Posts Tagged ‘m-wallet’

In the very last weeks, some news relating to EC’s investigation opened into mobile commerce JV by UK mobile operators Telefónica UK (O2), Vodafone and Everything Everywhere, urge me to give an in deep look at the matter, whit the aim to better understand what is the real scenario they are moving in (… or they was already moved in, even if by single initiatives, as I’ll try to argue in my article).


What’s the JV (… and what is not)

The proposed joint venture, dubbed “Project Oscar” (first announced in June 2011), would create a company owned in equal parts by the above mentioned telcos, intended to create a single mobile wallet platform, where cards, coupons, transactionsal information, … are stored and managed, thank to the SIM card hosting.

As reported by Dan Balaban’s article on 16th April 2012 (1), “[…] Besides setting specifications and business rules for NFC payment applications, Oscar would provide a “single contact point for advertisers, media agencies, retailers and brands,” the telcos said in a statement today, in which they noted that service providers would be able to “book advertising space and create campaigns across all opted-in mobile users, affording economies of scale that they could not ordinarily achieve.” “.

The big excluded…

3UK, a fourth UK telco (belonging to Hutchison 3G), relates the last year Total Telecom news (2)[…] on September 2011 called on the European Commission to block Vodafone, O2, and Everything Everywhere’s plans to form a mobile commerce joint venture, claiming it has been deliberately excluded for competitive reasons.[…]

The EC’s reason why

An EC statement (3), says: “The Commission’s initial investigation revealed that the joint venture and its three parent companies may have the technical and commercial ability and incentive to block future competitors from offering their own mobile wallet services to customers in the UK, or to degrade the quality of these competing mobile wallets so that they become less attractive.

By reading The Telegraph’s article on 12th April 2012 (4), I found that “[…] a source close to the process said that the European Commission’s Competition Directorate was likely to want to examine the proposals further largely because “the entire mobile phone payments market is still so embryonic”.” and – by continuing with Dan Balaban’article (1) – “[…] A fourth UK telco, Three, or Hutchison 3G UK, has opposed the proposed joint venture, and that may have influenced the decision of regulators to carry the antitrust investigation to a deeper level, though the commission’s statement Friday did not mention this“.


During last fourteen months, each single operators have started (or declared the intention to start) different m-Payment projects, by involving bank or financial institutions in them.

Hereafter I’d like to propose a map, to sum up the different initiatives.

This map is belonging the article “A retrospective analysis of the mobile commerce JV by UK mobile operators Telefónica, Vodafone and Everything Everywhere at the time of EC’s investigation” –  R. Garavaglia - CloseToPay blog –26 th April 2012 | To see the (#) referred news, go to the end of the article

This map is belonging the article “A retrospective analysis of the mobile commerce JV by UK mobile operators Telefónica, Vodafone and Everything Everywhere at the time of EC’s investigation” – R. Garavaglia - CloseToPay blog –26 th April 2012 | To see the (#) referred news, go to the end of the article


The platform powered by the JV, appears to be a Mobile Wallet platform, allowing financial institutions and other brands (transportation ?) to go to one place for payment and not-payment (e.g. loyalty/couponing/offers) services in the NFC scenario. The business model is based on a SIM rental proposition, as I’ve described in one of the oldest article of mine (10), on July 2009 “Mobile “estate” ” (only for Italian spoken guys, … sorry world!), where the Secure Element is hosted in the SIM.

The Secure Element backbones the Mobile Wallet and, inside of it, different Applications can be hosted (Payment Applications and Value-added Applications).

Who can provide the Mobile Wallet?

As far as regulation concerns, it should be useful and relevant to clarify some aspects regarding the Digital Wallet issuing activity.

As remarked by the last White Paper on Mobile Payment (11), issued by EPC (European Payments Council) on 7th February 2012 , conceptually, a Mobile Wallet can be provided by an authorized Payment Services Provider (for instance, it could be an eMoney Issuer) that issues the payment means with the scope of managing only that specific payment means, or different payment means by the same PSP.

Alternatively, the mobile wallet can be provided by a Trusted Third Party but shall be conceived in to be able to manage payment means issued by multiple payment service providers.” states the EPC document.

The Wallet issuing activity by a PSP and the European regulatory for payment services: an opportunity to manage with care

For the first case (PSP), I’m trying hereafter to analyze very shortly, some chances rising up the arrangement and evolution of the European regulatory framework for Payment Services, assessing the scenario of SEPA landscape, by focusing the opportunity for non-banking competitors (like telcos), to play the role o Payment Services Provider, under the prudential regime provisioned by the PSD (2007/64/EC Directive) and by the so called “2EMD” (Directive 2009/110/EC, on the taking up, pursuit and prudential supervision of the business of Electronic Money Institutions – EMI).

In the SEPA paved arena, non-banking players can really get a Payment Institution or eMoney Issuer license, according to PSD and 2EMD, in one of the Member State; then, thank to the passporting right, they can deal with its payment services proposition, through the whole EEA (European Economic Area).

Concerning the last chance (EMI), issuing e-money grants the new Payment Services Provider to issue and manage Stored Value Account (SVA) in a pre-paid way (is this the way O2 is seeking? the mobile operator has had an application for an e-money license lodged with the Financial Services Authority, for more than a year …).

Although both the above opportunities can be endorsed by non-banking players via the creation of a hybrid entity (Hybrid Payment Institution o Hybrid EMI) and no NewCo should be needed, therefore they have to make an alliance with a bank, since PI/EMI cannot hold deposits (better: funds placed on Payment Account/SVA, require to PI and EMI to be compliant with the funds safeguarding rules, provisioned by PSD and 2EMD) and they cannot have the direct access to that Payment Systems listed in the SFD – Settlement Finality Directive.

Finally, it’s correct to remark that PSD and 2EMD are not permitting everybody to become Payment Services Provider, as the way to get a valid Payment Services Provider clearance, is not so streamlined as it seems.
In other terms, a new entrant, wishing to obtain a PI or EMI license, must own and demonstrate the best awareness about the complexity of the prudential regime and conduct of business rules, it will be compliant to (risk management/control, cost optimizing, protection of reputation, etc.), and, of course, it must be able to manage it.
A trusted brand/image along with the resources to manage customer relationships, are another basic ingredients, to achieve profitable goals in the Mobile Payment market, by dealing with a Payment Services proposition autonomously.

The importance to be “Wallet” (… and to be Wallet Issuer)

As stated above, when I described the Mobile Wallet in the sense of “container“, I’ve left – deliberately – to understand, how it can bring not only the ability to host a sole generic “Mobile Payment Application,” but one (or more than one) “Value-Added Mobile Application”.

The relevance of value-added services, such as Mobile couponing or geo-fenced promotions, is strategic for the development of the NFC market, as they are characterized by high profit margins that – in some circumstances – may partially subsidize the entire mobile eco-system.

In this scenario, when the Mobile Wallet proposition is developed in conjunction with the payment service, it can positively leverage the network effects. Sharing the platform to broaden NFC user experience, means to think about opening up the platform from two-sided to multi-sided, it means to achieve the so called “Open NFC.”


As the map I’ve drawn shows, each of the companies forming the JV, has already demonstrated their single commitment on the Mobile Payment Market, by revealing the ability to create partnership in what I can call “cooperative space” (TELCO – Finance).

Can telcos in the JV, share their assets in the name of the “Open NFC”? What about future? Can the European Commission accept it needs a new approach to payment network JVs ?

It is for posterity to judge!

Sources (link to the mentioned articles/documents)

(1) “Doubts Raised for Proposed NFC JVs in Europe as Regulators Probe UK’s Project Oscar” – NFC Times – 16 Apr 2012

(2) “3UK urges EU competition watchdog to block rivals’ m-commerce JV” – Total Telecom – 8 Sep 2011

       Mergers: Commission opens in-depth investigation into the creation of a mobile commerce joint venture by UK mobile operators Telefónica, Vodafone and Everything Everywhere

(4) “Mobile phone payments platform set to be delayed again by European regulators” – The Telegraph – 12 Apr 2012

(5) “O2 seeks UK license for mobile money play” – Finextra – 3 Feb 2011

(6) “O2 names financial services partners to power new mobile wallet service” – The Paypers – 20 May 2011

(7) “UK wireless operator O2 launches mobile wallet” – Finextra – 26 Apr 2012

(8) “Vodafone and Visa team on NFC m-payments” –Finextra – 27 Feb 2012

(9) “Barclaycard and Orange launch Quick Tap MCP scheme” – Banking Technology – 24 May 2011

(10) “Mobile “estate” “ – R. Garavaglia – BancaMatica – July 2009

(11) WHITE PAPER MOBILE PAYMENTS 2nd edition – Document EPC492-09 – Version 3.0 – Date 7th February 2012

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Il 9 Marzo 2009, nell’ambito dell’evento Planet Card 2009 organizzato da
IIR Istituto Internazionale di Ricerca, si è tenuto a Milano il Workshop PAYMENT INSTITUTIONS.

A tutti coloro che vi hanno partecipato, voglio esprimere il mio ringraziamento e l’auspicio che quanto ho cercato di condividere (con la passione e la perseveranza di sempre), sia stato utile e profittevole, e che quanto appreso possa essere per ognuno, non già l’approdo finale di un percorso formativo, bensì il punto di partenza per un’ulteriore crescita professionale.


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Tranquilli, non è un articolo di ispirazione freudiana !

Il SE (puntato) di cui vi voglio parlare è il Security Element.

Avrete certamente inteso che mi sto riferendo al tema Mobile Finance, di cui voglio in questa sede parlare.
Partirò da uno degli elementi tecnologici più importanti che abilita l’erogazione di quei servizi in mobilità, dei quali, per ragioni di semplicità, mi limiterò a considerare la sola declinazione m-Payment (in realtà, i ragionamenti e le analisi che condurremo, possono liberamente applicarsi al più ampio spettro dei Mobile Finance Services).

In particolare, vorrò porre l’attenzione su alcuni aspetti che impattano pesantemente le strategie di sviluppo dei servizi in mobilità, e che vedono nel luogo di installazione del SE, nella gestione del medesimo e nella gestione/personalizzazione delle applicazioni in esso ospitate, uno dei temi maggiormente condizionanti.


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Nei giorni 11, 12, 13 Novembre 2008, si è tenuto a Milano il

Mastercourse  e-Payment ed il Workshop Mobile Payment, organizzati da IIR Istituto Internazionale di Ricerca.

A tutti coloro che vi hanno partecipato, voglio esprimere il mio ringraziamento e l’auspicio che quanto ho cercato di condividere (con la passione e la perseveranza di sempre), sia stato utile e profittevole, e che quanto appreso possa essere per ognuno, non già l’approdo finale di un percorso formativo, bensì il punto di partenza per un’ulteriore crescita professionale.

Vi sono grato se vorrete esprimere i vostri commenti e suggestioni.

Per qualsiasi ulteriore necessità di approfondimento, l’invito è quello di frequentare  www.closetopay.com: sarò lieto di poter rispondere (nell’economia di un blog) alle domande che mi verranno formulate.

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Digital Media Italia, il cui payoff recita “Un’iniziativa per interrogarci sul ruolo dell’Italia e per programmare il nostro futuro“, è a mio avviso una tra le più autorevoli ed importanti iniziative che abbia conosciuto in questi ultimi anni.

Dmin.it è un gruppo interdisciplinare, aperto, senza scopo di lucro, che si propone di definire aree di interventi che consentano all’Italia di acquisire un ruolo primario nello sfruttamento del fenomeno globale Digital Media. 

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No, non è un annuncio di qualche faceto intermediario immobiliare appassionato di origami.

La Carta è (come sempre in CloseToPay) una Carta di Pagamento, anche se, in questo caso, è d’obbligo porre l’accento sulla tecnologia: parliamo di Carte a Microprocessore.
Gli spazi ? Zone di memoria e/o capacità di processing.

Sto parlando della possibilità (e del mercato che da essa trae spunto) di ospitare su una Carta a Microprocessore, più applicazioni concorrenti (nell’accezione informatica del termine !), ovvero di

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Il fatto

  • Sabato pomeriggio del 2 Agosto, Elda ha già fatto le valigie e sta per chiudere casa, domani sarà già al mare !
  • Elda si accorge di un’infiltrazione d’acqua sotto al pavimento della sua cucina.
  • Chiama l’idraulico di fiducia (anche lui in partenza).
  • L’idraulico interviene e sostituisce la tubatura fallace: costo della prestazione: 150 €.
  • Elda ha fretta (vuole partire !) e chiede al professionista se può andare bene un assegno.
  • L’idraulico spiega che anche lui è in partenza e che non vuole aspettare l’indomani per incassare l’assegno presso la sua banca.

Come risolvere il problema ?

Una possibile soluzione

  • Elda e l’idraulico non hanno ne il tempo ne la voglia di perdere tempo con sistemi di pagamento tradizionali.
  • Elda ha una Carta di Credito.
  • L’Idraulico ha una Carta di Credito ma è sprovvisto di un POS GSM (probabilmente non ha neppure il POS fisso, in quanto non è un esercente ma un libero professionista che presta il proprio operato al domicilio dei propri clienti).
  • Elda e l’idraulico hanno un telefonino (probabilmente anche più di uno !) ed entrambi hanno aderito alla proposta che le rispettive banche hanno formulato loro: “Pagamenti in Mobilità con SMS” (nome di fantasia)
  • Elda chiede il N° di telefono dell’idraulico
    • Compone un SMS con il quale trasmette al Centro di Gestione del Servizio:
      • Il N° dell’idraulico
      • L’importo da trasferire (150 €)
  • L’idraulico riceve dal Centro di Gestione del Servizio un SMS che gli notifica
    • Pagamento in arrivo dal mittente (N° di Elda)
    • Importo trasferito 150 €; Accettare ? (Replay/…)
    • L’idraulico accetta il pagamento inviando SMS di reply

Elda e l’idraulico possono partire subito per le vacanze ! 


La storia di Elda e l’idraulico (che, per la cronaca, raccontai la prima volta nel 2000 in occasione di un kick-off aziendale dedicato al lancio di un progetto strategico), rappresenta ancora oggi un esempio di Peer-to-Peer (P2P) Payment realizzato tramite tecnologia Mobile.
In realtà, stante la presenza fisica e contemporanea dei due soggetti pagante/pagato, la transazione di Mobile Payment che si innesca tra Elda e l’idraulico, dovrebbe appartenere alla categoria F2F (Face-to-Face) Payment, ma questa digressione mi offrirà lo spunto per una classificazione funzionale degli scenari di Mobile Payment che pubblicherò in un altro post.

Per il momento vi invito a riflettere sui seguenti 3 punti:

  1. Ruolo delle Banche proponenti il servizio fantasiosamente chiamato “Pagamenti in Mobilità con SMS” 
  2. Ruolo dell’operatore (o degli operatori) di rete mobile
  3. meccanismo di accounting associato al telefono cellulare

L’analisi … nei prossimi articoli, nel frattempo i commenti sono aperti per qualsiasi richiesta o suggestione.

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