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The Mobile Payment Opportunity

Get Paid Anytime Anywhere



January 2012
Sahir Anand



~ Underwritten, in Part, by ~













This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and
represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc.
and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.




January 2012
The Mobile Payment Opportunity: Get Paid
Anytime Anywhere
Payments are the next step for mobile and tablet shopping. According to
Aberdeen's September 2011 Mobile and Tablet Shopping De-Mystified:
Adoption & ROI Business Case report, after consumer adoption of mobile web
(57%) and mobile email (40%), payment transactions over a mobile phone
device (m-payments) were the mobile shopping component next most likely
to be identified as essential, chosen by 40% of 300 qualified enterprises
surveyed by Aberdeen (including 80 companies in retail and related
industries).
According to Aberdeen data cited in this report, even though m-payments
are a recent technology innovation, they are expected to grow briskly as a
consumer payment form factor within the next three years, due to the
mobile / digital affinity of consumers. In the last three years, this industry has
seen rapid ecosystem advancement in terms of commercial launches,
advanced pilots, and new platforms / solutions. The m-payment ecosystem
comprises merchants (retail, hospitality, restaurants etc.), financial
institutions, handset manufacturers, payment infrastructure providers, and
mobile network operators (MNOs).
A slew of commercially-ready mobile payment systems, consumer mobile
wallets, payment-ready handsets, and point-of-sale (POS) enabling tools have
hit the market. In fact, according our latest survey conducted in December
2011 involving 75 companies, 56% possess an m-payments initiative at some
stage of deployment or consideration. This report identifies the key drivers
and challenges likely to shape m-payments at the merchant-level as a next
step in the evolution of the payments ecosystem, from the perspectives of
customer use, transaction volume, loyalty, and payment security.
Current Market Adoption & Value Proposition
From an end-consumer standpoint, m-payments (with or without Near-Field
Communications (NFC) or mobile contactless payment technology) could
be game-changing in alleviating traditional payment complexities such as
check-out time and customer convenience at POS. From a banking
perspective, m-payment is a new opportunity to expand both in-store and
non-proximity payment transaction convenience beyond traditional payment
acceptance boundaries.
Figure 1 below indicates that 24% of companies have currently deployed m-
payments related technologies and business processes. Another 50% have
launched initiatives: a pilot program or a trial (12%); budgeted to start
adoption within 12 months (20%); considering this technology (18%).
Analyst Insight
Aberdeens Insights provide the
analyst perspective of the
research as drawn from an
aggregated view of the research
surveys, interviews, and
data analysis
Mobile Payments Definition
Aberdeen defines mobile
payments as the ability for a
consumer to fulfill payment
transactions using a
consumer-owned mobile or
tablet device at a merchant or
retail POS/check out location
or elsewhere. Mobile
payments technology includes
but is not limited to the use of
mobile contactless or near-
field communications (NFC),
short message service (SMS),
payment sticker, mobile
wallet, wireless application
protocol (WAP), direct
mobile billing, pre-paid, smart
poster, and loyalty

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2011 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
The general awareness of key consumer and merchant elements associated
with this technology is also trending upwards. This survey indicates that 90%
of companies are aware of this technology, compared to percent 80% of
companies surveyed by Aberdeen in 2008 (see report) and 63% in 2007.
The three biggest groups of companies that indicate high levels of awareness
include: retailers, banks, and hospitality / restaurant companies.
Figure 1: M-Payment Initiatives in the Market


Source: Aberdeen Group, December 2011
Mobile contactless or NFC payment is the technology of which respondents
are most aware: 77% of respondents cite affinity towards NFC transactions,
followed by mobile wallet, mobile web payments (WAP), and short
messaging service (SMS)-based mobile transactions like the ones used for
mobile money transfers.
Awareness of NFC and Mobile Wallet is on the Rise
An NFC-enabled phone transaction is provisioned with a payment
application (i.e., credit or debit card) issued by the consumer's financial
institution or bank. The application and payment account information are
encrypted and loaded into a secure area in the phone. The phone uses built-
in smart-card NFC technology to communicate with the merchant's
contactless payment-capable POS system, similar to the contactless payment
cards and devices in use today. Proximity mobile payments can be made at
both attended POS locations (such as stores) and unattended locations
(such as vending machines) that use the existing merchant payments
infrastructure. NFC-enabled mobile phones can also support applications
other than payments. Examples include coupons, ads and loyalty / rewards
programs.
26%
18%
20%
12%
15%
9%
0% 5% 10% 15% 20% 25% 30%
No completed or planned activity
None yet, but considering it
None yet, but budgeted to start within
12 months
Pilot project launched
Have deployed within 2 years
Have deployed within the past 3 - 5
years
Percent of Respondents n=75
Demographics
Of the 75 responding retail
organizations, demographics
include the following:
Job title: C-Level (20%); EVP /
SVP / VP (11%); Director
(17%); Manager (17%);
Consultant (18%); other
(17%)
Department / function: Sales
and Marketing (34%); IT
(23%); Corporate
Management (8%); Product
Development (12%); Supply
Chain / Logistics (6%); other
(17%)
Segment: Banking/Finance
(24%); IT Consultants to
End-Users (15%); Retail
(15%); Payment
Infrastructure (18%);
Hospitality (6%); Food and
Beverage (4%); and Other
(18%)
Geography: North America
(46%); APAC region (19%)
and EMEA (35%)
Company size: Large
enterprises (annual revenues
above US $1 billion)- 31%;
midsize enterprises (annual
revenues between $50
million and $1 billion)- 31%;
and small businesses (annual
revenues of $50 million or

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2011 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
The m-payment model that respondents were next most aware of was
mobile wallet-based phone transactions. These transactions can be enabled
using a native software application on the consumer's mobile phone device.
Consumers register by providing their phone number and other
information, and the payment provider sends them a personal identification
number (PIN) via short message service (SMS). Mobile wallets can be
enabled with or without NFC technology. A typical mobile wallet can be
similar to an online wallet, including debit, credit, pre-paid, loyalty, and
driver's license details of the consumer for use at merchant locations for
myriad transactions. In addition to mobile NFC and wallet-based
transactions, m-payments using mobile WAP and SMS-based mobile phone
transactions also form part of the primary mobile payments model.
Direct mobile billing (44% respondent awareness), mobile pre-paid (52%
respondent awareness), and mobile gift cards (45% respondent awareness)
are the other models in the m-payment ecosystem. Consumers can use
direct mobile billing to make a purchase on an e-commerce website applying
user authentication codes provided by the payment provider. The
consumer's mobile phone account is then charged for the transaction.
Figure 2: M-Payment Techniques or Methodologies Enterprises
have heard about in the Past

Source: Aberdeen Group, December 2011
Payment and Loyalty at the Center of M-Payment
Figure 3 below shows the functionalities being fulfilled by currently
implemented m-payment programs within merchant and other related
segments such as transit. As expected, 8 out of 10 enterprises selected
payment transactions as a top functionality. However, mobile wallet
functions and mobile loyalty programs are starting to become a preferred
extensible part of the overall m-payments model; nearly 3 out of 10
59%
62%
75%
77%
0% 20% 40% 60% 80% 100%
SMS-based mobile phone transactions
Mobile web payments (WAP)
Mobile wallet-based phone
transactions
Mobile contactless or NFC - enabled
mobile transactions
Percent of Respondents n=75
"For us, the top two challenges
associated with mobile
payments are customer
adoption and staff training."
~ Brett Lowe, eMarketing
Manager, Shoprite
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2011 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
enterprises selected mobile wallet as a top functionality. Merchants and
related enterprises are turning toward a more holistic payment experience
for two reasons: first, the convenience of the mobile phone device as a
viable payment option for consumers. Second, merchants want to add the
value associated with the use of coupons, loyalty programs, and gift cards
within the same experience or transaction. Could this re-define the way
consumers interact with brands or consumer services? For merchants and
other consumer service companies m-payments could be game-changing, as
they have always struggled to provide an all-in-one tool for payments and
loyalty, other than private-label credit cards, which are currently used by
only 16% of merchants. Will this change the way loyalty programs are
conducted on a day-to-day basis? A resounding- Yes!
Figure 3: Current Functions Fulfilled by M-Payment Programs

Source: Aberdeen Group, December 2011
POS and Cross-Channel Customer Connectivity
M-payment has cross-channel (store, e-commerce, call center etc.)
implications for merchants who accept such payments, banks who act as
issuers of these payment options, MNOs, and payment infrastructure
providers.
Besides the value of e-commerce for enabling Mobile WAP transactions, a
POS system or register in the store and un-attended terminals can be a
destination for mobile phone transactions. As a result, introducing m-
payment technologies at the store POS is top of mind for merchants
(retailers, hospitality, and restaurant companies) and banks (see figure 4
below).

22%
27%
29%
84%
0% 20% 40% 60% 80% 100%
Issuance of loyalty program
Acceptance of loyalty program
Mobile wallet functions (i.e., driver's
license, payment cards, loyalty
programs, coupons, and gift cards)
Payment transactions
Percent of Respondents n=75
"The key is figuring out PCI
implications and franchisee
investment areas for mobile
payments growth within our
organization."
~ Vice-President, Large U.S.
Based Pizza Restaurant Chain
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2011 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
Figure 4: Top Two Current POS Payment Improvements Being
Considered by Merchants

Source: Aberdeen Group, December 2011
When asked about the top two POS payment-related improvements they
are considering, 38% of respondents rate m-payment right on the top of the
wish-list, followed by mobile coupons (22%) and contactless payment
systems (19%). An astounding 61% of banks and financial institutions rank m-
payments as the top priority for payment acceptance improvements.
M-payments are not a buzzword anymore. This payment form factor is
emerging as a key part of the strategic technology and business agenda
within the merchant and banking space. Converting the current POS
environment to a mobile payment-ready workflow requires merchants and
banks to consider some payment acceptance infrastructure upgrades. These
upgrades are not substantial, but may be required in areas like POS payment
software, NFC-payment reader or pin-pads.
Current Business Pressures
So why all the hoopla about m-payment, and what are its implications
moving forward? To a certain extent the answer lies in the business
pressures, actions, capabilities, and technology enablers covered in the next
following sections of this report.
The main driver leading end-users toward payment innovation areas like m-
payment is customer convenience (see figure 5). When talking about
traditional debit, credit, pre-paid or loyalty at point-of-service, 33% of
merchants list grappling with long and complicated customer transaction
time in stores as one of their top two business pressures (as seen in
Aberdeen's March 2011 The Customer Connected Store: 2011 Store Operations
Automation Best Practices benchmark report). Transaction complexity issues
11%
14%
19%
22%
38%
0% 10% 20% 30% 40%
EMV payment acceptance
Mobile handhelds for in-store functions
Contactless payment systems
Mobile coupons
Mobile payment
Percent of Respondents n=75
"We deployed an m-payment
initiative about two years back.
We do believe that the
merchants will drive adoption.
We are focused on ensuring
privacy, security, and software
upgrade/implementation
elements."
~ Vice-President, Large North
American Bank
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2011 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
extend to any point-of-service across channels. Six out of 10 enterprises
indicate that they are under pressure to improve customer convenience.
Merchants, banks, and consumer service organizations cannot afford to be
oblivious to the drastic shifts in customer product search, buying and
payment behavior. The word- DIGITAL- is an integral part of shifts in
customer behavior at every customer touch point, including payment. In the
age of digital and personalized consumerism, merchants, banks, and
consumer service organizations must constantly seek and provide easy, fast,
personable, and trendy payment experiences, ultimately contributing to the
overall consumer experience and satisfaction. The risk of not doing so, or of
being late in the game, is lost sales opportunity and competitive
disadvantage. Therefore, the pressure to respond to the customer's digital
affinity via m-payments has become imperative for a third of enterprises.
Figure 5: What Are the Top Two Pressures Driving Your
Company to Focus Resources on Mobile Payments?

Source: Aberdeen Group, December 2011
Current Strategic Actions
As a result of the above pressures, the top two strategic actions for nearly 6
out 10 enterprises relate to advanced discovery (see Figure 6) to determine
the cost-benefit of m-payment. These companies are trying to comprehend
the software and hardware implications of payment infrastructure change
management. Just as with the adoption of card-based contactless payment
systems nearly a decade ago, m-payment is likely to undergo similar scrutiny
in terms of cost and implementation standards from retail, hospitality, and
transit companies. However, the transition is likely to be less challenging
due to the experience of contactless deployments, recently concluded and
ongoing mobile NFC pilots, and other commercial mobile payment
applications deployments in Europe, and Asia-Pacific regions.
24%
28%
33%
61%
0% 10% 20% 30% 40% 50% 60% 70%
Desire to be a market leader
Need to improve customer retention
and loyalty
Desire to take advantage of customer's
mobile phone or digital affinity
Need for greater consumer
convenience
Percent of Respondents n=75
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2011 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
Using external services to help implement this new payment technology is
the third most commonly cited strategic action, reported by almost a third
(27%) of enterprises. Our data shows that when it comes to the use of
external services, respondents are most likely to consider the following
entities within the next 12-24 months: credit associations (53%), mobile
payment solutions/service provider (36%), bank or another financial
institution (31%), payment processor (29%), and MNO (26%). Several
external entities already impact the growth and acceptance of m-payments,
and will continue to do so in the future. This is both good and bad news, as
merchants and other enterprise end-users at some stage tend to expect
scalability, ownership, and unbridled extensibility for their POS payment
applications. The above entities will have to address these end-user
challenges now and in the future.
Figure 6: Top Two Strategic Actions Relative to the Use and
Adoption of Mobile Payments

Source: Aberdeen Group, December 2011
Current & Planned Capabilities for M-Payments
To prime m-payment strategies for actual execution, enterprises are using
capabilities or competencies related to process, knowledge, technology, and
organizational factors. Due to the fact that m-payment is recent
development (24% of respondents have had initiatives for no more than five
years), many of the top capabilities cited in Figure 7 are being embraced on
average by a fourth of companies. The top few are of crucial importance.
First, executive buy-in and an internal champion are required for payment
technology innovation, as 60% of companies have a legacy payment
technology infrastructure (five years or more). Executive buy-in and support
is needed for any major additions or changes to the current payment form
factors, software, processing, gateway or other major infrastructure
requirements like payment data storage, security, and network management.
26%
27%
29%
30%
24% 25% 26% 27% 28% 29% 30% 31%
Upgrade technical infrastructure to
enable future implementation
Use external services to help
implement the technology
Understand the software and
hardware implications
Assess cost-benefit aspects of the
technology
Percent of Respondents n=75
"The provision mobile-
enabled point of sale solutions
is important to us. We are
very keen to enable mobile
payments but will need our
POS providers to implement
the solutions."

~ Lis Miller, CFO, DryGreen,
Australia
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2011 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
Conversations with end-users in retail, restaurant, and transit companies
reveal that executive support is a prerequisite for m-payment innovation.
Change management functions and direct design / development involving
internal IT teams is another capability imperative for any POS change. Large
and mid-size retail, as well as restaurant enterprises, operate sizeable POS
teams that manage day-to-day system performance, upgrades, data security,
and payment innovation.
Figure 7: Current Capabilities

Source: Aberdeen Group, December 2011
The top planned capability for the next two years for 55% of enterprises
relates to the application of mobile payment industry standards for upgrades
and deployments. In the last two years, the industry stakeholders (FIs,
Banks, MNOs, Industry Associations, and Solution Providers) have
attempted to create mobile payment blueprints (i.e. ARTS and others in
Europe). However, this industry may lack a common minimum program
comprising of a cross-country code for uniform deployment, services,
security, and maintenance / support standards. M-payment standards vary
between early adopters like Japan and South Korea, next-wave adopters like
Europe, North America, and even fast-track adopters such as India and
China. In several cases, the standards are driven by unique country-specific
mobile-centric and payment-related regulatory requirements, and other
unique market conditions associated with consumer data, including mobile
consumer data and m-payment opt-in. One bright spot is that this industry
and ecosystem continues to address the standards-related challenges
associated with market-ready solutions and the acceptance for open
technology / architecture requirements.
21%
22%
25%
25%
28%
0% 5% 10% 15% 20% 25% 30%
Ability to review mobile payment
technology performance
Ability to upgrade POS system and
payment data infrastructure
Ability to develop knowledge within
the design team
Executive-level mandate or established
internal champion
Senior management support for
payment technology upgrade
Percent of Respondents n=75
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2011 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
Figure 8: Planned Capabilities

Source: Aberdeen Group, December 2011
The second highest planned capability is related to the use of mobile
payment data for business intelligence (BI) purposes. This capability hinges
on unique and relatively new mobile BI models adopted by individual
enterprises. For instance, 42% of merchants plan to adopt mobile BI
capabilities--however, including m-payments requires a separate mobile-POS
integration and data separation layer for daily data analysis.
The value of m-payments data for customer insights, traffic, conversion, and
revenue forecasting purposes cannot be debated. However, companies must
involve the right partner to explore these advanced capabilities. A key
success factor is to build m-payment data intelligence into the initial m-
payment deployment model framework.
Current & Planned Capabilities for M-Payments
Figure 9 highlights the current technology enablers that form part of the m-
payments technology ecosystem. Due to recent evolution in the mobile
NFC technology ecosystem, usage and adoption are low (on average less
than 10% of respondents) for mobile NFC handset readers, payment pin-
pads, mobile contactless stickers, over-the-air provisioning software, and
NFC-capable POS terminals. Mobile wallet adoption is in the same vicinity.
However, enterprises including merchants, restaurants, and other consumer
service companies show greater adoption of secure payment card data
management, also known as payment card industry data security standards
(PCI DSS) compliance, which is capable of handling m-payment transactions.
Also evident in Figure 9, due to earlier evolution, mobile WAP, and SMS-
based mobile transactions such as the ones used for mobile money transfers
have seen higher adoption compared to technology that supports NFC-
based transactions. Meanwhile, 16% of companies use a relatively new
entrant: 2-D bar code scanning technology for mobile phones, which can
51%
52%
52%
54%
55%
49% 50% 51% 52% 53% 54% 55% 56%
Ability to review mobile payment
technology performance
Ability to initiate a pilot program for
mobile payment trials
Ability to inform employees to prompt
usage of mobile payments
Ability to use mobile payment data
into business intelligence
Ability to apply industry standards for
mobile payments
Percent of Respondents n=75
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2011 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
read coupon, multi-channel promotions, and smart poster applications.
Finally, 18% of merchants indicate current use of digital bar-code scan and
print solutions.
Figure 9: Current Enablers

Source: Aberdeen Group, December 2011
Planned adoption of m-payment ecosystem technologies is far rosier than
current adoption. Figure 10 below indicates the strong planned adoption
trend among companies as they continue to familiarize themselves with
commercially-ready m-payment options via financial institutions, trusted
service managers, and external third-party service or solution providers.
Mobile wallet and loyalty are on top of the wish-list, followed by mobile
NFC or contactless payment requirements like NFC readers and pin-pads,
and NFC-capable POS terminals.
The other models for m-payments, such as mobile WAP, SMS-based mobile
transactions, smart poster applications, and mobile gift cards, also find favor
among around half the survey respondents.
16%
16%
23%
32%
0% 5% 10% 15% 20% 25% 30% 35%
Mobile web payments
2-D bar-code scanning technology for
the mobile phone
Short message service
Secure payment card data
management
Percent of Respondents n=75
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2011 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
Figure 10: Planned Enablers

Source: Aberdeen Group, December 2011
Overall, technologies supporting NFC or mobile contactless payment
continue to emerge as "game-changers," as they can support POS payments,
unattended payments, mobile wallet, loyalty apps, and even bill payment. In
fact, 47% of the survey respondents contend that NFC will be the "killer"
application in the future, provided its market availability is improved not
only on the retail side but also on the buyer side. This survey also shows
that merchants, MNOs, and banks are considered the troika of entities that
can further NFC implementation in the industry.
Figure 11: Who should trigger the NFC implementation?

Source: Aberdeen Group, December 2011
46%
53%
53%
46%
55%
57%
58%
60%
60%
35% 45% 55% 65%
Mobile Short message service payments
Mobile gift card application
Smart advertisement or poster application
Mobile web payments (WAP)
NFC-capable contactless POS terminal
Mobile contactless (NFC-ready) pin-pads
Mobile contactless NFC handset readers
Mobile loyalty software application
Mobile wallet software application
Percent of Respondents n=75
6%
9%
9%
20%
23%
33%
0% 5% 10% 15% 20% 25% 30% 35%
Public transport systems
Infrastructure providers
Software developers
Banks
Mobile network operators
Merchants
Percent of Respondents n=75
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2011 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
Security and payment fraud concerns are potential inhibitors to m-payment
technologies. Four years into this research, security concerns still come up
from respondents. For enterprises adopting m-payments, security is not just
about safeguarding or compliance with PCI DSS, but protecting against a
growing number of mobile data and payment security threats. Mobile
payments data and consumer liability need the same security protection and
the same structure of data governance as card based payments.
As stated in previous Aberdeen research on this topic (report cited on page
2), "data breaches emanating out of lost or stolen mobile devices are the
biggest concern for merchants. Some of these concerns are unfounded due
to security parameters such as liability coverage provided by financial
institutions and several levels of data encryption followed by mobile
network operators and software application providers."
Another factor that may contribute to the concerns around mobile payment
security is the general lack of awareness among merchants about the secure
transaction environment for mobile payments, both for NFC and mobile
wallet related applications. Either way, the mobile payments ecosystem will
have to address security concerns by providing demonstrable evidence of
data security during initial deployments and pilot programs.
Figure 12: Two Security Factors of Most Concern for the
Adoption of Mobile Payment Systems

Source: Aberdeen Group, December 2011
Case in Point
A specialty retailer of women's fashion apparel and accessories, including
pants, jackets, blouses, handbags and jewelry, sells branded items on an
exclusive basis through its network of a few hundred retail stores in 45
states and its website. The company has revenue in excess of 1 billion
dollars, and is vertically integrated throughout its value chain from design
23%
27%
40%
47%
0% 10% 20% 30% 40% 50%
Vulnerability of air interface between
the consumer device and POS terminals
Lack of data security features
Lack of a strong payment verification
guidelines
Mobile phone is lost or stolen
Percent of Respondents n=75
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2011 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
and manufacture to its various retail channels, including store and e-
commerce / mobile. Like many companies, this retailer has been investing in
mobile commerce in recent years, and has faced some growing pains. In
March of 2011, the company launched a mobile shopping site for its retail
customers. Immediately, the company was receiving thousands off hits per
day and thousands of additional orders per week. This served to place even
greater pressure on their supply chain and inventory management practices.
Also, it required more emphasis on maintaining a common shopping
experience among all customers. We knew we were on to something, but
we didnt anticipate the very strong market reaction to our launch. We had
to quickly take steps to maintain our level of service, explained a Vice-
President of IT at the company.
The company is taking steps streamline inventory management processes to
maintain customer service levels and to promote customer loyalty among
their new mobile customer base. We have plans to deliver several follow-
on releases of the mobile application before the holiday in an effort to
enhance the value of the site. Our Mobile Shopping website will tie into our
real-time inventory and ordering, with in-store availability, the Vice-
President said. Going forward, we will continue to evaluate customer
response and survey results and plan to what we hear."
Understanding and improving the mobile shopping experience is only part of
the solution. Seamlessly and securely handling mobile payments can prove a
difficult challenge for retailers, who must stay current as the mobile
payment market (and it support technology) change. While we have been
accepting contactless payments for 3 years, we are always looking into ways
to improve. Currently looking at a mobile wallet application provider, which
is just a 'branding' of our existing contactless card program, explained the
Vice-President of IT at the company. The infrastructure for mobile
payments is still evolving, and its final shape has yet to be determined. As of
now, banks cant break out contactless from other credit card transactions,
and wallet transactions looks like any other contactless transaction. In the
end, even this branded -mobile wallet may only have a short lifespan as true
NFC evolves and hardware needs upgrading, the Vice-President said.
Key Takeaways
From an end-consumer standpoint, m-payment (with or without Near-Field
Communications (NFC) or mobile contactless payment technology) could
change the game by alleviating traditional payment complexities like long
check-out times and making the POS more convenient . From a banking
perspective, m-payment is an opportunity to expand both in-store and non-
proximity payment transaction convenience beyond traditional payment
boundaries. The promise of m-payments technology is undeniable; however,
several questions must be addressed:
1. If NFC is game-changing and the future killer application, then why are
respondents concerned about the market availability of NFC-ready
handsets, peripherals, etc., despite progress on several fronts, including
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2011 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
recent large orders from mobile handset manufacturers such as RIM,
Samsung, and others?
2. Can merchants, banks, and MNOs lead mobile NFC adoption without the
support and usage desire of a key ecosystem link- the consumer?
3. Why is security still a concern for so many respondents? Can the industry
establish uniform guidelines for m-payment security and data intelligence?
4. Can merchant adoption of m-payments be triggered by consumer
demand, legacy POS overhaul cycles, EMV (Europay, MasterCard, Visa)
payment acceptance or a combination of these factors?
The actions below can help end-users make a smooth transition toward an
m-payments model.
Develop a comprehensive roadmap and business justification via
consumer and market research for considering key customer touch
point advancements. Include within the due diligence process
advanced digital and mobile payment models like NFC transactions,
mobile wallet, mobile web payments (WAP), direct mobile billing,
and short messaging service (SMS)-based mobile transactions.
Consider timely enhancements to POS (every two years) in the
areas of traditional card-based payments, advanced payments,
integrated marketing functions such as loyalty that enables improved
customer-centricity and transaction speed.
Prepare a digital POS and payments migration path to adopt the
hardware, software, security and services necessary to enable new
payment methods such as proximity cross-channel payments, and
cross-channel marketing functions such as digital couponing and
loyalty.
Develop an internal knowledge culture for effective transaction data
management, security, and business intelligence strategies governing
payment experience models, but, more importantly, prepare for
new payment methods such as mobile contactless and wallet
applications.
For more information on this or other research topics, please visit
www.aberdeen.com

The Mobile Payment Opportunity: Get Paid Anytime Anywhere
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2011 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897

Related Research
The Customer Connected Store: 2011
Store Operations Automation Best
Practices; March 2011
New Customer Service Strategies in
Retail: The Reign of Kiosks and Self-
Service?; March 2010
Mobile and Tablet Shopping Demystified:
Adoption and the ROI Business Case;
September 2011
Customer Centric-Retailing 101Customer
Intelligence and Engagement Strategies;
October 2011
Author: Sahir Anand, Vice-President & Research Group Director;
(sahir.anand@aberdeen.com)


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The Mobile Payment Opportunity: Get Paid Anytime Anywhere
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2011 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897

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Blaze Mobile develops innovative mobile commerce and advertising
solutions that enable secure, convenient, cost-effective transactions and
promotions from the mobile device. The Blaze Mobile Wallet enables fast
and easy contact-less purchases including movie and event tickets as
well as fund transfer, banking, and personal finance management. It can
manage bank accounts at more than 8,000 supported financial institutions,
view electronic receipts, and quickly and easily create expense reports.
Blaze Mobile Wallet also offers valuable location based services such as
maps and points of interest, including ATMs, restaurants and more all in
the palm of your hand.
For additional information on Blaze Mobile:
Blaze Mobile
2930 Domingo Ave., Suite 123
Berkeley, CA 04705
www.blazemobile.com
info@blazemobile.com


The Mobile Payment Opportunity: Get Paid Anytime Anywhere
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2011 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897

Kony enables companies to provide innovative mobile solutions on every
mobile device. Leveraging the KonyOne Platform, an application is defined
just once, and deployed across more than 9,000 devices, 7 operating
systems and multiple channels, including native, HTML5 and mobile web,
hybrid, social media, SMS/MMS, kiosks, desktop and tablet applications.
KonyOne provides a universal framework that ensures the best user
experience by optimizing all native capabilities for each device, operating
system and browser. Given the rapidly changing market, Kony future
proofs applications against OS and browser updates, providing SLAs
guaranteeing timely support of the newest operating systems and devices.
For additional information on Kony Solutions:
Kony Solutions
7380 W. Sand Lake Road, #390
Orlando, FL 32819
Telephone: 321.293.0160
www.kony.com
sales@kony.com

The Mobile Payment Opportunity: Get Paid Anytime Anywhere
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2011 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897

Infineon Technologies offers semiconductors and system solutions adressing
three central challenges to modern society: energy efficiency, mobility and
security. The target markets are automotive, industrial electronics as well as
chip card and security applications.
Infineon has been the world leader in hardware-based security components
for more than a decade and supplies a wide range of security chips capable
of providing the protection for sensitive data required for mobile payment
transactions and similar applications. Its NFC portfolio supports all NFC
applications and business models and delivers the security and performance
crucial for the success of NFC.
For additional information on Infineon Technologies:
Infineon Technologies AG
Am Campeon 1-12
85579 Neubiberg, Germany
Telephone: +49.800.951.951.951
www.infineon.com
nfc@infineon.com