US Mobile Payments Market and What Are Apple and the Other Big Boys Up To?

Seems like more US mobile payments announcements are happening – Do you agree and what does this mean?

I agree. All year the number of mobile payment announcements has been on the increase. Last week was an especially hot week for rumors. It is increasingly confusing – what is happening, what does it all mean? Therefore I am writing a series of blogs to explain the market in a way that non-mobile payment specialists can understand. That way as you read news and other commentary it will provide a framework for what is going on. In some parts of the world mobile payments have already gone mainstream, but the US is behind. I expect in the next few years that will all change.

But to specifically answer your question about what it means – it means that mobile payments are happening in the US and it will be big.

What is Apple up to?  Are they interested in competing with Visa or Paypal?

This will be a long answer but worth it…so bear with me while I talk about Apple.

Apple is a clear  market maker  in “Open Mobile” (call it what you want – mobile 2.0, social mobile, convergence of internet and mobile – I call it Open Mobile).   They  took on that role with the success of the iPhone and App Store. Others had to  follow – Android, Windows, Blackberry etc. Apple led the way and showed everyone else how it is done.

Apple for a while has been rumored to be interested in and working on mobile payments. This is very big – especially given the strength of Apple’s great innovation track record.  So when they talk about getting into mobile payments – that is big news because they could have that same kind of influence they had with Smart Phones – change the game and then everyone else has to catch up.

Really, Apple is  already doing mobile payments and has been since they launched the iPhone. Their solution  was built on an existing payment relationship – iTunes. Most of their iTunes users long ago set up an iTunes account to download music on the web. As part of this account, they probably linked a payment card (credit or debit) and may have loaded value from an iTunes card they bought at a store. Since they have so many users and music downloads – the volume is very high and the users trust this as a reliable, easy, fast way to pay for music, games, and other digital content. It is very big (160M users have cards on file, volumes are massive) and it is done globally. An iTunes account is used for music on an iPhone or an iPad. But in addition, Apple has begun to open up its payment platform and make is accessible to others as iTunes users have begun to use it  for purchasing applications from the app store.  Again – it’s easy, users do it all the time.

What else might Apple do?

They are a great innovation company – and mobile payments are all about innovation. Really hard to predict exactly what they will do but there has been two separate waves of rumors – one is that they are going to launch something around proximity payments via NFC, the other rumor is that they may make a bigger play in digital content payments by doing something with mobile carrier billing payments.

Can  you say more about Apple and NFC?

NFC is where the consumer can now “wave or touch” their phone in a real world situation to make a payment. This means there will be a special chip in your phone and that chip will be able to talk to something else – a merchant terminal (where you swipe you card today) might be modified, or some other new kind of machine or display will allow you to do transact by waving or “touching” your phone. Another phase used for this is contactless payments – called this since these systems usually work when you are close but the devices don’t actually have to touch. It is better than Bump or Bluetooth for some applications because it can be faster, more reliable, and more secure. That being said – it requires a lot of physical infrastructure for it to be useful in enough places for anyone to care. And you have to have a new phone that has the right hardware and software.

When Apple puts the NFC chip in their phone and starts to build their own applications or encourages others to build applications – then things could happen quickly.  Just like the iPhone broke down the mobile carrier’s  “walled garden”, this move could open up payments and they could help create new business models for in store payments. They could also couple this with location based ads and other applications. Apple drove the development of new business models with the music and smart phones – depending on what they do they could change the rules by which different players interact to do payment and commerce. So they have the potential to move the NFC world forward significantly by developing a new tapestry of the hardware, software and business models to move it forward.

This is what is needed since NFC technology has been around a long time but mostly in pilot because nothing has ignited the market. And since the infrastructure will cost Billions – someone really needs to get things moving to make it happen. (Obopay works all over the world and in only a few countries do we see scaled NFC applications. Most places in the world it is all about remote payments.). Apple moving into this space should ignite the market – and get lots of folks moving faster. But as it moves faster it will be much bigger than just Apple.

So is mobile payment in the US all about Proximity Payments and NFC?

Here are things to remember about NFC:

• Apple is not the only company that can ignite the market. There is a rumored that three of the four major Mobile Carrier will form a new company to work together on making this happen here. This announcement and their combined investment can get things moving – but only Apple, with the success of the iPhone and now the iPad is the leading Open Mobile innovator. So Apple’s moves will have a particularly powerful impact. Some players won’t take a Mobile Carrier JV as seriously because those company structures are more complex and have failed in other places in the world. I personally take both things seriously and think they both have lots of potential. Of course they are other large players, like Google or large merchants, that can make a move and have a big impact also.
• NFC takes time – it is a massive physical infrastructure upgrade and will require a new ecosystem for payments to be defined and successfully rolled out. Japan – where it launched many years ago (date?), is just beginning to see adoption. There it was used primarily for convenience stores and trains – where time is of the important and you have smaller value payments. So it will be big and it will take time.  In the US we have some of the physical hardware already – because we already have many merchant terminals accepting NFC cards. That being said there is still work to make sure the business relationships and payment infrastructure to leverage the card based solutions in mobile.
• Since Open Mobile is changing everything, NFC may not be used as much as some predictions by market analysts. Some things that are proximity may move to remote. Just like the internet moved lots of in store shopping to web shopping. When we have all kinds of payments and applications on our phones – some of the things we buy standing at a Register or a shopping line, may move to remote. Definitely when you buy remotely but maybe even in a store – we may not have to go through the today checkout process in the future. Sounds futuristic but we have all the building blocks today to make lots of changes in commerce.
• The same technology can and will be used for non-payment activity also. An example is mobile boarding passes. Some airlines allow you to download your electronic boarding pass and then you take a mobile bar code displayed on the screen to check in or when you board. This could also be done with NFC solution. In Japan you can use NFC to walk up to a poster and hold your phone and you can get more detailed product information.

So Proximity and NFC will be a part of mobile payments, but this will take time. In the meantime there are many other categories of mobile payments; remote purchase of digital content, buying from App stores, buying on the internet, buying from a mobile application, paying bills, texting a donation, paying a small business remotely and person to person transfers. All of these will be big and those will most likely be mainstream long before the physical infrastructure for NFC is fully built out in the US.

What about the latest rumors?

Last week Boku was rumored to be in conversation with Apple and Google. Speculation is that there is a potential acquisition by one of them that will happen soon. Boku is not the only company in their business, there are others -  Zong and Bill to Mobile to name two others.  These companies specialize in allowing users to use their mobile phone number to purchase digital content on the web using their phone number and their phone bill. It is a simple check out, simpler than putting card information into the website, and then the user gets the item immediately. The user pays later when the charge shows up on their phone bill.  Now that people are buying digital content directly from their phone – the potential is the same is to do it all directly from the phone.

So would Apple or Google buy one of these companies? Not sure. So what do these companies do?

• They really aren’t exactly payment companies. They are gateways to mobile carrier billing for now. But this is important since people want to purchase digital content and this is a really easy way to do it. The mobile carriers get additional value added service revenue whether they are involved in digital content distribution or not. It also is great because these distribution and payment systems can be international. A buyer can be in one country and the digital content creator can be in another. It can cross boundaries. It does require lots of relationships behind the scene – but once they are established, it all works.  The fee paid the mobile carrier varies depending on where you are in the world – but in our country it is probably as high as 35%. Also the content provide payment is delayed – again differs depending on where in the world. But it can be 45 – 120 days before the content provider gets the money. Still it is a benefit for them since it increases volume significantly.
• This mobile payment application is helping create consumer behavior around using phones and phone numbers to buy things. This can be built on by other solution providers – since consumers understand how to do it and that it works – it builds trust and understanding. Since this method doesn’t work for everything – like buying more expensive items or physical goods- providers that support that will have less training and evangelizing to do. In fact, consumers will start asking for this.
• These solutions aren’t really that innovative in that they have been available in the market for some time. They are just new to us and are gaining popularity. In Korea, it was started by the mobile carriers developing systems to do this but they were spun out and formed independent companies. When I visited Korea in 2008 the two companies that did this told me that 90% of all digital content on the web is purchased. Their economics are more favorable to the content providers and I think that is partially why it has become so dominate.

A few weeks ago AT&T announced that it will enable Boku, Zong and BilltoMobile begin interfacing directly with  the AT&T billing system. Previously their integration with AT&T were through premium SMS systems which were less reliable. This is an opening up of carrier billing which will help these solutions grow.. Apple and Google partnering with these companies would increase their role in mobile payments for digital content. Apple or Google could also replicate what those companies do, but it takes time to build the mobile carrier relationships around the world. Because of the economics of carrier billing, this solution won’t really work for non-digital content purchases or digital content purchases that is very margin sensitive.

What are the take away’s

What Apple does is important but we will have to wait beyond the rumors to see what happens. I will say that there are many large opportunities for mobile payments and it is not just about digital content or proximity payments. There is significant opportunities in remote shopping, small and medium business, and money transfer.  Just a few numbers for you to keep in mind.

-          Over $75 Billion in money exchanged between families in the US alone will quickly go mobile

-          70 trillion transactions per year that are cash and check today will quickly go mobile

-          80 percent of sellers of goods and services are underserved today without access to digital payment acceptance (credit/debit card and electronic check acceptance). Huge opportunity for mobile payments

These areas are all where P2P payments come into play and will prove to be a large market opportunity too. In markets where P2P is fully implemented it represents over 50% of the mobile payment transactions. Users want P2P for money transfer, casual payments, payments to individual merchants, cross border remittances and check replacement. This is a big opportunity and right in Obopay’s sweet spot.
Back to Apple – they are clearly already big in mobile payments with iTunes and the App Store. They are going to do more – most likely a bigger play in online payments and in store payments, and they are not the only big player that is actively looking at this space. I expect Apple’s focus will be as it always has been – on innovation and delighting the Apple customer. What they do, will make others move faster. That is their role in Open Mobile.

Two more blogs in the works; one on the rumored AT&T, Verizon, and T-Mobile JV, the other on segmenting the mobile payment space by types of users and uses.
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1 comment November 9th, 2010

Tell us about your visit to Washington DC?

The State Department had a half day event for employees and guests about Mobile Money. Well attended and great interest in mobile money for “development” (improving political, economic, and human conditions around the world).

The group was diverse in experience – which is a challenge for a presenter. Since I co-presented the first session my goal was to create a common understanding of mobile money, how it is successfully implemented, and what are the benefits. I wanted to make sure the audience came up to speed quickly and got beyond the simplistic view.  The feedback was overwhelmingly positive about the opening session (partial credit goes to Jan Chipchase my co-presenter who started the session with a look at the needs of under-served people around the world) .

What is the role of State in Mobile Money

In conversations I learned that although State is enthusiastic about mobile money for development, their engagement model is still to be determined. They want to see these solutions go to places like Haiti as well as large markets like India. Yet I don’t think they yet know exactly what their role should be in helping make that happen. I was able to give them some initial input and plan to follow up in the coming weeks. Here are some of my thoughts on how they should get involved:

1. Encouraging financial services regulatory certainty for mobile money. As they “encourage” they have vast resources of knowledge and experience on regulations.  Obopay operates in diverse regulatory environments – which is one of our great strengths. Yet it is prohibitive to launch mobile money in markets where regulation is uncertain.  State has the influence and resources to accelerate this in some cases.
2. Discourage anti-competitive and anti-innovative practices. We have seen around the world financial and telecom actors take action to inhibit new entrants and innovation. The State Department can encourage mobile network operators and financial actors to adopt open access practices. This will encourage innovation and create a vibrant market. And this will in turn translate into more services reaching more people that need them.
3. Help trusted actors connect. Especially important in challenging markets. We have passed the test and demonstrated we are trusted to US regulators as well as regulators and partners around the world and, as a result, we get inquiries from many developing countries (for example Nigeria, Pakistan). We would like the State Department to help local actors know about us, since we have the trust of US regulators. And we would like their help in understanding which local actors are good partners – especially in challenging countries. Of course, we would want this for the industry  – not just for Obopay.

Tell us about your other meetings in Washington DC.

I have to confess that although I have been to DC many times, I have never reached out to talk with law makers. I met with staff from 6 Congressmen and 1 Senator. I was impressed with how accessible their offices were and how open they were to discussing important topics with me. I wanted to focus on legislators who were involved in foreign affairs, and banking regulations—two areas where we have a great deal of experience to share.

All were keenly interested in mobile money – learning more, understanding how it works, asking how they can be helpful. Most meetings were primarily initial discussions but clearly there is opportunity to engage government in the dialogue and policy setting to ensure we maximize the opportunity to create growth and jobs.

One surprise was the lack of cross government coordination. I ended up educating people about what activities were going on in other agencies – treasury, state. Although we are a collaborative government in spirit, our size and complexity makes cross functional sharing difficult.

This administration is young and clearly tech enthusiasts. I am hoping that it will help build more communication between the Legislative and Executive branches. While most offices where watching CNN or CNBC – maybe in the future they will be reading blogs and watching tweets from each other. No question that social media should have a strong impact on intra agency communications

Do you expect follow up and results from your visit?

Hard to say. I know it was worthwhile to make the connections. I will keep in touch with many of the groups and individuals I connected with and we shall see what comes out of it. I have to admit it made me a little patriotic coming to Washington and meeting with different organizations. Despite all our challenges, we have many great qualities. One is the number of smart, passionate, hardworking people working on the “Hill”.

1 comment August 5th, 2010

ATT, Verizon, and T-Mobile reportedly have formed a joint venture for mobile payments

What will be the impact?

For a time, we’ve been saying in this space that the tipping point for mobile payments in the United States was upon us.  A story covered by Bloomberg news yesterday serves as corroboration of this belief. Shortly after the final bell rang on the NYSE yesterday, Bloomberg reported that unnamed sources claimed AT&T and Verizon Wireless were planning a joint venture(JV) to uproot the hold traditional plastic credit cards have on electronic transactions by developing a smart phone based payment system. T-Mobile was also reportedly a minor player in this consortium.

• The pilot of this JV is reported to be in 4 cities with smart phones and proximity payments as the key application (instead of swiping a card you wave your phone in front of a special retail terminal).
• Discover and Barclays are participating as financial services partners
• They don’t yet have a CEO for the JV and are undertaking a search.
• This is being seen as a potential threat to Visa and Mastercard and their 82% share of consumer retail payments in the US.  This could also have a big effect on banks since they have significant revenue from “interchange” – the fees tied to MC and Visa transactions.

It is too soon to predict the full impact and the speed at which this new venture will be rolled out.  If, however, it is successful the potential is huge since more than half of all the new phones shipped in the market today are smart phones. What is predictable is a response from the other players in the US. Some, like banks, VISA, Mastercard, retailers, have had a “wait and see” attitude about mobile money in the US. Compared to their counterparts in other parts of the world, the US-based companies have been slower to invest in mobile.  This news will accelerate their plans, serving as a call to action for financial institutions in the US to quickly begin planning how to enter the mobile payments market, not just launch mobile banking solutions.

Is the opportunity for mobile payments in proximity payments or wireless payments?

Both, only proximity payments take a lot more time to gain broad adoption.   In Japan it took a decade.  The opportunity is very large – the biggest segments are retail, check replacement, money transfer, and online commerce.  All four represent significant opportunity.

One of the big questions is what will get things started here. We think the US market is more likely to ignite around wireless payments first, then move into proximity due to challenges in bringing together the number of players required to roll out proximity payments and the expense involved.  Once started, people will expand their use to other types of payments. We see this in every country where we are – it starts with one compelling reason but once the consumer trusts it they are looking for other uses.

This  venture into retail proximity payments could change how we pay for things when we are doing in person transactions. Visa and MasterCard were responsible for processing 82 percent, representing $2.45 trillion of consumer spending on cards in the US according to the Nilson Report. If mobile payments from the mobile operators take off, this could be impacted. This would also impact the banks since they generate revenue from VISA and Mastercard payments.

Do you think the mobile carriers will be successful in payments?

They can be. And mobile carriers playing a lead role in mobile payments in the US may be a concern for financial institutions, which have traditionally played that role here.  We see and even work with mobile carriers in other markets who are creating successful solutions. However, in the US the mobile payment market is the financial service providers’ to lose. But they must act quickly, and move into a full range of mobile money  transactions because the carrier efforts have already begun—and they have already seen some success in other areas like “text to donate” and digital content billings. In the US consumers are first looking to other financial service providers to provide mobile money. If they move quickly, they definitely can be a part of consumer solutions. There is a window open right now for financial service providers to move quickly into wireless payments, since proximity payments will take some time to rollout.   The necessary physical changes required in phone and merchant terminals will increase the time for implementation.

How will Obopay respond and what does this mean for Obopay

We offer a comprehensive mobile money service operating in 4 countries. Today, we offer our partners Mobile Money solutions which will allow them to deploy their own branded mobile money service. Designed to make the bank’s accounts or existing prepaid offerings the anchor for all current and future mobile money transactions, the service combines complete brand control, and a full range of mobile transactions and applications with simple low-cost integration and deployment. Obopay’s Mobile Money for includes the ability to send and transfer money as well as payment card acceptance available to everyone. It can be implemented in 30 days or less.

We know that this JV will accelerate interest in mobile payments and with it the adoption of our service. And those financial service providers that prefer to get the capability from MasterCard can adopt MasterCard’s Mobile MoneySend or FIS Global’s People Pay solution–both of which are offered in partnership with Obopay.

August 3rd, 2010

Obopay Speaks at the US State Department Today

What is Tech@State Mobile Money?

The US State Department‘s mission is to “Create a more secure, democratic, and prosperous world for the benefit of the American people and the international community”. It reports to Secretary of State Hillary Clinton, as does the Foreign Service.  It is the arm of the government focused on foreign affairs.

Tech@state are conferences to give state department staff an opportunity to learn about important technology trends.  On August 2, 2010, the State Department will host a Tech@State focused on Mobile Money. They will address the following key questions,

1. How do we scale the mobile frontier, leveraging technology and partnership for sustainable development and financial inclusion?
2. What do case studies reveal about success and failure?
3. What are the applications of mobile money and its implications for U.S. foreign policy?

They expect around 250 people to attend in Washington DC and then more through remote participation (embassies around the world). The sessions will also be web broadcasted.

I am co-presenting the opening talk entitled “Scaling the Mobile Frontier: How do we leverage technology and partnerships for sustainable development and financial inclusion?” My co-presenter is Jan Chipchase, Director, Frog Design.  Obopay’s perspective is unique since we are delivering mobile money on three continents, in four countries, and our service operates in diverse banking and payment market conditions from the US to India.

Why is US State Department interested in mobile money?

People and organizations working on foreign policy are keenly interested in anything that has the potential to create a more secure and more prosperous world. Although it is a very new area, we already know that mobile money has been shown to contribute to increased economic opportunity, improved quality of life, and enhanced security.

Most of the world still is heavily dependent on cash for personal, business, and government use of money. In India, for example, 91% of all payments are in cash. Cash can be lost or stolen; is expensive to handle; is difficult to trace activity and detect illegal usage; and can dramatically increase the time and resources needed to make a business or personal payment. Mobile money changes people’s lives by bringing mobile banking and electronic payment to people and small businesses who have traditionally had limited or no access to these services.

The State Department sees the potential of mobile money from many angles: economic growth; political security; the empowerment of women; health care payments; enabling commerce, especially for rural markets for supplier payments; and ,of course, the big goal of financial inclusion (bringing full range of banking services to underserved people). There are five billion mobile users but only 1.5 billion people with good access to banking. Mobile money has the potential to bring banking to everyone with a mobile phone.

What is the social and economic impact of Mobile Money?

Mobile phone adoption is unprecedented – reaching over 80% of people in a fifth of the time it took for landlines to reach similar penetration. The initial successes with mobile money are demonstrating the same unprecedented growth. Early indicators are showing that the same breakthrough in adoption will happen with Mobile Money.

In two years in Kenya – two years since the start of mobile money – over 38% of households have at least one mobile money account according to William Jack of Georgetown University and Tavneet Suri at MIT. In contrast, after five decades of traditional banking, only 22% of adults have bank accounts.

Financial Inclusion

In Africa, only 5% of the population of most countries in banked. There are now approximately 18 million mobile money users in Africa. It is climbing by approximately 35 thousand per day.   In India, 41% of people are unbanked and traditional banking is struggling just to reach 500 million people. Yet India now has over 600 million mobile phone subscribers and a strong retail network to service those users. The potential for mobile money in these markets is huge – and the impact it will have on the people, the businesses and the economies will be significant. India has been slower to rollout mobile money for two reasons; first it is a bigger country and more complex implementation by the nature of the market; and second, regulators have been slow to establish the necessary guidelines–although that has recently changed.

At Obopay we are working with Nokia in India. We have started our rollout after a successful pilot in Pune. We believe that in India, although it will take longer to get started than in Kenya, once established we will see the same rapid adoption that was experienced in Kenya.  Because we also have an implementation with the fastest growing mobile operator in Kenya (YU), we see firsthand the similarities between the two markets.

Scale this around the world, and you can understand the full potential. GSMA estimates that around 2 billion people who have no access to bank accounts already have mobile phones. That number is expected to rise as mobile phones continue to grow in emerging markets.

Tell us more about what is happening around the world?

We are seeing tangible savings for mobile money users around the world. This comes from reducing transaction fees, and lowering transport and time to transactions– sometimes dramatically.  In Senegal, paying the water bill took three days (two for travel and one standing in a Queue). Now the rural people can load money in their village and pay electronically.  In India, rural businesses can now send payments to suppliers in the city. This reduces travel time, speeds deliver of supplies, and increases safety because they don’t have to carry cash when they are traveling.  And in the US, we are helping families and small businesses to save time and money with a better way to pay and get paid.

We are also seeing it start with one use – money transfer in Kenya, remote top up in India, pay your water bill in Senegal. But once it starts, consumers begin to expand their use, and the benefits they receive. GSMA calls this moving to more sophisticated payments, creating stronger financial literacy that empowers life and work.   We encourage this by adding more uses for the service – although we always focus on driving adoption with a simple value proposition.

Ironically, the  number of unbanked consumers taking traditional bank accounts increases after exposure to mobile money. Therefore, this promises to be a good standalone business but also will drive people to other traditional bank products.
For many, Mobile Money is the first time they have created any tangible financial history. This allows a user to build up a documented history of good behavior. That financial identity will be useful in assessing their qualifications to receive microcredit and other financial products.

Is mobile money important in the US or just emerging markets like India?

Mobile money clearly will bring better affordable access to financial services for people who need it. But it also provides benefits to banked people, providing more convenience, ways to connect better to family members and young people  And for small businesses, it gives them a better way to get paid. It also allows for the elimination of checks and cash – which helps the environment by using less paper and gas for transport. In the US most people have bank accounts, but there is a growing number of families considered underserved by traditional banking. Both groups can benefit

What else are you doing in Washington DC this week?

I am meeting with Congressional staff members “on the Hill”. I have requested introductory meetings with people involved in the following committees. My goal is to make sure they understand the full potential of Mobile Money.

House Committee on Financial Services

Subcommittee on Domestic Monetary Policy and Technology

House Committee On Foreign Affairs

Subcommittee on Africa and Global Health
Subcommittee on the Middle East and South Asia

House Committee on Financial Services

Subcommittee on International Monetary Policy and Trade

Senate Committee on Financial Services

Banking and Financial Issues

State Department
International Communications and Information Policy

August 2nd, 2010

Mobile Money Is The Most Important Innovation In Banking In 30 Years

Mobile Money is reaching a tipping point in the US. I just returned from traveling around the world meeting with bankers discussing their successes with mobile. All the bankers I talked to are working on mobile banking. But it isn’t just about the rest of world anymore – it’s happening here in the US as well and it is changing everything.

Today Obopay announced a new offering, Mobile Money for Banks. US banks are beginning to understand how big and transformational mobile will be for their business. And Obopay has developed a bank offering that benefits from our innovation on three continents. It gives the banks what they need to have a strong innovative offering and provides it in a way that they can do a very fast, low cost implementation with a complete mobile money transaction set. 1 month to advanced bank branded mobile money which includes mobile applications, web widgets, and most sought after consumer use cases. Mobile payments have reached a tipping point.

The offering is way beyond bank transfer (repackaging ACH) and traditional niche P2P services.  It includes a number of industry firsts for mobile payments, all based on successful use cases we have experienced: the ability for small sellers and cash based merchants to get paid through mobile phone, website or email; instant payments from one family member to another; and P2Ps that are instant and optimized for a mobile experience. Analysts and our primary research confirms that banks must act now to implement a mobile payment program or risk losing this revenue stream to their competitors or non –traditional providers like Paypal, Apple or Mobile Carriers. With Mobile Money for Banks we are giving them the ability to lead not follow.

It is also the culmination of years of experience and these products are a natural extension of our company strategy, since we have been working with banks some time now. Thus far the response has been very positive as we have shared the details with our banks, channel partners like MasterCard and FIS, and with press and analysts.

We have heard the message from our banking partners regarding what they really want – and we have provided it:

• Bank branded and controlled
• Easy and swift implementation
• Inexpensive solution

I am really excited about the market opportunity and our new offering. Mobile Money will be $630B market according to Jupiter by 2014 – and mobile has a track record of being faster and bigger than anyone ever predicts. Proud of our offering and excited to work with banks.

Links:

May 11th, 2010

Last Day at Davos

“I know first-hand in Kenya, where farmers have seen their income grow by as much as 30% since they started using mobile banking technology and one World Bank study found that a typical developing country, a 10% increase in the penetration rate for mobile phones led to an almost 1% increase in per capita GDP. Put this into context, that would for India translate into almost $10Billion a year.”

Hillary Clinton, Sec of State

The last day has been good. Wrap up with the technology pioneer WEF team. We gave them feedback on how they could improve the program. Mostly about communications and preparation before the event. They have a buddy system but some buddy’s were more helpful than others. It is essential that you prepare for the event ahead of time since once you are here there is too much going on to set up all the meetings you want on the spot.

We also recommended trying to get the technology pioneers a little more involved in the larger events. We discussed the value of that to WEF and to the pioneers. It was clear that making that happen was non-trivial. They coached us on how to get ourselves more engaged with WEF and an indirect result could be more involvement with sessions.

I went to two sessions – one was a CNBC live broadcast on Gender equality in the workforce. The picture above is the CEO of Coke talking about how Coke is aggressively pursuing more women at all levels. He seemed genuine and committed. That being said there are many complex issues with workplace, culture, and home. Others on the panel were COO of Facebook, CEO of Booz. Good job for traditional global inc. issues, not as great on international issues or SME issues. Nothing about access to capital.

The other was the Global Economic Outlook. What follows are my notes. Very brief and may be of interest. I am sure you can go online and get more comments from WEF. Larry Summers was articulate but talk about unemployment of MEN in the US. They should get someone to media train this guy. It was embarrassing that someone that high up in the US government was so politically incorrect.

A good day. I am very tired from a long week but this was the best conference I have ever been to. All the technology pioneers felt the same.

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Notes from Global Economic Outlook session.

India. Growth is strong. need policies to bring down deficite – slowly. Complex. Investment needs to be increased. Financial reform.

Japan. Change structure of economy. Lehman shock gives us the opportunity. More focus on local consumer. Capitalism needs reform to prevent these speculation drivers of growth (subprime crisis). International regulation.

China. 8.7 percent. Consumption growth is strong. Regional disparity getting better. Structure change and deal with over capacity. 33 percent investment growth. 15 percent consumption growth – need this to get larger – closer to 33. Overcapacity big issue. Pure export driven has to change. Structural issue. Need international cooperation.

DB CEO – legacy assets – still may be an issue. Regulatory issues – have to deal with these. Regulators part of the solution.

US – Summers. Statistical recovery, human recession. Moderate gdp growth rate expected. Unemployment is a Big issue. 1 in 5 not working. Recovery will mean 1 in 7 or 8. Job creation and credit access esp for med size business is key. Optimistic about US commitment to global economy (immigrants implied here)

Strauss – Kahn. Improving re-balancing. Growth – now looking at india and china to fuel growth. US will not. Corporate cross border banking.

February 1st, 2010

More from Davos

“Obopay, founded by Carol Realini, particularly struck my imagination, and was enthusiastically explained by Tom Standage …the opportunity was clear enough, without Standage’s endorsement. Obopay offered people who had never had a credit or cheque card the means to send money to relatives, or pay for utilities or food using their phones.

“Half of the world’s adults [or 2.5 billion people] have no access to banking,” Realini said. Obopay, and companies like it, could empower those people, making them more economically productive, and overturn banking. That’s the kind of thing I look to technology to achieve.” – Jason Pontin, Editor in Chief and Publisher of Technology Review

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This has been a great event for mobile banking and Obopay. Mobile Banking is discussed in many sessions and conversations. Yesterday I attended a private workgroup on Mobile Banking. Since it is private I am not allowed to discuss it but I believe the WEF will write a report that I will hopefully be able to share with all of you.

The Technology Pioneers program is a dream come true for a entrepreneur; recognition and a chance to build a very broad and deep network around the world.

It is hard to get into a rhythm at Davos. The day starts early and ends when participant just can’t stay awake any longer. I have not yet made it past 11PM – but the evening activities go way later – until around 2 PM. On the first few days I wanted to do everything. Then I realized that was impossible so I have now settled into an approach that is 1/3 sessions, 1/3 preset 1-1 meetings, 1/3 general networking.

I can’t say enough how full every day has been. And how amazing. Almost all of the corporate attendees are CEO’s. I have had an opportunity to talk to CEO’s of 3 major Mobile Operators, 2 of the world’s biggest banks, and many others. Not only do you meet them, you connect with them. We are all here as “equals” so the normal barriers between people breakdown. It is a unique gathering.

I am not sure what I was thinking but at one technical pioneer event there was an “incident”. There was a journalist – who will go unnamed – who was berating a technical pioneer. This journalist didn’t understand or appreciate the value of the tech pioneers business. So I got up and told the journalist that he was out of line and to back off. He really was out of line and also I think he didn’t understand the business because he couldn’t even imaging the environment of an emerging market. His context was so stuck in Silicon Valley. Time for Silicon Valley to open up its view of the world and understand the emerging markets and the next 3 B consumers.

(If someone from Obopay’s PR agency was at this meeting they would have wanted to put duck tape over my mouth. This is not the kind of thing a entrepreneur and CEO should be doing with a major journalist. I just couldn’t sit by and let this go on without speaking up.)

At that same meeting there was a process where the attendees selected those tech pioneers whose companies were the “best”. The criteria was subjective – but I think the most important factors were – was this going to be a large global successful business and was this business going to change the world. I’ll am happy to report the results – Obopay was selected as one of the top pioneers.

Jason Pontin, Editor in Chief and Publisher of Technology Review, wrote an article about this – check it out.

Davos Day 2: OboPay Is One of the Fairest

The attendees of the World Economic Forum chose the startups they like most.

http://www.technologyreview.com/blog/pontin/24732/?ref=rss

February 1st, 2010