The Netsize Guide

The Gemalto Netsize Guide | Foreword
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Welcome to the Gemalto Netsize Guide

Congratulations! You have downloaded the latest edition of the Gemalto Netsize Guide. Over the years, weve evolved the guide into a must-have reference tool for anyone working in the mobile content and commerce space or, indeed, anyone just curious about it. And what a broad base that now represents! In a decade, mobile has changed from a talk-and-text medium into arguably the worlds most personal and important communications channel. The arrival of the always-connected generation and the advances in mobile technology have turned the phone into a machine for playing games, listening to music, watching ads, redeeming vouchers and much more. These changes have brought mobile to the attention of all corners of industry. Today, you need a mobile strategy whether youre a bank, a retailer, a record label or a hotel chain. Now, the stage is set for one of the biggest shifts of all the reinvention of payment and commerce through mobile technology. Or course, mobile payments have been around ever since the first ringtones were charged using reverse-billed SMS. But now were seeing an explosion of much more sophisticated new products and services. Theyre designed to speed up the purchase of digital goods, make mobile a convenient and secure home for traditional banking services and reinvent the loop between searching/discovering/sharing and checking out whether its online or on the high street. The impact of these ideas will be enormous. Thats why this new edition of The Gemalto Netsize Guide is dedicated to this exciting space in a series of thought provoking interviews, case studies and opinion pieces. However, we have also, as ever, collated a treasure trove of the mobile stats you love so much. Its great to be back. Enjoy the Gemalto Netsize Guide!
By Philippe Valle, Executive Vice President, Telecom Business Unit, Gemalto
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The Gemalto Netsize Guide | Contents

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Contents
Market overview and introduction 1 Operator billing section Payforit, how SMS can help financial organisations, physical goods 2 Micropayments section In-app payments and virtual items learning lessons from Gbanga and EA 3 Emerging markets section P2P transfers in growth markets Telcel in Mexico, the Indian post office 4 Mobile NFC section Market overview, Turkcell report and living contactless 5 Mobile wallet section Market overview, Visas v.me plans, the behaviour-changing wallet 6 Mobile banking section User interface lessons, UK Payments Council plans 7 M-commerce section Reports on M&S, Wrapp, coupons, iZettle and more 8 Security and identity section Multi-factor authentication, Trustonic 9 Future trends section 4 10 12 22 24 32 34 40 42 54 56 66 68 76 78 98 100 110
The mobile as psychic ID, Dr Ian Pearson on smart dust, payment jewellery... 112 10 Data section Market stats on subscribers, handsets, behaviour and more Acknowledgements 116 118
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The Gemalto Netsize Guide | Market Overview

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Preparing for the age of mobile money

The conditions are in place for the mobile to become a viable payment tool. Rmi de Fouchier, VP of marketing communications at Gemalto's Telecom Business Unit, looks at the impact this could have on retailers, banks, carriers and users...
The idea of using your phone to buy something other than airtime has been around since the first premium rate text services were launched a decade ago. Today, virtually all consumers have used mobile to buy a digital product, vote for a TV show or make a charitable contribution. But as we move into 2013, the mobile payments space is ready for the next phase in its evolution. Get ready for an era of mobile wallets, banking services, barcode and contactless payments, social commerce and more. Why now? Well, the first big reason is that money is going digital. Consumers have become comfortable with online transactions, so its logical they should migrate these activities to their mobile phones. The second main reason is the technical capabilities of the phones themselves. The 2013 smartphone is always connected to the web and comprises a touchscreen that makes previously complex interactions pretty straightforward. Its far easier to move money around when it requires swiping, dragging and dropping rather than myriad key presses on multiple screens. Third is the surge of interest among brands, operators, merchants and banks. In their own ways, they are each exploring the potential of the technology. Broadly weve identified nine distinct market sectors, on which well focus in this edition of The Gemalto Netsize Guide. They are: Operator billing Mobile payments used to mean one thing using the phone bill to pay for digital content like ringtones or games through reverse-billed SMS. This form of message05
Touchscreens make complex actions straightforward. Its easier to move money around with swiping, dragging and dropping than myriad key presses.
At the end of 2012, the GSMA estimated there were 104 mobile money services in development.
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Global revenues for freemium apps on iOS devices quadrupled to the end of 2012...on Google Play, they grew by three and half times in the same period.
based billing is still highly prevalent for some services such as phone voting and charitable donations. But for digital goods bought through apps or via the mobile web, a more intuitive and speedy checkout mechanism is required. This is where direct operator billing comes in. These payments are debited when a user clicks buy now in an app or on a web page (fixed or mobile web). Quite simply, they let the use click once to pay. No more text confirmations required. In-app micropayments, freemium and virtual goods Something drastic has happened to app pricing since apps were introduced in 2008. It has, in the vast majority of cases, reduced to zero. Instead, developers have embraced the freemium model, giving away their products and charging for virtual items later on. According to App Annie Intelligence, global revenues for freemium apps on iOS quadrupled to the end of 2012. And for Google Play, worldwide freemium revenues grew by three and half times in the same period. This represents a dramatic change in the way people pay for mobile goods. There is a sticking point, though. iPhone and iPad users can
only pay for their apps with credit cards. This excludes millions of card-less users. To reach this group, other platforms such as Android, BlackBerry and Windows Phone are supporting payments direct from the phone bill. Or they are buying from web sites through the desktop browser. P2P transfers, banking and payments in emerging markets Nowhere has the impact of mobile money been felt more keenly than in so-called emerging markets. Here, the ability to use even the most basic feature phone to move money has transformed many millions of lives and made a meaningful impact on the wider economy. These services target the unbanked by giving them the option to send and receive texts, which they can use to pay for goods and services or cash out at ATMs. In markets largely based on cash transactions, such services save a huge amount of time spent queuing and also reduce the money given over to intermediairies. At the end of 2012, GSMA estimated there were 104 mobile money services in development. Interestingly, some of the newer launches
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NFC requires support from OEMs; there should be 300m NFC handsets in the market by the end of 2013.
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see operators teaming up with banks and specialist providers like Gemalto to deliver services that use mobile but are powered by traditional banking structures. NFC proximity payments NFC is undoubtably the biggest noise maker in the mobile commerce space. Theres huge interest in contactless NFC transactions made via the phone and in 2013 the market is more promising than ever. NFC is the tech that lets users 'tap' to make a data transfer. It can be used to open a door, swap contact details or
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of course transfer money. Millions already do this using a contactless debit card, but embedding NFC in a phone offers the potential for additional rich functionality. Of course, the tech requires an infrastructure upgrade at store level, which is ongoing in most geographies. It also requires phones that support NFC there should be 300m in the market by the end of 2013. Mobile wallets For many observers, the term mobile wallet is synonymous with NFC. But mobile wallets dont have to support contactless payments they
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In 2010, the US start-up Square had an idea: why not use the phone to replace the instore credit card reader?
Mobile can increase the chance that a shopper will visit a physical store, do a price search on their phone and go elsewhere.
can use QR codes, email and many other channels. And they are about more than just paying. Indeed, they can allow consumers to store coupons and discounts, loyalty cards, event tickets and public transport passes in one place. The crucial benefit of a mobile wallet is that merchants and brands can push information to them, while consumers can store and then redeem promotions and offers. Its powerful stuff, and its why so many big firms are so keen to take part. Unsurprisingly many companies have launched wallets from Isis to Google, PayPal to MCX, Venmo to Kuapay. Mobile POS card readers In 2010, the US start-up Square had an idea: why not use the phone to replace the in-store credit card reader? This would enable small traders to avoid the cost and time needed to install specialist card readers and change the in-store dynamic by making assistants more mobile. It worked amazingly well. In 2012 Square processed $10bn from two million merchants and spawned dozens of imitators. Now, even larger retailers are investigating the benefit of removing the bottleneck of traditional tills and the customer service
upside in taking payments anywhere in the store. Mobile banking services In emerging markets, the mobile phone is helping many users to engage with banking services for the first time. But in mature markets, where virtually everyone has a bank account, the challenge for the banks is different. They have to harness the power of mobile to make banking even easier. Theyre mostly doing this through apps, which let customers browse their payment history, move money between accounts, set up direct debits and so on. However, some banks are beginning to explore more ambitious goals by giving customers the ability to link a mobile phone number to a bank account and thereby transfer funds without having to share bank details. Mobile commerce, the high street and the impact of showrooming The smartphone has been a mixed blessing for high street stores. On the one hand, they can create mobile sites, which stimulate demand for impulse shopping and take the store into peoples homes. But mobile also increases the chances that a shopper will visit a physical store, do a price
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Source: Square, Inc
search on their phone and either go elsewhere or even buy from a rival mobile web site if they find a better deal. The latter phenomenon is called showrooming and its become one of the mostdebated topics in mobile. To combat this habit, retailers are trying to join up their online and off-line channels, with special daily deals, voucher codes, mobileoptimised websites and tracked affiliate programmes.
of advertising and with the advent of social media such as Facebook and Twitter, its easier than ever for consumers to spread the word. This is why a host of new start-ups have created services that let people send physical and digital gifts to friends in their social network or phone address book. Although its impossible to predict precisely how these ideas will evolve, its fairly certain the impact of these services will be profound. In this issue of the Gemalto Netsize Guide, we will attempt to tackle them all
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Mobile social commerce

Its a given that word-of-mouth can be the most powerful form
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OPERATOR BILLING
The Gemalto Netsize Guide | Operator Billing

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Introduction
The mobile payments bandwagon started rolling in the early 90s when the first mobile consumables were born and were charged using premium rate reverse-billed SMS messages. SMS still has its uses for charity donations, voting and so on but for todays downloadable goods, a preferable option is direct operator billing in which just a single button click on a fixed or mobile site can complete the purchase. When its properly integrated, mobile operator billing offers a compelling alternative for those who dont have or dont want to use a bank card. Why? Because the payment flow can be quicker than card transactions, which can require lengthy form filling. Indeed, BlackBerry reckons that, when it offers carrier
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billing for apps, an average of 75 per cent of gross sales come via the payment channel and that revenues increase by between 100 per cent and 300 per cent. Of course, there are hurdles to progress. Many operators run billing systems that cannot yet handle direct payments, while others charge relatively high rev shares to use their systems. But there is real momentum behind the space. In fact, some analysts believe billing can generate huge revenues for operators in the coming years. Juniper Research expects income from this channel to rise from $2bn in 2012 to more than $13bn by 2017. Over the next few pages, we will look at how the UK crossnetwork scheme PayForIt is progressing, how mobile payment can be used to bill for physical goods and more
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The Gemalto Netsize Guide | Payforit

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Payforit clicks into place

In the UK, all the major mobile operators joined forces to create one platform for mobile billing: Payforit. In theory it makes mobile payment for digital goods nice and easy. So, hows it doing? We asked Dave Hillier, customer solutions team manager (Northern Europe) at Netsize...
About a decade ago, the first mobile consumables became available. Ringtones, wallpapers and so on became a huge craze. And they did so in spite of some rather clunky billing methods. In most cases, consumers were charged using a reverse billed text message (or three). In time, it became possible to visit a mobile web page and then click to buy. But, because the different operators each had their own billing platforms, it wasnt simple to connect to every network and therefore serve every customer. Far better to create a single system that pulls all the operators into the same process. In 2007, this is exactly what the major UK carriers decided to do. The result was Payforit. Heres the consumer experience of Payforit: a user goes to a mobile website and wants to buy a product. They see the buy now symbol to pay for the goods using the phone bill rather than the card. They click on this and, because the mobile web site has already identified the user, they can pay without any further authentication. Payforit hasnt been without criticism. There were complaints about the scale of the fees charged, the revenue shares and mostly the lack of promotion given to the concept. This meant that when willing consumers clicked pay they were sent to a Payforit landing page without realising what it was. This confused users and led to many abandoned payments. But despite these flaws, demand for mobile billing kept growing with new products like gaming items and dating site subscriptions emerging. So Payforit was updated. In 2012, it was radically rethought with many new features to improve the payments flow, provide a clearer navigation and give the merchant the ability to skin the checkout screens around their own brand. Here are the main changes: Improved Payment Screens Payforit 4 was designed to reduce on-screen clutter, and convey a less is more attitude to the appearance of the new payment screens. Single Click Billing The faster the checkout the better. So, with v4, merchants can include a check box that approves single click billing for that service by the consumer.
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The Gemalto Netsize Guide | Payforit

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This means that subsequent purchases on the same site (after the consumer has logged on) can be made with a single click, with no other PIN codes or passwords required. Of course, there are parameters on how long single click opt-in lasts and how much can be spent before they need to opt-in again. HTML5 Embedded Payments HTML5 enriches a mobile web page so that it behaves more like an app supporting rich media features such as video and animation, and connecting to the phones core functions like camera, clock, location and accelerometer. What makes it even more appealing to publishers is that HTML5 apps sit outside the app stores and thus avoid these stores rev shares. Payforit now supports these apps. Customisable payment screens PayForIt 4 no longer takes consumers away from the merchants site to complete a transaction. Instead, the merchants can bring their own branding and styles into the payment process. They can now choose between an embedded or popup pay screen or select a full screen version.
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Push messages Push notifications allow publishers to text opted-in alerts and marketing messages from within an app. The new version of PayForIt can embed these texts with a link that redirects straight to the PayForIt payment screen. So, how is Payforit doing? The payments intermediary Netsize processes more Payforit transactions than any other. Dave Hillier, customer solutions team manager (Northern Europe) at Netsize, believes Payforit has made the business of selling mobile consumables much more legitimate and trusted than before.
payment icon and think it will lead to a new payment screen. They wont expect to check out in one click. He believes merchants recognise this too. Indeed, many prefer the wi-fi payment flow, which sends a text message confirmation to the user before payment. This comes back to the need for more marketing of the Payforit brand to address general ignorance of direct-tobill payments. I think a lot of people just dont know what mobile billing is. They may be prepared to buy something, but theyre still shocked to discover theyve been billed so quickly.
In 2012, Payforit was given new features to improve payments flow, provide clearer navigation and give merchants the ability to skin checkout screens
The opportunity to obscure the price of an item has been eliminated, he says. This used to be an issue that caused consumers to lose trust. But Payforit has changed that. And merchants like it because it means customers stay loyal. Hillier acknowledges how easy Payforit has made the checkout process. But he says that it can be too easy.Im sure some users will click on the For the same reason, the receipt process could be improved too. Consumers see Payforit on their bill and they dont know what it is, he says. Overall, though, Hillier believes Payforit has delivered an improved process for users and merchants.Its better than its ever been, and were working on more implementations than any other intermediary, he says.
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The Gemalto Netsize Guide | Financial Messaging

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Special delivery! How SMS can help

Despite competition from email, IM, push notifications and more, the SMS text message cannot be beaten for simplicity, ubiquity and reliability. The fact is, people read texts. This is why financial services companies are using text to improve vital services. But they can do more, says Peter Garside, head of sales at Netsize (Northern Europe). And he has eight ideas to share
Theres a widespread belief that, at some point in the future, human beings will augment their bodies with cybernetic enhancements. Weve all seen Terminator and RoboCop, right? Well, maybe the future is here now, and its the mobile phone thats providing the extension to our limbs and senses. In a 2012 study, research showed that some smartphone owners touch their devices 200 times a day. People take their phones with them everywhere, and panic when they think theyve forgotten or worse lost them. This semi-biological link with our phones is both a boon and a peril for marketing and customer relations. A survey conducted in New Zealand revealed that people read their text messages in an average of four minutes, while the average for email is around 48 hours. The pull of text Unsurprisingly, consumers are also far more likely to respond to SMS. A 2012 study by direct
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marketing specialist Cellit found text produces engagement rates six to eight times higher than retailers normally achieve via email marketing when used for redemption, data collection and brand awareness. Whats more, a database of mobile numbers is generally more accurate than those of other media. People can give false postal and email addresses, but when they text in to a shortcode or divulge digits to a registration process, their details are usually robust. And even when people change their handset, the SIM remains the same. Easy as A2P All over the world, enterprises are waking up to the power of SMS as a communications channel. According to Informa, A2P (application to person) messaging represented 4.5 per cent of total SMS volume in 2011. But it estimates this will grow 18 per cent a year to reach six per cent of total SMS volume in 2016.
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ENTERPRISE MESSAGING AND FINANCIAL SERVICES: EIGHT GREAT IDEAS...
SMS insurance reminders
Bank card PIN codes
This works best when a policy has expired, like travel or car insurance. A text reminder is far more likely to be read than an email, and its cheaper than using a call centre. Insurers can also easily upsell other services using the medium too.
It costs a lot to send two letters to customers, as most banks do now. Also, theres a risk of fraud if the two letters are intercepted in the post. Sending a PIN by SMS is far more secure and almost guaranteed to reach the customer. You can also experiment with texts that expire after a given time or insist that customers confirm receipt.
SMS PIN to activate a new payment card
SMS to replace bank card readers for online transactions
When a customer receives a new card, they generally have to call a number to activate it. Again, a text is quicker and cheaper.
"Some banks issue customers with plastic card readers, which they have to use for all online banking activity. The system is very secure, but there are occasions when users find they dont have their readers to hand when they need to make a payment. Using text based authentication could complement this process and could, in some cases, be a cheaper and more effective solution."
when the monthly allowance has been reached. Reassuringly expensive Intriguingly, the premium cost of SMS is also an important advantage. Why? Because it makes both sender and recipient value it more. This is one reason why enterprises continue to choose text over and above new OTT channels such as Skype and WhatsApp, At
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Enterprises have other reasons to value the medium. They know that the only way they can reach virtually 100 per cent of the adult population is through SMS. The mobile is private, unlike landline and email. SMS also works in areas where the radio signal is weak and a mobile data connection is not feasible. And SMS can be made free to users so they can reply even
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Temporary PINs when bank cards are lost
SMS confirmation when buying products abroad
This is very useful for customers who forget or lose their bank cards, which happens a lot. The user is sent a PIN to their mobile, which can be entered into an ATM to dispense cash. Its being used by some banks already.
Its great that banks call customers as an anti-fraud measure when a purchase is made overseas. But these calls are expensive to make and theyre not always answered by customers. A text is far more effective, quicker and cheaper.
Text PIN to replace passwords for online purchases
Texts for how did we do customer questionnaires
Everyone hates the friction and time involved in online transactions. But we also want security when the card is not present, so these measures have to be in place. However, a text PIN sent to a customer is quicker and also offers better protection because of that old combination of what you know and what you have.
Its good for CRM to get feedback when a service has been provided. But calls can be expensive and intrusive, while letters are ignored. Text can be responded to when its convenient, and its more likely to be read. Some companies are already using this for broadband installations, but I dont see why financial services firms couldnt use it too.
Netsize, we believe this premium factor is critical. And we know this market intimately because our payment network connects more than 1,000 companies to over 160 operators and 2bn consumers. The fact that SMS has a real and perceived premium cost means that texts are treated differently from other kinds of messages. If it were free, it would feel more like spam. I
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think this is the key to why enterprises and their customers like it so much. Im confident the boom in mobile money and banking could drive yet more demand for A2P messaging, with this old school medium providing an unbeatably secure and reliable way to send One Time Passwords (OTP), PIN codes and more. Here (above) are eight real-world scenarios...
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The Gemalto Netsize Guide | Operator billing for physical goods

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Lets get physical

Consumers regularly use mobile billing to buy digital goods. So why not physical items? Regulation makes this is a complex issue, but some companies are testing the water. One of them is Selecta, which offers a pay by text option to customers using its vending machines. We talked to Johan Lindholm, marketing manager at Selecta Nordic
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The ability to pay for products using the phone bill has been well-established since the first ringtones were made available around a decade ago. Since then, the market has grown and evolved. Alongside premium rate text messaging, its become possible to pay by mobile simply by clicking a button on a fixed or mobile web site. These options are popular
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with merchants and consumers because they can speed up the checkout process and because they provide a payment option to end users who dont have or dont want to use a debit or credit card. Indeed, some analysts believe operator billing is set to explode: Juniper Research expects revenues from this channel to rise from $2bn in
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2012 to more than $13 billion by 2017. However, virtually all the spending to date has been on mobile consumables (ringtones, alerts, wallpapers) and digital goods (virtual gaming items, dating site subscriptions, music downloads). So, the question many are asking is: why not use carrier billing to pay for physical goods? Regulatory questions Well, the main obstacle is financial regulation. Using phone credit to pay for physical goods would, in effect, turn a mobile operator into a bank because in the case of postpay subscribers payment would come at the end of the month, several days after the goods have been purchased. There is also a small risk of money laundering to be considered. Ultimately, airtime is viewed as e-money whenever it is used to buy a service not delivered and consumed on a phone. In Europe, the European Commission codified its approach to this subject in the E-Money Directive. This dictates that operators need to apply for a banking licence should they wish to move into billing for physical goods. Well, it used to. In 2011, a second directive introduced
new provisions designed to encourage competition in the payments space. This has encouraged some providers to launch services that move the market closer to using airtime to buy physical goods. Vending leads the way Among the most progressive of these is Selecta, the vending machine company. The firm teamed up with billing specialist Netsize in 2010 to enable consumers to buy from kiosks in Stockholm using a simple SMS message. A year later it expanded into Norway, Finland and Denmark. It is also planning launches in the UK and France in the future. Heres how the system works. A user sends a text to a shortcode on the kiosk containing the name of the machine and the monetary amount required. The system checks his or her credit status and returns a text to the user and the machine approving the transaction. It takes just a few seconds. All mobile transactions charge a 30c premium to account for the rev share taken by the operator. Revenue uplift Johan Lindholm, marketing manager at Selecta Nordic, says the innovation has delivered two million transactions and a
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Airtime can be viewed by regulators as e-money whenever it is used to buy a service not delivered and consumed on a phone.
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20 to 30 per cent revenue uplift since its been introduced. People still like to use cash, but they also like the added convenience of mobile payments. And theres a large demographic of younger people out there who dont have cards and this option gives them an alternative when they dont have cash, he says. In the event of a failed transaction, Selecta issues a credit with no questions asked. However, to date, there have been minimal problems. Lindholm says: If a consumer
money app into which users can top up via bank transfer, debit or credit card. They mandated that WyWallet should be used for all forms of mobile payment. WyWallet was set up so that users could be easily identified, thus reducing the chance of money laundering. However, many saw it as a tool through which operators could wrest back control in mobile payments. Either way, it has cut Selecta revenues by half. The alternative to using WyWallet is to download
Selecta, the vending machine company, teamed up with billing specialist Netsize in 2010 to enable consumers to buy from kiosks in Stockholm using a simple SMS message.
Virtually all bill-to-mobile spending to date has been on mobile consumables and digital goods. So, the question is: why not use carrier billing to pay for physical goods?
complains we automatically send a credit, which goes to zero when it is used. We can easily check to see if a machine is faulty. Fortunately we dont get many complaints. The Swedish issue While Selecta is committed to expanding its service across multiple European countries, it has come up against a hurdle in its original launch region of Sweden. Here, the operators responded to EU concerns over money laundering by launching WyWallet a mobile
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Selectas own app, load card money onto it, and use this to pay. However, this is clearly less intuitive and democratic than a simple text message sent from any type of mobile handset. Still, Lindholm believes the app has its place in what should be a period of expansion for the mobile payment channel. The app just moves SMS into a new UI which some people prefer. Overall, I think mobile billing can grow and expand into new areas. Its a very exciting space.
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IN-APP PAYMENTS
The Gemalto Netsize Guide | In-app payments

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Introduction
When Apple launched its iTunes App Store in July 2008, it almost immediately set the template for the way that mobile content was sold. No more operator decks, failed downloads and multiple clicks just an icon on the home screen, a pre-registered credit card and one or two clicks to make the purchase. By the end of 2012, Apple had accumulated 40bn app downloads from 500m active account holders. Meanwhile Google was approaching 30bn downloads. And global revenue from apps passed $30bn by the end of the year according to ABI Research almost double the amount that apps had generated by the end of 2011. This market is creating many interesting new business models for entertainment and media publishers. Most notably its propelled the notion of freemium into the mainstream. Here, users download an app for free and then pay small
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amounts (micropayments) for new levels, virtual items, more playing time and so on. The theory is that free invites millions to play and just a small percentage of this vast user base needs to pay to make the app profitable. Today, market tracker App Annie Intelligence believes freemium apps generate 69 per cent of the worldwide iOS app revenue and 75 per cent of global Android app revenues. Its not all perfect, of course. Some app makers have been criticised for highly expensive virtual items while app store owners have been chastised for building systems that allow youngsters in particular to buy items with minimal safeguards. That said, the in-app model is here to stay, and is providing a compelling alternative to timehonoured up front payments. Over the next few pages, we will explore the space more fully and find out how traditional games maker EA is adapting to the model
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Micro-pay your way

The games industry has embraced micro-transactions with great success. Are there lessons here for the under-fire news media? Oh yes, says Matthias Sala, founder of the mixed-reality game studio Gbanga
In the last decade, the video games industry has adapted to the presence of free culture and piracy by publishing freeto-play games with novel business models. Its been a radical shift from the days when games came in boxes and cost $50. But today were in a market in which nearly everything is free, so the money comes later from micro-payments for virtual items. At our own company, Gbanga, we have players who appreciate our games so much that they are happy to pay between 99 cents and 99 dollars for virtual goods that have no physical value per se. Of course, we could have monetised our games with advertising even though ad pay-outs are much lower than on the desktop. But bothersome ads tend to deter
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loyal customers, who dont like compromising the already limited space on their mobile screen. And, anyway, most players are too immersed to notice most ads so theyre pretty ineffective. Free with micro-payments is proving a much more sustainable model. But what I find interesting is how this concept is almost unique to gaming. Other industries have been challenged by the switch to digital, but dont seem to be embracing freemium at all. For example, there are very few news apps among the top grossing app rankings. Newspapers and magazines face a severe crisis but they seem to be ignoring gamings lucrative business models and concepts for digital content. Instead, theyre experimenting with paywalls mirroring online the traditional format of customers paying for articles at a newspaper kiosk. Even the word paywall sounds off-putting. And most services just havent worked. After introducing paywalls at New York Times and NZZ, readers abandoned online newspapers in favour of free offerings. The interruption by a payment form while reading was just too frustrating. No, I think the news media need to take heed of the
games industry and to free content supported by microtransactions. Here are my five tips for making it work.
Make the most of your brand Like gaming, news is short-lived and expendable. Game titles differentiate themselves through brands, along with the quality of graphics and sound. Familarity and quality are the main reasons for a players decision to buy into a product. The same is applicable to media: readers are fans of a newspaper, TV show or blog. They have had great experiences in the past and appreciate the different angle of writing, the quality of research etc. So readers will return to those media services frequently to see what is new. To block readers at this stage with a paywall is counterproductive. The Economists digital strategy with a combination of free qualitative blogs and apps is a perfect example for great content for free . On boarding making access easy In games, the first couple of seconds are crucial.
Freemium is almost unique to gaming. Other industries have been challenged by the switch to digital, but dont seem to be embracing freemium at all.
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Prospective players make their decision within 45 seconds on whether they wish to play a game or drop it. A smooth onboarding is achieved with the help of tutorials, video sequences and a fancy, intuitive design. It should be the same for news. Is it easy to sign up for advanced services? Are cookies used to show recently read articles and preferred categories? Are push notifications sent for updates of the articles recently read? Basic but convenient
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functionality can turn one-time visitors into regular visitors. Forms with more than two fields (or credit card information) are guaranteed turn-offs.
Offer micro-payments at the right moments The usability of games is increased with small pop-ups aimed at frequent players pop-ups offering tools to create virtual farms quicker or additional levels that can be unlocked. Such features are offered through microwww.netsize.com

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payments precisely at the moment they become handy. Not before and not after. News sites should also offer context-sensitive features such as: a quick archive search tool; printing of an infographic at higher resolution; a PDF export of a special topic or daily favourites; the activation of detailed statistics in an economy analysis article.
Introduce dynamic pricing The pricing of virtual goods and services should be dynamic. Like in a supermarket, publishers should offer weekend specials, promotions for power players, multipacks and bundles. And they can use metrics to decide these price points. So, for example, complete versions of very popular articles might have a premium price while rarely read articles are free (or vise-versa). And dont forget, a long tail of free articles is also beneficial for SEO purposes.
surprise happens: players win new items or score extra points. All these positive experiences increase player engagement and entertainment value. There are many similar opportunities in the area of news publishing. For example, readers could be rewarded for repeatedly sharing articles. Or they could access a sample of new premium content that would normally cost something. Readers should be assisted in discovering new and surprising articles, just like Amazons Recommendations. Within the last 30 years, the games industry has had to radically change and adapt repeatedly. It is now a treasure chest of smart business models and great product designs that are fun to use. These are not just buzzwords. They are an opportunity for all industries, including the digital media business.
The pricing of virtual goods and services should be dynamic. Like in a supermarket, publishers could offer weekend specials, promotions for power players, multipacks and bundles.
Increase loyalty and takeover with quality and variety In the video games industry, committed players are constantly rewarded with extra levels, bonus points and advanced avatars. Beginners are rewarded with starter packs. After each app launch, a positive
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The Gemalto Netsize Guide | EA s in-app experiment

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free-to-play
A new breed of games developers are setting the pace on mobile platforms, and embracing radical new freemium models. But the old giants, like Electronic Arts, are adapting too. We spoke to Peter Parmenter, head of new platforms at EA
The launch of a new console used to be a major event for the video games industry. There was a three-to-four year gap between each machine, and the arrival of a new device was the cue for an explosion of developer activity and consumer spending. Not any more. Its been six years since the PS3 arrived. Eight years since Xbox 360. And although successors to these machines are both in the pipeline, the clamour just isnt the same as it once was. And the reason for this ismobile. The arrival of the iPhone and Android platforms gave consumers a cheap and convenient new channel for gaming. And they changed the rules for developers too, who could suddenly go direct to gamers via the OEMs app stores. No need for CD replicators, wholesalers, publishers and shops. But it wasnt just the structure of the industry that changed. The products did too. A market increasingly dominated by huge, graphically complex adventure games and ultra-realistic sports SIMs was suddenly home to casual time-killers. How many pieces of fruit can you chop up in a minute? Whats this drawing I just made? Can I smash this building up with a flying bird? In time, the casual nature of these games squeezed prices to the point that freemium started to dominate. In this free-to-play business model, consumers download and play a basic version of a game for free but then pay for virtual goods and currency through micro-transactions. According to market watcher App Annie Intelligence, global revenues for freemium apps on iOS quadrupled in the 24 months to the end of 2012, with
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Land of the
The opportunity lies with the new audiences free-to-play can address. Indeed, The Simpsons: Tapped Out posted a recordhigh of 3.2m million daily active users over the Christmas period.
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EAs Peter Parmenter: Free to play has turned games from products into live services
Freemium extends the life of a games franchise. Instead of the short sales burst that follows a retail release, these titles can live all year and evolve over time.
freemium apps generating 69 per cent of worldwide iOS app revenue and 75 per cent of global Android app revenues. These seismic changes laid waste to the old order. Historic names such as THQ and Atari were dismantled or closed down. But not all of them failed to adapt. Ubisoft spun off a mobile games arm, Gameloft, as early as 2005, and reported revenues of 208.3 million in 2012. Meanwhile the biggest publisher of all, Electronic Arts, anticipated the changes by reinventing its biggest franchises for mobile platforms. It also bought market share by acquiring publishers PopCap and Chillingo. EAs mobile division generated $86m in the final quarter of 2012, which was a 23 per cent year-on-year rise. Overall, revenues from iOS and Android channels doubled in 2012 and mobile overall accounted for nine per cent of the companys sales in the preChristmas quarter. The numbers prompted EAs CEO John Riccitiello to acknowledge that packaged games are likely to decline in the coming years. He told analysts: "We think we've reached sort of an end of an era. We are reaching a tipping point relative to digital, and we've intimated, in as many ways as we can, that we are
believers and it's worth investing in next-gen technology." For the time being, EA is still shifting a lot of boxed product, and the firm talks positively about the potential impact of new consoles. But theres no denying the fundamental shift in favour of new and purely digital products. The job of managing that transition falls to Peter Parmenter, head of new platforms at EA. He believes that the new era is a tremendous opportunity because of the new audiences it can address. Indeed, The Simpsons: Tapped Out recorded a record-high of 3.2m million daily active users over the Christmas period. Theres no doubt that the freemium model is enticing this army of new users in via titles like Real Racing 3 (see main picture). Parmenter says: We recognised early on that the rise in freemium as a business model has been great news for customers who face no barriers to entry, which means we're able to introduce our brands to a much broader audience. We've also seen the shift of focus to games as a live service. So we don't just make and ship a game and then move on to the next one. Instead, our studios and publishing organisations continue to
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support that product with content that engages consumers via consistent and relevant updates. Parmenter thinks freemium games are like TV shows with a regular stream of new content that keeps audiences tuned in. That presents the opportunity for EA to sell ingame products. Examples include premium characters such as Hans Moleman or Dr Nick in The Simpsons: Tapped Out or ingame currency such as Life Points in The Sims Freeplay. It also extends the life of a games franchise. Instead of the short sales burst that follows a retail release, these titles can now live all year and evolve over time. Parmenter says: It means the fun no longer has to end when you put down your Xbox controller or switch off your PC. Having these
incredible franchises in the palm of your hand means that now you can stay immersed in your favourite game environments no matter where you are. This has the potential to enrich the gaming experience. For instance, the story line of EAs grisly shoot-em-up Dead Space on iOS was used to provide an explanation of what happened between the events of Dead Space and Dead Space 2 on console and PC.
HOW MUCH DO USERS SPEND ON FREEMIUM? MORE THAN YOUD THINK

Its been stated again and again that the average price point of the app economy is on an inevitable path to zero. Thats not strictly true. Paid apps appear regularly in the app store top 50s (especially on iOS). Still, the rise of freemium cannot be denied. Indeed, research firm
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Gartner said that 89 per cent of app downloads in 2012 were free and projected that in-app purchase would be present in 30 per cent of apps by 2016 (against five per cent in 2011). Whats interesting is how much those downloaders who do convert to paid are
willing to spend. Another analyst, W3i, revealed in 2012 that 47 per cent of total in-app revenue comes from transactions costing $9.99 to $19.99. By contrast, transactions from $0.99 to $1.99 only contribute an average of six per cent to total game revenue.
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03
EMERGING MARKETS
The Gemalto Netsize Guide | Emerging Markets

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Introduction
As many commentators have pointed out, mobile money is the one area in which the new emerging markets have surged way ahead of their counterparts in so-called mature mobile regions. In countries where people dont have access to banking or to the PC-based internet, phone-based money transfer has immediate and obvious benefits. Simply, mobile removes the barriers of time and location. Where once an individual had to walk miles to join a queue at a specified time to pay a bill, now he or she can send a text wherever and wherever they are. Its hardly surprising that the idea should flourish. The pioneering service M-Pesa in Kenya launched in 2007 and
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is now available in seven countries including India and Tanzania. It is used regularly by more than 15m customers, generating more than 165m transactions per month. But trade body GSMA says there are now 150 live mobile money services worldwide, generating $4.6 billion in monthly transactions. Of course, theyre not all like M-Pesa. In other markets operators are teaming up with banks to give users a combination of banking services, airtime top-ups and real physical payments, which are transacted via phone but powered by traditional banking structures. In this section well assess the space and look at one example: Mexicos Transfer...
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Transferring to a better way of life

Mobile money services launched first in emerging markets. Why? Because they have the power not just to simplify lives, but to transform them, says Tim Green
In 2008, the US military launched a scheme with Vodacom and Roshan, Afghanistans biggest mobile carrier, to use mobile transfers to pay over 500 Afghan National Policemen. When the M-Paisa pilot began, some of these individuals believed they had received a pay rise of up to 30 per cent. They hadnt. They were merely being paid their correct salaries for the first time without any money being skimmed by dishonest agents. The example of M-Paisa illustrates one of the many benefits of mobile money transfer in emerging markets: a figurative and literal pay-off. And it helps to explain why, today, the momentum behind these services is unstoppable. Telco trade body GSMA runs the Money for the Unbanked (MMU) programme, which monitors the number of live and planned mobile money services of this type. It says there are now 150 live mobile money services for the unbanked, 41 of which were launched in 2012. In 40 markets there are at least two different services available while in Kenya, Madagascar, Tanzania and Uganda there are more mobile money accounts than bank accounts. Overall, there are now 81.8 million registered customers. This momentum looks set to continue. Analyst Berg Insight says total active mobile money users in emerging markets will grow from 61 million (2011) to 381 million by 2017, with the total value of transactions projected to increase from $44 billion in 2011 to $395 billion. Whats more uncertain is exactly how the market will evolve. Its not easy to launch these services. There are legislative and regulatory issues to address and, of course, any new launch has to be available to a decent proportion of the population not just users of one operator. This explains why the traditional bank and card issuing sectors have begun to engage with the space. Theyre teaming up with operators to build services on the back of secure and well-established financial structures.
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Source: GSMA
Thus, Visa is now offering operators a speedy route to building mobile money services, using a platform hosted in Visa managed data centres, and built on technology that has been deployed in more than 30 countries. It says the system handles everything from user interface design to consumer enrolment, transactions processing, authorisation, clearing and settlement. Inevitably, MasterCard Worldwide is doing something similar. It launched its Mobile Money Partnership Program in February 2012 to link mobile money accounts with pre-paid MasterCard cards and thereby bring ubiquitous acceptance to mobile wallet consumers. In some countries individual banks are collaborating with operators and data specialists to let customers use mobile
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phones to set up bank accounts, transfer money, withdraw cash from ATMs, purchase airtime, and pay at merchant points of sale. A good example is Mexicos Transfer, launched in April 2012 by Telcel, Citigroup's Banamex, Banco Inbursa and Gemalto (see following pages). Clearly the impact of these services has been considerable. But as they develop, there is the potential for more. In November 2012, the original money transfer service M-Pesa was updated to let users save and borrow. M-Shwari was added as a menu item so there were no forms to complete and no need to visit a bank branch. Inside two months, reports said total transactions were at the equivalent of more than $11.6 million, comprising $1.43 million borrowed and $11.35 million deposited.
Bank and card issuing sectors have begun to engage with the space, teaming up with operators to build mobile services on the back of secure and wellestablished financial structures.
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The Gemalto Netsize Guide | Mobile money in Mexico

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Money Mex the world go around

M-payments can transform the lives of the unbanked. Which is why Transfer was launched to reach the 80 million Mexicans without access to formal financial services, says Naomi Lurie, director of marketing, Mobile Financial Services, at Gemalto
People in so-called emerging markets spend a great deal of their time queuing. In a cash economy, paying bills and debts is arduous: every payment requires its own physical transaction. That means hours spent waiting behind others, while forms are filled and money is counted. Mobile money transfer services offer a compelling
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antidote to this way of paying. They give people the chance to set up accounts on their phones, which can be topped up with cash by official agents. Thereafter bills can be paid using a text message. The savings in time are immense, and promise to deliver dramatic improvements to the quality of individual lives as well as macro-economic
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benefits to the country. Such services are being trialled all over the world. One of the most ambitious is Mexicos Transfer, which was launched in April 2012 as a joint venture formed by Amrica Mvil (Telcel), Citigroup's Mexican unit Banamex and Banco Inbursa with Gemalto providing the technology to power the backend systems. Transfer lets customers use mobile phones to set up bank accounts, transfer money, withdraw cash from ATMs, purchase airtime, and pay at merchant points of sale. Though primarily aimed at Mexicos 80m unbanked population, the ultimate aim is to extend the service to Amrica Mvils Latin American subscriber base of 240m subscribers. Heres how it works: customers sign a contract in both urban and rural locations via Telcel shops and agencies. A Transfer account is created for the customer and linked to their mobile number. The account includes a stored value account (SVA), but can also point to an existing Banamex or Inbursa bank account, which serves as a funding source. The customer then chooses a PIN. Once registered, users can top up with cash or from their existing bank account or via a money transfer from someone
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else. The customer receives notifications about the account and transactions via SMS and/or email. When they want to withdraw cash, they can do so via an agent, bank branch or ATM. And if money is sent to someone without a Transfer account, they too can cash out at an agent by showing him or her their text alert. Of course, all of these functions have to be verified by the back-end system and this is where Gemalto comes in. Its Gemalto Mobile Payment Platform (GMPP) authenticates the customer, makes sure they have sufficient funds to perform the transaction, deducts fees as required, and maintains transaction history. It also monitors the account activity according to predefined limits on transaction amounts and frequency, and prevents transactions when limits are exceeded. Although customers use SMS to send and receive money, the GMPP uses USSD push technology to prompt the customer to enter their PIN. USSD (Unstructured Supplementary Service Data) is the text protocol used by networks to send messages to applications, and these messages are not stored on the phone. Its often used by customers to check balances using the star or hash keys.
Mexicos Transfer lets customers use mobile phones to set up bank accounts, transfer money, withdraw cash from ATMs, purchase airtime, and pay at merchant points of sale.
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In all transactions, a twofactor authentication is required in which the platform identifies the sender, and uses this second channel USSD to prompt him or her for a PIN. If the PIN is correct, the user is authenticated. However, the system can add another layer of security for certain requests, such as cash out at ATM or adding a card to the account. Here, it generates a one-time-password, which is
sent to the customer by SMS to give to the agent or to key into the ATM. In order to bring Transfer users more fully into the existing banking system, Banamex and Inbursa also created the option to purchase a pre-paid debit card linked to the account. This increases the options for paying in and out of the system, although the limits applied to these types of
M-MONEY IN INDIA: THE POST OFFICE DELIVERS

Mobile money transfers are launching across India. But the vast size of the country presents a problem when it comes to cashing out money sent to a handset. Enter the Post Office
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accounts tend to be stricter than for standard mobile-only Transfer accounts. Transfer is still in its development phase but as it evolves, the plan is to extend it to include richer financial services like savings, insurance, micro-loans and international remittances. Manuel Medina Mora, chairman of the executive committee of Banco Nacional de Mexico and Grupo
Financiero Banamex (pictured), says: "We are proud to lead this technological innovation effort, creating simple and convenient financial solutions for the population needs, particularly the unbanked, through a very simple formula. We are aware of the potential that this platform has to transform the banking operation, initially in Mexico, and also when we expand it to Latin America.
Source: GSMA
For all the talk of its rapid urban development, more than 70 per cent of Indias one billion inhabitants live in rural areas. Mobile money has the potential to transform the lives of these people by eradicating the time spent queuing to pay bills and settle debts (see previous article). Domestic money transfer is also critical when so many breadwinners work in cities and send money home. But every m-money system needs a network of agents through which to top up and cash out accounts. Many countries use operator stores or commercial banks. In India, the role has been taken on by the Post Office. The Department of Posts (DoP) savings bank is the oldest and the largest banking system in the country, with each outlet
serving an area of 21.23 square km and a population of 7,114 people. In 2012 the state-owned telecom operator BSNL and platform specialist Gemalto teamed up with DoP to launch a new service called Mobile Money Transfer. This over-the-counter service allows anyone with a mobile phone to send money. The sender provides the cash and the recipients mobile number to the post office employee. The recipient receives an SMS alert with the transaction details. The recipient can walk into the nearest Post office and cash out the money. The service has been launched in Delhi, Kerala, Bihar and Punjab, but there are plans to connect all 155,000 branches across the country.
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04
MOBILE NFC
The Gemalto Netsize Guide | Mobile NFC

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Introduction
For all the progress made by mobile as a remote payments medium, it is still not a mainstream channel for small value payments made in-store. Not yet. But in the last two years, there's been a big drive to change this using NFC technology. NFC is the tech that lets users 'tap' to make a data transfer. It can also be used to open a door, swap contact details or of course pay for stuff. Until recently, most peoples experience of NFC came via bank cards if they had any experience of NFC at all. But the potential to embed the tech inside a mobile phone remains an exciting possibility. Now, its happening. The advantages of mobile NFC are many. An NFC mobile wallet can keep a record of all transactions and receive pushed offers to drive more
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activity. This ability to 'close the loop' between the marketing of a product or service and its redemption in-store probably explains the clamour to establish viable NFC services. It's why some of the world's biggest operators have closed strategic partnerships with the giant card companies. Meanwhile shipments of NFC-enabled handsets are creeping up, with most highend BlackBerry, Android and Windows Phones now supporting the standard. The industry is still waiting to see what Apple will do. Over the following pages, well look more closely and the tech and its potential. Well also investigate the various trials being run by operators and find out what happened when two journalists left their wallets at home to go completely contactless
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Touch and go?

Theres huge momentum behind mobile NFC. Pilots all over the world are making it possible to pay for real items merely by tapping a phone on a reader. Are these the transactions of tomorrow? Tim Green ponders
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At the end of 2012, there were almost 50m contactless cards in circulation across Europe, with 590,000 merchants accepting them.
2012 was a big year for Near Field Communication. The spotlight fell on the tech at the London 2012 Olympics, where only Visa cards or cash could be used to make a purchase, and every terminal was enabled for contactless payments. After the event, Visa confirmed that 150,000 payments at games venues were made using the technology. That's 15 per cent of all card payments to the value of 20 and under. Is that good? Well, it depends on whether you regard contactless cards as new or not. The first such cards were actually launched across Europe in 2007, but it's taking consumers a while to get to grips with the idea. Still, there's immense support from Visa and MasterCard, which both believe strongly that tap to pay will succeed chip and PIN as the default payment method for smaller transactions in store. At the end of 2012, there were almost 50 million contactless cards in circulation across Europe, with 590,000 merchants accepting them. By the end of 2013, there should be 70 million Visa PayWave cards in use So, what's any of this got to do with mobile? Well, the consensus is that contactless cards will one day, inevitably, be embedded inside a handset. The question is when. And how. Indeed, Visa has stated its belief that by 2020 more than 50 per cent of transactions will be made with mobile devices. So, what makes mobile such a good home for NFC? Here are four reasons: 1. Ubiquity The fact that developed nations have 100 per cent mobile penetration means that once NFC becomes standard in devices, it will quickly be within the grasp of virtually all consumers. This is an opportunity for credit card firms. After all, even some mature markets still have low credit card penetration rates. 2. Interactivity An NFC mobile wallet can be linked to the native features of the device display,
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Visa has stated its belief that by 2020 more than 50 per cent of transactions will be made with mobile devices.
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A Q&A ON NFC
What is NFC? Near Field Communication is a contactless communications technology based on inductivecoupling that enables the transmission of data over a few centimetres. Its like an ultra-short range BlueTooth, and is mostly in use within smart cards. NFC operates at 13.56 MHz and transfers data at up to 424 Kbits/second. Two NFC-compatible must be brought within four centimetres of one another for data to be moved: a simple wave or touch can establish an NFC connection. How many NFC phones are currently in use? According to ABI Research, 102m NFC phones were shipped in 2012, with the stand-out models being the Galaxy SIII, the Nokia Lumia range, various BlackBerrys and all Google Nexus devices. Of course, as of early 2013, theres no iPhone. Still, ABI reckons 285m NFC-enabled devices will be shipped in 2013, and that this number will accelerate to 1.95bn by 2017. How big could the market get? Juniper Research predicts 1.8 billion people (about a quarter of the global population) are now making mobile payments and that, by 2017, the value of mobile NFC payments made could reach $110 billion.
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keyboard, touch screen, sound and vibration to become far more interactive. This in turn can deliver much richer rewards to user and issuer. Most obviously, NFC can be linked to apps that display purchase records on the screen. You simply cant do that on a card. 3. Remote management The addition of a mobile network factor to NFC means that management functions can be executed remotely in real time. Thus, a user can start a new service immediately following subscription or, conversely, he or she could ask the service provider to shut down services when a device is lost or stolen. Result? Both users and providers get certain controls for managing security and risks associated with NFC services. 4. Multiple accounts A contactless wallet on a single NFC-enabled mobile phone can hold lots of different virtual cards. This is very convenient for the user, offers more market reach to the issuer and tremendous opportunities to the handset maker/mobile network. Ultimately the big idea here is that mobile NFC can close the circle comprising search,
discovery, offer and payment. As some like to say, it can hyperlink the world. So you will be able to tap your phone to an NFC tag on an advert then visit the store to buy the product without the need for cash, and receive loyalty points instantly updated to your NFC wallet. All in one simple, seamless system, with the same level of security as if using EMV bank cards. The process of moving contactless cards to the phone is, of course, already underway. Arguably, it began with the launch of Google Wallet in the US in September 2011. The Google Wallet app enables contactless NFC offers and transactions from the handset in store clearly an early move by Google to get its online advertisers thinking about how to continue the consumer journey from the desktop to the street and then the store. But it hasn't been plain sailing. Google began by storing a limited number of mandated cards in the device before letting users add their own from the cloud. But the bigger problem was device availability. Only Sprint would range the small number of NFC-enabled devices preloaded with Google Wallet. The others declined to join
An NFC mobile wallet can be linked to the native features of the device. Many operators believe NFC represents the fourth wave of revenue after voice, text and data bundles.
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Mobile NFC could close the circle comprising search, discovery, offer and payment. Operators argue a secure element in an NFC SIM is far harder to crack than those stored on the cloud or in the operating system.
in. Why? Because they were readying their own joint venture for NFC payments: Isis. Crucially, the Isis wallet stores the 'secure element' of the cards it supports in the SIM. Operators believe this is far harder for fraudsters to crack than secure elements stored on the cloud or in the operating system. Using the SIM also gives operators a chance to participate directly in the mobile wallet space. Whether this will be via a 'rental fee' for taking a slot on the SIM or transactional shares or some kind of 'big data' analysis fee has yet to be determined. Still, many operators believe NFC represents the fourth wave of revenue after voice, text and data bundles. And if you consider that Americans alone spend $6.2 trillion each year on goods and services, you can see the possibilities. So a huge number of trials have now been launched by operators in partnership with banks, device makers, retailers and card companies. These services depend on a Trusted Service Management (TSM) platform to ensure the wallets are enabled securely inside the SIM. Gemalto is involved in most of them. Its UpTeq NFC SIM platform handles the processing, storage
and verification of confidential and sensitive data. It also contains an expanded capacity for hosting NFC services that can include payment, as well as transportation, access and loyalty programs. UpTeq currently underpins well over 50 major trials including those of China Unicom, KDDI Japan, Deutsche Telekom, Isis, Orange, T-Mobile and Vodafone Europe. Its also behind some noteworthy pilots in emerging markets such as Brazil. In a trial with TIM Brasil and Banco Ita, participants can make purchases in more than 100 frequently visited restaurants, coffee shops and local stores. But there remain other ways to make mobile NFC a reality outside of the SIM. Google will continue with its project, while Visa did a deal with Samsung to make its phones (including Galaxy S4) provisioned for PayWave. And in February, Spains Bankinter revealed a tech that keeps the secure element in the cloud, accessed via a one-time temporary PIN. Whats certain is that more ideas and trials will be forthcoming. The prize a slice of the worlds low ticket transaction revenues is just too glittering to pass up.
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TURKCELL TAPS IN TO MOBILE NFC

While many in mature markets are still planning mobile wallet services, a small number of schemes are launched and live. Arguably the most advanced of them all comes from Turkey, a country with a huge number of young people and a growing reputation for mobile innovation. Turkcells original wallet, Cep-T Para, launched in June 2011 and comprised a pre- pay card linked to a mobile account. It offered text- based alerts, payments and money transfers. At the same time Turkcell was mindful of its smartphone customers so in April 2011 it enhanced its wallet offering with the launch of the NFC- based Cep-T Cuzdan. Overall, the joint offering had 1.2m users in Turkey by the end of March 2013. Ali Salc , mobile finance business director at Turkcell, says: We think it is genuinely the worlds most advanced wallet. Users can do cash transfers, airtime top-up, online payments, couponing, contactless NFC transactions and in future non-NFC retail transactions and utility bill payments.
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While in-store payments remain embryonic, the focus for NFC is on redeeming offers. The system will push five offers to consumers based on their preferences and behaviours, with the option to browse a catalogue too. Each offer generates a code, which the merchant enters into their system to redeem. And of course, Turkcell stores all secure data relating to its NFC wallets inside the SIM. Salc says: Its been proved that wallets stored in an app or an OS can be hacked. Putting the secure element inside the SIM adds a very powerful layer of protection. Its like having a locked draw in a deck inside a locked room. And I dont think the others can compete with this.
Gemaltos UpTeq platform underpins over 50 NFC trials including those of China Unicom, KDDI, Deutsche Telekom, Isis, Orange, TMobile and Vodafone Europe.
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The Gemalto Netsize Guide | Contactless Challenge

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Easy as NFC?
Is it possible to abandon cash and go purely contactless today? Gemaltos VP of Marketing Communications, Telecom Business Unit, Remi de Fouchier reports what happened when two bloggers took the Gemalto Contactless Challenge
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In summer 2012 during the London Games, Visa and Samsung worked hard to promote contactless as a payment method around the Olympic Park. Visa was aware of the enduring confusion among consumers of its PayWave
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contactless technology, while both partners were keen to show how mobile could take NFC payments a step further. The results were pretty good (see box). But Gemalto was keen to assess how much the Games did to boost the
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When the payments come off successfully, Jon and Ewans delight at the ease and simplicity was palpable.
widespread adoption of NFC throughout the city after the event had finished. To do so, it decided to engage two battle-hardened tech journos Mobile Industry Reviews Ewan MacLeod and technology expert Jon Choo in the first Gemalto Contactless Challenge. The two hacks were set loose across the UK capital with a Samsung Galaxy SIII and a QuickTap NFC Wallet in a series of challenges to see how easy contactless payments can be. QuickTap is run by Orange and Barclaycard and, according to their websites, retailers like Subway, Pret A Manger, MacDonalds and The Slug And Lettuce all accept it. But what is the reality? Almost halfway through the contactless challenge, it was fair to summarise it as a steep learning curve for everyone. On the plus side there were numerous places where one could go contactless on the UK high street. And when the payments came off successfully, Jon and Ewans delight at the ease and simplicity was palpable. However, we also saw occasions where payments werent offered, or the payments failed at the point of sale, causing frustration to the otherwise upbeat bloggers.
Heres how Ewan described a typical day of trying to buy breakfast, lunch and dinner entirely with contactless. I could simply have gone into McDonalds three times since every McDonalds has this technology. Thats no fun and its a bit repetitive. So I hatched the following plan: Pret a Manger for breakfast, M&S for lunch and then Tesco, EAT or similar for dinner. I began strongly. Pret is like McDonalds in that the team there were more or less fully up to speed on contactless. The lady simply nodded with mild disinterest when I eagerly asked if I could pay by phone . The transaction was approved in super quick time. Fast forward to lunch at Cafe Nero. I had been concerned about how people would react to me paying with a phone. Maybe some would think Im trying to pull some kind of trick. But no. It was fine. The chap who served me barely raised an eyebrow as I paid with my Galaxy. Dinner was where things spiralled out of control. My social media followers had suggested Waitrose was either fully contactless or almost there. Not so. My local branch had no payWave readers. So I tried M&S.
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Disaster. Absolute disaster. I tried to pay 8 with my Galaxy and the M&S unit simply gave the error message, multiple cards detected . The queue was getting very big as I repeatedly tried to get the thing to work. So I paid with chip and PIN. Now I was running late for my train. Then I remembered Subway round the corner from the station. I walked to the front cash register, asked for six white chocolate cookies and held my phone over the card reader. I made my train. THIS is why you need contactless. It is fast!
And heres a typical day for Jon:
The day is blighted by my own stupidity: for probably the second time in my life, I forgot my wallet. I have to rely purely on my NFC Samsung Galaxy S III phone. I feel very exposed. Happily, the day starts well at the Southbank Centre, where the Riverside Terrace Cafe accepts contactless. In fact the Southbank has really embraced the technology, with even information on payment methods advertising the virtues of going contactless. My first NFC fail of the day occurred at Benito's Hat in Covent Garden. I asked the staff whether they accepted
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contactless payment, and was told by two people that, yes, they did. But the tills were old and it quickly became apparent that the staff assumed contactless meant magnetic strip! I paid for my food with loose change. Now penniless for the day, I could not afford to let a mistake like this happen again. Another fail came at the Sacred Cafe at the Stanfords travel bookstore. They do have a contactless terminal, but it doesnt work. I completed the challenge at an EAT restaurant. I have been to three separate EATs this week; they always get it right. There are two challenges that continue to elude me: 'get a haircut' and 'watch a film at a cinema'. I walked past two barbers today without success. Worse are the cinemas. I visited some of Londons landmark cinemas but to no avail. BFI IMAX, Empire Leicester Square, VUE Leicester Square, Odeon Leicester Square, Odeon West End and the Prince Charles Cinema none accepts contactless. My experience highlights the pitfalls of going fully contactless or cashless in 2012. Contactless cannot yet not replace your physical wallet, and even if tap-to-pay payment proliferates, there will always
I had been concerned at how people would react to me paying with a phone; the chap who served me barely raised an eyebrow.
Two challenges continue to elude me: 'get a haircut' and 'watch a film at a cinema.
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be independent merchants who are cash only. Its fair to conclude that both bloggers emerged with the view that contactless, when implemented properly, is a genuinely friction-free and speedy way to complete lowvalue transactions. This is of real benefit to consumers, while offering the
prospect of more revenue to high street merchants. However, as of early 2013, the technology is far from widely available in one of the worlds biggest cities and even when it is, the machines dont always work and are not always understood by staff. In the end, Jon finished the challenge on 227 points, ahead of Ewan on 153.
NFC PAYMENTS AT THE OLYMPICS 2012

All eyes were on contactless payments at the London 2012 Olympics, where only Visa cards or cash could be used to make a purchase and Visas PayWave NFC terminals were ubiquitous and heavily promoted. After the event was over, Visa reported the following uplift in contactless usage (all contactless including card-based): I There were six times the number of contactless transactions during games time as there were during the same period in 2011 I During the games the Olympic venues accounted for 15 per cent of contactless transactions in the UK I Ten per cent of all on-site Visa payments were contactless at Olympic venues over the games 20 per cent of those under 20. In an effort to promote mobile contactless payments, Visa and Samsung teamed up with opinion formers to trial mobile NFC in the run-up to the London games. In all, 726 Visa staff, partners, Visa-sponsored athletes and journalists were issued with Samsung Galaxy SIII NFC phones equipped with a Visa mobile app. They processed an average of 15 transactions each using the wallet. "The London 2012 Olympic and Paralympic Games offered a unique opportunity to demonstrate the value and potential of contactless payments to our partners and members from around the world," says Mary Carol Harris, head of mobile at Visa Europe. "We believe strongly in the value of mobile and contactless payments. By 2020 we expect that half of all transactions over our network will be through a mobile device. As of end 2012, there were more than 40m contactless Visa cards issued across Europe, 24m of which are in the UK. By the end of 2013, that number is expected to rise to 70m contactless Visa cards across Europe.
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TOOLED UP FOR THE NFC CONTACTLESS CHALLENGE: THE QUICK TAP WALLET
So, how did the two Contactless Challenge competitors use NFC to pay by mobile? Simple: they turned to Quick Tap one of the worlds first mobile NFC payments services. QuickTap is a contactless app developed by Orange and Barclaycard that links both the NFC technology located in a handset with a secure contactless micro-SIM (inserted separately) to allow users to pay for items of under 20 at contactless payment terminals in the UK. Both handset and microSIM need to be Quick Tapenabled to make payments with the app. For the Contactless Challenge the two rivals used pre-paid Quick Tap Samsung Galaxy SIII handsets (on the Orange network, now part of Everything Everywhere/EE) with the Quick Tap wallet app for Android, available for download from the Google Play store. Once registered, up to 150 can be stored on a Quick Tap-enabled handset and you can add up to 100 from any MasterCard or Visa credit or debit card at any one time.
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05
MOBILE WALLETS
The Gemalto Netsize Guide | Mobile Wallets

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Introduction
Few subjects in mobile generate as much debate as the mobile wallet. Given that trillions of dollars are moved every year via cards and cash, its hardly surprising that the mobile world would want a role in these transactions. However, as of 2013, theres still no single model for what a mobile wallet actually is. Broadly, a mobile wallet resides on a handset and stores digital versions of payment cards, transit passes, tickets and loyalty cards. Usually, its designed to mimic the appearance of a physical wallet arranging cards in slots and giving users the ability to tap on one to access it. But beyond this broad definition it gets a bit more complex. Theres the question
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of which transmission tech to use for payments: could be contactless NFC, barcode scanning or even text or email. Then you have to decide where the wallet resides usually its located within a downloadable app, but a it can also be part of the OS itself (as in the case of Apples Passbook) or stored inside a secure element such as a SIM card. These are weighty issues with a huge potential pay-off for the companies that win out. And its why most of the worlds operators, card companies, banks, retailers, OTT firms and handset makers are testing services now. In this section, well look at how the space is developing and talk to Visa about its approach
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Your money? Theres an app for that

NFC or barcode? SIM or OS? Despite lingering confusion about how to build a mobile wallet and where to store it, theres tremendous momentum behind the concept. Tim Green, editor in chief of Mobile Money Revolution, looks at the options
When market watcher comScore quizzed US consumers for its Digital Wallet Road Map 2013, it revealed a lamentable awareness of mobile wallets. Take away PayPal, and only 12 per cent of consumers had used one. But theres worse. Even after testing these wallets, respondents still scored an average of 45 per cent in terms of demonstrated level of understanding. The study revealed how much work has to be done in order for the public to become as excited about the mobile wallet as are its many stakeholders telcos, OTT firms, banks, retailers. Because make no mistake, theres tremendous momentum in the business behind the idea. Today, probably the most successful mobile wallet is Starbucks simple payment app. Users top it up from a bank account and the app generates a barcode, which is scanned in store to debit a payment. As of January 2013, it was handling 2.1 million mobile payment transactions a week for a 7 million user base. But is it really a wallet? Possibly not, but its simple barcode system has got observers wondering how Apple might tweak its own barcode-using Passbook app for payments. Currently Passbook acts as a receptacle for third party ticketing and promo apps, but not yet financial transactions. Start-ups stake a claim While Apple mulls its next move, start-ups are trying to gain market share. Take LevelUp. It invites retailers to install a counter-top scanning device. Meanwhile users download the LevelUp app and assign their cards to it (although no payment data is stored on the app). The merchant uses the scanner to redeem offers sent to shoppers.
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Theres still a lamentable awareness of mobile wallets. Take away PayPal, and only 12 per cent of consumers have used one.
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The USP of LevelUp is that its free to merchants. It makes money by running loyalty programs based on the data it gathers. LevelUp hit one million users in February 2013 and has more than 5,000 participating restaurants and shops. But can it compete against the many huge organisations entering the wallet space? Retailers go it alone In the US, the big retail chains are preparing to go it alone with a wallet also based on barcode redemptions. The Merchant Customer Exchange was unveiled last September by WalMart, Target Corp, 7-Eleven and other members with more than $1 trillion in annual sales between them.
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In April 2013 MCX announced it had selected Gemalto to power its mobile commerce platform. Then theres PayPal. The online payment specialist transacted $14bn on mobile in 2012. Yes, most was for remote payments via the smartphone, but PayPal is also making aggressive moves into the high street via a barcode-based service for in-store face to face payments. At the close of 2012 its system was useable in 18,000 physical stores around the US. PayPal has loudly rejected NFC as a channel for payments. This sets it apart from many of the bigger corporations entering the space notably Google, the Gemalto-powered Isis JV and the many partnerships between
Apple might yet tweak its own barcode-using Passbook app for payments. Currently it acts as a receptacle for third party ticketing and promo apps, but not yet financial transactions.
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LevelUps wallet syncs with a dedicated reader in US stores
2013 should see Isis joined by a number of operator-based NFC wallets that house the secure element of a payment app in their SIMs.
Visa/MasterCard and individual operators. Google Wallet was unveiled to much fanfare in September 2011, and has been through many changes since. It launched with support for just a single credit card, which resided inside the app. This deterred many potential users. Later Google switched to a cloud-based model, so that users could assign any payment card to it, with authentication performed remotely on the cloud. This might simplify the service but it effectively puts Google at the front end of card transactions, giving it access to the transactional data and the
brand value in store. This has not gone down well with the card giants. Google launched its wallet with the long-term goal of providing its core customer base online advertisers with a channel for pushing offers (and then seeing them redeemed) to customers in the physical world. That remains the aim. The issue is availability. At the moment, it is still only ranged on Sprint devices; Verizon, T-Mobile and AT&T do not range it. The latter three are backing Isis, their own NFC JV, which has similarities with Google Wallet. Isis, relying on Gemaltos TSM platform, launched in Austin and Salt Lake City in 2012. Unlike
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Google, Isis loads cards on to the SIM, not the cloud, and has the backing of Visa, Mastercard, AmEx and Discover. Merchants on the scheme include Foot Locker, Macys, Coca-Cola and many convenience stores and petrol stations. NFC in the SIM Its still early days for Google Wallet and Isis, and both have been criticised by observers who point to the lack of NFC infrastructure in store and the indifference of customers. Still, 2013 should see Isis joined by a number of operator-based NFC wallets that house the secure element of a payment app in their SIMs. A myriad of services are set to arrive imminently with SIM specialist Gemalto alone confirming wallet launches for Telus, China Unicom, TIM Brasil, TIM Italia, T-Mobile, Vodafone Germany and many more. There are vast potential rewards for the winners in mobile wallets. This is why, despite the current confusion, most experts believe they will become commonplace. Andrea Jacobs, payments practice leader of comScore, says: There was a time when consumers were reluctant to use ATMs for similar reasons, and, today, look at how far weve come.
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DIGITAL WALLET CONSUMER AWARENESS

Aware of Digital Wallet PayPal ...............................72% Google Wallet ................41% MasterCard PayPass.....13% Square Wallet ...................8% V.me by Visa ......................8% Isis.........................................6% Lemon Wallet ...................5% LevelUp...............................5% Used the Digital Wallet PayPal ...............................48% Google Wallet...................8% MasterCard PayPass .......3% Square Wallet ...................2% V.me by Visa ......................2% Isis.........................................1% Lemon Wallet ...................1% LevelUp...............................2%
Source: comScore Digital Wallet Road Map 2013
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Visa Europes Jonathan Vaux says the web has changed the way we shop without improving the payment experience too much
The Gemalto Netsize Guide | Visa v.me

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Visas passport to speedy e-commerce

When it takes hundreds of clicks to complete online transactions, its no wonder so many people abandon them. This is costing the industry a fortune so now Visa is doing something about it. The Gamalto Netsize Guide talked to Jonathan Vaux, Visa Europes SVP of market strategy, about its new digital wallet, V.me.
Something rather huge happened at the end of 2012. Across the developed world, major high street retailers faced closure or bankruptcy. From Hendy Hardware in the US to Jessops in the UK to FNAC in France, some historic names were under threat. One obvious reason for this is the rise of mobile and online commerce. The ascent of digital shopping has moved transactions away from cash in favour of card payments. But its fair to say that the user experience of digital payments remains deeply unsatisfactory for many. For the giants of online commerce, things are mostly better. With Amazon, iTunes et al, consumers are happy to go through the pain of storing their details because they know they will return to that store and that next time the process will be quicker.
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But for the long tail of ecommerce stores that are visited more occasionally, that lengthy sign-up can be a significant barrier. Indeed, according to Baymard Institute, the average shopping cart abandonment rate is a sobering 65.23 per cent. Thats horrific reading for merchants, and for card providers too. And its the main reason why Visa has created V.me. Heres how it works: users store their card details (any card not just Visa) along with their billing address to the V.me service. Thereafter, whenever they see the V.me sign on a participating merchant site, they can check out using a simple pass code. No need to type in a 16 string card number, CVV number or billing address. Yes. Its a lot like PayPal. But Visa believes its brand name and the plans it has for
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For the long tail of e-commerce stores that are visited more occasionally, that lengthy card sign-up process can be a major barrier. Whenever a user sees the V.me sign on a participating merchant site, they can check out using a simple PIN. No need to type in a 16 string card.
the service will make it an attractive option for consumers. The Gemalto Netsize Guide talked to Jonathan Vaux, Visa Europes senior vice president of market strategy, about the project
Whats the big idea behind V.me?
designed V.me so that it could adapt to these changes.

What stage is V.me at now?
The web has changed the way we shop and brought with it a number of significant new merchants whose operations are entirely digital. This has made card payments critical, but the experience hasnt improved much. It takes too long to input details, and anyway customers are still nervous about entrusting these details to anyone but the biggest and most familiar online merchants. Then there are the security measures, like those squiggly letters. People dont like those much either. So we wanted to simplify the process with one wallet that could be used securely and quickly across multiple retailers. The other critical factor was making this a cloud-based wallet that would work across any kind of device. Platforms like mobile and kiosks are transforming the payment journey for people: you can search online and pay in store, or browse in store on a kiosk and have items delivered. Its all changing, and we
Visa Inc has soft launched it in the US with partners like the U.S. Bank, Bank of Tennessee, the Greater Texas Federal Credit Union, PNC, the America First Credit Union and others. Merchants include Living Social, 1-800-Flowers, PacSun, Shoebuy.com, Buy.com, and MovieTickets.com. Were also running pilots in France, Spain and the UK, with Ireland and Poland due in 2013. Our main job is to get buy-in from the banks as they have to encourage users to sign up.
How can you reassure customers that V.me is secure?
Obviously theres always tension between reducing friction and providing security. We know that. So V.me has Visas recognised anti-fraud engine underpinning it. And, of course, the system doesnt share details with the merchant so thats another bit of reassurance for shoppers. Finally, Visa is a giant and trusted organisation, so we hope that this in itself will breed confidence.
How can retailers get signed up?
Its very important to make it easy for retailers to integrate V.me so were also working
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closely with the major payment providers like WorldPay that many merchants use to supply checkout systems on their sites.
You implied that V.me is heavily dependent on the support of retail banks. But could there be a standalone Visa V.me by Visa app for money transfers and so on?
What about NFC?
Visa is right behind contactless, as weve shown with our rollout of the PayWave system. A sync with NFC is definitely in the pipeline.
Many wallets being launched also support loyalty and store cards. Is this possible with V.me?
Its possible. However, the question to ask is whether it would be better to roll it into a banks own mobile app offering. Its a little early to say.
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The architecture can definitely support this, and can extend to important features like geolocation that make offers and so on more meaningful.
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The Gemalto Netsize Guide | Wallet Psychology

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Can mobile banking make people more responsible?

Will the mobile wallet make people see money as they did when they used a leather wallet full of cash? Mobile banking expert Tim Parsons believes it might. He says it could make even people more sensible in their spending
There were many great things about the 70s: flares, discos and the leather wallet stuffed with cash. Its unlikely that, in an era of mobile money, well see a revival of the latter. But there is one sense in which the old wallet could show us the future of banking and payments. Today less than a third of our spending is cash and over 89 per cent of us are paid direct to bank accounts. Money has gone digital. We get paid electronically, we never see or touch most of our wages and the key feature of a modern wallet is how many plastic cards it can hold. As a result, weve become distanced and disconnected from our money. Its all so different from 40 years ago. Back then cash was king and the wallet was a money management tool. Think about it. Most payments came out of that single wallet and every one provided instant and intuitive feedback on the cash remaining. So, when someone asked if you wanted to go to the disco, you had a pretty good idea if you could afford it or not. Thus, every payment provided a subtle but constant reminder of how much money you had left. When youre connected to your cash in this way then you have the knowledge to make informed spending decisions, which means that youre in control. Back in the driving seat Today, thats mostly gone. And we all know the unpleasant experience of checking our balance to discover the sobering gap between perception and reality. I think the move towards mobile money provides a fantastic opportunity to recreate the power of a cash wallet and much more besides. Todays mobile banking is about payments, current and savings accounts, card statements and so on. The smart wallet of the future can be about intuitive money management, providing control and transparency in the short and long term. Imagine if every time you make a payment you get instant feedback on what youve spent, how this
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compares with last week, and how it may impact future spending. So when you pay for lunch you get a reminder that, this week, youve spent more than expected and that it may leave you short before pay day or affect your holiday plans. This might prompt people to think: maybe tomorrow Ill economise a little. Analyse the data Just as with a cash wallet, every payment made via mobile is an opportunity not just to engage with your money, but also to form a much deeper understanding of your needs and desires. Digital money and electronic payments need to have the same level of visibility as cash in a wallet. The banks have records of all our spending histories and, with permission, this could be used to help each of us build an informed and dynamic view of our digital spending patterns. Analysing previous years would allow the bank to predict regular but occasional events, such as annual insurance premiums. Combined with scheduled payments and other regular spending the bank could offer a forecast of future spending which the customer could then tailor to their exact needs.
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This forecast of planned and unplanned future spending would give the customer a forward view on their money, providing the knowledge to make wider day to day spending decisions. Going live The good news is that the first balance forecast services are starting to appear. Simple Banks safe-to-spend monthly view and KeyBanks recent launch of mycontrol banking each provide examples of the smart wallet concept in action. Meanwhile the first new generation bank may well be here in the form of Movenbank. Its Spend, Save, and Live service combines multiple accounts and credit cards to provide the most complete insight into your spending with the aim of helping you to learn more about your money and know how much you really spend so you can spend smarter and save more. I believe these rich personal financial management services offer an exciting glimpse of what a truly smart wallet might look like.
Money has gone digital: we get paid electronically, we never see or touch most of our wages. Imagine if every time you make a payment you get instant feedback on what youve spent and how it may impact future spending.
Tim Parsons is a director at mobile banking consultancy Think Design Deliver
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MOBILE BANKING
The Gemalto Netsize Guide | Mobile banking

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Introduction
The addition of online services to physical branches has changed banking and now inevitably it's being followed by the creation of new mobile options. The advent of the userfriendly smartphone and the always-on connection is bringing millions of people into the mobile banking space, and prompting banks to launch apps and sites that offer basic functions such as checking balances, arranging direct debits and setting up reminder alerts. According to Aite Group, a USbased financial services research firm, the number of US consumers using a mobile to access their bank account will increase from 33 million last year to 96 million by 2016. Needless to say, it wont be plain sailing. Real and imagined security scares remain a hindrance for the sector. Which
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is why, in the UK for example, Wincor Nixdorf found 72 per cent of consumers consider mobile banking services to be insecure and unsafe. Still, most insiders believe these fears will be allayed and that mobile banking can become more sophisticated and even begin to change peoples spending behaviour. In the UK, all banks are working with the UK Payments Council to assign bank details to mobile numbers so that individuals can transfer funds without ever having to know each others account specifics. Well look at this more closely over the following pages. We also ask a banking expert to speculate on how up-to-theminute financial updates and easy-to-read information could make banking apps alter users financial habits...
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Next seasons big transfer?

Imagine if all bank accounts were linked to users phone numbers. No one would ever need to know another persons bank details. All transfers could be as simple as sending a text. Well, the UK is building just such a scheme and it launches next year. We asked Neil Aitken, senior communications officer at the UK Payments Council, all about it
In early 2012, the UK bank Barclays made headlines with a new mobile banking service called PingIt. While its rivals were launching apps that enabled basic account services from a smartphone, Barclays dreamed up a product with a single and simple proposition: to let customers make a money transfer using just a text message. Users register for the service, create a five digit passcode, then link their phone number to their bank account. From then on, they can select any number from their phone book
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(or enter a new one) and send the money to that number. If the recipient has a PingIt account, the money is transferred. If not, they get a text inviting them to sign up. Despite some alarm about security (of which more later), the service attracted 500,000 users in six months. It appealed because of its speed and simplicity and the fact that, while people are nervous about giving away bank details, they are less concerned about sharing their mobile number. A little lazily, some commentators complained
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The UK Payments Councils CEO Adrian Kamellard says the idea will deliver far-reaching improvements for users
that the product merely showed how far mature countries were behind markets like Kenya and India, where mmoney was well-established. But PingIt is different from MPesa and the like because, while they use mobile airtime as a currency, PingIt cleverly links the mobile ecosystem with the existing banking network. Inevitably, the idea spread beyond Barclays. In late 2012, Visa announced it was to replicate it. In early 2013, Bank Of Ireland launched a service called Pay To Mobile. But it was in November 2012 that the biggest news broke, and the UK Payments Council confirmed it was working on an industry-wide money-transfer service that embraced virtually all UK bank customers. Widespread support At present the project covers eight financial institutions Barclays, Cumberland Building Society, Danske Bank, HSBC Bank, Lloyds Banking Group, Metro Bank, RBS and Santander. Together, they represent 90 per cent of UK current accounts, but discussions are continuing to add more institutions. The service is due to launch in spring 2014. Its a highly ambitious project, at the heart of which is a central database that can securely store all customer mobile phone
numbers and link them to their account details. This repository is now complete, so the participating banks are currently making their systems compatible with it. Viral effect In theory, the service could revolutionise money transfers in the UK. As Adrian Kamellard, CEO of the Payments Council, said at launch: The mobile payments project is a fantastic example of the unique role the Payments Council can play in delivering far-reaching, innovative improvements for bank customers. This new service will offer a simple, secure way to split a bill for dinner, receive money from a friend or pay a tradesman without needing to remember or share account details. Of course, it will be incumbent on the individual banks to encourage their own customers to register for the project when it goes live next year. But one can imagine the viral effect that could kick in once a critical mass of users signs up. What could make all the difference is that money will be transferred between accounts using the Faster Payments service, which was launched in 2008 by the Payments Council to process online transfers. It processed more than 800m
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online and phone banking payments in 2012. Mobile transfers will also be processed by the LINK ATM network, which processed 3.1bn transactions in the period. Neil Aitken, senior communications officer at the UK Payments Council, believes this is a critical distinction. Its not strictly true to call the service pay by text. Instead, when you make a payment to another phone number the transfer is made via the existing payments infrastructure. Faster Payments, in other words. Anti-fraud measures At launch, anyone with a mobile number will be able to register to receive payments, but only smartphone users will be able to send payments. In the UK, that should be 75 per cent of phone users. A good majority, but hardly ubiquitous. Its anticipated these customers will make transfers from within an app, though Aitken stresses that the precise methodology is down to the individual bank. Of course, no service of this sort can ever escape big questions around security. The UK Payments Council insists, as youd expect, that stringent anti-fraud measures have been built into the system. But often its human fallibility that is the bigger flaw
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here. What about the phishing text/email that encourages the user to surrender their details? Or the innocent downloaded app that is actually a Trojan, which records keystrokes? Future possibilities Aitken acknowledges the real risks here, but says the member banks must encourage vigilance among their users. Consumers get the same legal fraud protection when using mobile payments as any other payment service, but ultimately responsibility for security is shared. Banks need to educate customers but customers also need to take care to protect themselves. Although the scheme is being launched to handle transfers between account holders, theres no doubt it has the potential to expand into something bigger. From the start, individuals will be able to pay businesses as well as other individuals. In time business-toperson could be added. So is it possible that the scheme could extend into the retail environment? Its not part of the plan, says Aitken. Card issuers and retailers have already made substantial investment in NFC for in-store payments. But the flexibility to innovate is built into the mobile payments scheme so, in future, who knows?
At present the project covers eight financial institutions representing 90 per cent of UK current accounts. One can imagine the viral effect that could kick in once a critical mass of users signs up.
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The Gemalto Netsize Guide | The bank app user interface

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Designs on mobile banking

People use PC banking once a week; on mobile it could be once a day. How does this affect the design of mobile banking services? Clayton Locke, CTO of Intelligent Environments, outlines the key factors in great design
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The mobile money battleground is hot. All over the world, financial institutions are bringing new products to market. Its a very crowded space, so the pressure is on providers to push the boundaries of innovation in customer experience just to stay competitive. Of course, any new mobile banking or payments product begins with the user. To truly understand customer needs, Intelligent Environments reviewed most of the mobile and online banking apps in the market, analysing the benefits and faults of each to gain an understanding of what is currently out there, and also the gaps in current offerings that could be closed to provide a better customer experience. We found that what the customer really wants is almost always grounded in the most practical and useful features of a software app. In terms of mobile banking, that means the ability to check account balances, look at recent transactions and interact with the bank. These features must be easily available and a pleasure to use. Most important of all though is that transactions must be made as simple as possible. As banking and payments go mobile, the time it takes for a user to complete a transaction must also decrease. The average user accesses their online bank
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account once a week, whereas the average mobile banking customer will access their account once a day. Mobile customers will not wait for the information they need they expect instant access on demand. This expectation for performance puts immense pressure on mobile money solutions to process higher transaction volumes with faster response, and all this while the customer is on the move. Invisible security Another critical non-functional aspect of the user experience is security. Mobile security protocols are still new, which means that vulnerabilities and malware are not well known to many developers. So bank grade security and encryption are necessary components of any mobile financial services product. These features may be invisible to the customer but nonetheless they are a key source of competitive differentiation for the banks. The danger was illustrated by the Eurograbber malware attacks in 2012. Hackers targeted the PCs and mobiles of banking customers, using SMS messages used by banks for login and authentication to gain access to accounts. Its estimated that the total lost reached 36 million from over 30,000 customers of
Clayton Locke: Mobile banking customers want apps that are a pleasure to use.
Mobile banking customers will not wait for the info they need they expect instant access on demand.
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over 30 banks in Italy, Spain, Germany and Holland.
Aside from app design itself, its vital that help is offered to customers when difficulties arise. Poor customer care is a major source of dissatisfaction.
Security and encryption may be invisible to the customer but they can be a key source of competitive differentiation for the banks.
Unimaginable innovation Further ahead, innovation will also be driven by the capabilities of new devices. Entrants looking to make a splash in the mobile financial services arena will deliver features that customers didnt even realise were possible in the area of loyalty rewards, biometric security or location based offers. As an example, take QuickDeposit. It uses the camera features built into the phone, so that customers can take a photo of a cheque they would like to deposit and pay in without having to leave their home or post a deposit slip. Not only does this save the bank money in processing costs, its also incredibly convenient for the customer. It pays to care Aside from app design itself, its vital that help is offered to customers when difficulties arise. Poor customer care in call centres is a major source of dissatisfaction. This area can be neglected by those developing mobile apps, who tend to pour investment into the mobile features rather than investing in the software or staff required for customer support. Innovation in mobile banking and payments must
extend to the servicing of the customer as part of their overall user experience. Its also essential that the user experience is integrated across all channels. With smartphone apps for banking and payments increasingly mirroring the services available via branches, ATMs or PCs, the customer should have a consistent and seamless experience across every channel. Call centre staff need a management console that enables them to offer a personal service with technology, for example, that allows the agent to look at a customers smartphone screen via their console, so that they have exactly the same view of the app as the customer has at the other end of the phone. In summary, future innovation will put improvements to the mobile customer experience at the centre of any successful mobile financial services application. Its vital that those companies seeking to make a name in this increasingly crowded market make the most of technology to provide a truly innovative level of customer service, integrated across all of the multiple channels now used by todays typical customer.
Clayton Locke is CTO of digital banking specialist Intelligent Environments
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CASE STUDY:
THE CITIBANK IPAD APP

When Citibank decided to make its first banking app for tablets, it tore up the rulebook and started from scratch. The result won awards and mass consumer uptake
Since the launch of the iPad, the public has gravitated fast towards the tablet habit. At first, the impulse was largely entertainment, but in time tablets started to become tools to perform everyday tasks such as banking. However, the user experience of the tablet swiping, pinching, zooming is very different from that of the PC or laptop. This necessitates a fresh approach to product development. And also a significant opportunity when thought through with diligence and creativity. So when Citibank decided to create a banking app for tablets in 2011, it chose to start from a blank page. With help from design agency Fjord, it aimed to make a service that would give users more value from their own data. Elegant data visualisation became a key part of the app to help customers get a better picture of their finances. So, it departed from traditional ledger-style banking to offer graphs and visual representations of accounts and transactions. The idea was to make it easy for customers to
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check balances, control cashflow, pay bills, transfer funds, access rewards and find Citibank ATMs and branches. Features include: I A bar chart that displays positive balances in green and debts in red. I A dot chart that shows individual daily transactions, past and future, which can be drilled into with a tap. I Lists of financial transactions that can be navigated with slider tools that take advantage of the iPad's fingerswipe feature. I Pie charts showing the customer how he or she is spending money, breaking down payments by payee. I Graphics that reveal how demographically similar customers are spending by categories, such as home and health (based on anonymised Citi credit card data). I Charts of spending that are filtered by location, age group,
income bracket and purchase category. I Direct access to Twitter customer support. Our iPad app is all about listening to clients and understanding that they need their digital banking experience to be more engaging and dynamic beyond the standard static tables you find with other iPad apps, says Tracey Weber, head of Internet and Mobile Banking, North America Consumer Banking, Citi. Well, it worked. The app enabled Citi to go from processing $1bn through its banking apps in January 2012 to $31bn by January 2013. And it was recognised by the industry too, winning the Mobile Entertainment Forums 2012 Meffy Award for Most Innovative App.
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M-COMMERCE AND THE HIGH STREET
The Gemalto Netsize Guide | M-commerce

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Introduction
A study by Javelin Strategy & Research revealed that consumers spent $20.7 billion shopping on mobile devices in 2012, and that more than 25 per cent of users buy items from phones and tablets. The number represents an astonishing change in shopping behaviour, which is both a tremendous opportunity and a great threat to retailers. On the one hand, merchants can create mobile sites and then sell from them, which stimulates demand for impulse shopping and takes stores into peoples homes. But on the other, mobile also increases the chances that a shopper will visit a physical store, do a price search on their phone and either go elsewhere or even buy from a rival web site if they find a better deal. The latter phenomenon is called showrooming and its become one of the mostdebated topics in mobile. A 2012 report by Tradedoubler found 42 per cent of mobile
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E E T
comparers in the UK admitted performing these in store comparisons. This may be why disruptive online merchants are doing so well on mobile. For example, eBays mobile sales reached $13 billion in 2012, and should hit $20 million in 2013. To combat the migration of shoppers to virtual stores, a host of start-ups, along with more well-established telco and payments firms, have built solutions using QR codes, NFC and other tech to return some advantage back to retailers. And merchants themselves are trying to join up their online and off-line channels, using coupons, in-store kiosks, social media and more to keep customers coming into physical stores. Others are using dongles to turn phones and tablets into card readers, thereby transforming the way assistants interact with shoppers. In this section, we talk to the protagonists behind some of these exciting new ideas
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The Gemalto Netsize Guide | Mobile POS readers

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Kings of the dongle

All over the world small traders are accepting card payments not through specialist readers, but through smartphones. Its a quiet revolution and its all thanks to a group of start-ups such as Square, SumUp and iZettle. Now, these firms are preparing for the next stage, as Tim Green, editor in chief of Mobile Money Revolution, finds out
Its hard to think of any mobile start-up thats made more headlines than Square, the business launched by Twitter founder Jack Dorsey in 2010. His big idea was to make a credit card reader that could plug into any smartphone or tablet and thereby turn that device into something capable of taking card payments. At a stroke Square would give any small business or sole trader from caf to kiosk to hairdresser to plumber the ability to collect payments from Visa, AmEx or MasterCard without investing in pricey specialist readers. Square was an immediate success. Merchants loved it for opening up access to otherwise lost business. Consumers loved it for giving them more payment options. And the card giants thanked Square for delivering a huge new merchant base. By 2012, the firm was processing $10bn for small businesses per annum and Jack Dorsey was American Bankers Innovator of the Year. Squares US provenance arguably helped to make it the focus of press and investor attention. But Dorsey was not the only one to have the idea. At around the same time, Swedish entrepreneur Jacob de Geer had a similar revelation when his stallholder wife bemoaned business lost because she couldnt accept card payments. As a result de Geer set up iZettle in 2010. Chip and PIN conundrum Since then other firms have entered the mobile POS space, including payleven, SumUp and mPowa, plus some of the major financial institutions Square and iZettle helped to displace Intuit, Bank Of America, PayPal. This land grab has forced the participants to compete on price with many charging zero for set up, no monthly fee and no minimum spend. A 2.75 per cent rev share on each payment is more or less standard. What makes the market tricky in Europe (and has kept Square out) is the card giants mandate of the chip and PIN system for payments. This means providers have to develop a dongle that comes with a keyboard which
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By 2012, Square was processing $10bn per annum for small businesses. The land grab has forced participants to compete on price, with many charging zero for set up, no monthly fees and no minimum spend.
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is technically difficult and not very portable. Some firms have worked around this with readers that are remote from the smartphone dongle and require a Bluetooth connection. Others have simply made do with chip and signature and trusted that merchants and consumers will be content with this. Thus, with most systems, MasterCard, American Express and Diners Club just insert their card, sign on the screen and get an emailed receipt. However, Visa has not approved this methodology. Its users type in their mobile number to the merchants device, get a text to their own phone and then type in their own card number to pay. Teething problems with Visa havent prevented the main European rivals from making good progress. Together their services are now live in the UK, Italy, Portugal, Ireland, Germany, Austria, Italy, Spain, the Netherlands and all Nordic countries. And theyve closed
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iZettles Stewart Roberts says ease of sign-up is the key factor for merchants
some significant distribution deals for their products. In November, iZettle teamed up with the UKs new 4G network, Everything Everywhere. The deal saw EEs 297 retail sites selling iZettles card readers for 20 each with a 20 voucher that can be used towards iZettle transaction fees. The intense competition in the space makes one wonder if there is enough business for everyone to survive. Stewart Roberts, UK MD of iZettle, believes the potential market is huge and that its effect can be transformative.There are 3.6m sole traders in the UK alone, and 2m with secondary employment like DJs and wedding photographers. I think we can make a big difference to businesses like these. And were getting a lot of interest from government too, because they realise that most income generated by local businesses gets spent locally too and this can have a profound effect on the economy. Roberts agrees that the mobile POS sector is riven with technical and commercial hurdles now, but hes not concerned for the long term. Theres no doubt the industry is fixated on the whole mag stripe, chip and signature, chip and PIN thing now. In 18 months that will all be over. The price issue will also go away: when
readers sell for 40 euros that will be a psychological barrier for users who will see them as essentially free. Then, the differentiator will be the ease of signing up for merchants. Easy does it iZettle says its registration process is now around five minutes a result so radically different from the traditional card reader vendors that its frankly a bit ridiculous. These firms have so many legacy systems to connect and so many manual workarounds to make that it costs them hundreds of pounds and takes around three weeks to register one new account, adds Roberts. But doesnt that speed just invite fraudsters? Roberts insists not, adding that the iZettle system is ratified by the Swedish FSA and interrogates databases to block merchants that try to register non-existent names or pay themselves. Ultimately, he concedes that the reader is just the start of a communication between merchant and customer. What we do is link the analogue and the digital. At the moment were accumulating lots of data we dont use. But we can. I think this will be less about offers and more about helping local traders to keep the day to day management of their businesses simple.
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Paylevens chip and PIN reader was one of the first to have launched in the European market
The Gemalto Netsize Guide | Mobile coupons

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Scissors. Paper.Mobile?
Can mobile coupons harness the power of digital to save bricks and mortar stores? We quizzed two m-coupon pioneers: Steve Rothwell, CEO of Eagle Eye, and Joachim Alvarez, product manager at Mobilab
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Last year, in the US alone, FMCG marketers distributed 305 billion paper coupons to bargainseeking shoppers. Yes, 305 billion. Its a colossal, almost bewildering figure, which suggests just how hungry the public is for coupon-related bargains. But behind the statistics, all is not well. Its becoming clear to marketers and consumers that, as a medium for coupons, paper is just not up to the task. According to the market watcher NCH, the 305 billion figure was down from a peak of 332 billion in 2010. And the reason for the decline could be that paper is such a pain. NHC said that, of those who used fewer coupons in 2012, 46 per cent did so because of the inability to find coupons for the products they wanted, 39 per cent complained of offers expiring before they had a chance to use them, while 30.7 per cent said they did not have time to clip coupons. If paper vouchers present problems for the public, its just as bad for the brands distributing them. Insiders say the redemption rate on paper coupons is one per cent. In other words, you need to print one million coupons to get 10,000 redemptions. Then there are the issues of fraudulent copying, the messiness of acceptance at the till and the utter inability of marketers to track
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which consumer is redeeming which offer. And yet, for all these barriers, the fundamental power of coupons remains. At a time when bricks and mortar stores are under threat from all sides, they represent a powerful channel to sustain high street footfall. The answer is obvious: mobile. Indeed, the market for mobile coupons is already established. Many specialist companies offer a platform through which to send vouchers to opted-in customers either via SMS or app. Redemption is usually done through a unique number or a barcode, both of which tie the coupon uniquely to the recipient. And these companies are making good progress. UKbased Vouchercloud, for example, gained 1.8 million registered users and had more than 2,000 active merchants in two years before being bought by Vodafone in 2012. Meanwhile, many of the new mobile payment services from Isis to Google Wallet to Groupon are basing their business models around coupons because they recognise that its the ability to push offers to users (rather than a merely enabling a transaction) that is going to make them money. Then theres Apple, whose Passbook application gives brands a channel through which to reach tens of millions of iPhone users.
Juniper Research predicted 10bn mobile coupons will be redeemed in 2013, which is 50 per cent up on 2012.
20 per cent of mobile coupons are redeemed, which is 20 times more than paper.
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Eagle Eyes Steve Rothwell says mobile coupons will only succeed if staff can redeem them easily
The redemption rate on paper coupons is one per cent. In other words, you need to print one million coupons to get 10,000 redemptions.
In a widely quoted report, analyst Juniper Research predicted 10bn mobile coupons will be redeemed in 2013, which is 50 per cent up on 2012. It reckons the public is embracing discount coupons redeemed through mobile and tablet devices and that retailers must seize the opportunity to reverse the decline in the high street.. Report author Dr Windsor Holden says: While weve heard that online retail is killing the high street witness the recent administrations of Jessops and Blockbuster in the UK mobile offers a means of engaging with the consumer at every point in the retail lifecycle, from product discovery to purchase. Of course, there are plenty of hurdles to clear in order for mobile coupons to go mainstream. The primary one is in-store acceptance. Clearly, no merchant will invest in readers before a market is established. This is why some companies have designed processes that work with existing in-store systems. One is Eagle Eye Solutions, whose vouchers take the form of numbers that are typed into the chip and PIN terminals ubiquitous across most of Europe. Steve Rothwell, CEO of Eagle Eye, says: This is not about mobile. Its about retail. And
retailers must be in control of their venues and own the mobile coupon experience. The assistants simply have to be able to make it work. In the current climate, that means keyed entry so even when scanners are not working they can just tap in the numbers. The Eagle Eye system works with any chip and PIN reader and takes a few days to implement (setting up a major home entertainment chain took 22 hours). Consumers take their mobile codes with them stored via email, text or app and sourced from any third party coupon firm that has an agreement with Eagle Eye and the cashier inputs the numbers to make the redemption. Its been launched with 40 retail groups and is set for a US launch soon. Rothwell is very positive about the future. He says: Im sure every coupon will end up on the phone eventually. There are so many advantages. Paper coupons can be copied and we reckon one in six are fraudulent, which equates to a 16 per cent margin reduction. Also, 20 per cent of mobile coupons are redeemed, which is 20 times more than paper. As indicated, Eagle Eye is agnostic about the medium over which its codes are redeemed so long as the retailers can easily support
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them. For this reason Rothwell is positive about NFC. This is a little unexpected given the relatively slow adoption of NFC and Rothwells insistence that in-store systems must be ubiquitous and familiar. However, he believes
that coupons could kickstart the switch to contactless. I absolutely believe in NFC, he says.If anything, the industry is underestimating how fast it will take off. But it wont be payments that drives it, it will be offers and coupons.
Mobile coupons could actually kickstart the switch to NFC contactless.
When m-coupons redeemed 5,000 items in just 210 minutes

When Swedish ice cream maker GB Glace created a campaign to give away 5,000 cones in 2011, the promo assumed legendary status in the local food market. Why? Because the campaign was executed via Facebook with mobile redemption in-store. It was new, bold and amazingly effective: the ice creams were gone in three and a half hours. The GB Glace experience revealed the efficacy of running coupon campaigns via mobile. While paper coupons generate an average one or two per cent
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redemption rate, mobile does 33 per cent. And when the offer is free, mobile can hit 66 per cent. Compelling. Which is why the provider behind the promo, Mobilab, now works with 1,000 brand on 4,000 campaigns a year. Like the UK's Eagle Eye, Mobilab emphasises the importance of systems that are accessible both by consumers and merchants. So it uses simple text codes that can be manually keyed in, rather than QR codes, which can't be scanned by most systems. And, crucially, it works
closely with the giant Swedish coupon clearing house Kuponginlsen. This semigovernmental organisation has a virtual monopoly on the market. Joachim Alvarez, product manager at Mobilab, says business is booming. "Mobile doesn't just give you more redemptions, it also gives you more control. So a brand can decide who gets a coupon, when they get it and where. And it can see how many are opened, and switch off the campaign when a limit is reached," he says.
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The Gemalto Netsize Guide | Marks & Spencer

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Top Marks
Marks & Spencer has invested heavily in multi-channel, developing apps and filling stores with free wi-fi, QR codes, kiosks and tablets. The aim? To blur the lines between online and physical shopping. We talked to Benjy Meyer, M&Ss head of new channels
There are few more historic and enduring retailers than Marks & Spencer. It started as a market stall in the Northern English city of Leeds in 1884 and went on to become part of the fabric of British life: a byword for cosy and dependable shopping. Today, in 2013, M&S has evolved into an international business; it has over 700 UK stores and 400 more in 44 countries across Europe, the Middle East and Asia. Yet, it still retains its steady and traditional British brand image. In many ways, though, the firm is blazing a trail for new ways of retailing. Specifically, in mobile. M&S was the first major high street retailer in the UK to launch a fully mobile-enabled website in May 2010. Last year, the site and the M&S app were re-designed as part of a bold strategy that would move M&S towards a vision of multichannel shopping. Thus, the new app gives customers the ability to browse the full M&S catalogue as well as providing them with functions including a store
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Marks & Spencers Benjy Mayer: stores have to meet the demands of smartphone shoppers
Its all about preparing shoppers and staff for a world in which the physical store and the online site can co-exist for mutual benefit.
locator, QR code reader, barcode scanner and wish list application. The scanner helps customers zap to find alternative sizes and colours of a garment that may be unavailable in store. And then order it. Naturally, such functionality requires stores to be equipped to meet the demands of smartphone shoppers. Thus, QR codes are reproduced throughout the shops (offering access to video product reviews) and wi-fi is made available universally to ensure connectivity at all times. In some locations, staff use iPads to alert customers to the full online product range, and to help shoppers order from the web and then pick up in stores or have items delivered. Its all about preparing shoppers and staff for a world in which the physical store and the online site can co-exist for mutual benefit rather than compete against each other. And it appears to be working. A survey in late 2012 by eDigitalResearch placed Marks & Spencer top of 14 retail brands across mobile optimised sites, apps and desktop sites with an average score of 86 per cent. The success is evident in M&S s financials too. Mobile-based sales for the third quarter of 2012 were up 90 per cent year
on year. They now account for around four per cent of digital. But all this progressive work has not stopped M&S from ignoring the basics like text messaging, for example. Benjy Meyer, the retailers head of new channels, says the utility of text makes it a critical channel. We use SMS alerts for promotions and offers, and shortly we will use SMS to update customers on the delivery of the products theyve ordered. Its extremely important, he says. But what would make it better would be the ability to identify individual users from their texts something only partially possible at present. Meyer says: What we really want to do is to use a unique code in these texts so that we can ID every customer and track redemptions and so on. At the moment we can only do that with registered loyalty customer that use our credit card accounts. Were working on that, with a view to driving more value out of our marketing campaigns. SMS will remain a relevant tool, but as more and more customers start using the M&S app, there will be opportunities for richer interactions. The obvious one being a geofencing option that opens communications to shoppers when they are in store.
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Weve looked at it, says Meyer. Generally, we want to explore how an app can respond when a customer is near to or inside the store. Weve talked to app developers about the possibility of waking an app up, although there can be a battery issue there. But its a possibility. Mind you, the M&S app wont necessarily be the only one assessing a users location. Plenty of third party products Google Wallet, PayPal etc may well be doing the same and competing for attention. Meyer admits this issue has yet to be resolved. I think we have to be aware that our own app will not be the only way for customers to engage with M&S. There will be other crossretailer apps that offer an alternative too. Obviously that will expose users to rivals, but we have to see apps as complementary and work with them.
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Of course, what many third party apps are waiting for is the mainstream arrival of NFC. Closing the loop between searching and paying is whats made Google, for example, so keen to support contactless. But its still some way off, says Meyer, who admits that even QR codes are a mystery to many shoppers. Id say most customers are still pretty unaware of QR codes. It depends on the territory. In Germany and the US its a bit different. I think that when it comes to product information, barcode scanning is easier and image recognition technology is probably the way its going long term. As for NFC, well its not a reality for us yet. But we are the UKs biggest processor of contactless card payments so if the market does transition to mobile then we will fully support that and all the extra resources it can deliver.
We have to be aware that our own app will not be the only way for customers to engage with M&S. There will be cross-retailer apps that offer an alternative.
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The Gemalto Netsize Guide | Retail Impact

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Three steps to retail heaven

Mobile is already changing the way people behave in store. Today, consumers are used to comparison shopping on their phones. But this is just the start of a huge behavioural change. Michael Nuciforo, consultant at Keatan, outlines three key shifts...
Once, consumers were excited about having a computer in their home. Now, they have them in their pockets. In future, computers will be embedded in devices all around us and this connectivity will drive transformations in the way we shop. In fact, I'd predict most instore interactions will revolve around phones and their ability to know where we have been, where we are, and where we are going. So, how might shopping change? Here are my three predictions: limited uptake by users. However, in the second wave I expect the use of AR to escalate and retail is where it will excel. With increasingly sophisticated algorithms and 360 degree product scanning tools, an AR app will be able to determine precisely what product is in front of it. This changes the game. At a basic level an AR app will tell you what the product is, who made it, and even how sustainable it is, but here comes the really cool part - it will also tell you the price. A personalised price calculated for you, not based on supply and demand, but on who you are, how much stock is left, how many people are in the store or even time of day. And because the price will be dynamic the retail store will be back in control. Through AR a merchant could present different prices for different people. It could be based on what type of customer you are, such as a regular, someone who usually visits a rival outlet or someone with lots of influence on others. These slight variations in price could drive huge increases in sales for retailers.
Personalised pricing Price tags are socialist by nature one price is displayed to everyone. So it doesnt matter who you are, or what your income is, the price presented is the same. This limits the bargaining position of the retailer and it means all customers are treated as equal. I foresee a world of no price tags and I think augmented reality will be the tool that makes this happen. AR has been touted for a number of years as the next big thing. At first, it focused on presenting static information over a real world view with
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The Gemalto Netsize Guide | Retail Impact

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No more queues Retailers are obsessive about store space. Income is always quantified against square footage. But POS space is actually taking up room that could be used to show off more products. Meanwhile queues frustrate customers and take up even more space. The good news is that mobile could help to eradicate both these problems. First, retail staff can use phones to take payments anywhere in the store from the changing room to the exit. Customers will even be able to self-checkout if they want. This evolution in retail will lead to three significant benefits. It will increase the available space in the store, reduce the cost spent on point of sale areas and it will also allow all staff to get out from behind the counter. By encouraging staff to use their own devices, retailers can even save on hardware costs. Retailers will only have to focus on the app that sits on staff devices. In time they will be able to launch apps for staff that will be much richer than any POS interface today.
Warm conversations Does it frustrate you that in your favourite shoe store they dont know your name, shoe size or preferred colour? Do you long for the days
of great service, when you were treated as an individual and not a pest? Well, mobile, location and social data could recreate these warm conversations. Over the next few years we are going to see the proliferation of dual apps: one for customers and one app for staff. Retailers will use the customers app to generate meaningful insight into their preferences, and in return the customer will receive offers and discounts. This insight will then be presented to staff in the store. Salespeople will map the customers location, so as soon as they walk into the store, they will know who they are and what they would like to purchase. The opportunities are endless. Staff could even receive bespoke info about the customer they are speaking to such as what they have liked on Facebook, what location they have come from, what they have recently bought. While this might seem a little scary, it will become the norm. Most importantly retailers can keep the conversation going after the transaction. Unlike traditional POS systems today that add no value other than taking the payment, these new apps will allow retailers to keep talking with customers after the purchase.
Michael Nuciforo is a mobile banking expert and founder of the strategic consulting firm Keatan.com.
Imagine a personalised price based not on supply and demand, but on who you are, available stock, how many people are in the store or even time of day.
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The Gemalto Netsize Guide | Social commerce and Wrapp

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The gift that keeps on sharing

Social networks have changed the way we communicate. Can they change the way we shop? Wrapp thinks so. This Swedish start-up lets consumers give free gifts to people in their social graph and gives brands a viral tool to create targeted marketing campaigns. The Gemalto Netsize Guide spoke to Carl Fritjofsson, Wrapps co-founder and SVP of business development...
People like getting presents. They also like giving them. And its so much nicer when the free gift comes from a friend, rather than a leaflet through the door or an unsolicited email from a corporation. This simple fact is the driving force behind the rising social commerce sector and start-up companies such as Wrapp, ParcelGenie and DropGifts. These firms are in subtly different ways enabling users of social media to sign up and then send gifts to friends. The attraction to brands is obvious: with the wealth of data amassed by social networks, its possible to target campaigns at particular groups, and then receive detailed data back on their effectiveness. Such is the ideas appeal that Facebook bought one of these start-ups (Karma) and used its platform to build the Facebook Gifts service, which was soft launched in the US in 2012. However, the company thats arguably making the most progress with the concept is Swedens Wrapp. Its co-founder Carl Fritjofsson talked to The Gemalto Netsize Guide What is the Wrapp offer? There are two sides to it. The first is the consumer side making it easy for people to give gifts of real value to friends and family. We want to be for gifts what Facebook is for comms. Facebook made it OK to stay in touch with old friends. It lets people decide who to connect with, when and how often. We aim to do the same for gifting by using social graphs in a similar way. Then there is the retail side. Were trying to harness the power of social and mobile to offer a channel for friend-tofriend marketing. Its a platform that has barely been explored by most brands, but it offers amazing potential because its non-intrusive. How do you make money? We charge the retailer a small fee when the gift card is
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We want to be for gifts what Facebook is for communications. Facebook lets people decide who to connect with, when to connect and how often. We aim to do the same for gifting by using peoples social graphs.
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redeemed and we also take a small cut of anything a user adds to a gift card via credit card or PayPal. How many users do you have? And how many retail partners? We have over one million users in eight countries, although most of them are now in the US. And there are around 250 retail partners including H&M, Nike, The Gap and others. During the holiday season in the US., Wrapp users were sending over one million gifts a week . Why are you targeting the high street when shopping seems to be moving so fast towards the web? Well, the fact is that over 90 per cent of all sales still happen in physical stores. And although theres been great innovation in marketing in the last 15 years, nearly all of that has been in digital. Physical retailers are still using expensive channels like TV, even though they cant precisely measure their effectiveness. They lack digital targeting tools, so were trying to give them these tools without them having to make huge outlay in platforms.
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How do brands use Wrapp? They sign up and get a dashboard through which they can create a campaign. They decide which groups to target based on gender, age and location, and how much they want to offer. These promotions are then made visible to users to give to the people in their social graph if they match the demographics of the retailers target groups. Later, the brands get a report showing how many gifts were sent and when, and the same for when they were redeemed. All this data is anonymised and aggregated to protect the users privacy. Whats the consumer experience? They download the Android or iOS app and then sign in via Facebook. This shows all their friends. They can then choose the friend they want to send a gift to and see all the offers available. They select the person, write a greeting and press the give button. Theres also the option to add funds to the gift card using a credit card or PayPal and for others to contribute to a group gift. The recipient gets a notification that theyve received a gift. If the gift is for an e-commerce site they can shop on the site straight away. If the gift is for a physical retailer they
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just take their phone into the store to redeem it by opening the gift in the Wrapp wallet on their phone and presenting the barcode to the person at the cash register who scans it. How successful are the campaigns? The goal is to drive people into stores using gift cards and for them to then spend once they are there. On average they spend four to six times the amount of the free gift card. So these consumers are not bargain-hunters. Theyre genuine shoppers. Why redeem gifts through the Wrapp app and not individual retailer apps? Some retailers would like to build Wrapp in, but most users want access to many offers in one place. I may shop at Gap, for example, but that doesnt mean I would always download their app or like them on Facebook. So its more effective for Gap to be in our app. Are you dependent on Facebook? Is that a danger when Facebook is also active in social commerce? We use Facebook so you can give free gifts to the people in your social graphs and as a means of distribution for the gifts. Thats it. Users can also send the gifts via email or SMS,
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and were looking at integrating with Twitter, LinkedIn and others. Is Facebook Gifts a threat to Wrapp? Its a very different proposition. It offers paid-for gifts only, and its exclusively about physical gifts and e-commerce. As a result, senders have to give Facebook their card details and recipients have to give their physical addresses. Basically Facebook Gifts is about generating a revenue stream for Facebook. Wrapp is . about marketing getting the right people into the right stores. And our gift cards are purely digital theyre in your phone so theyre always there when you want to buy something you really want. No one gets sent a physical gift. . Longer term, does the decline of the high street concern you? I think well see an evolution in the way we shop in towns and cities. Theres a furniture store in Sweden called Bolia. It started online but now it has high street outlets, which are basically showrooms. Customers shop there, but have goods shipped to them. I think well see more of this kind of merging of a brands ecommerce activity and high street operation.
Theres been tremendous innovation in retail marketing in the last 15 years, but nearly all of that has been in digital. Physical retailers are still using expensive channels like TV, even though they cant precisely measure their effectiveness.
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SECURITY AND IDENTITY
The Gemalto Netsize Guide | Security and identity

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Introduction
The mobile industry has been pre-occupied with questions of mobile security, identity and privacy since the ringtone scams of the early noughties. Here, consumers were tricked into bogus subscriptions that debited funds from their mobile accounts. That was bad. But now that mobile is becoming a channel for card payments and banking services, the need to tighten security is even more pressing. Depressingly, the criminals are already at work. Security specialist NQ Mobile says it discovered 25,000 pieces of mobile malware in 2011, and that last year, the figure jumped to 65,000-plus. Often this malware takes advantage of human gullibility, taking the form of bogus software delivered through apps, websites or SMS to get inside the consumer's device.
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Sometimes these attacks are relatively benign directing the user to an ad, for example. But now that personal finance apps are becoming popular, there's no doubt the criminals are looking at scams that can give them access to people's banking details. To combat this, the industry is experimenting with lots of intriguing new ideas. One is multi-factor authentication. Here, the user enters two PINs one is their own, the other is a temporary PIN sent to their phone. They can also provide a third form of authentication such as fingerprint or iris. Other firms are investigating how to bury the security 'keys' inside the processors of a phone so that criminals can never phish for access to it. We'll examine these intriguing ideas over the following pages...
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Me, myself and ID

No matter how secure the system, there will always be fraudsters who dupe consumers into surrendering their details. So how do we protect users from their own vulnerability? The answer may be multi-factor authentication, says Ray Wizbowski, VP of strategic marketing (security business unit) at Gemalto. We asked him to explain
Gene Spafford, professor of computer science at Purdue University once said about IT security: The only truly secure system is one that is powered off, cast in a block of concrete and sealed in a leadlined room with armed guards and even then I have my doubts. Its a pretty dramatic and pessimistic statement. However, there are powerful arguments to suggest that, in the absence of concrete, we can turn to strong authentication to keep peoples identities safe. Theres no doubt that most vulnerable part of the chain when it comes to mobile payments is the user. According to a Verizon/Secret Service data breach study, 86 per cent of records breached across all industries were the result of stolen login credentials. In todays connected world, stealing IDs is more serious than stealing payment details because it enables criminals to set up multiple scams. Typically fraudsters steal IDs using social engineering by developing a fake app that records key presses or sending a bogus charity appeal that requests personal details and their scams get more and more sophisticated as consumers wise up. So what can the industry do to protect users from themselves? First off, be realistic. There's always a balance to be struck between convenience and security because obviously the more layers of protection you put in, the more friction there will be for the user. In this sense, it all comes down to context. A consumer using Gmail, for example, will probably implement minimal protection because they wouldn't send high security information through it and they know that Google is tracking them anyway. But for mobile
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The most vulnerable part of the chain is the user. A Verizon study found 86 per cent of records breached across all industries were the result of stolen login credentials.
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payments, a much stronger form of security is needed. Typically, mobile payment systems are processed using a single PIN or password. And this is where the vulnerability comes in, since people often use guessable passwords such as, well, password. Moreover, the speed with which criminal's computers can crunch through millions of combinations makes even apparently secure passwords vulnerable to attack too. A much safer form of protection, then, is 'two factor' authentication using a one-time password (OTP). Here, the service in question pushes the OTP to the user's phone, and he or she types that password into the system. This makes the authentication process a blend of what you know (the
password) and what you have (the phone). It's a powerful combination, as the criminal cannot use the stolen card details unless they have the phone too. This immediately prevents industrial level harvesting of card data. The technique can also return some control back to the user, who can vary the level of friction based on their own preferences. So, for example, a consumer could request an OTP notification whenever they are outside of pre-defined location or when theyre abroad. But some experts think the industry can do even better than two-factor. Ray Wizbowski, VP of strategic marketing (security business unit) at Gemalto (pictured), says: "Mobile OTPs allow you to quickly and cost-effectively strengthen your security with strong authentication, especially for remote users accessing cloud services. But we need to evolve to stronger forms of authentication and always be thinking that the more layers of security you can implement, the better." So how can you the industry go further than two factor? The answer is by adding a third element to something you know and something you have: something you are.
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How can the industry go beyond 2-factor authentication? By adding a third element to 'something you know' and 'something you have': something you are.
The obvious candidates here are biometrics, such as face recognition, fingerprint or iris. All parties in the mobile money value chain are appraising these technologies. It's noteworthy that Apple made a corporate swoop for biometrics specialist Authentec in 2012. Still, none of these concepts is perfect. Wizbowski says: "Biometrics are interesting but the tech is at an early stage. Take face recognition. There are question marks over how well it works in low-level light. And what about using it while driving? That's hardly practical." For these reasons Gemalto is carefully tracking another concept that's almost 'hardwired' into the phone itself: device fingerprinting. Wizbowski explains: "Every phone is unique. It has its own serial numbers, but more than that it comprises a certain amount of memory, music files, photographs and so on. These details may change, though not dramatically. So taken together they provide a powerfully unique identity." But theres more. A significant and complementary security technology could be the 'trusted execution environment', which buries encryption inside the chipset of the device (this is covered in the feature on page 104) rather
than inside a download app or in the OS. In this instance, when a user wants to authenticate a transaction they retrieve their details from an encrypted area in the microprocessor, which is virtually impossible for criminals to break into. Gemalto is leading this drive as one of the partners in Trustonic, a JV promoting ARM's Trust Zone technology. Taken together, all these ideas could make mobile
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money the subject of so much fear and caution among consumers far safer than online or even plastic transactions, says Wizbowski. "The fact is, people have their plastic cards cloned, and they still use them. People will get used to mobile payments. It's inevitable. And they'll get past their security fears as they realise that their mobile identities can protect them better than anything that came before. It's up to the industry to
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make mobile payments seamless and secure. Hes confident that the industry has the will to make this happen too. Youd have to be foolish not to believe that mobile will be at the centre of peoples financial lives. The VC money pouring into the space proves it. And every financial services company has a mobile strategy now. They know its coming, and theyre preparing for it.
People will get past their security fears as they realise that their mobile identities can protect them better than anything that came before.
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In chips we trust
Imagine if passwords and PINs could be hardwired into the phone chipset. It would turn your mobile into a credit card, safe from cyber-criminals, and personalised to you. This is the big idea behind ARMs TrustZone and last year Trustonic was set up to sell it to the world. We spoke to Trustonics VP of market development, Robert Brown
In 2012 Google did a U-turn and changed the way it managed the credit cards assigned to its Google Wallet app. Originally it stored information inside the app, but this had worried consumers and the industry, which feared that these details could be skimmed by criminals. So Google had a re-think. Now, consumers keep their details on the cloud and this data is accessed by the app over the air. The thing is, in theory its better to keep details inside a phone as the two-factor combination of a personal PIN and a personal device offers excellent protection. Googles problem was that the details were held in an operator OS (Android) at the mercy of clever hackers. But what if you could embed all the passwords for your bank cards inside the chipset of your mobile phone rather than the OS or an SD card or the cloud? It would bury the secure details inside the guts of the handset, where it would be better
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protected from attacks. Actually, this is not a new idea. In fact, the chipset designer ARM developed TrustZone in 2002 as a secure area inside its processors just for this reason. Renewed push TrustZone was probably a little ahead of its time. But today smartphones and permanent 3G/4G connections have made mobile payments a reality. And since ARM-based processors are in 95 per cent of all smart devices, the firm is preparing a renewed push. In 2010, ARM formed the Secure Services Division to drive standardisation and certification surrounding TrustZone technology. That resulted in devices such as the Samsung Note shipping with TrustZone embedded. However, a further acceleration came in December 2012, with the formation of Trustonic. This new company was formed by ARM along with security specialists Gemalto and Giesecke & Devrient (G&D) with the aim of taking the tech
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to companies in enterprise, commerce, payments and entertainment. At launch the many highprofile partners included 20th Century Fox, Cisco, Discretix, Good Technology, INSIDE Secure, Irdeto, MasterCard, NVIDIA, Samsung, Sprint, Symantec and Wave. Vaults, keys, deposit boxes Robert Brown, VP of market development at Trustonic (main picture), explains why TrustZone security set-up is unique. The analogy is with a bank vault, he says. The TrustZone hardware isolation in the processor is the strong vault door, for which only a few people have access. Inside are safety deposit boxes, which are analogous to the software separation provided by Trustonic software. Within these boxes are the various apps placed there by firms that need secure services. Then there are keys to the deposit boxes, which we provide to firms to ensure only they can gain access to their deposit boxes. The industry term for it is a Trusted Execution Environment or TEE. The point is that you can give multiple providers access to this room but none of them needs to know or worry about which other providers are located there.
A consumer with a TrustZone phone will arrive at a mobile checkout page, click on their payment app and enter a PIN. No long and painful payment forms to fill out. Trustonic calls it click and PIN.
The primary aim of Trustonic is to unleash the potential from the many devices already equipped with TrustZone technology. It can then offer secure access to the TEE to payments firms and their apps. What does this mean in practice? Brown lays it out: The beauty of a card is that its physical, its uniquely yours and only you know its PIN. But a card doesnt have a screen or keyboard. This means that when you buy something from an internet site, you dont have a PIN entry device so you are making a cardholder not present payment and these are always more vulnerable to security attacks. ARM TrustZone and a Trustonic TEE effectively turns the phone into a card payment terminal because it enables security to extend from the chipset to the user interface. It can capture your PIN in a trusted and safe area that criminals cant access. This turns mobile purchases from cardholder not present to cardholder present. Renewed push It doing so it can also speed things up. In practice, a consumer with a TrustZone enabled phone running a Trustonic TEE will arrive at a mobile checkout page, click on
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their payment app and enter a PIN. No long and painful payment forms to fill out. Trustonic calls it click and PIN. However, the concept doesnt just apply to the mobile web. It can work with desktop shopping too. Sites could add a 2D barcode generator, for example, and when scanned by a TrustZone compatible app it would prompt the user to enter their secure PIN into the phone. The app would approve the purchase and ping the merchant to make a payment. Again, this would turn such e-commerce transactions into cardholder present payments, with all the added safety that implies. Indeed, the common skimming techniques used by criminals to generate copycat payment screens that harvest card details would be useless; the card details are in the device, not on the screen. Making it physical Thinking further ahead, TrustZone has the potential to move into physical locations. One can imagine shoppers checking into a high street store, scanning items as they go and then paying the retailer from their in-phone app as they leave the store. No tills. No cashiers. Possibly, no NFC. Brown believes this could bring about huge behavioural
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changes. He says: It could radically alter the way we shop, with the potential to go back to the old way of shopping. Years ago, people had an account with a local store owner and they would settle up at the end of the week. This experience was built on trust because it was easy for both retailer and shopper to identify each other. High levels of trust in our devices could revive that. The idea of proximity payments could disappear. People could shop and then pay where and when it suits them. Making the case Trustonics immediate task is to convince the banks, card giants, OEMs and retailers to support its concept. It operates an open business model, allowing handset vendors to incorporate the technology into their own products while enabling service providers to activate these capabilities later when users demand them. It will need to be persuasive since anything that adds to the bill of materials the combined cost of the components inside a device has to be offset by a perceived increase in value. However, with such a huge footprint in the smartphone and tablet space, ARM and/Trustonic is better placed than most to make that case.
Skimming techniques used to generate fake payment screens that harvest card details would be useless: the card details are in the device, not on the screen.
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The future of payment security: the Psychic ID?

Whats the best way to secure peoples identities in a digital economy? Dave Birch, of electronic transactions specialist Consult Hyperion, believes a combination of mobile and science fiction might have some answers
As the world races towards a new electronic future, politicians, professionals and the public all recognise the need for an ID scheme that improves on the vaguely Orwellian paper-based identity card. The ideal system would apparently paradoxically offer both more security and more privacy by exploiting a combination of smart card, biometrics and cryptography with something we all carry around with us every day. For years such a hi-tech device didnt exist. Of course, now it does: the mobile phone. Heres how I think the ID scheme could work. Fans of the UK TV show Dr Who will be aware of the concept of psychic paper, which displays only the material required by the observer. So, if the customs officer on Alpha Centuri wants to see a Betelguesian quarantine certificate, the psychic paper looks like a Betelguesian quarantine certificate. I believe the mobile has the power to offer something similar, which I call the psychic ID. This only reveals the relevant credential to the checker. For example, if you are trying to get into a nightclub and you need to prove that you are over 18, your psychic ID will show your age. Your name, age, address, weight and driving convictions will be withheld. Physical and virtual If you are not 18, the psychic ID remains blank. The psychic ID will have nothing printed on it except perhaps a photograph of the holder, perhaps some kind of card number for administrative reasons (which is not related to the sector-specific ID numbers that the card stores) and it will divulge nothing except the information that its interrogator is entitled to see. Of course, if I want to, I can reveal more details. But that is under my control: an
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The psychic ID will store different identities to be used in different circumstances. I ought to be able to tell my card who I want to be on a per transaction basis.
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unscrupulous financial organisation could never extract any details behind my back. It would be crazy, obviously, to design a system for the 21st century that only works in physical locations. But the psychic ID would work in virtual environments too. By connecting my psychic ID to the web, remote counterparties could see it in the same way as the receptionist, cashier and doorman. And each persons psychic ID card will actually store a handful of different identities, to be used in different circumstances. I ought to be able to tell my psychic ID who I want to be on a per transaction basis, presumably defaulting to the most pseudonymous identity because, in most cases, identity is not relevant to a transaction. Multiple me So, just as the typical wallet contains three or four bank cards, the typical psychic ID will contain three or four identities. So why is the mobile the best device for storing a psychic ID? Well, it already contains a secure SIM card, has a keyboard, a display, and with the recent introduction of NFC the ability to interact with smart cards (and each other). One might envisage, for example, that a bar owner
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wishing to verify that a patron is of legal drinking age could simply touch his or her phone to the patrons psychic ID. If the patrons picture is displayed, then they are over 18. If the patrons picture is not displayed, then they are not. If we finally couple all this together with the single most important property of the mobile phone that everybody has one and they take them wherever they go we really are a lot closer to my vision of a 21st century ID scheme for the future. A role for the SIM Ultimately, its very important that we create an infrastructure to manage identity, and that the infrastructure includes clear division of responsibilities and assignment of legal liabilities. A separate ID system would take a big chunk of the costs out of building and running new financial systems and thereby lead to valuable innovation in the market. I think that a mobile, SIMbased approach might be the best way forward here. The SIM provides the tamper-resistant hardware that we need to store the keys, the mobile phone provides the connectivity and interfaces and mobile operator provides the business model. There has to be a business to make identity work.
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FUTURE TRENDS
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Introduction
For all the noise emerging from mobile payments, theres still no firm consensus around how these transactions will actually be carried out in a mature market. NFC? QR codes? BlueTooth? Something else? Ultimately, when money goes digital, all thats needed is a suitable transmission medium. And it could be anything. This uncertainty has prompted some intriguing ideas. There are start-ups that use sound waves to send
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information. Others use the camera to capture card details. But the longer term promises even more radical change. Advances in processing power, memory storage and miniaturisation could usher in an age of weird stuff like electronic tattoos and smart dust. In this future gazing section well look ahead to these changes and ponder how they might alter our idea of what money actually is
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Futureshock!
What will payments look like long after the teething problems of battery power, connectivity and walled gardens have withered away? The Gemalto Netsize Guide asked futurologist Dr Ian Pearson to look ahead 25 years to an era of face recognition, payment jewellery and even smart dust
For all the changes wrought by the information age, human beings still behave as they did centuries ago. This is why the most successful new technologies essentially mimic human nature. After all, what is Twitter if not a gossip over the garden fence? For futurologist Dr Ian Pearson, the need to emulate human interaction is crucial for the evolution of payments. He believes technologies that mimic rituals represent the best bet for success the long term future. These rituals could include: speaking an agreement to pay someone, making good eye contact, shaking hands on a deal, taking a virtual product off an augmented reality shelf or tossing a virtual coin into a virtual hat. Of course it will take time for this simplicity to be achieved because of teething problems around low battery life, signal coverage and security issues. However, in a report for the Payments Council, Pay Your Way 2025: Future Payments, Dr Pearson argues that by 2025, most of the major battles will be over and people will be able to spend their money electronically without worrying about what kind of devices or apps they have or whether there is a good signal.
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So, what form will these payments take? And how will they be authenticated? Here are eight possible scenarios Facial recognition At the moment, face recognition falls foul of the commonest bypass in biometrics persuading someone that it really is you. But adding another security token, such as a PIN, gesture or voice recognition, can make the face better as a trusted payments medium. The presence of the phone is a useful extra security measure in itself, since people generally take care of their phones and quickly report them missing if they are lost or stolen. Smart jewellery Electronic devices will shrink in size and might even cause the disappearance of phones as we know them now. Instead, tiny pieces of jewellery such as lapel pins, rings, badges, even ear or nose studs will carry out a range of electronic functions. Some will be used in security systems, such as identifiers, encryption devices, accelerometers and personal profile managers. Smart dust It is still partly science fiction, but by 2025, it may be possible to make smart electronic devices smaller than a speck of dust. It could be sprinkled into office
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Electronic devices will shrink...and jewellery such as lapel pins, rings, badges, and even nose studs will carry out electronic functions.
Blank PIC
machines to detect anything printed or copied or intercept keystrokes even before the sensitive data gets into the computers security defences. The ability of smart dust to intercept signals, passwords and generally eavesdrop on transactions via computers means that it could undermine the confidence in the security of electronic payments. Handshakes In the late 1990s, The Massachusetts Institute for Technology demonstrated that data can be transmitted through the skin via a simple handshake. They showed a data rate of 2Mbits/sec was achievable even then (equivalent to over 100 pages of text during a handshake). Clearly, this sort of mechanism could also be used as part of authentication process too, with plenty of capacity to carry all the data needed. Handshakes are a wellestablished social ritual, so using them for payment transactions would feel very natural. Fingerprints Fingerprint recognition isnt secure on its own. It is quite easy to get someones fingerprints from a glass used in a pub, for example. So fingerprints should be used in conjunction with other security tokens, such as a card, PIN, voice or face
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recognition. Luckily, systems can be made that combine these in ways that integrate smoothly into social culture. For example, you could print simple electronic circuits onto fingernails. Or a ring could contain an accelerometer to add gestures to the authentication process. Digital wax seals Humans have evolved a range of sophisticated rituals for forging agreements. One of them, the wax seal, is well suited to modernisation. It would be quite easy to make security wax that incorporates some special ID particles programmed with a code by contact with the ring. A fingerprint in the wax could be a nice touch too. Electronic tattoos Further in the future it will be possible to print electronics into the skin itself using compressed air jets to blast 10 micron sized electronic capsules. Depending on the printing depth, these devices could stay in the skin for variable periods. Surface layers would wash or wear off in hours to days, whereas deep printed devices could stay for life. New kinds of currency In 2025, many people will use virtual currency such as BitCoin and others yet to enter the market. These kinds of electronic payments need not depend on
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other forms of currency so their value would depend on the circumstances of use. Algorithms could take into account the time of day, identity, age, employment status or social group, location, or any other measurable factors. Electronic cash could also be tracked easily, leading to a situation where a note or coin may be worth more than its face value, if it has been spent previously by someone famous. Indeed, some celebrities may design their own cash brand, just as they do today with perfumes. What about after 2025? Well, Dr Pearson says technology wont stop evolving, but will become more uncertain. He reckons biometric tech could use the skin as a platform and make direct links into the brain. Indeed, it may be possible to pay just by thinking the intent to pay, or snapping your fingers. But, really, this far ahead, its anyones guess. He says: 2025 is close enough that we already know most of the technologies that will have enough time to play out properly, that simply isnt the case for 2040 or beyond.
It will be possible to print electronics into the skin using compressed air jets to blast 10 micron sized electronic capsules.
Dr Ian Pearson was BTs futurologist from 1991 to 2007 and now works for Futurizon, a small futures institute. Pay Your Way 2025: Future Payments is available to download at www.payyourway.org.uk
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MOBILE DATA
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Introduction
Over its many previous editions, the Gemalto Netsize Guide has evolved to become a useful reference source of mobile market data. This year the aim is the same but the approach is a little different. There's still valuable information about operator market shares and subscriptions, smartphone penetration, social media usage and so on. But for 2013, we've also tracked down insightful data on consumer behaviour too. Especially as it relates to mobile commerce and content. Hope you find it useful. Many thanks to all our data partners.
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WORLDWIDE MOBILE DEVICE SHIPMENTS AND PROJECTION

2012 m 2016 m CAGR %
Basic phone
122
58
-17
Feature phone
770.8
660.9
-3.8
Smartphone
694.8
1342.5
17.9
Tablet
114.6
383.5
35.3
Notebook
215.7
169.1
-5.9
Netbook
18.3
0.3
-65.4
Total
1936.2
2614.2
7.8
Source: Canalys estimates and forecast, 2013
Estimates vary, but the general consensus is that this year 2013 will see the global mobile population move past two billion for the first time. Its an eye-popping number, yet still leaves plenty of room for growth. According to Canalys, over 600m more people will join the mobile club by 2016. The big change is, of course, the rise of the smartphone, which represented around a third of all phones in 2012, but will account for more than half in 2016. Its a similar story for tablets. The number of people using a tablet will triple in the next three years.
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These operator subscriber numbers have been sourced from news reports and official company filings. Most reflect subscriber bases for 2012.
GLOBAL MOBILE SUBS

Operator subscribers.......Millions
m-tel ..........................................1.3 BH Mobile ...............................1.4
Argentina Claro ..........................................19 Telefonica ............................16.5 Telecom Argentina............18.9 Nextel ......................................1.5
HT Eronet ................................0.4
Brazil Vivo ............................................78 Claro...........................................64 TIM..............................................66
Armenia Viva ...........................................1.8 Beeline .....................................0.6 Orangeq...................................0.4
Oi ................................................51
Bulgaria Mtel ...........................................4.9 GLOBUL....................................4.3
Australia Telstra ....................................13.8 Vodafone ................................6.7 Optus .......................................9.4
Vivacom ..................................1.6 Max Telecom .........................n/a Nexcom...................................n/a
Canada Austria A1...............................................5.2 T-Mobile .................................3.9 Orange .....................................2.3 3..................................................1.2

Operator subscribers.......Millions
Rogers Wireless ....................9.3 Bell Wireless ...........................7.4 TELUS Mobility ......................7.3 SaskTel Mobility ....................0.5 MTS Mobility..........................0.5 Wind..........................................0.5
Belgium Proximus..................................5.5 Mobistar ..................................4.4

Source: company filings
China China Mobile ....................710.3 China Unicom ..................239.3 China Telecom ...................69.1
BASE..........................................4.4
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GLOBAL MOBILE SUBS

Croatia T-Mobile ..................................2.4 Vip..............................................1.9 Tele2..........................................0.7 Greece Czech Republic T-Mobile .................................5.3 O2 ..............................................4.9 Vodafone.................................3.4 Hungary Denmark TDC .........................................3.94 Telenor ........................................2 Telia ...........................................1.4 3 .................................................n/a India Bharti ......................................183 Finland Sonera ......................................3.2 Elisa ...........................................3.6 DNA ..............................................3 Voda.........................................150 Reliance..................................118 Idea ..........................................114 BSNL...........................................98 Tata.............................................67 France Orange...................................26.6 SFR ..........................................20.9 Bouygues Telecom................11 Free Mobile.............................4.4 Aircel..........................................65 Unitec.....................................39.6 Sisterma ................................13.7 MTNL ........................................5.1 Loop .............................................3 Videocon.....................................4 Germany Deutsche Telekom ................36 T-Mobile ..................................5.6 Telenor ...................................3.4 Vodafone.................................2.4 Cosmote ..................................7.9 Vodafone.................................4.4 Wind .........................................3.2 Vodafone..................................35 E-Plus .........................................24 O2 ..............................................19
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GLOBAL MOBILE SUBS

Indonesia PT Telkomsel ........................120 PT Indosat ...............................55 XL Axiata ..................................45 STI .................................................3 Axis ............................................17 PT Hutchison ..........................21 Lithuania Ireland Vodafone Ireland..................2.3 O2 ..............................................1.5 Meteor .........................................1 3 ...............................................0.75 Mexico Telcel .........................................69 Italy TIM ..........................................32.2 Vodafone .............................29.6 Wind .......................................21.2 H3G...............................................9 The Netherlands KPN.............................................10 Japan DoCoMo ..................................60 KDDI ...........................................37 SoftBank ..................................30 Nigeria MTN ........................................45.6 Kenya Safaricom ................................19 Airtel.......................................4.48 Etisalat ..................................14.4 Glo .........................................22.3 Celtel .....................................16.6 EMTS ......................................14.3 T-Mobile ..................................4.9 Vodafone.................................5.3 Movistar ...................................20 Lucacell .......................................7 Nextrel ........................................4 Omnitel....................................1.9 Tele2..........................................1.9 BIT .................................................1 Latvia
Latvijas Mobilais Telefons ........1
Essar Telecom......................2.55
Tele2 .............................................1 BITE Latvija..............................0.5
Telkom Kenya (Orange)......3.1
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GLOBAL MOBILE SUBS

Norway Telenor Mobil.........................3.2 NetCom....................................1.2 Mobile Norway/Tele2 .........0.5 ICE.net......................................n/a Romania Orange ......................................10 Vodafone.................................7.8 Cosmote .................................6.4 Digi.Mobil ...............................1.3 Romtelecom...........................0.1 Philippines Sun ............................................14 Globe Telecom ......................31 Smart ........................................54 Russia MTS .........................................71.2 MegaFon...............................62.6 Beeline...................................56.1 Singapore M1 ................................................2 Starhub ...................................2.2 Singtel .....................................3.6 Tele2 .......................................22.7 Rostelecom ..........................13.5 Sotovaja Svjaz........................2.3 SMARTS....................................1.9 Yota ...........................................0.7 Poland Orange...................................14.9 Plus .............................................14 T-Mobile ..................................15 Play ............................................8.7 Virgin........................................n/a Slovakia Portugal TMN...........................................7.3 Vodafone Portugal...............6.6 Optimus...................................2.5 Orange .....................................2.8 Telekom ..................................2.2 O2 ..............................................1.2 Serbia MTS............................................6.8 Telenor .....................................1.6 Vip..............................................1.8
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GLOBAL MOBILE SUBS

South Africa Vodacom...............................31.7 MTN ........................................22.7 Cell C ............................................9 8ta .................................................3 Virgin ........................................0.2 Ukraine Kyivstar ..................................25.1 MTS .........................................19.5 life:)............................................7.7 Intertelecom ..........................1.3 TriMob ......................................0.9 PEOPLEnet ..............................0.8 Spain Movistar ................................22.5 Vodafone ..............................17.6 Orange...................................12.2 Yoigo.........................................3.2 UK
EE (EE, Orange, T-Mobile) .........26.8
O2............................................22.5 Vodafone ..............................19.5 3..................................................8.8
Sweden Telia ...........................................2.2 Tele2..........................................4.7 Telenor ....................................2.4 3 .................................................n/a US Verizon...................................98.2 AT&T ........................................107 Sprint .........................................55 T-Mobile ...................................33 Switzerland Swisscom.................................6.1 Sunrise.........................................3 Orange .....................................1.6 TracFone ...............................21.3 Clearwire .................................9.5 Cricket..........................................6 Us Cellular ...............................5.8
Turkey Turkcell ..................................35.2 Vodafone ..............................18.8 Avea........................................13.5

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SMARTPHONE PENETRATION BY COUNTRY

Total Audience: 13+ yrs old
millions
Number of smartphone users

millions
Percentage of total using smartphones

%
US.................................234................................121.34........................51.9
The momentum behind the smartphone in mature markets is now unstoppable. According to these comScore figures, more than half of the population in virtually every major mobile territory now uses one. In some markets, the figure is moving towards two thirds.
Canada ......................22 ..................................13.4.............................60.6
Japan ..........................102.7 ............................28.9.............................28.2
EU.................................241................................131.4 ..........................54.6
UK ................................49.5...............................30.8.............................63.2
France ........................47.5...............................24.4.............................51.4
Italy .............................48 ..................................24.5.............................51.2
Germany ...................61 ..................................29.5.............................48.4

Source: comScore MobiLens report, October 2012 Smartphone audience: 13+ yrs old
Spain ..........................35 ..................................22.1.............................63.2
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The smartphone market is largely dominated by Apple and Samsung: in most markets they control over half of all sales. But there are exceptions. Nokia is hanging on in Spain and Germany, for example, while Japan retains a fondness for domestic OEMs Fujitsu and Sharp.
MARKET SHARE BY OEM

JAPAN
% of total mobile audience % of smartphone audience
Apple ...........................................9.2 ...............................................31.0 Sharp ...........................................21.2.............................................18.6 Sony .............................................8.3 ...............................................11.5 Fujitsu .........................................12.4.............................................10.0 Samsung ...................................3.4..................................................7.5
UK
Apple ...........................................17.4 .............................................27.4 Samsung ...................................26.8 .............................................24.7 RIM ...............................................9.9................................................15.7 HTC ...............................................9.3................................................14.4 Nokia ...........................................19.5................................................7.9
GERMANY
Samsung ....................................31.6.............................................33.4 Apple ...........................................10.9.............................................22.4 Nokia ...........................................24.3.............................................16.5 HTC ...............................................4.9..................................................9.7 Sony .............................................10.4 ...............................................7.6
SPAIN
Samsung ...................................29.6.............................................32.8 Nokia ..........................................29.2.............................................21.0 Sony ...........................................10.0.............................................11.7 Apple ..........................................6.8 ...............................................10.5 HTC ..............................................4.9..................................................7.5
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MARKET SHARE BY OEM

US
Apple ..........................................18.4 .............................................34.6 Samsung ...................................26.4 .............................................20.2 HTC ..............................................5.5................................................10.2 Motorola ...................................11.0 .............................................10.0 RIM ..............................................3.8 ..................................................7.2
The battle of the handset OEMs is never dull. Apparently impregnable market positions can crumble in just a few quarters. These comScore stats reflect the dominance of Apple and Samsung, which generally command over half of the smartphone market in most territories.
CANADA
Apple ..........................................18.6 .............................................30.8 RIM...............................................17.3 .............................................28.5 Samsung ...................................26.0 .............................................17.7 HTC ..............................................4.4 ..................................................7.3 LG .................................................13.5................................................5.7
FRANCE
Samsung ...................................42.3 .............................................38.5 Apple ..........................................11.7 .............................................22.5 Nokia...........................................16.7 .............................................10.3 RIM ...............................................4.0 ..................................................7.7 Sony.............................................7.5 ..................................................6.8
ITALY
Nokia...........................................35.9 .............................................33.7 Samsung ...................................31.6 .............................................29.6 Apple ..........................................9.0................................................17.1 RIM ...............................................2.8 ..................................................5.4 LG ..................................................6.2 ..................................................3.9
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The influence of the different mobile smartphone platforms varies drastically by region. Broadly, Android has the lead. In Europe it represents two thirds of all smartphones sold.
SMARTPHONE MARKET SHARES BY OS

EU5 Dec-11 Dec-12 % % iOS .................................................22.8............................................25.3 Android........................................51.8 ...............................................61 RIM ................................................10.8 ..............................................4.4 Symbian ......................................8.8.................................................2.6 Windows .....................................2.6.................................................4.7 Bada..............................................2.7.................................................1.7 Other ............................................0.4.................................................0.3 UK Jan-12 Jan-13 % % iOS .................................................29.3............................................30.6 Android........................................49.3............................................52.6 RIM ................................................15.7 ..............................................5.8 Symbian ......................................2.7.................................................0.8 Windows .....................................2.4.................................................6.2 Bada..............................................0.3.................................................0.3 Other ............................................0.3.................................................0.1 GERMANY Jan-12 Jan-13 % % iOS .................................................24 ...............................................24.2 Android........................................57.4............................................65.3 RIM ................................................2.5.................................................0.6 Symbian ......................................9.3 ....................................................3 Windows .....................................5.8.................................................5.1 Bada..............................................0.6.................................................0.9 Other ............................................0.3.................................................0.7 FRANCE Jan-12 Jan-13 % % iOS .................................................24.5............................................27.5 Android........................................45.8............................................57.4 RIM ................................................11..................................................5.2 Symbian ......................................3.5.................................................0.4 Windows .....................................3.8.................................................5.7 Bada..............................................10.8 ..............................................3.4 Other ............................................0.7.................................................0.3
Source: Kantar Worldpanel ComTech
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ITALY Jan-12 Jan-13 % % iOS .................................................21.9............................................21.5 Android........................................50 ...............................................55.4 RIM ................................................3.8.................................................2.4 Symbian ......................................18.5 ..............................................5.2 Windows .....................................4.5..................................................14 Bada..............................................0.8.................................................1.3 Other ............................................0.4.................................................0.2 SPAIN Dec-11 Dec-12 % % iOS .................................................6.9.................................................4.4 Android........................................58.7............................................84.1 RIM ................................................18.5 ..............................................4.2 Symbian ......................................15.5 ..............................................3.4 Windows .....................................0.4 ....................................................3 Bada..............................................0........................................................0 Other ............................................0 ....................................................0.9 US Jan-12 Jan-13 % % iOS .................................................50.6............................................45.9 Android........................................43 ...............................................49.4 RIM ................................................3.3.................................................0.9 Symbian ......................................0.4.................................................0.1 Windows .....................................2.1.................................................3.2 Bada..............................................0........................................................0 Other ............................................0.6.................................................0.5 AUSTRALIA Jan-12 Jan-13 % % iOS .................................................37.3............................................35.9 Android........................................52.4............................................59.3 RIM ................................................0.8.................................................0.3 Symbian ......................................4.9.................................................1.6 Windows .....................................1.8.................................................3.4 Bada..............................................0.1.................................................0.3 Other ............................................2.7.................................................0.9
Overall, Android is the biggest selling smartphone OS. But check out the regional differences. In Spain, eight out of ten choose the Google platform. In the US, its still just under half.

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A reminder that the world doesnt always follow the pattern set down by the US and Europe. In China, RIM has no market share. In Brazil, iOS is at 1.6 per cent while Symbian commands 27.9 per cent.

URBAN CHINA Jan-12 Jan-13 % % iOS .................................................n/a .............................................23.2 Android........................................n/a .............................................71.5 RIM ................................................n/a ...................................................0 Symbian ......................................n/a................................................3.5 Windows .....................................n/a................................................1.2 Bada..............................................n/a ...................................................0 Other ............................................n/a................................................0.6 BRAZIL iOS .................................................3.2.................................................1.6 Android........................................28.9............................................60.7 RIM ................................................8.4.................................................1.9 Symbian ......................................44.6............................................27.9 Windows .....................................6 ....................................................4.2 Bada..............................................3.9.................................................0.3 Other ............................................5 ....................................................3.4
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SMARTPHONE USERS MOBILE ACTIVITY US %

1 Accessed news and information ....................................88.6 2 Used email ...............................................................................................78.4 3 Accessed weather .............................................................................67.1 4 Accessed Social Networking Site or Blog..................................65.4 5 Accessed search .................................................................................58.7 6 Accessed maps ...................................................................................53.6 7 Used major instant messaging service.......................................46.2 8 Accessed sports information .......................................................40.8 9 Watched TV and/or video on mobile phone ......................................40.0 10 Accessed entertainment news ....................................................38.2
We know people love their smartphones. But what do they actually use them for? This comScore research reveals information and entertainment to be the chief pursuits.
CANADA
1 Accessed news and information ....................................79.8 2 Used email ...............................................................................................69.8 3 Accessed weather ..............................................................................60.2 4 Accessed Social Networking Site or Blog ..................................57.8 5 Accessed search ..................................................................................55.5 6 Used major instant messaging service .......................................49.9 7 Accessed maps ....................................................................................44.9 8 Watched TV and/or video on mobile phone ......................................33.9 9 Accessed bank accounts .................................................................33.8 10 Accessed entertainment news ....................................................30.1
JAPAN
1 Accessed news and information ..................................88.3 2 Used email ..............................................................................................72.4 3 Accessed weather .............................................................................67.6 4 Accessed search .................................................................................60.4 5 Accessed maps ...................................................................................46.5 6 Accessed entertainment news ....................................................43.6 7 Accessed sports information .......................................................41.8 8 Accessed Social Networking Site or Blog..................................40.1 9 Accessed financial news or stock quotes ...............................37.8 10 Accessed traffic reports ..................................................................34.7
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SMARTPHONE USERS MOBILE ACTIVITY ITALY

%
1 Accessed news and information ...................................67.7 2 Used email................................................................................................50.1 3 Used major instant messaging service .......................................46.8 4 Accessed weather ..............................................................................45.3 5 Accessed Social Networking Site or Blog...................................44.1 6 Accessed maps ....................................................................................38.3 7 Accessed search ..................................................................................33.6 8 Watched TV and/or video on mobile phone............................................32.9 9 Accessed sports information ........................................................31.2 10 Accessed Personal photo or Video sharing ........................................28.9
GERMANY
1 Accessed news and information ..................................73.3 2 Used email ...............................................................................................57.8 3 Accessed weather .............................................................................54.7 4 Used major instant messaging service.......................................46.4 5 Accessed Social Networking Site or Blog .................................45.6 6 Accessed search .................................................................................40.0 7 Accessed maps ...................................................................................36.8 8 Accessed sports information .......................................................31.6 9 Watched TV and/or video on mobile phone......................................28.1 10 Accessed entertainment news ....................................................27.5
SPAIN
1 Accessed news and information ..................................74.0 2 Used major instant messaging service.......................................61.8 3 Used email ..............................................................................................58.5 4 Accessed Social Networking Site or Blog .................................53.1 5 Accessed weather .............................................................................47.6 6 Accessed search .................................................................................42.5 7 Accessed maps ...................................................................................40.2 8 Accessed sports information .......................................................34.5 9 Accessed Personal photo or Video sharing ........................................33.9 10 Watched TV and/or video on mobile phone......................................33.4
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SMARTPHONE USERS MOBILE ACTIVITY EUROPE %

1 Accessed news and information ..................................75.2 2 Used email ...............................................................................................59.2 3 Accessed weather ..............................................................................52.5 4 Accessed Social Networking Site or Blog ..................................50.8 5 Used major instant messaging service .......................................48.6 6 Accessed search ..................................................................................43.1 7 Accessed maps ....................................................................................38.9 8 Accessed sports information ........................................................33.2 9 Watched TV and/or video on mobile phone ......................................30.5 10 Accessed entertainment news ....................................................30.3
UK
1 Accessed news and information....................................84.5 2 Used email ..............................................................................................71.3 3 Accessed Social Networking Site or Blog ................................63.7 4 Accessed weather................................................................................60.0 5 Accessed search....................................................................................57.3 6 Used major instant messaging service......................................49.0 7 Accessed maps......................................................................................43.3 8 Accessed sports information..........................................................39.1 9 Accessed entertainment news......................................................36.2 10 Watched TV and/or video on mobile phone .....................................33.8
FRANCE
1 Accessed news and information .................................74.2 2 Used email .............................................................................................55.3 3 Accessed weather ............................................................................52.0 4 Accessed Social Networking Site or Blog.................................45.7 5 Used major instant messaging service......................................40.6 6 Accessed search ................................................................................39.0 7 Accessed maps ..................................................................................35.4 8 Accessed bank accounts ...............................................................30.6 9 Accessed entertainment news ...................................................29.8 10 Accessed sports information .......................................................28.4
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Does the smartphone complement high street shopping? Or does it merely re-direct consumers to cheaper alternatives and ecommerce sites? These are fundamental questions. In this research, comScore reveals a mixed picture, with over a quarter of consumers using phones to find stores, but a similar number performing activities in store. This is a vague description, but it can refer to showrooming ie finding cheaper goods elsewhere.
SMARTPHONE USER RETAIL ACTIVITY

UK %
Accessed online retail .....................................................................26.2 Found store location........................................................................25.0 Activities performed in retail store .............................................18.4
FRANCE
Activities performed in retail store ............................................25.8 Found store location........................................................................17.3 Accessed online retail .....................................................................11.7
ITALY
Activities performed in retail store.............................................25.5 Found store location........................................................................21.1 Accessed online retail .....................................................................16.1
GERMANY
Accessed online retail ....................................................................26.8 Compared product prices .............................................................19.3

Activities performed in retail store ...........................................19.0
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SMARTPHONE USER RETAIL ACTIVITY

US %
Found store location ...........................................................................34.0 Accessed online retail .........................................................................25.2 Activities performed in retail store.................................................20.8
CANADA
Found store location ...........................................................................29.9 Activities performed in retail store ................................................28.4 Accessed online retail ........................................................................10.3
Does the smartphone complement high street shopping? Or does it merely re-direct consumers to cheaper alternatives and ecommerce sites? These are fundamental questions. In this research, comScore reveals a mixed picture, with over a quarter of consumers using phones to find stores, but a similar number performing activities in store. This is a vague description, but it can refer to showrooming ie finding cheaper goods elsewhere.
JAPAN
Found store location ..........................................................................28.7 Accessed online retail.........................................................................23.7 Activities performed in retail store ................................................12.2
SPAIN
Activities performed in retail store ...............................................30.3 Found store location ..........................................................................21.6 Accessed online retail.........................................................................10.4
EUROPE
Activities performed in retail store.................................................23.3 Found store location ..........................................................................20.7 Accessed online retail ........................................................................19.1
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Heres a more detailed analysis of how people use their phones to aid mobile commerce in one territory the UK. This comScore research reveals an interesting picture of consumers searching store locations, contacting friends about items and even photographing products in store.
MOBILE COMMERCE ACTIVITY - UK CONSUMERS

% of all % of smartphone consumers consumers Accessed online retail site Ever in month ...............................................................17.6 .......................26.2 Once to three times throughout the month .....10.3 .......................15.3 At least once each week ...........................................5.7 ............................8.5 Almost every day .........................................................1.6 ............................2.4
Scanned QR/barcode with mobile phone (ever in month) .........7.2..........................10.9
Found store location ..................................................16.9 .......................25.0 Purchased goods or services ..................................12.6 .......................18.8 Compared product prices ........................................12.1 .......................17.7 Researched product features ..................................11.8 .......................17.4 Made shopping lists ...................................................11.4 .......................15.9 Found coupons or deals ...........................................10.6 .......................15.5 Checked product availability ..................................10.5 .......................15.2 Used deal-a-day ...........................................................8.3..........................12.3
Activities performed in retail store Took picture of a product .........................................14.7 .......................18.4

Texted or called friends/family about a product .........17.7 .......................16.1
Sent picture of product to family/friends ..........7.4 ............................9.4 Scanned a product barcode ....................................6.2 ............................9.1 Compared product prices ........................................5.2 ............................7.7 Found store location ..................................................4.0 ............................5.7 Found coupons or deals ...........................................3.4 ............................4.9
source: comScore MobiLens report, October 2012 `Smartphone audience: 13+ yrs old
Researched product features ..................................3.2 ............................4.8 Checked product availability ..................................2.3 ............................3.4 Purchased goods or services (online) ..................1.8 ............................2.5
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MOBILE COMMERCE ACTIVITY - UK CONSUMERS

% of all % of smartphone consumers consumers
Types of goods or services purchased via mobile Clothing or accessories ............................................4.8 ............................7.2 Books (not ebooks) .....................................................3.2 ............................4.7 Tickets ............................................................................2.9 ............................4.3 .......................................................................2.6 ............................3.7
More insight into mobile commerce behaviour in the UK. Here, comScore reveals what kinds of products are purchased direct from a phone and shows that more than a quarter of smartphone users perform banking activities on the go.
Groceries
Consumer electronics / household appliances 2.3 ............................3.4 Meals for delivery or pickup ....................................2.2 ............................3.2 Daily deals or discount coupons ...........................1.9 ............................2.8 Personal care / hygiene products ..........................1.8 ............................2.7 Sports/Fitness equipment .......................................1.1 ............................1.7 Gift certificates .............................................................1.0 ............................1.4 Furniture .........................................................................0.7 ............................1.1 Hotel accommodations ............................................0.7 ............................1.0 Flowers ............................................................................0.7 ............................1.0 Auto / Auto parts .........................................................0.7 ............................1.0 Airplane tickets ............................................................0.5 ............................0.8 Car rental or ground transportation ...................0.2 ............................0.3
Payment/banking activity perforrmed Accessed bank accounts ...........................................19.0 .......................28.2 Accessed financial news or stock quotes ...........13.5 .......................19.5 Accessed electronic payments ...............................11.6 .......................17.4 Accessed shopping guides ......................................9.2..........................13.4 Accessed credit cards ................................................7.1..........................10.4
source: comScore MobiLens report, October 2012 `Smartphone audience: 13+ yrs old
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Its a truism that most people dont pay for apps on Google Play. The preferred model seems to be adfunding. These statistics from Distimo reflect this market reality: of the top ten publishers, only three actually charge for their apps. Unsurprisingly, perhaps, gaming is the most popular category, commanding a third of all downloads.
TOP 10 PUBLISHERS BY DOWNLOADS IN GOOGLE PLAY IN 2012

number of apps (iPhone) Average app selling price
Google....................................................60 ..............................................0 Facebook ...............................................2.................................................0 Rovio .......................................................13 ........................................2.29 Go Dev Team ........................................135............................................0 Adobe Systems....................................31............................................10 Kakoa ......................................................4.................................................0 YouTube .................................................1.................................................0 Runner Games .....................................12 ..............................................0 NHN Corporation................................119......................................1.28 Skype ......................................................4.................................................0
APP DOWNLOADS BY CATEGORY

Number of downloads........................................................% Games .......................................................................................................33 Widgets .......................................................................................................8 Entertainment ..........................................................................................7 Social............................................................................................................5 Lifestyle .......................................................................................................4 Music............................................................................................................4 Photogrpahy .............................................................................................4 Productivity ...............................................................................................4 Tools .............................................................................................................3 Communication .......................................................................................3 Ultilities .......................................................................................................3 Books and reference...............................................................................2 Education ...................................................................................................2 Travel............................................................................................................2 Personalistion ...........................................................................................2 News.............................................................................................................2
Source: Distimo 2012 Year In Review
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AVERAGE APP SELLING PRICES (IPAD) - 2012

$ Games ......................................................................................................2.85 Business...................................................................................................8.04 Education................................................................................................3.29 Entertainment .......................................................................................2.78 Lifestyle....................................................................................................3.68 Music ........................................................................................................5.74 Navigation............................................................................................11.56 News .........................................................................................................3.11 Newstand................................................................................................3.11 Photography..........................................................................................3.49 Productivity............................................................................................6.81 Ultilities....................................................................................................3.61 Travel ........................................................................................................2.93
Is it possible to charge money for apps in an era of freemium? Just about. These numbers from Distimo show the average selling price for iPad apps is $3.42 and for iPhone its $1.86. Of course, price varies by category, with navigation apps commanding easily the highest price tags. Distimo says around 69 per cent of all Apple App Store revenue now comes from in-app micropayments.
AVERAGE APP SELLING PRICES (IPHONE) - 2012

$ Games...........................................................................................................2 Business..................................................................................................3.62 Education...............................................................................................2.72 Entertainment......................................................................................1.62 Lifestyle.....................................................................................................1.8 Music .......................................................................................................2.57 Navigation.............................................................................................7.25 News........................................................................................................2.26 Newstand ..............................................................................................3.29 Photography.........................................................................................1.86 Productivity ..........................................................................................3.37 Ultilities...................................................................................................3.17 Travel..........................................................................................................1.7
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Source: Distimo 2012 Year In Review

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For many people around the world Facebook is the internet. Although the US remains its biggest market with over 160m users at the end of 2012, the social network is no longer a western phenomenon. Markets like Chile, Hong Kong and Taiwan each have 50 per cent plus penetration.
FACEBOOK SUBSCRIBERS BY COUNTRY

Country No. of Users Penetration
1 United States ......................163071460 .........52.56% 2 Brazil ..............................................66552420..................33.09% 3 India ...............................................61499220 ....................5.24% 4 Indonesia .....................................47165080..................19.41% 5 Mexico ..........................................39945620..................35.52% 6 Turkey ...........................................32438200..................41.69% 7 United Kingdom .......................32175460..................51.61% 8 Philippines ..................................30094560..................30.12% 9 France ...........................................25307820..................39.07% 10 Germany ......................................25063880..................30.64% 11 Italy ................................................23028220..................38.16% 12 Argentina .....................................20403520..................49.35% 13 Thailand .......................................18202320..................27.13% 14 Canada .........................................18002560..................53.45% 15 Colombia .....................................17685920..................40.01% 16 Spain .............................................16918200..................36.38% 17 Japan .............................................13809800..................10.85% 18 Malaysia .......................................13085000..................46.28% 19 Taiwan ..........................................13036320..................56.94% 20 Egypt .............................................13010580..................16.17% 21 Australia .......................................11677680..................54.28% 22 Vietnam ........................................11221380..................12.53% 23 Poland ...........................................10253960..................26.63% 24 Peru ...............................................10002340..................33.44%
Source: Social Bakers, March 2013

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25 Venezuela ....................................9759380 ....................35.85%
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FACEBOOK SUBSCRIBERS BY COUNTRY

Country ................................................No. of Users ..........Penetration
26 Chile ..............................................9506360 ....................56.77% 27 South Korea ................................8286920 ....................17.11% 28 Pakistan ........................................8055680.......................4.37% 29 Russia ............................................7585740.......................5.39% 30 Netherlands ................................7516620 ....................45.16% 31 Romania .......................................5679800 ....................25.87% 32 South Africa ................................5534160 ....................11.29% 33 Saudi Arabia ...............................5502420 ....................21.38% 34 Ecuador ........................................5379300 ....................36.37% 35 Nigeria ..........................................5357500.......................3.48% 36 Morocco .......................................5250340 ....................16.60% 37 Belgium ........................................4923480 ....................47.33% 38 Sweden ........................................4849860 ....................53.62% 39 Portugal .......................................4706960 ....................44.09% 40 Hungary .......................................4374240 ....................44.05% 41 Algeria ..........................................4322820 ....................12.50% 42 Greece ...........................................3971980 ....................36.11% 43 Czech Republic ..........................3849900 ....................36.75% 44 Hong Kong ..................................3746460 ....................54.31% 45 Israel ..............................................3739440 ....................50.85% 46 Serbia ............................................3570380 ....................48.61% 47 Tunisia ...........................................3436720 ....................32.46% 48 UAE ................................................3370780 ....................67.75% 49 Bangladesh .................................3233300.......................2.07% 50 Denmark ......................................2995800 ....................54.63%
For many people around the world Facebook is the internet. Although the US remains its biggest market with over 160m users at the end of 2012, the social network is no longer a western phenomenon. Markets like Chile, Hong Kong and Taiwan each have 50 per cent plus penetration.
Source: Social Bakers, March 2013

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Facebook is not the only social network in the world, whatever Hollywood might think. For all its global proliferation, other sites still command strong loyalty in individual regions. These statistics, from browser firm Opera Software, show the percentage of its unique users visiting social media sites at least once a month. Naturally, Facebook dominates. But sites like Odnoklassniki show great pull in the Causasian region, for example.
SOCIAL MEDIA SITE VISITS BY MOBILE WEB USERS

Facebook Odnoklassniki VKontakt Twitter
Afghanistan Albania Algeria Angola Argentina Armenia Australia Austria Azerbaijan Bahrain Bangladesh Belarus Belgium Bolivia Botswana Brazil Bulgaria Burkina Faso Cambodia Cameroon Canada Chad Chile China Colombia Congo Costa Rica Croatia Cuba Cyprus Czech Republic Denmark
Democratic Rep of Congo
56.76 83.02 43.68 69.20 68.76 17.57 61.03 34.11 48.67 33.39 67.43 10.05 46.07 63.10 78.03 60.28 54.58 61.06 66.20 72.37 39.21 75.11 61.80 0 59.39 64.95 77.64 66.80 37.44 48.90 43.65 26.09 71.15
1.31 0.12 0.06 0.02 0.01 82.57 0.06 1.27 38.75 0.24 0.01 30.11 1.27 0 0 0 0 0.40 0 0.07 0 0.15 0 0.01 0 0 0 0 0.06 00 3.54 1.20 0.46 0.03
0.39 0.23 0.34 0.07 0.13 9.55 0.15 1.30 10.17 0.33 0.08 68.27 0.70 0 0.19 0 0.10 0.86 0 0.21 0 0.29 0 0.17 0 0.14 0 0.13 0.33 4.91 2.26 0.01 0.09
4.12 4.06 4.59 5,48 11.23 1.07 4.13 2.36 4.62 6.84 3.73 3.67 4.08 5.85 2.72 11.10 11.96 2.16 4.81 4.59 6.61 6.79 9.81 9.05 0 11.90 4.34 5.33 3.41 0 3.20 2.34 2.01 6.00
Bosnia and Herzegovina 66.56
Source: Opera Software's 'State of the Mobile Web' report, October 2012 % of unique visitors accessing domains at least once per month (via Opera Mini)
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Ecuador Egypt El Salvador Estonia Ethiopia Finland France Georgia Germany Ghana Gibraltar Greece Guyana Haiti Honduras Hong Kong SAR China Hungary Iceland India Indonesia Iran Iraq Ireland Israel Italy Ivory Coast Jamaica Japan Jordan Kazakhstan Kenya Kuwait Kyrgyzstan Laos
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66.84 60.87 79.26 32.83 75.99 35.50 34.37 23.14 33.06 71.26 51.03 55.53 62.53 79.65 70.63 65.09 66.64 45.39 57.78 75.92 57.57 39.74 48.33 37.50 49.71 56.98 55.53 12.41 70.51 6.21 71.08 34.41 9.33 71.39
0 0.20 0 7.88 0.02 0.31 0.62 79.43 1.22 0.01 0 2.09 0 0 0 0.07 0.06 0.15 0.01 0.01 0.05 0.07 0.25 5.32 0.88 0 0 0,05 0.10 12.00 0 0,20 41.59 0
0.14 0.42 0 18.05 0.12 1.73 0.63 4.79 0.82 0.08 0 1.24 0 0 0 0.18 0.28 0.39 0.09 0.15 0.28 0.17 0 4.81 0.89 0 0 0.06 0.19 14.91 0.05 0.37 8.66 0.13
11.08 5.92 12.03 5.70 6.67 3.73 4.38 1.48 2.91 8.67 5.84 5.30 4.59 9.95 8.61 4.47 3.24 2.84 4.32 12.96 3.87 5.09 9.28 2.69 4.46 4.94 6.63 14.94 6.65 1.59 12.02 6.24 1.76 5.47
Social media is about more than Facebook. Twitter is on the rise and sites like Odnoklassniki command great loyalty in the Causasian region, for example. These statistics, from Opera Software, show the percentage of its unique users visiting social media sites at least once a month.
Source: Opera Software's 'State of the Mobile Web' report, October 2012 % of unique visitors accessing domains at least once per month (via Opera Mini)
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Social media is about more than Facebook. Twitter is on the rise and sites like Odnoklassniki and VKontack command great loyalty in some regions. These statistics, from Opera Software, show the percentage of its unique users visiting social media sites at least once a month.

Latvia Lebanon Liberia Libya Lithuania Luxembourg Macedonia Malaysia Mexico Moldova Monaco Mongolia Montenegro Morocco Mozambique Myanmar Namibia Netherlands New Zealand Nicaragua Nigeria Norway Oman Pakistan Palestinian Territory Paraguay Peru Philippines Poland Portugal Qatar Romania Russia Rwanda
21.01 59.63 53.33 53.12 36.75 31.73 68.95 77.50 75.47 8.70 87.79 43.59 67.65 63.54 76.32 52.05 80.88 27.16 58.76 76.90 62.71 24.45 23.38 54.05 62.20 74.47 70.86 78.47 38.05 48.58 60.06 50.64 7.07 68.68
5.66 0.20 0.27 0.02 1.66 0.13 0.06 0.07 0.01 82.29 0 0.32 0.32 0.09 0 0 0.01 0.33 0 0 0.01 0.52 0 0.05 0.05 0 0.01 0.02 0.57 0.60 0.08 0.38 48.81 0.07
5.09 0.32 0.25 0.10 3.50 0.99 0.35 0.21 0.09 10.14 0.04 0.98 0.95 0.38 0.10 0 0.07 0.53 0.24 0.05 0.05 0.99 0 0.21 0.17 0.09 0.06 0.08 1.36 0.75 0.22 0.15 44.74 0.02
9.46 6.34 7.32 5.68 3.16 2.71 3.83 8.59 7.62 1.07 2.26 3.63 4.29 5.77 9.47 5.61 6.85 11.07 4.91 4.09 6.55 3.42 3.70 7.06 3.29 15.75 4.74 11.24 1.75 3.80 5.69 2.30 2.39 6.73
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Source: Opera Software's 'State of the Mobile Web' report, October 2012 Unique visitors accessing domains at least once per month (via Opera Mini)
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Saudi Arabia Senegal Serbia Sierra Leone Singapore Slovakia Slovenia Somalia South Africa South Korea Spain Sri Lanka Sudan Sweden Switzerland Syria Taiwan Tanzania Thailand Togo Trinidad and Tobago Tunisia Turkey Uganda Ukraine United Arab Emirates United Kingdom United States Uruguay Uzbekistan Venezuela Vietnam Yemen Zambia Zimbabwe
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25.03 61.50 62.24 68.78 61.06 47.81 50.08 54.13 61.26 15.14 72.28 61.93 75.11 27.58 27.60 72.71 49.07 67.96 60.10 65.21 48.50 70.22 67.69 65.33 8.88 62.51 48.49 49.54 76.31 7.58 56.97 54.10 52.06 80.29 85.05
0.61 0.01 0.06 0.08 0.09 0.09 0.14 0 0 0 0.37 0.02 0.01 1.72 0.33 0 0.02 0 0.14 0 0 0 0.82 0 19.91 0.38 0.33 0.17 0.02 75.11 0.02 0.02 0.09 0.02 0
0.58 0 0.34 0.37 0 0.49 0.33 0 0.03 1.22 0.82 0.17 0.09 1.38 0.81 0.04 0 0.08 0.25 0 0 0.96 0.74 0.07 70.96 0.66 0.41 0.25 0 5.81 0.07 0.04 0.22 0.09 0.04
5.42 7.15 4.31 7.96 7.91 2.04 3.20 5.13 6.82 3.19 12.59 5.11 8.47 3.87 3.77 6.06 2.26 10.51 4.75 4.95 5.71 6.19 13.29 10.54 2.72 6.43 9.77 9.34 5.78 1.47 13.96 1.18 7.57 8.65 8.06
Social media is about more than Facebook. Twitter is on the rise and sites like Odnoklassniki and VKontack command great loyalty in some regions. These statistics, from Opera Software, show the percentage of its unique users visiting social media sites at least once a month.
Source: Opera Software's 'State of the Mobile Web' report, October 2012 Unique visitors accessing domains at least once per month (via Opera Mini)
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Heres another means of gauging the influence of specific handset makers: how many ad impressions they attract. These stats, from Opera Software, clearly reveal the dominance of Apple. And note how minimal the percentage of ad impressions commanded by Nokia. Less than two per cent.
TOP 15 MANUFACTURERS BY AD IMPRESSIONS

Rank Manufacturers 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Q3 2012
Apple ...................................................................31.45% Samsung ................................................................................24.35% HTC .............................................................................................7.96% BlackBerry.................................................................................7.90% Motorola ...................................................................................5.91% LG ................................................................................................5.09% SonyEricsson ...........................................................................1.61% HUAWEI .....................................................................................1.56% Nokia ..........................................................................................1.25% ZTE ..............................................................................................1.18% Amazon.....................................................................................1.01% Sony............................................................................................0.66% Acer.............................................................................................0.45% Kyocera......................................................................................0.44% Pantech .....................................................................................0.40%
Source:Opera Software's 'State of the Mobile Web' report, October 2012 October 2012
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TOP 20 MOBILE PHONES BY AD IMPRESSIONS

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 DEVICES Q3 2012 OS Apple iPhone.............................16.04%.............................iOS Samsung Galaxy S ............................4.90% ...............................Android BlackBerry Curve ...............................3.39% ...................BlackBerry OS Samsung Galaxy 5............................2.79% ...............................Android Samsung Galaxy Ace.......................1.61% ...............................Android BlackBerry Bold..................................1.44% ...................BlackBerry OS HTC Desire............................................1.30% ...............................Android HTC Evo..................................................1.26% ...............................Android Motorola Droid RAZR......................1.25% ...............................Android BlackBerry Torch ................................1.25% ...................BlackBerry OS LG Optimus..........................................1.13% ...............................Android HTC Droid Incredible.......................0.95% ...............................Android BlackBerry Bold Touch ....................0.95% ...................BlackBerry OS Samsung Vibrant Galaxy S............0.91% ...............................Android Samsung Admire ..............................0.87% ...............................Android Samsung Fascinate ..........................0.74% ...............................Android Samsung Galaxy Mini .....................0.71% ...............................Android SonyEricsson Xperia ........................0.67% ...............................Android Samsung Within ................................0.66% ...............................Android Motorola Droid X...............................0.60% ...............................Android
Source: Millennial Media, Q3 2012
Which phone models are best for generating ad impressions? These stats, from Millennial Media, reveal its the Apple iPhone. No real surprise there. But the scale of the lead is huge nearly four times the size of Galaxy S.
OS SHARES BY TRAFFIC AND AD REVENUE

OS Share % of traffic % of revenue Android ...........................................................30.94% ..............................29.97% iOS ...................................................................41.91% ..............................51.02% iPhone .............................................................29.08% ..............................37.28% iPad ...................................................................5.82%.................................10.49% iTouch ..............................................................7.01%....................................3.26% RIM ...................................................................3.74%....................................4.12% Symbian .........................................................9.01%....................................1.69% Other ................................................................14.40% ..............................13.20%
source: Opera State of the Mobile Web, Q4 2012
More evidence of the superior ad revenue potential of iOS here: These numbers from Opera Software show that iOS comands the highest amount of ad traffic 42 per cent but that the revenue on this traffic is even higher, at 51 per cent.
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The Gemalto Netsize Guide | About us

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The Gemalto Netsize Guide

Published by: Gemalto N.V 6 rue de la Verrerie, 92197 Meudon Cedex, France Editors: Donya Ekstrand Head of Marketing Communications, Netsize IPX Tim Green Editor in chief, Mobile Money Revolution www.mobilemoneyrevolution.co.uk tim@mobilemoneyrevolution.co.uk Design and layout: 155 Creative info@155creative.co.uk www.155creative.co.uk
Gemalto logos and product and/or service names are trademarks of Gemalto N.V. or its affiliates. The reproduction, duplication, distribution, publication, modification, copying or translation of any of the material contained in this guide, without the express and written authorization of Gemalto and Netsize, is strictly prohibited. Counterfeiting shall be pursued. NetsizeTM is protected by French, EEC and international intellectual property laws. All other trademarks and copyright material quoted in this guide are the sole property of their respec- tive owners. Where a trademark or a copyright material is quoted in this guide by third parties contrib- uting to it, Gemalto and Netsize do not thereby represent that such third parties have an ownership interest in, or a license to use, any such trademarks or copyright material. No copyright material in this guide may be copied or further disseminated without the express and written permission of the legal holder of that copyright. While Gemalto and Netsize have attempted to make the information in this guide as accurate as possible, the information in this guide is provided 'as is' without any express or implied warranty of any kind. Gemalto and Netsize exclude all liability to any person arising directly or indirectly from using this guide and any information from it. @ 2013 Gemalto N.V. All rights reserved.
155creative
design. print. online.
Data: Thanks to comScore, Socialbakers, Opera Software, Millennial Media, Kantar WorldPanel Comtech, Canalys, Distimo Photo credits: Fotolia. Photos and images supplied by the interviewees are published under their responsibility. Acknowledgements Many thanks to the interviewees and all who have worked together to produce this edition of the Gemalto Netsize Guide. Johan Lindhom (Selecta), Peter Parmenter (EA), Cenk Bayrakdar (Turkcell), Matthias Sala (Gbanga), Julia Bell, Jonathan Vaux (Visa), Neil Aitken (UK Payments Council), Stewart Roberts (iZettle), Steve Rothwell (Eagle Eye), Benjy Myers (M&S), Michael Nuciforo (Keatan), Lisa Rytter and Carl Fritjofsson (Wrapp), Rob Brown (Trustonic), Dave Birch (Consult Hyperion), Tim Parsons (Think, Design, Deliver), Clayton Locke (Intelligent Environments), Ian Pearson (Futurizon), Joachim Alvarez (Mobilab), Berit Block (Comscore), Laura Grigerova (Socialbakers), Julie Sajnani (Opera), Peter Rogers (Kantar), Remco van den Elzen (Distimo), Stephen Jenkins (Millennial), Vikki Burt (Canalys), Tim Cawsey, Ray Wizbowski and Naomi Lurie (Gemalto) and Peter Garside, Dave Hillier, Niclas Granholm and Mathias Larsson Carlander (Netsize). @ 2013 Gemalto N.V. All rights reserved.
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Netsize (a Gemalto company) is the global leader for mobile operator micropayments and messaging. We connect and contract directly to carriers and help our customers to monetize mobile services or services linked to mobility, improve brand awareness, acquire new customers, manage customer relationships and optimize business global efficiency. The 2012 merger with IPX, combining two of the best companies in the business, has led to the establishment of a leader with unrivalled geographic coverage, a strong capacity for innovation in payments and messaging, and the ability to offer customers customized in-app, PSMS, online and direct billing solutions in over 50 countries . The Netsize payment network reaches more than two billion consumers. We connect more than 1,000 companies to over 160 mobile network operators and provide solutions for distribution channels such as vending and ticketing; as well as services like mobile marketing, hosting and service management. In addition, Netsize offers payment and connectivity services (PCS) to eight mobile network operators in four countries. Our messaging services cover delivery to all mobile phones in virtually every country in the world, and are complemented by innovative software solutions like certified messaging, voice SMS, or the Netsize M-Marketing Campaign Manager. Netsize employs more than 250 telecom professionals and has local offices in 21 countries serving more than 1,000 customers. We have direct connections, contacts and integrations with mobile operators and our customers get the benefit of our experience and local knowledge. www.netsize.com www.netsize.com/contactus.htm
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Gemalto (Euronext NL0000400653 GTO) is the world leader in digital security with 2012 annual revenues of 2.2 billion and more than 10,000 employees operating out of 83 offices and 13 Research & Development Centers located in 43 countries. We are at the heart of the rapidly evolving digital society. Billions of people worldwide increasingly want the freedom to communicate, travel, shop, bank, entertain and work anytime, everywhere in ways that are enjoyable and safe. Gemalto delivers on their expanding needs for personal mobile services, payment security, authenticated cloud access, identity and privacy protection, eHealthcare and eGovernment efficiency, convenient ticketing and dependable machine-to-machine (M2M) applications. We develop secure embedded software and secure products, which we design and personalize. Our platforms and services manage these products, the confidential data they contain and the trusted end-user services made possible. Gemalto develops secure embedded software and products, which we design and personalize. Our platforms and services manage these secure products, the confidential data they contain and the trusted end-user services they enable. Our innovations enable our clients to offer trusted and convenient digital services to billions of individuals. Gemalto thrives with the growing number of people using its solutions to interact with the digital and wireless world. For more information visit www.gemalto.com, www.justaskgemalto.com, blog.gemalto.com, or follow @gemalto on Twitter. www.gemalto.com www.gemalto.com/php/contactus.php
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The Gemalto Netsize Guide | Foreword

Welcome to the Gemalto Netsize Guide

By Philippe Valle, Executive Vice President, Telecom Business Unit, Gemalto

The Gemalto Netsize Guide | Contents

The Gemalto Netsize Guide | Market Overview

Preparing for the age of mobile money

The Gemalto Netsize Guide | Market Overview

The Gemalto Netsize Guide | Market Overview

The Gemalto Netsize Guide | Market Overview

The Gemalto Netsize Guide | Market Overview

Source: Square, Inc

Mobile social commerce

The Gemalto Netsize Guide | Operator Billing

The Gemalto Netsize Guide | Payforit

Payforit clicks into place

The Gemalto Netsize Guide | Payforit

The Gemalto Netsize Guide | Financial Messaging

Special delivery! How SMS can help

The Gemalto Netsize Guide | Financial Messaging

ENTERPRISE MESSAGING AND FINANCIAL SERVICES: EIGHT GREAT IDEAS...

SMS insurance reminders

Bank card PIN codes

SMS PIN to activate a new payment card

SMS to replace bank card readers for online transactions

The Gemalto Netsize Guide | Financial Messaging

Temporary PINs when bank cards are lost

SMS confirmation when buying products abroad

Text PIN to replace passwords for online purchases

Texts for how did we do customer questionnaires

The Gemalto Netsize Guide | Operator billing for physical goods

Lets get physical

The Gemalto Netsize Guide | Operator billing for physical goods

The Gemalto Netsize Guide | Operator billing for physical goods

The Gemalto Netsize Guide | Operator billing for physical goods

The Gemalto Netsize Guide | In-app payments

The Gemalto Netsize Guide | In-app payments

Micro-pay your way

The Gemalto Netsize Guide | In-app payments

The Gemalto Netsize Guide | In-app payments

The Gemalto Netsize Guide | In-app payments

The Gemalto Netsize Guide | EA s in-app experiment

The Gemalto Netsize Guide | EA s in-app experiment

The Gemalto Netsize Guide | EA s in-app experiment

HOW MUCH DO USERS SPEND ON FREEMIUM? MORE THAN YOUD THINK

The Gemalto Netsize Guide | Emerging Markets

The Gemalto Netsize Guide | Emerging Markets

Transferring to a better way of life

The Gemalto Netsize Guide | Emerging Markets

The Gemalto Netsize Guide | Mobile money in Mexico

Money Mex the world go around

The Gemalto Netsize Guide | Mobile money in Mexico

The Gemalto Netsize Guide | Mobile money in Mexico

M-MONEY IN INDIA: THE POST OFFICE DELIVERS

The Gemalto Netsize Guide | Mobile money in Mexico

The Gemalto Netsize Guide | Mobile NFC

The Gemalto Netsize Guide | Mobile NFC

Touch and go?

The Gemalto Netsize Guide | Mobile NFC

The Gemalto Netsize Guide | Mobile NFC

The Gemalto Netsize Guide | Mobile NFC

The Gemalto Netsize Guide | Mobile NFC

The Gemalto Netsize Guide | Mobile NFC

TURKCELL TAPS IN TO MOBILE NFC