Online Payment Congress showed strong focus on Mobile Payments

Thursday 15 March 2012 | 08:14 CET | Background

Recently the latest edition of the Online Betaal Congres (Online Payment Congress) took place in Amsterdam. This edition there was a strong focus on mobile payments during the plenary sessions.

The recurring theme of the plenary sessions was the increasing use of smartphones and tablets by consumers which means that, as Ed Nijpels from Thuiswinkel.org stated: “online shops need to offer as many different payment methods as they can”. A web shop needs to be accessible from a mobile phone but it also needs to offer the choice of paying through the mobile channel.

This was emphasised by the new trend of SoLoMo, which both Pascal Spelier from CapGemini and Eelco van Wijk from PayPal described: Social Location Mobile. Social stands for social media, through which web shops can listen to what their customers are saying about them, but they can also use social media to promote their products. Location refers to the location-based apps which most smartphone users have installed on their phones. Spelier quoted Gartner research which has found that 80 percent of smartphone owners have location-based services on their phone and half of them use location-based services that provide offers, discounts and specials based on their current location, while 75 percent of mobile shoppers take action after receiving a location-based message. Mo stands for Mobile and more specifically the smartphone user, as various research points to an increase in mobile usage, including mobile payments. Eelco van Wijk from Paypal indicated that PayPal’s processed USD 0.75 billion in mobile payments in 2010, had grown to USD 4 billion in 2011 and is expected to increase to USD 7 billion in 2012. Although price comparisons, browsing products and reading online reviews are the most popular actions regarding mobile shopping, purchasing products come in fifth place according to research from Nielsen shown by Spelier.

A further trend discussed was the convergence of mobile payments into a new ecosystem of financial institutions, retailers and mobile network operators. Van Wijk sees mobile payments as the start of a journey to a multichannel channel in the cloud, a convergence of online, offline and mobile. From the Pathe (cinema) app already two –thirds chose to also pay via PayPal in the app. He also pointed out that the most lucrative customers are those who own more than one mobile device as they make twice as many mobile purchases as smartphone-only buyers.

According to van Wijk it is essential to make mobile payments simple, although that does not mean that one size has to fit all. He emphasised that retailers should use SoLoMo to think about the customer journey before actual payment, to think about how does a customer shop via a mobile device. It isn’t simply about payments, it is also about demand generation, mobile advertising, about using location-based services, about bar code scanning and about loyalty.

With regard to NFC PayPal believes that there are too many parties in the value chain with too many different business models and services, who currently can’t find each other as there are too few NFC enabled smartphones and too few retailers accepting them. Therefore PayPal feels that customers and retailers will not wait for NFC.

A good example of non-NFC mobile payment is the recent trial between online shop Bol.com and Dutch bank Rabobank. They conducted a trial last year with Rabobank customers who owned an iPhone. The trial was the test for iDEAL Mobiel, the mobile version of the successful Dutch online payment system iDEAL in which various banks cooperate. Bas Winkel from Bol.com indicated that e-commerce should now include several platforms, including mobile, and that the customer needs to get the same level of service and experience on each platform. The pilot included the automatic forwarding to the customer’s Rabobank internet banking site via the Rabobank App, thereby following the normal Rabobank mobile banking rules. This meant that customers came to a familiar environment increasing their trust of using mobile payments. Overall the customers in the pilot gave the iDEAL Mobiel app a high mark with 83 percent feeling it trustworthy, with 80 percent indicating they would use it and with 74 percent saying they would recommend it to friends. Gert-Jan Rösken from Rabobank announced that the iDEAL Mobiel app would go live in the second half of 2012. There is now a blue print for all banks to use but each bank can and will roll it out according to their own schedule.

According to Rösken more innovation is possible with an App than with NFC, although Rabobank also has several NFC projects taking place. If Rabobank will focus more on iDEAL Mobiel combined with Vodafone’s recent deal with Visa, then this could potentially mean another negative situation for the Dutch Sixpack consortium as they are not likely to start any NFC trials until 2013 and so could be missing the boat of increasing mobile payment possibilities and awareness among Dutch smartphone users. Although even further away from full implementation, the European Banking Association is aiming to start its first technical trial of MyBank in June 2012. This European version of iDEAL is initially designed for online payments but Fatouma Sy from EBA told Telecompaper that they are also planning to launch a mobile version.

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