White Paper by: Let’s T@lk Payment$

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Generic Information: SK Planet, SK telecom’s internet service arm,

launched the mobile wallet service in 2010. Supports array of functionalities like transport

tickets, movie tickets, loyalty programs but lacks those of debit and credit cards.

Reached 9 million subscribers with 2.5 million active users per month in April 2013.

220 service providers support the wallet. Can be used across 80,000 locations in South

Korea. In May 2013, the Korea Times had reported

that it is used by 75% of users having smartphones with smart wallet functions.

Factors driving Success: Timing of launch as it was first of its kind back

then. The way it has been promoted to service

providers. SK telecom highlights its large customer base as well as CRM capabilities to attract service providers.

Positive perception by customers towards mobile wallet. They want a single medium to store multiple storage cards.

Annual growth in payment cards at a CAGR of 8% reaching volume upwards of 264 million back in 2011. The surge in card ownership increased access to banking services which further increased mobile wallet adoption.

Operators forging partnerships with banks and payment networks. E.g. SK telecom partnering with card issues to support both PayPass and payWave standards.

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Generic Information: The words Osaifu-Keitai literally mean ‘Wallet

Mobile’. The mobile wallet service was launched way

back in 2004. It is based on FeliCa integrated circuit

developed by Sony which is a de facto standard in Japan.

Osaifu-Keitai include array of services like loyalty card, identity card, electronic money, public transit and credit card as well.

The mobile wallet gets advantage from the FeliCa platform to integrate contactless payment technologies like NFC, QR code, etc.

Factors driving Success: The FeliCa platform helped it grow

exponentially in Japan. But the major factor attributed to its success

can be NTT Docomo being the market leader in Japan among mobile operators.

Although the mobile wallet service has brought about other players as well including banks and has witnessed collaborative models as well.

Very high penetration of mobile phones in Japan at around 87%.

Early adoption of mobile internet in Japan. E.g. i-mode, the mobile internet service by NTT Docomo, largest operator in Japan.

Early adoption of prominent cellular technologies in Japan like 3G and 4G.

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Generic Information: The wallet service was founded in October

2011 by four major mobile operators in Sweden: Telia, Tele2, Telenor and 3.

It paved the way for 97% of Swedish mobile phone users to pay for goods at participating businesses.

It uses the simple SMS platform for transactions using a mobile app.

This enables it to function not only on Android and iOS smartphones but also on older phones based on Java.

WyWallet provides a popular payment mechanism called purchase-on-invoice.

This mechanism facilitates card-not-present (CNP) transactions in which customer can inspect purchase upon receipt and pay for them later.

Factors driving Success: The simple SMS platform makes it mobile OS

agnostic and has been a key factor behind its wide scale adoption.

The major reason behind its large customer base is the collaboration of the four operators which themselves hold majority of cellular customer base.

The collaboration among the operators has provided cross-operator interoperability and wide addressable market.

High mobile penetration and mobile internet penetration in Sweden.

In Sweden, internet penetration is 94%, mobile penetration is 150% and mobile internet penetration is 92.7%.

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Generic Information: Founded in 2001, SEQR is a popular mobile

wallet in Sweden and across Europe too. Seamless, a 12 year old company based in

Stockholm, installs its system at the point of sale with comes with stickers containing either QR codes or having NFC capability.

The SEQR app can be used to access the POS systems.

The methodology of transaction involves use of card details and account numbers stored on Seamless’s servers which is matched with cashier identification code and value of transaction stored at checkout system.

SEQR is completely independent of PCI and traditional card networks.

The service is currently active across 30 countries with Seamless handling more than 3.1 billion transactions.

Factors driving Success: The launch of the service in early years of the

millennium gave it wide geographical reach. The independence on PCI and traditional card

networks has given it wide-scale reachability. The lower transactions charges compared to

card companies is also an influencing factor behind adoption.

Effective distribution of sale outlets across 30 countries, the no of outlets being 525,000.

Highly developed telecommunications equipment and handsets manufacturing across Europe.

Strong collaboration between payment service providers and banks. E.g. PBS in Denmark, BBS in Norway & Luottokunta in Finland.

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Generic Information: It started as commercial NFC payment service

back in October 2012 in collaboration with MasterCard.

The service was launched with the participation of banks and allowed customers of T-Mobile to store credit and debit cards on their phones. Within a couple of months of its launch, it had already gained 5,500 NFC customers.

Currently, it works in collaboration with five major banks of Poland namely Eurobank, Raiffeisen Polbank, mBank, Getin and Noble Bank.

Factors driving Success: The collaboration with major banks of Poland

has fueled MyWallet’s growth. At the end of first quarter of 2013, there were

120,000 NFC point-of-sales in Poland which further aided the adoption of MyWallet.

The high number of NFC portals can be attributed to MasterCard project towards deployment of its PayPass technology.

With MasterCard collaboration in tow and the support of five major banks of Poland, MyWallet truly is on a successful roadmap.

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Generic Information: In 2012, the mobile wallet came into

existence as first of its kind collaboration between the Canada’s biggest wireless carriers i.e. Rogers Communications Inc. and Canadian Imperial Bank of Commerce, among the five largest banks of Canada.

It allowed contactless purchases up to C$50 using NFC-capable devices.

The mobile wallet service was SIM based and allowed payment card information to be securely downloaded to the SIM card.

Suretap was readily compatible at numerous point-of-sales (POS) including those of MasterCard PayPass and Visa wavePay.

Factors driving Success: Rogers had a large subscriber base (9 million

as of 2012) and also Rogers got its banking license approved in 2013 which propelled easy adoption of surretap.

The SIM based feature provided highest level of security and more control to the customer thus creating better perception among its adopters.

Through collaboration with MasterCard, Rogers was able to bring about virtual Rogers prepaid MasterCard which further aided adoption of suretap mobile wallet.

The Canadian market is dominated by debit card usage. Back in 2011, around 78.8 million cards were in circulation. With EMV adoption already in its final phases, this has paved way for mobile wallet.

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NTT Docomo’s iD In 2005, NTT Docomo invested US$1billion in Japan’s no. 2 credit card company at that time. This resulted in the launch of Docomo’s very own credit payment scheme called iD in the month of December. At the same time, DoCoMo also gave subscribers places to tap their phones to pay with iD, investing tens of millions of dollars more for minority stakes in convenience store chains. The telco also fronted the cost of contactless terminals for smaller merchants. Through its tens of millions of U.S. dollars’ worth of investment in retail chains, DoCoMo has managed to get the iD m-payment brand accepted at scores of convenience stores and other merchant locations–450,000 terminals in all. The high penetration of FeliCa chip enabled phones fueled the growth of the iD service.

NTT Docomo and KT’s NFC rollout Commercial NFC services were introduced

by Japan’s NTT Docomo and South Korea’s KT at end of 2012.

The services allowed subscribers to use a range of NFC mobile payments including mass transit ticketing, promotional couponing services, etc.

Facilitated customers travelling between Japan and South Korea to access the services with no constrains.

Further expansion of service through strategic tie-ups Visa Inc., Samsung Electronics Co. Ltd. and Gemalto.

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Other Wallets yet to see Sizeable Adoption

Isis’s Mobile Wallet in USA Isis, the firm behind this mobile wallet service, is a joint venture between the three largest operators in USA i.e. AT&T Mobility, T-mobile USA and Verizon Wireless. The mobile wallet service is thus supported on more than 50 Isis Ready smartphones under contract among the three operators. To use the service, a consumer basically requires an NFC capable smartphone and SIM based secure element. In USA, more than 20 million smartphones in market feature NFC technology with more being shipped by the leading three carriers. Isis mobile wallet has already had successful pilots in states like Texas and Utah unveiling a no of fruitful results. As many as 65% of consumers testing the service revisited merchants often and took advantages of mobile offers. Isis mobile wallet has deals with four major credit card companies: Visa, MasterCard, American Express and Discover. It has the support of six major handset makers. Not to be forgotten is the backend support of the leading cellular operators. Recently it has partnered with big point-of-sale system providers and financial institutions like Chase, Capital One and Barclaycard leading to incubation of more payment cards into Isis wallet. Such deals have given access to about 50% of all consumers in USA.

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