If you look back at the history of technology you find that what we know is not often what will be. What we forecast is likely though not often the result. Only one can guess how many trillions of messages of all types will be sent and shared by 2020. Forecasters say close to 3 trillion messages will be sent annually but if you look around the room and around the globe you only see the tip of the iceberg in user growth and use cases for messaging. When I grew up we had one rotary telephone and one TV. Now everyone has a TV in their hand and messaging types beyond your wildest imagination bombard you like hurricane. Sometimes SMS, chat apps, videos, email, and realtime meetings are all occurring at the same time. Looking forward even a little and beyond our traditional thinking, if digital transformation takes place in one industry can we not expect it to have a ripple or tsunami effect in many others. For example, take a look at Mahindar Comviva’s white paper on Digital Transformation and you will see an interesting view of the changing world of messaging. In another sector, IoT-internet of things devices will also be sending messages to me and everyone else on their chat lists to let people know what is going on. Are you beginning to see the compound or exponential growth in the world of messaging? Looking at this from another angle that of a provider or operator there has been the long “race to zero” where once high fees were charged for SMS, long distance and other services are now free. Now fee-based services are bundled together so the customer sees value in the overall benefit rather than any one feature or app. New fee-based features may arise though the business models may vary whether subscription or advertising derived revenues can level the playing field or even give rise to sustained revenues. Linkages with other business all aiming for the customer will be the new “middleman” in the mix. That is, companies who link with other companies to message you about things you need or want. Some are obvious like Amazon buying Whole Foods to bring all their other business to you whether you walk in the door, home delivery or even by drone in the future. At the same time there are tens of thousands of startups and others that are building unique and valuable solutions to solving specific problems with innovative technologies such as artificial intelligence, machine learning and wireless tech. I like to think that there is a new wave coming quickly of technology embedded literally in everything we buy including food, medicines, wearable and anything else that we do that will improve our lives in many ways we haven’t even thought about yet. For example, we really don’t know much about what we eat and its impact on our health. Yes, we know there are a lot of bad things but we don’t know conclusively if we eat one thing for twenty years that it will give us cancer or that it will help us live a lot longer. There are so many medical issues that via IoMT-internet of medical things that may be able to improve our lives, give us more energy and less live-threatening diseases later. I like the idea that my IoMT device will give me a warning or even a nudge when I eat something I shouldn’t or say that my weight-loss goals could be achieved if I did more of one kind of exercise than another. You can now see the world of messaging goes far beyond us chatting with each other which opens up even more possibilities than I have time to discuss today.
Internet of Things
The Mobile World Congress (MWC), GSMA’s marquee annual event, was bigger and better than last year, with a record number of 101,000 attendees from 204 countries. The theme “Mobile is everything”, was quite comprehensive in covering every major trend emerging in the mobility landscape, right from 5G to virtual reality. Like last year, ‘Payments’ continued to trend at the event, with bigwigs like MasterCard, Visa and PayPal showcasing leading innovations like Selfie Pay and Connected Car Payments. While there was a lot of action around payments, I have handpicked some trends emerging from MWC that are likely to have far-reaching effects.
Ecosystem is paramount.
Today, there’s consensus in the mobile financial industry that an open ecosystem is key to a successful mobile financial service. Key players including banks, mobile operators, tech companies and payment processors, in both the developed and emerging markets, are focusing on creating intra-industry and cross-industry partnerships in order to accelerate the pace of service innovation and meet changing customer expectations. This is quite evident from the slew of partnership announcements at the MWC. MasterCard announced a number of partnerships, which included Orange Romania for MasterPass, WISeKey for wearables, CU Wallet for customized digital wallets, and Children’s Miracle Network Hospitals for online micro-donation platform. Similarly, Visa is collaborating with Honda and ParkWhiz for car-based commerce. Online payments giant, PayPal has joined hands with Vodafone Wallet in Europe and with M-Pesa Kenya for international remittance via Xoom. In addition, Mahindra Comviva, a global mobile financial solutions provider partnered with Wincor Nixdorf, a European provider of IT solutions for retail banks. This partnership will enable consumers using the former’s mobiquity® Wallet solution to withdraw cash and top up their mobile wallets at the ATM by simply scanning or presenting a QR code or through their NFC enabled mobile device. This solution is a good example of how electronic and cash payment transactions can combine perfectly with each other and extend the benefits of HCE beyond the retail POS.
We also saw digital identity take centre stage with ‘Mobile Connect’. User authentication via Mobile Connect for HCE deployments highlights its potential of becoming one of the factors of authentication for mobile payments and commerce. The simplicity of establishing the user’s identity through the MNOs with standardized APIs will open up options for financial institutions and lead to a seamless user experience.
From ‘Internet of Things’ to ‘Internet of Payments’
The Internet of Things is catching momentum and payments are becoming important part of it. In a few years, machines will analyze our needs and preferences and make automatic purchases on the basis of our requirements. In the future, we will see intelligent fridges order and pay for weekly supplies and groceries and cars that direct us to the nearest fuel station when they detect that the fuel tank is empty. This is going to be a reality much sooner than you think with VISA demonstrating its “connected car experience” at the MWC. Visa, in partnership with Honda is making car-based commerce transactions a reality. Honda cars, fitted with chips talk to gas pumps and parking meters. Cars automatically detect the need to refuel, calculate cost and pay automatically, without the driver having to leave the car. Similarly, in the parking, the car will automatically detect the parking time and enable consumer to pay the exact amount via mobile phone.
The changing face of MWC
MWC used to be a MNO-centric event, especially in the context of trends. However, in the last couple of years, we have witnessed a change with MWC expanding itself to a mobility centric event. This is quite evident from this year’s keynote address, which drew participation from the likes of Royal Caribbean Cruises, Ford Motor Company, Starcom Mediavest, Turtle entertainment and Facebook.
In a way, this is a reflection on how the mobile financial solutions industry will evolve from merely being confined to banks and MNOs to a wider spectrum of industries, including auto manufacturers, retailers, social media majors, etc.
There is little doubt that MWC 2016 witnessed tremendous on-ground action. Expect 2017 to be equally busy. Stay tuned!