I am sure that you have all seen the increasing number of Western Union (WU) announcements that are showing up on our Google news alerts, one of the recent announcements was my own dear colleagues in Canada (EnStream/Zoompass) who launched international remittance using the WU rails for cash-out and intl. settlement. As a self proclaimed pioneer, which only means that I have been living on canned beans longer than most in this space, I cant help but feel that the service providers like EnStream are actually missing the mark completely! It would probably have been cheaper to just set up a WU agent shop in Chinatown-Toronto.
Part of the things that fascinated me about the convergence between mobile and financial services was the ability to disrupt the existing ecosystems who has no incentive to change, but is interested at worst in stagnation and at best some sort of managed democratization of their services. Instead EnStream should have spent a little bit of time identifying, like companies such as m-via has done, their target corridor and then focus on a viable cash-out network in the inbound market. That way EnStream could actually have lowered fees for the end consumer, while building a brand, revenue and network.
By integrating and getting "certified" against WU nothing has moved and in fact I am sure there are all kinds of ways that WU can tie down their newfound cash-in agents, making it hard for future disintermediation. I think that service providers needs to understand that press releases with no revenue is not valuable, but a distraction (similar to how Visa's VMT service is a poorly packaged punchline, why even bother?)
I know I am harping on EnStream in this post, but I am not really intending to, EnStream in this post just symbolizes the complacency that the service providers are beginning to show.
It concerns me because this industry was and is being built on disruption and ecosystem displacement. I hope that in 2011 the service providers will dig deep one more time and get back to what the intent was from the onset.
Happy new year for remittance disruption - (come on guys, its not that tough)
Saturday, January 15, 2011
Wednesday, January 5, 2011
My New Years Resolution in Mobile Payments
Like everybody else I have a list of 2011 todo's 95% of them will never materialize, but there is something refreshing about even making a todo list intended on improving your life. Very rarely do I make a "prediction list" in June, so "big ups" for December.
As most of you guys know I have been in the Mobile Financial Services Space since M-pesa was a mere thought bubble on a Vodafone presentation deck and I have had the pleasure of seeing Mobile Financial Services from a variety of different angles - Core Payment centric models with Zoompass, KushCash and others (TBA - wink wink), Mobile transport models with Zoompass, Clickatell and Mobile Money Ventures - and these different companies, plus the ones I have advised have allowed me to venture down all the verticals in the MFS space - pure banking, mobile money, pure remote, MMT and proximity payments, even a couple of core payment infrastructure plays. I am one of the few that have worked with ecosystems and deployed solutions in 1st, 2nd & 3rd world countries and its given me some untraditional perspective on things I guess.
When I began doing business in MFS in 2004, I started and launched a company called - - - - wait for it - - - - CellCash. CellCash was groundbreaking for its day, but in all fairness all it really was, was a stored value platform with SMS and Web as interactive channels.
Back then the business development cycles I had to go through to convince merchant acquirers that this was an ok use of the traditional merchant accounts, where tremendous.
I did succeed and was the first mobile money system launched in the US with all US carriers on board. I was lucky enough to sell the company shortly thereafter and go on to start KushCash with some friends. I guess the point here is that much have happened since 2004 and we all have a much better understanding of how the MFS space operates and looking back to those mornings in my home office trying to convince Chase Paymentech that it could be done definitely paid off - I feel blessed that I made the right choices and stayed in this space - Thank you all for making it fun and worthwhile.
Back then the business development cycles I had to go through to convince merchant acquirers that this was an ok use of the traditional merchant accounts, where tremendous.
I did succeed and was the first mobile money system launched in the US with all US carriers on board. I was lucky enough to sell the company shortly thereafter and go on to start KushCash with some friends. I guess the point here is that much have happened since 2004 and we all have a much better understanding of how the MFS space operates and looking back to those mornings in my home office trying to convince Chase Paymentech that it could be done definitely paid off - I feel blessed that I made the right choices and stayed in this space - Thank you all for making it fun and worthwhile.
So the market is now escalating and I think that companies that are in market already and have a foothold needs to go all out in 2011 - its the "Go big, or go home" year of Mobile Financial Services.
This leads me into my very profound resolutions :o)
This leads me into my very profound resolutions :o)
1. In 2011 I will help companies bank "A" continent. This has always been my objective and I think the time is right - so if you need ideas on how to bank a continent, reach out.
2. I will do my level best to help the market cross the final barriers in the communications gap between mobile and payments
3. I will be focused on 1 vertical to achieve my 9-5 goals and stay sane
4. I will create 1 disruptive technology - there are a couple of verticals that are not explored and on anybody's retinas - otherwise we will all become stale... and thats not ok
5. I will do my level best to be on the winning team for 2011 - no second place this year
There is quite a few people reading this and I hope that you guys will write your comments below so that we can capture your thoughts and perspective around 2011 in MFS.
Again I humbly thank you all for making the last 7 years unbelievably fun and exciting - and I guess its now "game on"?
Cheers - - - - J
Monday, January 3, 2011
5 Mobile Money Predictions for 2011
Happy New year to you all - Since I wrote the "Bong" blog post I have been away trying to get some good R&R for a big 2011.
I decided to create one of those "Prediction" blogs - just so everybody can tell me after the fact that I am wrong.
So here goes....
1. NFC goes mainstream in 2011
I think that after a long drive we are finally ready to place our bets and go mainstream with NFC. Some of the drivers are information around wireless operators now acknowledging that the handsets are coming in more than the original "test/pilot" batches, furthermore the Google's and Apple's of the world are driving behavioral change rapidly. Banks have to a large extend begun to understand that things can, and perhaps should, be done in a different manner than your normal BAU. Because of this shift SaaS and cloud models are beginning to get acceptance across banks. Innovation has rapidly become an agenda item with banks "post sub prime" and I have dealt with banks in even 3rd world countries that are rolling out RFID enabled cards in 2011. Biggest challenge will be for MNO's and FI's to be ready for the servicing of the solutions and many many more things - but this year will finally see all this come together.
2. The year m-pesa is no longer the poster child
I am keeping my fingers crossed - perhaps its wishful thinking. In all seriousness I think that 2011 will be the year of widespread Mobile Money roll out in 3rd world countries. We have crossed the hurdles of technology, we have jumped through hoops with agent models, we climbed the mountain of regulatory barriers and in all fairness we are ready to roll these services out in a "wash, rinse, repeat" manner that would have made Ford himself proud.
3. Acquisition spree
I think that in 2011 you will see some acquisitions from the associations and FI providers like FIS and Fiserv - these guys are all under tremendous pressure and if they dont make some drastic moves they will loose traction beginning in 2011. You will also see the card providers get even more active - companies like Gemalto has for years been buying small security companies but will probably have to ante up to keep new comers out of the space. Watch Silicon Valley for winners.
4. Demystifying Mobile Banking
2011 will be the year where people finally understand that mobile banking is not a great business, but its a great pivot point. Mbanking is a channel play and is very similar to other PSO's like CR2 and Accenture. Mbanking has no network capabilities because its a 1-1 relationship between the customer and their own bank, however mobile banking can be used as a great starting point for pivoting into network business' which is where the money is. I believe that mobile banking will increasingly be taken over by the larger FI's themselves, but the smaller CU's and mid sized banks may turn to their FS providers for help.
5. Emerging Payments & Disintermediation in Direct biller infrastructure
People have been speaking of emerging payments for some years now, but we are yet to see much movement. This year will see Direct Biller infrastructure being rolled out in larger scales, starting in emerging markets and trailing into the US and EU. Direct Airtime Top up will be a massive new opportunity in a +$300bn market filled with friction. Prepaid and postpaid electricity will be a big hit in emerging markets, so big in fact that the guys in the US should be having an emerging markets strategy in place today to capitalize on these massive opportunities. Mobile will play a massive role as the POP in these markets.
Lets see how right or wrong I am - I will keep score during the year.
Happy new year all!
I decided to create one of those "Prediction" blogs - just so everybody can tell me after the fact that I am wrong.
So here goes....
1. NFC goes mainstream in 2011
I think that after a long drive we are finally ready to place our bets and go mainstream with NFC. Some of the drivers are information around wireless operators now acknowledging that the handsets are coming in more than the original "test/pilot" batches, furthermore the Google's and Apple's of the world are driving behavioral change rapidly. Banks have to a large extend begun to understand that things can, and perhaps should, be done in a different manner than your normal BAU. Because of this shift SaaS and cloud models are beginning to get acceptance across banks. Innovation has rapidly become an agenda item with banks "post sub prime" and I have dealt with banks in even 3rd world countries that are rolling out RFID enabled cards in 2011. Biggest challenge will be for MNO's and FI's to be ready for the servicing of the solutions and many many more things - but this year will finally see all this come together.
2. The year m-pesa is no longer the poster child
I am keeping my fingers crossed - perhaps its wishful thinking. In all seriousness I think that 2011 will be the year of widespread Mobile Money roll out in 3rd world countries. We have crossed the hurdles of technology, we have jumped through hoops with agent models, we climbed the mountain of regulatory barriers and in all fairness we are ready to roll these services out in a "wash, rinse, repeat" manner that would have made Ford himself proud.
3. Acquisition spree
I think that in 2011 you will see some acquisitions from the associations and FI providers like FIS and Fiserv - these guys are all under tremendous pressure and if they dont make some drastic moves they will loose traction beginning in 2011. You will also see the card providers get even more active - companies like Gemalto has for years been buying small security companies but will probably have to ante up to keep new comers out of the space. Watch Silicon Valley for winners.
4. Demystifying Mobile Banking
2011 will be the year where people finally understand that mobile banking is not a great business, but its a great pivot point. Mbanking is a channel play and is very similar to other PSO's like CR2 and Accenture. Mbanking has no network capabilities because its a 1-1 relationship between the customer and their own bank, however mobile banking can be used as a great starting point for pivoting into network business' which is where the money is. I believe that mobile banking will increasingly be taken over by the larger FI's themselves, but the smaller CU's and mid sized banks may turn to their FS providers for help.
5. Emerging Payments & Disintermediation in Direct biller infrastructure
People have been speaking of emerging payments for some years now, but we are yet to see much movement. This year will see Direct Biller infrastructure being rolled out in larger scales, starting in emerging markets and trailing into the US and EU. Direct Airtime Top up will be a massive new opportunity in a +$300bn market filled with friction. Prepaid and postpaid electricity will be a big hit in emerging markets, so big in fact that the guys in the US should be having an emerging markets strategy in place today to capitalize on these massive opportunities. Mobile will play a massive role as the POP in these markets.
Lets see how right or wrong I am - I will keep score during the year.
Happy new year all!
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