nokia Money. Nokia’s approach is “directionally” sound given that Apple has yet to succeed in monetizing either the app store or the iPhone (as a payment vehicle). However Nokia may be best serve its “network” of handset customers by opening itself (and mobile applications) to many payment types and formats. Nokia’s emphasis on Obopay significantly alienates both banks and MNOs both of which will be in a much better position to incent an agent network to market (and educate) consumers.

The Nokia Money “wallet” strategy is highly suspect, particularly in India.  As a quick background for those of you in the US, although prepaid accounts for only about 20% of subscribers in the US, internationally it represents approx 70% of plans (74% in Asia, 68% EU, 90% India). This means consumers purchase unsubsidized handsets which are not tied (or locked) to an MNO.

Nokia’s has developed a low cost handset strategy for India which will add a broad services component in order to maintain its 55%-60% market share (of 10M new Customers per month). Last week Nokia’s EVP of Handsets Rick Simonson gave an interview with the Economic Times and provided insight into Nokia’s plans on  service growth.

Nokia has a large number of developers, but you are way behind competitors when it comes to the number of apps you offer?

… We will win because our size and scale enables us to have an active dialogue with over a billion customers who use our products. We describe an active user as a Nokia consumer who has used at least one of our services or any other service in the past six months at least once and we have reached out to him/her at least once during this period (with his/her permission).

For instance, we can ask them: ‘Hi, we realised that you have activated Nokia Messaging on your E72. Would you like us to activate your Music Store too?’ And then we do it very simply. Thus, this active dialogue also opens up a very cheap way of marketing our services too. We have 80 million active users now within months of launching this concept. By the first half of 2010, we target to have 115 million active users and 300 million by end of 2011. …

Within India, a Nokia wallet will likely succeed in digital content (Ovi) but face tremendous competition (and regulation) for use at POS or for remote payment. India’s regulators recognized Obopay’s plans earlier this year and specifically formulated the RBI regulation with them in mind. The challenge for Nokia is to deliver value on both the existing bank and MNO networks, either separately or in conjunction with both. A more effective payment strategy may be for Nokia to provide an open platform that supports multiple standards for payment and authentication. Ovi and NokiaMoney have the feeling of a proprietary closed system… Google Android will compete very effectively here if this is indeed the approach.

Written by tomnoyes

January 19, 2010 at 6:18 pm


with 2 comments

mPayy Launches Free iPhone Mobile Payment App

12 January 2010

Interesting effort by USBank, the key investor and  supplier of: technology, infrastructure, operations and Reg E compliance. Think of this as “merchant focused” paypal lite.. Sell merchants first.. (0 liability fraud) then try to get customers… Agreement states payment limit of $500 per MONTH. Banks have been trying to get moving with a paypal competitor for quite some time. Historically USBank has spent significant (well intentioned) effort in trying to get other banks involved in its efforts through groups like BITS, Payment Round Table, FSTC, … Given USBank’s majority investment here (rumored $5-7M) MPAYY may be able to patiently build the business through merchant integration.. (a long tough road). Paypal is well established in the CNP space, and their momentum is increasing…. it is tough to start any new payment type without a significant market driving adoption. Even today roughly 50% of paypal’s TPV is on e-Bay. MPAYY will be competing against a very well established team at paypal.

The paypal team is not only ramping up its merchant integration, with partners like Chase PaymenTech, it is broadening both consumer and merchant accounts internationally. Given USBank’s history, my guess is that they are making a strong play with other large US institutions to collaborate on a “paypal competitor”.

With respect to a “bank driven” mobile play (non card).. Cashedge is the clear leader watch here. With penetration into 60% of US Deposit accounts as the transfer service for: BAC, Wachovia, Citi, PNC, … Cashedge’s new POPMoney service will not only compete on P2P and Mobile.. but beyond.

For a bank friendly mobile “Card” play.. when will someone partner with Apple in putting NFC on the iPhone? Expect something soon.. VERY soon.

Written by tomnoyes

January 12, 2010 at 12:54 pm

Apple Event – Jan 27

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In addition to the iSlate announcement, I wouldn’t be surprised if there are some significant details about the next iPhone and Payment Capability (NFC, Visa, Bank of America and AT&T). It could be just wishful thinking.. but there are just too many things lining up for me to think it is coincidence:

  • Rumored ATT/Visa announcement at end of Jan on NFC
  • First Data making heavy investment to act as TSM
  • Apple’s “complete silence”  on NFC to date
  • 3 mobile Start up vendors (2 tied to Apple) are in pre-launch prep for major announcement at end of month (?unrelated)

Perhaps I drank too much egg nog…. it seems impossible that 6 vendors could maintain radio silence for so long.

Written by tomnoyes

January 4, 2010 at 9:54 pm

Posted in mobile payment

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