Re: An analyst's view of the payment industry

Hi Ricardo,

I agree with your point on carrier-billing, however, I still think that 
the major reason for no-push from operator in this direction is because 
of the push they are doing on mobile money.
On that regards, I'm not sure i got your point on the need for an 
institution between customer and merchant? Do you mean a 4th party, 
outside the mobile money service (the PSP), the merchant and the 
customer? I don't understand this. As far as the PSP is offering 
different bridges to customers and to merchants, there is no need for 
one-to-one mapping?
I also don't understand your point of the 2 parts of the equation? in 
mobile money (e.G. mpesa) as soon as each party is linked to the PSP, 
then payments and transaction is possible. This is how things are 
currently implemented.
Now related to this, the major issue is what I've experienced multiple 
time is interoperability: if you want e.g. to support customers from 
different mobile networks in Kenya then you need to write your payment 
application for mpesa (vodafone-based mobile money system), airtel 
money, orange money etc. Each time a new service is coming in, then you 
need to specifically add support for it (wrtie new code etc.)
The objectives and opportunity is see on short term is allowing merchant 
to write once all their app independently of the psp (or more exactly as 
a standardized api). If there is a standardized layer between the 
merchant and the PSP at least in terms of API messaging and protocols, 
and if this layer supports multiple PSP, then this would be a major step 
forward.
Then obviously, for the standard to have impact it needs to be adopted 
by both PSP, and merchant, and supported by customer browser/device. But 
this is the bootstrapping phase. After the original bootstrap, then imho 
the update could be quick because any new PSP would want to be available 
to all customers and merchants implementing standards.
The objective of W3C is not to have a new payment solution, but to have 
a standardized approach that would allow all current and future PSP to 
be easily interoperable and pluggable in the ecosystem at very low-cost.
The ratio effort/benefit is in my experience good to move to a 
standardized approach if the benefits are clear. Here it seems to me 
that all parties would benefit from being easily pluggable in any 
merchant site (for psp), to being able to support multiple payment 
options without changing a line of code (merchant), to selecting the 
cheapest most appropriate solution for payment (user).

steph



> Regarding your other point: the main issue with "mobile money" is that
> it still requires a "bank", some trusted institution that has the
> relation both with the customer and the merchant. The advantage of
> things like carrier billing or carrier-acting-as-bank systems (like
> MPESA) is that carriers already have a "trust" relationship with at
> least one of the parts of the equation. The issue is that they haven't
> usually been very good on establishing relation with the other part. You
> need both for having market impact
>
> Very similar to the situation that would happen in the case of a W3C
> payment solution, actually... you have to convince both merchants and
> their chosen financial institutions for adoption (and a bit users, but
> that probably mostly depends on the merchants)
>
> Saludos!
>
> ---
> ricardo
>
>
>
>
> On Fri, Jan 31, 2014 at 11:53 AM, Stephane Boyera <boyera@w3.org
> <mailto:boyera@w3.org>> wrote:
>
>     Hi Ricardo,
>
>
>         Just a comment on the "95% of mobile subscriptions are prepaid".
>         What do
>         you think is the issue with that?
>
>
>     no issue, just a fact. Usually people associate carrier billing with
>     post-paid billing. See for instance wikipedia definition in
>     http://en.wikipedia.org/wiki/__Mobile_payment
>     <http://en.wikipedia.org/wiki/Mobile_payment>
>     "Direct operator billing, also known as mobile content billing, WAP
>     billing, and carrier billing, requires integration with the
>     operator. It provides certain benefits:
>     the operators already have a billing relationship with the
>     consumers, the payment will be added to their bill."
>     but technically I agree that charges on prepaid-account can be
>     considered as carrier billing.
>
>     That said, the issue is exactly what you say in your last paragraph:
>     it is very restricted by most regulations. The reason of this
>     restriction imho is that you can usually complain about a bill when
>     you see how much someone has charge you compared to what he promised
>     to charge, but with pre-paid, you, as a user, have no way to track
>     the transactions that is charged to your sim. You just know when you
>     reached the end of your credit. Regulation have evolved in many
>     countries, where now each transactions must be announced to the user
>     with an SMS after it has be removed from the account.
>     The regulation have evolved in that direction (lots of restriction
>     also on premium numbers and alike now) to protect the users, and
>     this is definetly extra burden for merchants.
>     In all case, in my opinion, the clear trend in the last 5 years is
>     surely not towards developing carrier billing, but towards using
>     mobile money as a general payment system for unbanked populations,
>     at least in sub-saharan africa.
>     All in one, I agree with you that carrier billing on prepaid could
>     be good and easy for merchants, but I'm very doubtful that there
>     will be sudden change in the trend.
>
>     cheers
>     steph
>
>
>
>
>     --
>     Stephane Boyera stephane@w3.org <mailto:stephane@w3.org>
>     W3C +33 (0) 6 73 84 87 27 <tel:%2B33%20%280%29%206%2073%2084%2087%2027>
>     BP 93
>     F-06902 Sophia Antipolis Cedex,
>     France
>
>
>
>
> --
> Ricardo Varela - http://twitter.com/phobeo
> "Though this be madness, yet there's method in 't"

-- 
Stephane Boyera        stephane@w3.org
W3C                +33 (0) 6 73 84 87 27
BP 93
F-06902 Sophia Antipolis Cedex,
France

Received on Saturday, 1 February 2014 08:10:00 UTC