Archive for mobile

virtual payments nirvana

Posted in General with tags , , , , , , , , , on July 4, 2010 by newideasconsult

I often converse with companies and individuals seeking to ‘reach the un-banked’ through various technology solutions, either based on cards, ‘e-wallets’ or mobile phones, and am quite surprised when during the conversation the issue of where the cash for such solutions would be processed is met by some confusion or inaccurate responses by those very business people.  I specifically state it like I do, because ultimately no matter how ‘sexy’ or ‘sophisticated’ or ‘uncomplicated’ such a solution sounds, it always needs bank accounts behind it.  The unbanked will still need a place where cash is loaded and dispensed and those funds found within this solution will still be settled into and out of the solution owner’s own transactional (bank) accounts under customers instruction.  All solutions I have seen and or experienced work this way, though many may hide those bank accounts under several digital layers or they process those virtual account transactions through individual physical bank accounts or combined project bank accounts.  So to call these solutions anything other than banking solutions would be wrong in my opinion.  The line ‘how to reach the unbanked’ would make more sense if it reads ‘how to bank the unbanked’.  This may result in more regulatory appreciation by the ‘non-bank’ owned payment solution providers and their customers in the future, but is that such a bad thing?  It still stuns me that many people use PayPal for example without reading its own T&Cs that clearly define just how little regulation it is required to abide by…  The rush to new technology or the latest fad payment solution should become tempered when merchants and ‘account holders’ alike realize that there is no ‘virtual payments nirvana’, no silver bullet solution for the unbanked, and no ‘easy’ compliance process, though history shows otherwise.  If they are offered such, I would suggest they take a long hard look at the company’s terms & conditions, as well as the regulations they are subject to or not.  ‘Access to cash’ is what technology either makes easier, cheaper, more difficult or more expensive, and most if not all new ‘virtual payment’ services give you access to your own funds or enable you to access digital services using cash. What you as both a customer and a merchant need to figure out is if the choice you made makes your life easier and more risk free, and your banking and or payments less expensive, or not.  Your cash either sits in a bank account in your name or in someone’s else within such solutions, and they are either regulated or they are not.  For many customers, such clarity of the issues comes too late.


Payments future landscape

Posted in General, Innovation, technology with tags , , , , , , , , , , , , , on April 25, 2010 by newideasconsult

These past few months have been rather interesting in terms of the payments industry and the subtle shift in consumer perceptions.  One of the most amusing to me has been the clear lead Paypal has in the e-venture payment space to any other brand, card associations included.  This may not be a good thing in my opinion, but undoubtably it has happened.  Ask any e-venture owner what payment method they will be accepting on their platform or site, and at least 7 out of 10 will tell you Paypal.  Not Visa or Mastercard, but Paypal, regardless the obvious issues around its regulation and the bad risk prevention policies it employs.

This to me indicates a real challenge traditional payment companies may face during the next few years, which is how they can win back the market from ‘upstarts’ such as Paypal, Moneybookers, mobile networks, and the many alternative payment methods in the market today.  With the strength of the Paypal brand on the Internet, and to me this means their brand strength in terms of the Internet savvy generations, as well as the rapidly growing mobile payment services, what will the PCI (payment card industry) founding members (Visa, Mastercard, Amex, Diners and JCB) do to retain their brand strength or for some regain their brand strength?  Seems to me that as one accepts virtual payment instruments and mobile phone based solutions as the way forward, it removes or distances the payment methods used from a card, the base tool used in the credit card growth the past 4 decades.  Once NFP, mobile payments, and the next generation of Paypal type solutions have rolled out, the card brand will be completely hidden, and in my view, forgotten in the not-so-distant future.

Still some way to go before we can say goodbye to the plastic card (magstripe and chip), but it seems to me the subtle shift in market direction may just ring in that future much sooner than many may have thought.  Unlike the media industry’s late wake-up to the power of virtual distribution, the card payment industry may just have enough time to learn the new rules of the payments game, and hopefully apply them wisely to retain their future market share and brand strength.  Some may not be able to transition, as the departure from card may be too big a shift in paradigm for them, but those that do would have their years of payments experience married to new tech solutions that could eat the Paypals of the future for breakfast.

Demand driven mobile solutions

Posted in General with tags , , , , , , , , , , , , , , , , , , , on March 20, 2010 by newideasconsult

One of the issues we see surfacing during an economic drought is the demand test for products and services, especially in the ICT market.  These are the days of tighter budgets that see suppliers of services forced to shut down some services or products because they’re not being used.  Previously generous budgets allowed free reign in launching service after service, and short of our own egoes we were pretty much untethered in terms of what those offerings were.  To be the first with a service tended to be more important at times than giving the customers what they want.  I think today this type of approach has undergone a radical change and we are quickly starting to see a more realistic picture come to the fore in terms of what customers want.  For example, smart phones have changed many things for the consumer and quite often each model’s launch also causes a wave of goodwill that produces the most elaborate of services, supplied by retailers, content providers, and even banks.  Internet banking was slow in its initial uptake by financial insitutions in the late 1990’s early 2000’s, and I often wonder whether that tied to looser purse strings have seen these same companies now rush to launch mobile services to their customers regardless the need for them.

Nowhere can this be seen clearer than with mobile banking, where solutions have popped up from everywhere by everyone and sold as the ultimate customer service by many, including myself.  Mobile applications are definitely growing in demand , but I believe we may be missing some very obvious signs of what the customers actually want or need.  Today’s mobile banking product range reminds me of the Internet boom years, where everyone, regardless of country or creed, are being sold the most fantastic, high end, feature rich applications you can dream of, from balance enquiries to inter account transfers to P2P payments to 3rd party billing to prepaid MLM sales, and many more.  However the iPhone in the middle of Manhattan delivering the most wonderful financial application to a very appreciative sophisticated market, will fail miserably in Ho Chi Minh City, where an equally sophisticated market would be utterly frustrated by the same application.  A Blackberry service in Johannesburg is equally fantastic in bringing the world to its user, but fails fantastically to do the same for the farmer in Kimberley.  Yet we find that corporations behind these applications keep trying to sell them to everyone, from the East to the West, from the businessman in London to the farmer in Philipines, and time and again they fail to satisfy their customers or revoke the service completely.

Two reasons that jump to mind would be the wrong product for the wrong market, and the other a very crowded market place.  I have had some interesting chats with fellow technologists about mobile applications that may work in one country, but will suffer in another.  Person to Person payments must be one such an example, with the negative press recently caused by Citi Bank’s decision to shelve their P2P mobile service last December, causing quite a few hot debates.  P2PP works, just not in the USA right now and where it does it is not yet profitable and won’t be for some years to come.  Americans (and Westerners in general) have choice, and lots of it, and so thinking that they will rush to their phones to start transferring funds from one to the other, when they have many services in the market already enabling such a transaction, services that are known and trusted by those who would use P2P payments, was ridiculous.  Forcing those same parties (or at least one) to have a Citi bank account to enable the use the service was even crazier and showed a lack of understanding the P2PP early adopters market.  Another reason would be that a crowded market can often delay the take up of a new format of an old offering, which is exactly what mobile phones offer.

P2PP on the mobile platform works fantastically well in a 3rd world environment, minus a lot of Western bells and whistles though.  Banking applications in Vietnam or Zambia or South Africa or where ever, are often so basic in their format that the Western market would scoff at it, but they work and their use is growing rapidly.  This is because they offer their customers just what they need, a quick no-pains way to send money to someone.  They work because quite often they are the ONLY service available to the consumers in these regions that offer such a facility.   They work because they are almost always designed to work on any Java enabled phone, even the most basic models.  SMS banking too is similar in its acceptance in these regions because again it is an unsophisticated service that does what it says it can, and is easy to use.  Again no need for high end smart phones or changes to customer practices.  Mobile phone users can SMS, most do, and basing such a service on this most basic of mobile skills, makes a lot of sense to do.

For me and others in the industry, the mobile phone offers only another channel for the consumer to transact and access their accounts with, nothing more. Mobile applications too are for global markets what horses are for courses, to each its own.  You cannot apply a universal approach in product or service design to the mobile channel, and you cannot launch such services globally simply because it is fashionable in one city, country or region.  One of the most important considerations to make as a mobile service application developer is to ensure local representation or experience in the design team or you may miss the mark altogether.  Doing so for each market you enter, may sound like overkill, but could save you considerable losses in the long term.

There is so much more on this topic and my post has already been hacked to pieces to fit, so for now I will lay this issue to rest for some new post in the future.  Your comments though are most welcome and your opinions equally valuable in the debate about what works and why.

‘Steve apples HTC’ – or in plain english ‘Apple sues again’

Posted in General with tags , , , , , , , , , , , , , , , , , , , on March 3, 2010 by newideasconsult

I awoke this morning to news that Apple is suing yet another mobile phone company, HTC.  My post heading should explain my initial reaction quite well! It seems Apple, usually known for their ‘innovative’ products, are becoming known for suing instead.  So I am inventing the term ‘to apple someone’ which means ‘to sue someone in a technology dispute’.  I’m getting a little tired of reading how the new kid on the block has turned around and sniped just about everyone in the phone industry for so called patent infringements, but I guess that is the prefered strategy for Apple this decade.

Having said that, the blame for this crazy litigious wave we have seen the past few years should not be placed at a vendor’s door, but rather at the US Patent Office that now really really needs an overhaul.  You cannot be a under funded short staffed agency in the US acting as a doorkeeper to innovation across the globe using an old legal framework, and continue to make sane and sensible decisions affecting millions of dollars, successfully and fairly. The US Patent Office operates under tremendous pressure, tries to process millions of patents, and makes badly informed decisions because of that very lack in resource, funding and an aged mandate, leaving a minefield of problems for future generations that will cost billions to resolve and cut innovation down severely!

Technology is so fluid these days and software changes so rapid that keeping track of those changes and accepted norms, as well as the unique understanding of where software will go naturally in each of its publically used formats, i.e. phone, computer, and so on, requires a very very different look at how patents are awarded.  Just remember that ridiculous award to Amazon for one click purchasing way back in 2001 that caused such a ruckus amongst everyone when Amazon started to sue others because of this nefarious patent award.  Anyone in payments at that time knew that consumers wanted to complete the payment process as rapidly as possible, so the clicks needed to be reduced, a natural outcome of the booming e-commerce initiatives over that time and since.  Awarding a pretty flimsy ‘idea’ with a patent to someone with deep pockets absolutely harms the industry and the consumer.  Innovation simply dies with it!

Now the triggers of Apple’s various disputes with Nokia, HTC and others may actually be based on what they feel are real infringements to their ‘patents’.  I would dispute whether ‘patents’ would have been the correct legal framework for ideas that to me seem pretty close to how anyone will work with a device like a mobile phone.  They should never have been awarded those patents if it was not truly ‘innovative’ and required protection.  Time and again the USPO do this and time and again it is left to lawyers to sort out the mess.  So all the best to Apple’s legal team for recovering ‘losses’ for patent disputes – if the patent says it is yours, and someone else tries to make money from it, apple them, I agree!

Shame on the USPO who must take responsibility for the mess that is the legal minefield of the software / device patent landscape today!  Apple and others are only using the potholed approach you created to leverage money out of ideas that should never have been awarded patents in the first place.  When it affected only the US economy and people, it was already a shame, but at least limited.  However the mobile wars are going to spill over thanks to the approach Apple have taken to prevent the importation of devices during disputes they create (imagine how that can be abused by vendors in the future 😦 ), and globally it is going to cause havoc unless this mess is fixed and fixed soon!

The ultimate future for the mobile phone

Posted in General with tags , , , , , , , , , , , , , , , on December 14, 2009 by newideasconsult

Today I was asked my view on what I think the future holds for the mobile industry. To be frank, I suddenly realized I did not really know, a scary yet exciting place to be I guess. O, I spoke of the consumer reach the phone has that no other channel can ever match. I mentioned how the content owners are launching commendable efforts to expand their markets, by using the mobile channel. Nokia comes to mind here. I thought of mentioning the iPhone, the Blackberry and the Android powered phones that all have fantastically smart operating systems with some nice applications, but then remembered that those phones reach less than 2% of the total mobile market globally, and that the same market is dominated by prepaid services not contract. So it became tough to think of what the future holds for the mobile channel and therefore the mobile phone!

I think automated localized application results (think a hybrid of google search, google maps and google checkout for the mobile, and you have something of what I’m talking about) may be one of the many good futures for a mobile platform.

Maybe you have a better idea of what that future will look like?

Nokia Calling All Innovators Africa 2009 Awards – Cape Town winners

Posted in General with tags , , , , , , , , , , , on December 13, 2009 by newideasconsult

Cobi Interactive should be warmly congratulated for their fantastic achievement this month when they placed first for the 20fourlabs’s Afridoctor mobile application they developed at the CAIA 2009 awards.  They also placed 9th for Turn Left at the Barrel by Turn Left at the Giraffe.

This is a fantastic achievement because Cobi are still in their first year of operation!  As is my habit, congratulations to this wonderful team of technologists who managed to achieve so much in so little a time, and especially as they are fellow Capetonians!!!

Fundamo in Pakistan

Posted in technology with tags , , , , , , on October 17, 2009 by newideasconsult

Telenor Pakistan and the Tameer Bank announced this week (Oct 14th) that they are launching branchless banking based on the Fundamo product.  This is a wonderful achievement for a team from South Africa who have long strived to deliver their quality product abroad.  Well done also to Telenor Pakistan and the Tameer Bank for selecting a truly South African solution for their mobile banking project.