M commerce 451group

Emerging players in the M-Commerce marketVishal Jain, Analyst, Mobile ServicesThe 451 Group

The 451 Group

Founded in 2000New York City: HQ

Offices in London, San Francisco & Boston

Staff of 170+30+ Analysts

Analyzing the business of enterprise IT innovation

The 451 Group

451 Research is focused on the business of enterprise IT innovation.

The company’s analysts provide critical and timely insight into the

competitive dynamics of innovation in emerging technology segments.

Tier1 Research is a single-source research and advisory firm covering

the multi-tenant datacenter, hosting, IT and cloud-computing sectors,

blending the best of industry and financial research.

The Uptime Institute is ‘The Global Data Center Authority’ and a pioneer

in the creation and facilitation of end-user knowledge communities to in the creation and facilitation of end-user knowledge communities to

improve reliability and uninterruptible availability in datacenter facilities.

TheInfoPro is a leading IT advisory and research firm that provides

real-world perspectives on the customer and market dynamics of the

enterprise information technology landscape, harnessing the collective

knowledge and insight of leading IT organizations worldwide.

ChangeWave Research is a research firm that identifies and quantifies

‘change’ in consumer spending behavior, corporate purchasing, and

industry, company and technology trends.

Agenda

• Introduction to context of mobile commerce and payments

• Expanding scope of mobile commerce opportunity

• Emerging players and their business model

• Evolving nature of mobile advertising leading to payments

• Trends and Implications

Whose payments is it anyways

• Not so long ago - Mobile banking was seen as a harbinger of mobile payments

• However, its emerging into a wider context

BanksCarriers

• However, its emerging into a wider context

• New entrants are making payments a part of their services ecosystem

Mobile commerce – starts with payments

New marketplaces

“By breaking the market boundaries of theater

and circus, Cirque du Soleil gained a new

understanding not only of circus customers but

also of circus noncustomers: adult theater

customers.” – W. Chan Kim and Renee

Mauborgne, Blue Ocean Strategy


• Around 150 (451 Group estimates) mobile

payment startups with more than $500m in

VC/PE money

• PayPal to top $3bn in mobile payments

volume

• Apple iTunes reports $1.4bn revenue in Q2

2011

• M-Pesa contributed 13% to Safaricom’s

revenues for 2010

New marketplaces

revenues for 2010


• Around 150 (451 Group estimates for WE

and US) mobile payment startups with more

than $500m in VC/PE money


volume


2011


revenues for 2010

New marketplaces The Handwriting on the Wall

revenues for 2010 “The quicker you let go of old cheese, the sooner

you can enjoy new cheese” - Dr. Spencer

Johnson, Who Moved My Cheese


• Visa Europe commits €100m for mobile

payments

• Major banks across US and Europe form

consortium for mobile payments

• US Carriers commit $100m for mobile

payments

• Around 150 (451 Group estimates) mobile

payment startups with more than $500m in

VC/PE money


volume


2011


revenues for 2010

New marketplaces The Handwriting on the Wall

revenues for 2010

Mobile commerce opportunity

Higher

complexity

Video

Games

Fea

ture

s

Apps

Books

Newspaper

In-app

content

Web app

contentDigital Content

Digital + Physical Content

Coupons/Offers

In-store purchases

Ticketing

Location-

based/targeted

Real time offers

Financial

Services

Low Value High Value

Low

complexity

Wallpapers

Ringtones

News feeds

Scores

MusicFea

ture

s

Price per unit

Voting

Screensaver

Newspaper

VAS/WAP ContentPotential

Addressable

OpportunityPresent

Opportunity

Alternative payment chain

Credit card

Debit card

Email/phone/

Account Identifier

E-money

Card network

Carrier

Mobile phone

Clearing accountTransaction

currencyInitiating channel

Cards/fobs/etcVirtual Email/phone/

Id etc

Pre-paid

account

Bank Account

Bank

Money

equivalent

Cards/fobs/etc

Wallet

operatorDirect channels

Virtual

currency

Emerging players and their charging and billing methods

• Virtual currency going beyond virtual items

• Pre-loaded wallet – build an ecosystem around it

• Talk time as a global instrument – for remittances

• Directly linked to bank account , phone bill or card account

• Embedded payments – inside the browser but linked to card or bank account

• Loyalty is the next big payment engine – well entrenched and understood – but new form factors

Which model to follow – Different pricing regimes

Paypal Google

Checkout

Amazon

MPS

Merchant

account

fees

1.4% to

3.4% +

£0.20

1.4% to

3.4% +

£0.20

1.5% to

2.9% +

$0.01 to $

0.30

• Amazon vs. Facebook and AppleFacebook

Credits

iTunes

30% per 30% per

• Quick setup and low fees

but why charge higher for

low volume

• Premium for ecosystem

• Low fees but merchant accounts setup

the online way have to go through the

time consuming set up process

Micro+ payments – right mix?

30% per

redemption

30% per

redemption

Carriers Online merchant

account for accepting

cards

5% to 30% 2% to 4% + fixed fee +

monthly fee + setup

fees

Simplicity- equivalent of a card swipe and cash

By offering

Consumers

• Reduce the amount of information

required to purchase

• Enable new touch points – QR,

NFC for P2P, P2M environments

Merchants

• Quicker on-boarding and integration• Stop fee loss to traditional payment methods

• Load offers and promotions

• Track User purchasing

behavior

• Open new channels

Target cash and card volumes

+

• Open new channels

• Monetise assets

Mobile advertising has built the ecosystem for payments

App marketing

In-App upgrades

Offer marketing

Product marketing

Brand advertising Lead generation

Incumbents will leverage relationships driven by needs

Advertising Networks

Development platforms

Content aggregators

OEMs

Publishers/Developers

Expanding monetisation

opportunities for

developers

OEMs

Carriers

App stores

Services Platforms

Consumers Expanding their digital

ecosystem for business

opportunities

By enabling mobile payments

Advertising

Coupons

OffersRedeem

And/or

Embed into the browser or app

+

Attach/Embed the POS

into the device

Offers And/or

Purchase

+

NFC

QR

Bluetooth

Camera

Audio

Voice

New touch form

factors – for seamless

redemption and

purchasesOffers Initiated from – app,

social network, navigation app,

search, SMS, proximity scan

Market movements around mobile payments

Market entrants Acquirer Target

Mobile payments

acquisitions

Mobile Interactive Group ZayPay

eBay-PayPal Zong, Fig Card

Google Zetawire

Proxama Hypertag

Neomobile Onebip

Market launch Lead Provider Product

launch/partnership

Mobile payment product

launches

InMobi SmartPay

Blackberry Messenger Mobile gifting

Opera Software, Blackberry

App World

with Bango

Android Market with carriers

Mobile commerce is pervasive

Trends

Content

+ Payment

Content

+ Payment

Payments will have to be right

sized for the mobile medium and

Boundaries of

mobile

commerce

Boundaries of

mobile

commerce

Expanding scope of mobile

commerce outside the app store

ecosystem

Reason

Its just not app stores but several

other entities that are vying to sell

goods, content and therefore need a

mobile payments option.

Implication

Are payment options on existing

platforms suitable for the content + Payment

federation

+ Payment

federation

sized for the mobile medium and

transactions

Smartphone is

the media and

channel

Smartphone is

the media and

channel

Need for an end to end interface

that rolls in advertising, offers and

payments into one

platforms suitable for the content

being sold?

New players are building critical

blocks, beyond content, to sustain

user affinity – identity, payments,

advertising.

Thank You

Questions??

[email protected]

M commerce 451group

Technology

Transcript of M commerce 451group