Philip Yen, Group Head, Emerging Payments, APMEA, Mastercard is speaking in the Service Innovation & Monetisation track on Day Two of the LTE Asia conference taking place on the 18th-19th September 2013 at the Suntec, Singapore. Ahead of the show we speak to him about the challenges of creating a mobile payments eco-system and how LTE can help.
What role does LTE have to play in the development of mobile payments?
Mobile Payments consist of both remote and proximity payments. For remote payments, generally brought under the umbrella of m-commerce, LTE will absolutely play a key role. Payment is closely associated with a shopping experience and the richer, the faster, and more appealing the shopping experience, the more likely somebody will make a purchase. Thus, LTE will certainly promote mobile remote payments. For proximity payments, the consumer registration process has been a pain point as most consumers consider it “cumbersome”. LTE will help, at least marginally, to improve the registration process. Beyond that, LTE will make it easier and more practical to package additional services to couple with the basic proximity payments. For example, the search for merchant promotions and the redemption of such promotions will again be better facilitated by LTE.
To create a mobile payment eco-system, how important are partnerships with telcos?
Building mobile payment eco-systems typically requires strong partnerships among a number of stakeholders. For NFC eco-systems, the parties include telcos, banks, handset manufacturers, TSM service providers and payment networks. Each party plays a role and there are strong inter-dependencies. Thus, our view is that partnerships are very conducive to progressing mobile eco-systems, even though the absence of one party in some cases may not be a showstopper.
What are the challenges in creating a true mobile payments standard?
I tend to subscribe to the definition of “standard” as something the market has embraced, and not just something that had been produced by certain standards setting bodies. The challenges of reaching scale are associated with the right value propositions to all stakeholders and being able to move all stakeholders at the same time.
After years of hype NFC has still not entered mainstream usage? Will it ever do so and does it matter?
As mentioned before, building a NFC eco-system requires the participation of many stakeholders. Any time we need multiple stakeholders to make changes, it has taken a long time. The migration from magnetic stripe to chip for both cards and terminals has taken 5-10 years in most countries. I think NFC will take just as long, if not longer. There have been consistent increases in investments from many stakeholders. There are now a lot more NFC handsets, more TSM (trusted service manager) service providers, more telcos, banks and merchants taking advantage of the technology. So I am optimistic that NFC usage will continue to increase, but the driver will likely be some added value functionalities that the markets are still developing.
What are the challenges in educating consumers about the benefits of mobile payments?
If we have to do a full-blown education program for consumers, we may have missed the mark. Consumers were not formally educated on using smartphones and tablets. They are able to pick up those new technologies very quickly because they are easier to use, the interfaces are intuition and the content is rich. We need the same for mobile payments.