Copyright © 2010 TIO Networks Corp. All Rights Reserved the importance of embracing mobile payments Hosted by… 13 th Annual Utility Payment Conference.

Copyright © 2010 TIO Networks Corp. All Rights Reserved

the importance of the importance of embracing mobile embracing mobile paymentspayments

Hosted by…

13th Annual

Utility Payment Conference

Richmond, Virginia

October 18th to 21st

TIO

mob

ile


They WILL impact your internet, care and payments strategies.

Mobile devices are highly portable PCs with internet access.


One can draw many parallels between the PC Internet Revolutionand the Mobile Revolution.


Intro

• Late 80s and 90s companies scrambled to develop websites and web strategies.

• Today countless organizations are considering the impacts of the mobile landscape.

• We are in the middle of a technology evolutionary stage comparable to the dawn of Windows/Apple OSs and the internet browser.

• It is important you consider how mobilewill influence the way your customers needto interact with you.

• For utility companies, establishing “pocket share” on customers’ mobile devices and developing applications that are designed to deliver bill payment and customer service functionality should be a priority.


Presentation Themes:

Planning for Mobile and Addressing Customer Needs

Description of Mobile Landscape + Proliferation of Smartphone Technology

How Do Advancements in Mobile and the Smartphone Influence Payments


Evolution of MobileThe maturing of the cellphone

• 1G Analogue – Early 80sCharacterized by falling costs and prices with improving battery performance and shrinking form factors along the way. Purely phone.


• 2G Digital – 90sProvided foundation for Swiss Army Knife-like functionality. Included color screens, rudimentary browsers and polyphonic ring tones. Drove wholesale price declines and market growth.



• 3G Digital – 2000sHandset vendors scored big (more costly WDMA modems). Poor battery life and inadequate data services plagued service until approx. 2005 when infrastructure really starting catching up.



Evolution of MobileThe Future is Here!!!!!!!!!

• World has entered the 5th major technology cycle…

Convergence of mobile internet technologies, social networking, mobile video, VOIP and highly impressive mobile devices.

Source: Mary Meeker (Morgan Stanley) “Internet Trends Report - Future is Mobile”


• Previous cycles included the mainframe era of the 1950s and 60s,the mini computer of the1970s,and the desktop era of the 80s.






• Mobile internet will be bigger than desktop internet in 5 years.



• Comparing iPhone and iPod Touch versus AOL and Netscape, mobile internet is ramping faster than desktop did.

• Adoption of Apple devices is taking place more than 11 times faster than AOL did and several time faster than Netscape.

• The average cell phone usage pattern is 70% voice. iPhone is 45% voice.


Proliferation of Smartphones

• At the end of 2009 the US had approx 285 million cellphone subscribers (91% penetration).

Source: CTIA

• 2010 - Smartphones account for 25% of the US mobile market.• By end of 2011 they are expected to exceed 50%.

Source: Nielson Wire August 2, 2010

• And now RIM (Blackberry), Nokia (MeeGo) and MS (Windows Phone) each will introduce refreshed or new Smartphone OS’s before end of 2010.

• 5 year forecast for the worldwide mobile phone market show 1.3 B units shipped by end of 2010. From there shipments will grow at a CAGR of 6.6% to reach 1.6 B units worldwide in 2014.

(Source: International Data Corp).


Smartphone proliferation in the United States in October.

Respondents US Mobile Subscribers over the age of 13

(Source: ComScore)


Smartphones Impact on Mobile Payments

• Smartphones + 3G enhancements + other mobile technologies driving online mobile behavior and capabilities – including mobile payments.

• Mobile banking / payments showing adoption trajectory similar to online bill payment.

• 2009 the value of mobile payment transactions in the US was $5.2 B (6% of global #). Expected to reach $56.7 B in 2015 (CAGR of 49.19%).

• Mobile Payment networks operators – on own or in partnership with banks, card networks and mobile payment service providers – developing platforms and Apps to offer mobile payment services.

(Source: Datanomic.com)


Why Do Customers Like Mobile Bill Payment?

• Perceived Value of Mobile banking and associated services including receiving and paying bills, sending and/or receiving money, checking balances. 1,023 surveyed.

Source: Survey conducted by MQA Research on behalf of CheckFree and Firethorn.


It’s Settled. You need to start considering Mobile…Now What?

• Large number of different mobile phone devices and platforms.

• Some support Java ME, other SIM Application Toolkit, a WAP browser, or only SMS.

• Some platforms support robust applications (IOS, Android)

Questions and Challenges.

• Security of customer and payments information (credit cards, banking, etc)

• What functionality is key (payments, other customer service functionality, account management functionality, addressing smart grid future requirements like prepaid, etc.


Addressing the Challenges and Defining Direction / Next Steps

• Ensure that there are sufficient security features built into the App

Securitizing data(Customer information, payment modality information)

• Login Features: Require UN and PW to access the App

• Require a user PIN per transaction



Securitizing data(Customer information, payment modality information)

• Zero data should be stored on the mobile device

• Utilize the device as method of communicating information only

• Data is secure server side

• No card data on the device. Leverage tokenization



• Bill Payment Features

Features and FunctionalityWithout consideration for platform begin considering what minimum features and functionality your mobile solution should deliver.

• Account Verification: Ensure payments post accurately

• Expedited Posting: Ensure that payments post quickly

• Bill/Balance Presentment: Ensure that the correct payment amount is made

• Payment Methods: Credit Card, Debit, ACH, Paypal, Short term loan


Pushed bill reminders, service alerts & promotional messaging.

Messages and alerts from home screen populated in Messages inbox.

Messages linked to a variety of text, web or multimedia end points.


• Account Management Features:• Real-time balance presentment• Real-time account status• One click easy pay feature

(indexed accounts and payment methods) • Other Customer Care Features:

• Push Notifications: Bill pay reminders, service outages, new products and services, energy saving tips


21. Embedded iPhone mapping uses geo-positioning to provide user with the nearest land based bill payment locations.


• Other Customer Care Features:• What about the cash payer?

Find a local in person payment location.



• IOS and Android users are drawn to APPS.

• Blackberry and Microsoft are launching new OS platforms in the coming months (may also drive APP usage on those devices)

Platform Considerations(IOS, Android, Blackberry, WinMo, etc. etc. etc.)

• Careful consideration should be given to Blackberry OS, IOS, Android OS as well as WAP.



• Ensure that your mobile strategy allows for feature enhancement.

Some Final Considerations

• Ensure that your planning also takes into account OS upgrades. For example IOS has gone through several meaningful updates in the last few months.

• There are payment providers that can provision comprehensive mobile payment solutions and strategy fulfillment on behalf of your company.

• Consider sticking to what your company does best and align yourself with payments providers that focus on delivery and maintenance of mobile payment platforms.


TIO

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contactChris Ericksen:Mobile: [email protected]

Hosted by…

13th Annual

Utility Payment Conference

Richmond, Virginia

October 18th to 21st

Copyright © 2010 TIO Networks Corp. All Rights Reserved the importance of embracing mobile payments Hosted by… 13 th Annual Utility Payment Conference.

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