Google Wallet - Battling for control of the Digital Economy
Google Wallet's API and open platform - launched this week - demonstrates that while Paypal and telco NFC consortia like ISIS may seem like the direct competition, Google's real strategic focus is in deepening its intermediary role between merchants and consumers - online, offline and mobile. What value can telcos, banks and others add to the 'M-Commerce' market when Google does 'free'?
[Ed. This is one of the questions debated with the big guns in the industry and the World Economic Forum at our 'M-Commerce 2.0' executive brainstorms in New York (5-6 October) and London (10 November). There are still some seats free (available), so book in now if this debate is important to you - the agenda for the brainstorming and the stimulus speakers are described below.]
Firstly, here are some very useful links that explain Google Wallet to those unfamiliar with the details of it:
• Basic news (including good video) from the GSMA and the Register (on the Visa tie-up)
• High quality, key facts analysis on the Google Wallet launch and video showing the wallet in action from the Pymnts.com briefing room.
• And, as a bonus, a great link with in depth analysis, videos and presentations from Mastercard's recent CEO strategy preview in New York.
Google Wallet - the latest entrant to the battle
The commercial launch of the Google Wallet this September combined with new strategic developments from Visa, Mastercard and Amex and the emergence telco NFC consortia in the US, UK, Germany and elsewhere are shaking up the digital money market. In territories like Japan and Kenya mobile phones are widely used to pay for goods and services both at point of sale and for remote transactions. Elsewhere, m-payment and authentication systems, such as carrier billing and Apple's App Store, are making it easier for companies to sell digital content online. In fact, a host of companies have now developed systems that enable buyers to authenticate themselves and make purchases quickly and easily using a mobile phone, either by debiting an existing bank account or through their telco bill. These systems use everything from SMS to contactless technologies at point-of-sale to complete a transaction.
In short, m-payments are coming of age and have the potential to further disrupt the financial services industry by enabling other companies to become trusted intermediaries. But the bigger picture is really what we might call 'Digital Money', where the online and mobile worlds merge with the offline. Digital Money opens up opportunities for telcos, banks, Internet companies and even specialist startups to mash up valuable transaction data with real-time contextual personal data from mobile networks to augment understanding of consumers' purchasing history and shopping habits with analysis of future intent and support for spontaneous decision-making.
But, with major brands from the Internet, banking and telecoms industries competing for a piece of action, the Digital Money space is highly fragmented, featuring a myriad of incompatible technologies and business models. Confusing for both merchants and consumers, this fragmentation could slow the uptake of Digital Money and more broadly, m-commerce.
Digital Money 2.0 - New Business Models at the intersection of offline, online and mobile
To explore and progress these issues further, here's an update on our preparations for for the upcoming M-Commerce 2.0 Executive Brainstorms.
Key objectives of the brainstorms:
• To clarify the strategic opportunities within the emerging global 'Digital Money' market
• To share latest innovations and case studies of success/failure from around the world
• To explore the opportunity of leveraging 'personal data' to create new business models
• To help understand how the ecosystem will develop, roles of different players and how to manage non-traditional partnerships
• To determine how best to 'grow the pie' for Digital Money for the benefit of all
Hypotheses to test
• Purchasing transport tickets will be a leading-edge application, so speed and ease-of-use in consumer solutions are absolutely key
• There will be a battle royal between the Internet players and telcos for 'control points' within the Digital Money value chain
• Digital Money will grow, driven by Internet players and telcos eager to capture more transactional data online and offline
• Mashing up contextual, real-time Personal Data with other data can stimulate new business models. Telcos have a unique role in this space.
• Vendor fragmentation, user confusion/apathy and poor regulation will delay mass-market adoption in many countries
• Any solutions that depend on new handsets will be slow to take-off
Key questions for debate
• Studies make it clear that consumers around the world see the potential value of Digital Money. So how can we build a vibrant ecosystem that directly addresses consumer needs?
• How can co-opetition be managed such that the success of different players in the market supports others?
• How can we leverage related developments from around the world that are already getting traction - such as EMV chip card, SEPA and Identity standards - to create market enablers?
• How can we use mobile strong authentication capabilities to strengthen the security of and trust in the offline/online payment scenarios?
• How can payments facilitate the world of new services enabled by NFC?
• How could real-time personal data be leveraged in the short term in the Digital Money space?
Stimulus Presenters and Panelists
To support the brainstorming, in addition to the Telco 2.0 analysts, we're delighted to have senior executives from the payments industry joining the telco, media, retail and advertising execs, including:
• David Messenger, Executive Vice President and Head of Online & Mobile, American Express
• John Thomas, Senior Vice President, Electronic & Emerging Payments, Bank of America
• Dickson Chu, Managing Director, Global Enterprise Payments, Citi
• Bill Gajda, Head of Global Mobile Product, Visa Inc
• Jorn Lambert, Group Head Emerging Payments Europe, Mastercard
As normal we will use our interactive 'Mindshare' format, described here:
For more information please contact us.