In common with countries such as Iceland, Scotland now has its own cryptocurrency – Scotcoin.

It’s not altogether clear from the Scotcoin website (http://scotcoin.org) exactly how Scotcoins are created but in contrast to Bitcoin they are pre-mined and will be distributed free to anyone in Scotland who wants some. At present they cannot be exchanged for other altcoins and they have no value in fiat currency (unless the free market decides otherwise, according to the website). Nor is it entirely clear whether the founder is actually based in Scotland but he was, he says, born there.  The purpose of Scotcoin, he says, is to provide a plan B currency for an independent Scotland.

Now, as someone who is not by nature a libertarian, at least where others are concerned, I’m a bit suspicious about cryptocurrencies. I don’t own any Bitcoin and feel slightly seasick at the idea of an asset whose value fluctuates more than the waves on a bad ferry crossing. Here at Consult Hyperion thought we generally believe that the technology behind Bitcoin, the blockchain, is a lot more interesting than the currency itself.

Nonetheless I felt moved, as a Scottish resident, to obtain some Scotcoins. Purely out of professional curiousity, you understand.

This involved downloading and installing the Scotcoin wallet. In other words downloading and installing an executable file from a non-https website I’d previously not heard of. As an IT security graduate this made me feel even sicker than the Bitcoin exchange rate but I did it nonetheless (to an old laptop) and I now own 1000 shiny Scotcoins.

Now what? It’s hard to say. Is it for real?

I feel obliged to report that not everyone is convinced about Scotcoin (see http://loggingoff.tygabitworks.com/) but then there’s a lot of negativity about Bitcoin too. I’m absolutely not endorsing that view, merely reporting it but the Scotcoin website certainly displays a creative attitude to punctuation and spelling, whether that means anything or not. On the other hand around 100 or so other Scots seem to have downloaded the wallet so presumably they think it’s fine*. And my virus checker (paid for AVG) hasn’t picked up anything feeding my online banking details offshore.

In any case there’s absolutely nothing wrong with the concept of a Scottish cryptocurrency, irrespective of whether Scotcoin is it or not and Alex Salmond would be well advised to consider it. If you’d like to know more, Dave Birch will be talking about the idea of a Scottish virtual currency to the Financial Services Club Scotland in Edinburgh on 29^th April. 

*I’m enchanted to note that one of the first power users is called Dug. Dug of course is Scots for Doge.

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

The post A cryptocurrency for Scotland? appeared first on Tomorrow's Transactions.

The US should take a bold step forward and forget about patching up the old, creaking ACH infrastructure. Build something for the 21st century!

Tim Sloane from Mercator wrote a super piece on how the US ACH infrastructure isn’t quite up to the job of providing the real-time funds transfer infrastructure needed for a 21st-century economy.

in the best possible scenario they are more or less correct; funds will appear in the consumer’s prepaid account on some random day in the future

[From Prepaid Program Managers Take the Blame for the Problems of the ACH - PaymentsJournal]

Here in the UK, the picture is different. The new ACH, the Faster Payments Service (FPS), is working splendidly well and is already spawning new payment products (e.g., Barclays PingIt, Zapp and Paym). It’s not perfect (it would be nice to have messaging with more and structured content, for example), but it’s pretty good. Surely it can’t be that complicated for the top 10 banks in the US just to build something similar — but better, with messaging and APIs — and then open it up on the same basis as FPS: free to retail customers.

Per my blog yesterday, ACH debit tokens can work, particularly if the consumer doesn’t have to enter them. Also in ACH, banks are in a position to influence acceptance.

[From Payment Tokenization | FinVentures]

Following the Federal Reserve’s consultation process, NACHA has indeed said that it will look at delivering a more modern infrastructure for the US, but I still think (as we said in our response to the Federal Reserve consultation) that tinkering with the disco-era systems in place isn’t the best solution for the US.

The expense of making technology improvements is widely seen as a key reason that some banks opposed the 2012 proposal to modernize the automated clearing house network.

[From Nacha Revives Faster Payments Plan|PaymentsSource]

Indeed. So why bother? Leaving the existing network alone and build a new Faster Payment Service (FPS) on cheaper modern technology, using 20022 XML, and go push-only. Let the old ACH, and its pull services, wither away.

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

The post ACH infrastructure needs replacing, not patching appeared first on Tomorrow's Transactions.

Google Wallet is back!  They have moved away from a focus on NFC to an e-wallet that will work with all mobile phones and have drastically reduced the friction with merchants, banks, mobile carriers and customers.

Downloading the Google Wallet app to my iPhone was quick and easy.  After downloading the wallet, it asks you to “sign in with your Google Account” or “create an account”.  The tag line is “One Google Account for everything Google”…you don’t see sign-in with Facebook here!

After signing in, and giving my Zip Code (as you must live in the U.S.), and agreeing to the T&C and allowing messages to be pushed to me, I was instructed to create a Wallet PIN.

After confirming my PIN, it takes me to My Wallet home screen.   It screams out “P2P” wallet, as the Send Money banner is very prominent.   If I am a customer that has just downloaded this wallet for “in-store” purchases, you are going to be confused and think you can only send money to other people (since wallets and using them to shop in-store is extremely rare in the U.S. probably not an issue now).   If you have gone to the Google web site and read about the wallet, and Google Card, there is nothing within the wallet that leads you to the getting the card.

The Send & Receive money function requires Google to verify your identity.   Before I do the verification steps, I wanted to understand program Fees. Fees are as follows:

• Free to send money directly from your bank account or using the balance in your Google Wallet
• Fee of 2.9% per transaction (min. of $0.30) to send money using a credit or debit card (Free promo until March 19^th)
• Receiving money and transferring to your bank account is always free

An interesting note is when you go the Google Wallet web site, and click on Send Money it takes you automatically to add a credit card and not the verify your identity step.  Additionally, you have the option to order your Google Card and when you click to order, it takes you to verify your identity page.

The verification process is name, address, birthdate and last 4-digits of Social Security number.  As soon as the verification process is approved, the Send Money options immediately change to reflect an option to add a funding source, by linking a bank account and/or debit or credit card.  Additionally, the wallet home page is changed to reflect a Wallet Balance dollar amount and a new banner appears advertising that you can get the Google Wallet Card.   It seems the verification step is the critical step that activates the options of the card and bank account.  They don’t want to go too far down the path before they do the standard verification steps.

Now lets take a look at the Offers and Loyalty program feature.  Under the Loyalty program tab you have the option of adding your own program or selecting from a pre-populated list of 15 programs such as Walgreens to Marriott.  If you have a loyalty program card that is not listed, the wallet asks you to scan the barcode on the card using the built in scanner.  If no barcode exists, you can enter the account number manually.  For the list of programs, you can enter your account number, or if not an existing member, join the program.

It’s a very easy and straight forward process to setup your cards. When using the barcode, it automatically recognizes the program name (i.e., CVS extra care) and adds the card to the wallet along with the barcode and account number.  You have the option to pick card color as an option.  When using a pre-existing program such as Marriott Rewards, you enter your Marriott number, it verifies the account and brings back your number of points and program level such as Gold.  When you click on the Marriott card, it takes you to another page that provides a banner page for Marriott, messages, view your hotel bill, and other links to Marriott and related promotions such as their co-branded credit card.  The additional page with links, messages and promotions are only available to those companies that are pre-listed within the loyalty program.

The Offers tab is a little confusing. When you see the Offers and Loyalty programs banner on the home page and you click “View offers and loyalty programs”, it doesn’t do anything – just takes you to an info screen that tells you to use the menu button to view your saved items.  When you go to Offers, there is a My Offers and Explore tab.  The Explore tab has three offers (based on my zip) under local offers and you can save the offer, which then appears in My Offers. From the comments and reviews I see online, people are confused and not seeing the Explore tab as many people are asking how to get offers added to the wallet.   I do find it very interesting that Google has not integrated their Google Offers app into the Google Wallet.  When you add offers to My Offers within the Google Offers app, they automatically appear in the My Offers in my Google Wallet.  These two apps should be integrated.  Also, Google says that merchants will start to place Google Offers on their web sites and other locations.

Offers Note:  In my area there were very few offers available, and no offers that appealed to me.  Google does say that they will continue to tailor offers in the Explore section based on my Google Offers usage (the separate app) and my Google account activity and changes in my location.  Also, allowing the Wallet owner to mark offers as “used” doesn’t provide merchants with much protection from multiple use of the offer.  It would be interesting if Google could create a unique “barcode” or “offer” code that tracks not only that the offer came from Google, but also specifically track the user – maybe  new product coming from Google?

Now let’s review the Google Wallet Balance and adding your bank account to fund the wallet.  Since this is a free option, I will be adding my bank account and not a credit or debit card wherein I will incur a 2.9% fee.  They do inform you that bank transactions usually take 3 days but can take up to 10 days.

Entering the bank account information was very easy.  They clearly identified the information required and where/how to find the information.  The next step was the account verification step.  You can verify immediately by entering your bank account Member/User ID and Password, which links your bank account, or the Challenge Deposit, which takes 2 to 3 days to verify.  As I did not want to link my account and I was curious about the Challenge Deposit method, I selected Challenge Deposit.

In the Challenge Deposit process, Google will make a deposit of an amount up to a $1 to your bank account.  You check your bank account, look for the deposit amount, and they enter the amount in the wallet to complete the account verification step.  This took two days in my case.

Adding funds by credit card (Visa/MasterCard) is an option, but you cannot use your American Express to add funds.  You can use your American Express to send money, but not to add funds to your wallet.

 I ordered the Google Card, which arrived in approximately 3 weeks, and I was surprised to see the card was a MasterCard Prepaid card.  The MasterCard logo and hologram is on the back of the card.   Card activation was achieved via the Wallet.  Next step was to add funds to my Wallet, and I go online to my bank account and look for the Google Challenge Deposit I outlined above.  I find a $0.80 cents deposit transaction and go to my Wallet to enter the deposit amount.  Google Wallet verifies the amount is correct and I am now able to add funds to my Wallet.  I elect to add $20, and the transaction adds the $20 immediately.  Even though I was expecting to wait 2 to 3 days for the funds to appear, it occurs immediately.  Google communicates that adding funds from your banking account could take up to 5 days, but they note that only a small percentage take more than 2 days.

Add Funds Note:  The process is very easy and straightforward.  It does seem that Google must be doing some fraud/security steps during the add funds process.  In my case they added the funds immediately, no waiting, which means they were willing to take the risk that I had the $20 in my bank account, since it takes at least 1 day via ACH to receive funds. If Google is willing to take the risk, could they create a “near real time” ACH type of payment?  Something that the Federal Reserve is studying, and banks say will take years to implement, if ever, as they say they do not understand the business case to support it.

First use of the Google Card was at Home Depot on one of my 3 trips per project visits!   The clerk had never seen a Google Card and didn’t think it would work.  I swiped the card and it asked from my PIN number and transaction was approved.  Before I left the store I received a mobile message with my transaction information and my current Wallet Balance.  It worked just as easily as my bank’s debit card and actually was a much better experience in that my bank does not automatically send me via app message/text message my transaction information and my current bank account balance!

 Google Card Note:  The Google Card works just as easily as my bank debit card at the POS and it has the ability to add greater functionality in the future such as automatically utilizing Offers and Loyalty programs at the point-of-sale.  The one big negative with the Google Card, is that it will decline any transaction that is “greater” than my current Wallet Balance.  They do not automatically pull funds from my bank account or registered credit/debit card, they decline the transaction.  They do not offer the feature to “top off” my Wallet Balance automatically by allowing me to set floor limits, wherein my Wallet Balance reaches a specified balance, they add funds automatically (like my Starbucks wallet).  Google’s approach is to have me control my authorization of funds to transfer to my Wallet balance.

Now let me respond specifically to my list of questions and ratings from the original blog article. The rating is from a general public perspective, on each of the category questions listed here, on a scale of 1, 2 or 3.

•          1 (Confusing, Needs Work)

•          2 (Okay, Average)

•          3 (Easy, Better Than Most)

The rating is based on the individual wallet, and not compared against other wallets, since I have not worked with all of the wallets as of today. I will do an overall rating at the end of my e-wallet journey.

1 How is the wallet marketed/advertised to the general public?  What media channels?  How do I know the wallet exists? What is the message to me?

The advertising seems to be limited to online, and someone has to be looking to add the wallet.  You can see it listed as an option on your Google account.  I have not noticed this advertised in any other media channels, so you have to be looking for this wallet.  The message to consumers is that the wallet is for shopping, saving and paying.  Doing ecommerce faster/quicker seems to be the main message. Rating: 2

2 Why do I need this mobile wallet?  (Isn’t this the first question that needs to be answered in a manner that is simple and straightforward for the general public?) What issue does it address?  How is my life better by using the wallet?

This is a key question to be answered by all the wallets.  As I think about this from a general consumer (from the perspective of my wife – Lisa).  Why would I want to download this wallet?  What can I do that I can’t already do with my credit/debit cards in my physical wallet?  Lisa said that if she could save all her Loyalty cards to the wallet, this would be convenient and she wouldn’t have to carry all the cards in her purse.  From my point-of-view, they have not answered this question for me – more on this later. Rating: 1

3 Is it a payment-only wallet?  Does it have loyalty/rewards?  Other benefits?

This is intended to be an all-in-one wallet, with P2P, POS, and loyalty and offers all in one wallet.  It does not have its own loyalty/rewards program, but provides access to other programs.  It comes with a MasterCard card, which does provide in-store functionality.  Rating: 3

4 How do I get the wallet?  Download from iTunes app store?  Scan a QR code? Go to a web site?

You download from the app store. Rating: 2

5 Now that I have downloaded the app to my mobile phone, how difficult is it for me to register/set up?  Are there a few simple steps or do you need to be a nuclear engineer to figure it out?  Does it ask from my bank account information?  My debit/credit card number?

Set up as described above was very easy and straightforward.  Rating: 3

6 Where can I use the mobile wallet?  How many stores (real brick-and-mortar stores) not online stores – use it at Point-of-sale (POS) locations.  Transit?

The mobile Wallet cannot be used at any in-store locations. The Wallet can be used for online/internet shopping where the Google Wallet icon is available at checkout.  The Wallet can be use anywhere MasterCard is accepted via the Google Wallet Card, which is a MasterCard Prepaid account.  The Wallet Card does provide the user with the ability to use the Wallet wherever MasterCard is accepted.  On the other hand, it only accesses the balance in your Wallet and does not automatically “top-off” balances. A transaction will be declined if your current Wallet Balance is not great enough to cover it.   Rating: 1

7 What is the POS set up –stand alone tablet? Integrated cash register?  Typical card reader POS?  Contact-less/NFC?

Wallet can only be used via the Google Wallet Card, which is a MasterCard debit card.  Merchants do not have to do anything special to accept the payment. Rating: 3 (From a merchant perspective)

8 Is the POS experience easy?  Hard?  Confusing?  Does it actually work?

Easy…same steps as using a standard Visa/MC debit card.  It works.  So on one hand the e-wallet really “does not work” at the POS, since it is using a standard Visa/MC debit card and it is restricted by current Wallet Balance to cover the transaction. Rating: 1 (From a customer perspective)

9 What information do I get sent to me after the sale?  Do I get my receipt emailed to me?  A text message?  Is the transaction listed on my wallet?  Did I earn points?

I received a mobile message immediately after the transaction with details of my transaction.  Rating: 3

10 Are there fees? Do I need to reload my wallet (manually or automatically)? Is the transaction a prepaid card?  Or my debit/credit card?  Does it use the Automated Clearing House (ACH) network?

No fees if linking your Wallet to your bank account.  I need to manually reload my wallet; there is no automatically topping off if balance falls below a specified threshold.  You can link to your credit/debit card, and fees apply as I outlined above. Rating: 2

Overall I like the Google Wallet.  It is easy to set up and use as a P2P application and having the Google Card allows it to be used everywhere MasterCard is accepted.  But will I use it?  Not as a payment tool.  I am not someone that sees the value in P2P and I can easily use any one of my exiting credit/debit cards in my “physical” wallet.  Will I use it to store my loyalty/reward cards?  Maybe.  I already have used CardStar for a number of years for that purpose, so do I take the time to set up the Google version?  Not sure.  How about the Offers?  Again, in my area there are no enticing offers and the Google Offers app is not integrated with the Google Wallet – two separate apps.  The bottom line, Google Wallet has not answered for me (maybe for other people they have) the basic question of “Why do I need/want to download this app to my mobile phone?”

Next up will be Starbucks.

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

The post Google Wallet Review appeared first on Tomorrow's Transactions.

As “us” industry experts know, the iPhone does not have any Near Field Communication (NFC) capabilities and hence I will be limited by the wallets I can actually use (the general public doesn’t know NFC from ABC and do not care).  But, in the US, the iPhone is still the most widely used US mobile phone[1] and if you are going to be successful in the US, then you need to build your wallet to work with iPhones.

With so many competing wallets, it has become too confusing and too burdensome for the consumer to select any wallet.   Merchants, like Chipotle, have their own wallet, MasterCard and Visa have their wallets, banks have their wallets, card issuers that their wallets and there are a number of general purpose wallets…everyone has a wallet!  Based on my research, there must be over 100 competing wallets available today and new ones are being added every day.

Before I start my journal, I want to outline some questions that I believe need to be answered by each wallet I test.   And the questions are really from the perspective of the general public (not us payment people).  Here are mine, and I would like to hear from others on questions that you would like to address.  Here are my questions in a chronological order:

1. How is the wallet marketed/advertised to the general public?  What media channels?  How do I know the wallet exists? What is the message to me?
2. Why do I need this mobile wallet?  (Isn’t this the first question that needs to be answered in a manner that is simple and straightforward for the general public?) What issue does it address?  How is my life better by using the wallet?
3. Is it a payment-only wallet?  Does it have loyalty/rewards?  Other benefits?
4. How do I get the wallet?  Download from iTunes app store?  Scan a QR code? Go to a web site?
5. Now that I have downloaded the app to my mobile phone, how difficult is it for me to register/set up?  Are there a few simple steps or do you need to be a nuclear engineer to figure it out?  Does it ask from my bank account information?  My debit/credit card number?
6. Where can I use the mobile wallet?  How many stores (real brick-and-mortar stores) not online stores – use it at Point-of-sale (POS) locations.  Transit?
7. What is the POS set up –stand alone tablet? Integrated cash register?  Typical card reader POS?  Contact-less/NFC?
8. Is the POS experience easy?  Hard?  Confusing?  Does it actually work?
9. What information do I get sent to me after the sale?  Do I get my receipt emailed to me?  A text message?  Is the transaction listed on my wallet?  Did I earn points?
10. Are there fees? Do I need to reload my wallet (manually or automatically)? Is the transaction a prepaid card?  Or my debit/credit card?  Does it use the Automated Clearing House (ACH) network?

These are just some of the questions I intend to answer, and I am sure as I go thru my journal, I will add more questions. In addition to answering the questions, I will rate each of the wallets from a general public perspective, on each of the category questions listed here, on a scale of 1, 2 or 3.

• 1 (Confusing, Needs Work)
• 2 (Okay, Average)
• 3 (Easy, Better Than Most)

 How many wallet apps are too many?

The following wallets will be reviewed in the coming weeks:

1. Square Wallet
2. Google Wallet
3. bPay
4. CardStar
5. LevelUp
6. LifeLock (formally Lemon)
7. Belly
8. Venmo
9. PayPal
10. MocaPay
11. Starbucks, and many more

If you have a wallet that you would like me to add to my list, please let me know.

First up will be the Google Wallet!  Check back to see how Google fared.

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

The post Wallets, wallets everywhere! Which ones have an edge today? appeared first on Tomorrow's Transactions.

Avidly reading advice on strategies to avoid arrest by over-zealous US police officers, quoted in an article from the latest edition of Cryptogram, I felt comfortably detached from my surroundings. The luxury of a half-empty train on the Reading line is a rare treat.

The author of the article advised that unlawful activity is best indulged in from the comfort of your own home. If you must commit crimes in public, avoid drawing attention to yourself. In particular, even if you become aware of an officer while performing an illegal act, it is better to continue rather than raise suspicion through a sudden change in behaviour.

At this point I became aware that I had unwittingly become the focus of the gang, who had moved on from threatening to punch random strangers to wielding newspapers and cigarette lighters while daring each other to take my phone. Suddenly alert to the situation, I put my phone away, muttered ‘excuse me’ and wandered gently up the carriage. They left the train at the next station.

I’d made the mistake of forgetting that my brand new phone which I regarded as a standard device for accessing content and keeping in touch, could also be seen as a status symbol with significant market value. On reflection, it gave me a tangible example of one of the key risk concepts being investigated by the TREsPASS project: attacker motivation. This had moved from the general to the specific, as an opportunity was spotted and the incident unfolded. It was clearly unpremeditated and yet in many ways predictable.

As my brother commented the next morning, teenage gangs in our area just aren’t what they were in our youth, when they would steam the length of trains in groups of twenty or more. He also gave me a great tip for protecting my phone in future, which in his experience deters all potential muggers.  Waterproof, costing only a few pence, with the option of additional cotton wool for extra authenticity: an attractive little black plastic bag with yellow drawstring, as commonly carried by dog walkers.

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

The post Threats, risk and attacker motivation: a real life example appeared first on Tomorrow's Transactions.

Google did its job with a multiplicity of results. But I couldn’t access any of them because my MNO blocked them all as adult content. I didn’t use *rse or b*m as search terms but anything below the waist appears to be out for this MNO.

What I was presented with was a tiny, barely legible (even on my Samsung S3), barely branded screen asking me to input my credit card details to prove that I was old enough to read about what is probably age-related spine degeneration.

On an Android phone? You must be kidding.

And why is this necessary? I have an account with my phone provider (one of the big 4). I’ve had a business account with my phone provider for something like 10 years. Until recently, when I got my proper job with Consult Hyperion, I was VAT registered and the MNO had that information in its system. If, as the phone owner, I’m old enough for a VAT registration, I’m old enough to read about bottoms. And if I’m not the venerable phone owner and I’ve nicked their phone, I’ve probably nicked their credit card too.

There’s a lot of talk about big data at the moment. Proper use of data could considerably improve the prospects for mobile wallets. However if this is indicative of what mobile operators are doing with data, I’m not optimistic.

Frankly, I rather hope that the screen was malware generated rather than genuine.

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

The post If it’s not malware it should be appeared first on Tomorrow's Transactions.

This may be because the data is supplied by the GSMA’s Mobile Money for the Unbanked (MMU) team and focuses on the community that the MMU team engages with, so perpetuating the view that mobile money is exclusively an emerging market phenomenon – a view that I disagree with, if not in actuality, certainly in potential.

Consider what constitutes a mobile money scheme:

·         Customers’ access to their account, for carrying out transactions or for managing their account, is primarily through the medium of the mobile phone;

·         Cash can be deposited and withdrawn via the intermediary of human ‘agents’ in local shops;

·         Cash can (sometimes) be withdrawn at ATMs;

·         Transactions are fast, and tariffs are low;

·         Registration is simpler and faster than for a local bank account.

In addition, it is fair to say that mobile money schemes are generally aimed at the unbanked market – that is, people who are unable to access traditional banking services, however basic – but I would argue that that is a characteristic of the available, under-served market, rather than any law of nature.

The dramatic growth of mobile money services in the emerging markets is a consequence of the huge size of the unbanked market in those countries, coupled with the launch of services that provide them for the first time with readily accessible basic financial services.

But there are mobile money services elsewhere, and they certainly occur in the so-called emerged markets. In the UK, for example, we have seen a number of such services being launched in recent years. A prime example is O2 Money, launched in Q2 2012. This has all of the characteristics of a mobile money scheme, as described earlier, but with one important extension to ensure its applicability to the British way of living – it has a companion card, a plastic card which allows O2 Money to be spent in shops, and which can also used for ATM withdrawals.

It must be said, though, that none of the schemes in the emerged markets have broken through in quite the same way that M-PESA has in Kenya. This is principally due to the differences in the markets. As an example, in the UK (as in other “developed” countries), people with a bank account can access the services offered by mobile money using cards on line or in person and most have access to mobile banking.

So people with UK bank accounts are unlikely to be regular users of a mobile money scheme, and therefore a strategy needs to be developed to recruit customers that offers something beyond the basic financial services. I am of the firm belief that such a strategy can be developed, and that a successful strategy would embrace elements aimed at three different groups: the mainstream banked; the not yet banked (teenagers); and the unbanked (the poorer sections of society).

The mainstream banked will be the most difficult to attract, and the key here will be differentiators from the mainstream banks’ offerings.  As mentioned above, mobile money offers little advantage to them.

The not yet banked are a slightly easier proposition –almost all of them have a relationship with a mobile phone operator, and are very familiar with buying things with their mobile phone. A proposition is required to meet their needs, by incorporating elements such as entertainment tickets (discounts are the key) and products linked to stadiums and venues (such as closed loop payments), and the option of a companion plastic card is essential.  But ultimately, whether or not this supports an attractive business case is another matter.

But the UK unbanked are a proposition with great potential.  There are around 1.25 million unbanked households in the UK[1], equating to around 4.5 million unbanked individuals. There is a real need here, and the unbanked could form a valuable element of a broader model for a mobile money operator. And you can bet that, in modern Britain, the vast majority of these people have a mobile phone.

To those who would say that the unbanked have no money, and cannot therefore be of interest, I would point out that, in common with poor people the world over, they pay significantly more for financial and other services than any other segment: fuel, cheque cashing, and short term loans are all examples of the amount such people are forced to pay for services that the mainstream gets either for free or at very low cost.

At the core of any unbanked proposition must be the facilitation of social payments. The majority of social payments in the UK (including pensions) are delivered directly to bank accounts, and in a cost-efficient manner that is at least competitive with any mobile money offering. However, the 4.5 million unbanked recipients receive their payments by alternative means, and at significant expense to the UK Government. Giving these recipients a mobile money account, and facilitating these social payments, should be at the core of any strategy.

Access to cash is also an issue. In many of the poorer areas of the UK bank branches have been closed, and the only ATMs that remain are private ones in small shops that typically charge around £2 for a withdrawal. By adopting the agent approach of emerging markets, access to cash from the mobile money account would be greatly facilitated, and drive additional revenue into the local community.

By definition, unbanked people do not have access to the conventional banking system, and there is an opportunity for a mobile money operator to facilitate that access and so enhance their own proposition. Basic functionality, such as direct debits, should be offered in order to address, for example, fuel poverty (if you cannot pay for fuel – gas and electricity – by direct debit in the UK, you will be paying a lot more for the fuel you use). Another aspect of being unbanked is the lack of access to loans at reasonable cost (hence the controversial rise of the so-called ‘payday loan’) – there is an opportunity for a mobile money operator to create a portfolio of relevant of financial services for their customers here, in which partnerships could be formed with local organisations, such as credit unions, in order to promote savings and loans.  I am sure there are lessons that can be learned from the experiences of microfinance institutions (MFIs) in the emerging markets.

In summary, I do not believe that mobile money is exclusively a phenomenon of the emerging markets. There are significant populations in developed markets that closely match the characteristics of mobile money customers in the emerging markets, and there is a clear opportunity for the right mobile money propositions.

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

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These are personal opinions and should not be misunderstood as representing the opinions of
Consult Hyperion or any of its clients or suppliers

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

The post Finovate Europe appeared first on Tomorrow's Transactions.

These are personal opinions and should not be misunderstood as representing the opinions of
Consult Hyperion or any of its clients or suppliers

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

The post Making credentials practical appeared first on Tomorrow's Transactions.

These are personal opinions and should not be misunderstood as representing the opinions of
Consult Hyperion or any of its clients or suppliers

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

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