Mobile Money Network is a joint venture between Best Buy Europe and mobile payments firm Monitise, which aims to capitalise on the growth of mobile commerce. It plans to release Simply Tap, a mobile app which allows users to pay for products via SMS.
I've been asking CEO John Miliken about the Mobile Money Network, and the future of mobile payments...
What is the Mobile Money Network?
The Mobile Money Network (MMN) is a new business, developing mobile services that bring together a network of retailers, advertisers and banks to provide consumers with a simple, unified way to discover and purchase goods and services using their mobile phone.
What makes the Mobile Money Network different is our ability to deliver a network of retailers and partners that will act together to launch a unified customer experience available on any handset, on any mobile network operator, to buy products from any retailer.
Who is behind the Mobile Money Network?
MMN has some of retail, banking and mobile’s best people involved so we are in a pretty fortunate position. Best Buy Europe, Monitise and Charles Dunstone are all investors and Sir Stuart Rose is our Non-Executive Chairman.
We are also able to call on the extensive experience of our board members including Lord Davies of Abersoch, Former Minister of State for Trade Promotion and Investment, and former Chairman of Standard Chartered plc and Johnny Hornby, Co-Founder and Partner at advertising agency CHI & Partners.
How does Simply Tap work?
Simply Tap is MMN’s first service. From a consumer perspective, Simply Tap has three simple steps:
Step one: Customer completes a one-off registration with the Simply Tap service. They securely store their personal details, preferred payment card and delivery address.
Step two: Customer sees a product they want in a press advert, in a catalogue, online or in store and either tap the product details in to the Simply Tap application or send the code via SMS.
Step three: Customer confirms the order and the product is paid for and delivered automatically.
That is it. There’s no form filling, no need to repeatedly share credit card details, no hassle. Just simple, secure, spontaneous shopping.
What does it offer that other mobile payment solutions don’t?
In one word – ubiquity.
All other ‘mobile money’ services are based on exclusive partnerships i.e. Orange and Barclaycard. This market fragmentation is limiting and is a big turn-off for retailers. Retailers don’t really want to invest in technology that carves up the potential customer base.
Simply Tap is ‘everything agnostic’ and isn’t just about replacing a wallet with a phone. It also makes every advert (online, billboard, TV, print etc) a point of sale.
If an advertised product catches my eye in a magazine, I can buy it and have it delivered to my door with the touch of a mobile button. This makes ad spend work much harder and offers shoppers value beyond current payment offerings – immediacy.
Simply Tap also works around stock issues. If a product is out of stock, the shopper can still buy it and have it delivered to their home address rather than having to return to store. This is particularly relevant for big items where there is limited display space.
How does the conversion process work?
Simply Tap users can input the alphanumeric product code in to the app or send it via SMS, in order to start the purchase/payment process. Alphanumeric codes for product identification are initially important to maintain the ubiquitous aspect.
Simply Tap will also support new technologies such as QR codes as they become more prevalent.
When the product code has been entered and the user confirms the purchase, the product is then paid for by the preferred debit or credit card specified by the user on their initial registration and the product is shipped to their specified delivery address.
The simplicity of the purchase process will make conversion rates pretty high. At the moment, with an internet retail experience for example, the drop-out rate between product identification and purchase completion is huge.
This is mainly due to the fact that you have to sign-up for an account and register all your details on every different website. Registering once and having a service that works with the click of a button makes the whole process much more usable.
Do you think payments are the biggest barrier to mobile commerce?
I think there are two main problems: fragmentation and the fact that the umbrella term is causing confusion. Is mobile commerce buying something through the mobile web or an application or is it using your mobile as a payment device i.e. a replacement for your credit card?
It is a complicated landscape for consumers and retailers alike. We need to go back and look at the core benefits of mobile, everyone has one and it is with you all the time.
The processing power is also huge so we need to take advantage of all the elements that make the channel unique and create a unified environment to allow for mass adoption.
It is easy to buy from a website because more or less all online retailers behave the same way. It is easy to buy something using a credit card as the chip and pin machines are all the same regardless of bank, shop, purchase price etc. We need to get to that situation to realise the potential of mobile commerce.
How can retailers overcome these barriers?
It will take years to achieve the aforementioned ‘perfect’ ecosystem so retailers have to look at which service has the highest potential to cost-effectively reach the biggest audience.
To date, retailers are almost the after-thought in the value chain when it comes to mobile payments, after the manufacturers, operators and banks.
There has to be a cost effective and future-proof platform for retailers to fully commit. It’s no good if the onus is on retailers to spend millions of pounds upgrading the technology at the checkout, if that technology is going to be replaced by something else in a couple of year’s time.
Retailers need to think about what else these mobile commerce providers are able to offer aside from directly replacing the wallet. Realistically, people will still need to queue for an NFC checkout, so in that respect it’s just changing the gadget at the end of the queue rather than cutting it.
By opening up different points of sale for retailers through their advertising, it lowers the barriers to purchasing straight away, making immediate, impulse purchasing a reality.
How has fragmentation of the mobile payments market come about?
A huge increase in interest has prompted many different players to get involved, all keen to grab a piece of the pie. Now we find ourselves with almost too many services to choose from.
Given the opportunity mobile presents for retailers, it’s hardly surprising there’s been such an interest. Mobile is going to be one of the biggest catalysts for change in retail over the last 100 years and businesses don’t want to miss out like they might have done with e-commerce.
Breaking it down, there are three different parties involved with most mobile payment schemes.
Manufacturers create the handset with the technological capabilities. Network operators carry the data needed to make transactions and banks own the relationship with the consumer and their money.
That’s a three way split without even considering the retailers so it’s no real surprise that with some of these initiatives the revenue shares start to look a little unfeasible and far removed from the retailer’s original customer-engagement mission.
How can this problem be overcome?
If history’s anything to go by it will be through consolidation. Many of the services out now and set to be launched will no doubt be offering similar parts of the same service but to different people, so strategic alliances help consolidate the market, increase the user base and therefore the potential revenues.
We’ll also find that some of the weaker services that are not offering retailers any real extra value will get left by the wayside and eventually die out or be snapped up by a larger player.
Retailers also need to move on the front foot. By working collaboratively, the highstreet has a huge opportunity to use the mobile channel to its advantage.
What is your opinion on NFC, and other offline mobile payment solutions?
I think NFC is about the exchange of information rather than a standalone payments solution. If I am in a restaurant and can get the menu on to my device through NFC as I walk in the door and then order through it, that is interesting.
If it’s just a case of tapping my phone on an NFC device rather than ‘tapping’ my credit card, I can’t see where the experience improvement is.
How do you see mobile payments evolving over the next couple of years?
Ultimately the industry will change and adapt to how consumers are using their mobile, it always does. I think we’ll see a lot of consolidation in the future as the industry attempts to streamline itself in order to come up with a truly valuable service for retailers.
My hope is that retailers lead on the ‘revolution’. My expectation is that one of the major high-street retail brands is going to set a standard that others will follow.
Retailers are ready to make a significant move and realise the revenue potential of the channel. Certainly the conversations that we have had at MMN with 17 of the top 20 retailers indicate that the next six months could be very interesting for this industry.