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2013 | Book

Mobile Payment


About this book

Paying with mobile devices such as mobile phones or smart phones will expand worldwide in the coming years. This development provides opportunities for various industries (banking, telecommunications, credit card business, manufacturers, suppliers, retail) and for consumers.

The book comprehensively describes current status, trends and critical aspects of successful mobile payment. It combines theory and practice. Comprising essential aspects of a successful mobile payment as well as successful case studies and practical examples, this book is for all who are developing, offering and using mobile payment.

Table of Contents

1. History, Technology and Commerce
If someone were to show us a flash card with the word money written on it, most of us would probably go on to think about cash in the form of banknotes and coins. Cash is readily associated with money because of its status as legal tender, its liquidity and its virtually universal acceptance as a means of making payment.
However, money has changed its form considerably in the course of time. Indeed, the paper money and bank deposits familiar to us today are relatively modern inventions.
Thomas Lerner
2. The Market
The recent success of different business models in Asia and in various developing countries has underscored the existence of opportunities to earn money for enterprises willing to venture into mobile payment services.
Thomas Lerner
3. Strategies
One of the most exciting issues relating to the broad implementation of mobile payment services is that of business-model preeminence. Do business ecosystems developed and driven by specific sectors enjoy greater prospects of success in the implementation of mobile payment services than other business models? Is there currently a preeminent model out there?
In seeking to answer this question, I examine the key stakeholders in the classic value-added chain on the mobile payment market. For the sake of simplicity, these shall include customers, banks, mobile network operators (MNOs) and retailers, while credit card companies and other stakeholders will be considered to a lesser degree.
Thomas Lerner
4. Mobile Technology and Security
In addition to contrasting business models and the varying degrees to which the use of mobile payment systems has evolved, significant country-specific differences can also be seen at the intersection of technology and security standards. The dominant solutions in the developing countries, for instance, are based on a combination of USSD and SMS technology. In the first-mover countries of Japan, South Korea and China, companies invested in a contactless RFID smart card system known as “FeliCa” at an early stage, and thereby embraced a predecessor to the NFC technology that has captured the imagination of players in Europe and the United States. Then there has been the succession of other technologies such as those based on wireless application protocol (WAP) and their accompanying mobile networks GPRS, EDGE, UMTS and LTE. Also warranting mention is the use of QR codes, two dimensional barcodes that play a role in various independent mobile payment services such as the one introduced by Starbucks. And, last but not least, there are the various operating system applications or “apps” for cellphones and smartphones (e.g. Android, iPhone, Blackberry) that are used in conjunction with the above-mentioned technologies.
Thomas Lerner
5. Innovation Management
The establishment of a successful mobile payment service represents a major challenge for all of the prospective providers. To gain a sense for this, we need only to consider the multisided nature of the new business ecosystem, the complexity of the value-added chain, the successful convergence of the necessary industries and areas of technological know-how, the task of quickly resolving the chicken-and-egg conundrum and the delicate (if not impossible) task of securing the enthusiasm of retailers and customers from the beginning.
While the know-how of providers is usually limited to a particular market sector, mobile payment systems and their corresponding business ecosystems will require a level of cross-industry cooperation that can only be achieved in the framework of partnerships or mergers. This will enable the achievement of a certain degree of innovation. The most successful business models of the still-young Internet era (including the models deployed by the providers of existing mobile payment services) have all paid homage to the notion of open innovation74 as a source of ideas and as an approach to market development. This can be observed in the case of Apple, NTT DoCoMo (Osaifu-Keitai), SAP, Google and many other corporations.
Thomas Lerner
6. Case Studies
The East African country of Kenya has a population of nearly 39 million. Around 78% of all Kenyans live in rural areas. More than 42% of Kenyans are younger than 15-years-old. Among African countries, Kenya has experienced above-average growth in recent years.
The Kenyan economy is dominated by agriculture, with many people living from subsistence farming and the production and export of coffee and tea. Other industries are less developed.
Thomas Lerner
7. International Comparisons
Numerous alternative payment systems have appeared on the market since Square entered the market with its innovative payment system in the year 2009. In April 2011, Intuit entered the market with its GoPayment. iZettle appeared last year as a European Square solution. PayPal followed this year with its “PayPal Here” product. The following table offers a comparison of SQUARE, iZettle and PayPal Here
Thomas Lerner
8. Summary
Mobile payment is on its way – despite the fact that the multi-sided nature of the new business ecosystems, the complexity of the value-added chains and the wrangling over the best technologies and strategies for overcoming the various hurdles can sometimes leave one wondering whether it’s ever going to work out.
Growth in the mobile payment sector will increase dramatically in the coming years. This is not a matter of wishful thinking, as it may have been at the beginning of the new century. The trend has been amply confirmed by various market participants and the latest figures.
Thomas Lerner
Mobile Payment
Thomas Lerner
Copyright Year
Electronic ISBN
Print ISBN

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