Telco vs OTT - Mobile and Online Payment

  • June 2013
  • -
  • IDATE
  • -
  • 52 pages

Opportunities for telcos: NFC & carrier billing
This insight describes the main retail market payment methods used by OTT players and telcos.
It provides an overview of the competition between these systems and in the main payment markets, along with market forecasts for 2012-2017.
Also included is a benchmark of the players -ie. OTT content providers and telcos- detailing their position in each payment market.

Region:
World

This deliverable is part of the Telco vs OTT watch which includes:
- Half-yearly updated datasets- Half-yearly updated status reports
- A Net Neutrality benchmark on 15 countries and 3-sided business models report
- Quarterly market insights
- Direct access to leading OTT analysts

Table Of Contents

Contents

1. Key findings 6

2. Main concepts of mobile and online payment 7

2.1. In-store payment 7
2.1.1. Near Field Communication (NFC) 8
2.1.2. Non-NFC physical mobile payment system 9
2.1.3. Business model of mobile wallets 9
2.2. Carrier-billing services 9
2.2.1. Mobile payment and bank account 9
2.2.2. Premium SMS 9
2.2.3. Online payment system with carrier billing 9
2.2.4. Business model of carrier-billing services 10
2.3. Remote online payment 10

3. Mobile and online payment markets 11

3.1. Remote online payment 11
3.1.1. Market size 11
3.1.2. Market structure and ecosystem 12
3.1.3. Key trends 12
3.2. Carrier-billing services 13
3.2.1. Market size 13
3.2.2. Market structure and ecosystem 13
3.2.3. Key trends 14
3.3. In-store payment and NFC 14
3.3.1. Market size 14
3.3.2. Market structure and ecosystem 15
3.3.3. Key trends 16

4. Telcos and OTT strategies 18

4.1. Overview 18
4.2. OTT players 20
4.2.1. Facebook 20
4.2.2. Google 21
4.2.3. Apple 22
4.2.4. Amazon 23
4.2.5. PayPal 23
4.3. Telcos 24
4.3.1. Orange 25
4.3.2. Telefónica 27
4.3.3. Vodafone 28
4.3.4. NTT/NTT DOCOMO 30
4.4. Mobile payment alliances 31
4.4.1. ISIS 31
4.4.2. MCX - Merchant Customer Exchange 31

5. Payment and three-sided business models 32

5.1. Direct competition 33
5.2. OTT as intermediary between users and others 33
5.3. Cooperation between telcos and large OTTs 35
5.4. Transformation of telcos into OTTs 35
5.5. Telcos as intermediary between users and large OTTs 35
5.6. Telcos as intermediary between users and others 35
5.7. Conclusions 39

6. Appendix 40

6.1. NFC additional figures 40
6.2. Beyond two-sided models: three-sided models! 41
6.2.1. OTT as intermediate between ‘users’ and ‘others’ 42
6.2.2. Cooperation between telcos and large OTTs 43
6.2.3. Transformation of telcos into OTTs 44
6.2.4. Telco as intermediary between ‘users’ and large OTTs 44
6.2.5. Telco as intermediary between ‘users’ and ‘others’ 45
6.3. Alternatives to NFC at a POS 47
6.4. NFC - Secure Element and Trusted Service Manager 49
6.4.1. The Secure Element (SE) 49



Tables

Table 1: Payment services provided by OTT and telcos 18
Table 2: Payment services details by players 19
Table 3: Initiatives in emerging markets 33
Table 4 : List of main card reader mobile plug-in solution providers 48



Figures

Figure 1: The mobile and online payment market 7
Figure 2: Examples of possible usage with an NFC mobile wallet application 8
Figure 3: Evolution of worldwide e-commerce and m-commerce market 12
Figure 4: Evolution of direct carrier-billing market 2011-2017 worldwide 13
Figure 5: Forecasts of volume of transactions made in-store with an NFC-enabled phone 15
Figure 6: OTT mobile payment system usage 20
Figure 7: Facebook payment revenues by region and per quarter 2010-2012 21
Figure 8: Positioning of some telcos on the main payment services 25
Figure 9: Main partnerships and joint ventures made by telcos to provide common NFC payment
service 25
Figure 10: How the Wanda launch progressed in Argentina 27
Figure 11: Number of M-PESA active users, year by year 29
Figure 12: Number of apps paid through Vodafone billing 29
Figure 13: NTT mobile wallet uses 30
Figure 14: Mobile phone and financial services penetration in selected African countries 32
Figure 15: The multiple business model of “Le Monde” application 34
Figure 16: Google Wallet positioning 34
Figure 17: Extension to other payment services 36
Figure 18: Revenue opportunities beyond NFC 36
Figure 19: Authentication within YouConnect 37
Figure 20: The various steps of the Vodafone mobile wallet service roll out 37
Figure 21: "How much your shopping habits are worth?" 38
Figure 22: The mCommerce ecosystem of Vodafone 39
Figure 23 : Number of NFC-enabled mobile devices used worldwide - Forecasts 2013-2017 40
Figure 24 : Number of NFC mobile payment users worldwide - Forecasts 2013-2017 40
Figure 25: The five parts of the Telco vs OTT equation 42
Figure 26: OTT as intermediate between ‘users’ and ‘others’ 42
Figure 27: Partnerships between OTTs and telcos 43
Figure 28: Telco OTT initiatives in communications 44
Figure 29: Telco as intermediary between ‘users’ and large OTTs 44
Figure 30: Telco as intermediary between ‘users’ and ‘others’ 45
Figure 31: Operating profile of a telco 46
Figure 32: Signing for a card payment directly on the device 47
Figure 33: The Square Register card reader in use with an iPad 47
Figure 34: Example of cardlet organization in an NFC SIM card 49
Figure 35: NFC mobile device architecture with an integrated SE 51
Figure 36: NFC mobile device architecture with the SE in the SIM card 51
Figure 37: NFC mobile device and traditional mobile device architecture with the SE in the SIM card 52

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