Mobile Payment, Apple pay Et tu, Brute?


Few days ago the giant smart phone manufacturer Apple announced its new payment product ‘Apple pay’ and finally iPhone will come with NFC port in a step that all the world identified as very late step from Apple side!

Apply pay

Apart form the new introduced techniques, the added security value and the new payment experience, the announced product did not add any new value or proposition to the mobile payment industry.

 

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Mobile payment, the dark side of the moon!

In our recent post Saving the titanic we went through possible benefits of mobile payment and its capabilities and tracking options of this new revolutionary services. It was not possible to go through such capabilities without touching the most critical term Privacy!

Mobile payment, privacyCurrently digitizing consumer life is always suspected and accused, with multiple cases and news about privacy hacking and the endless arguments if this is ethical or not, legal or not, you might refer to the recent announced news about Google via this link for a story about an internet user arrested due to illegal email contents.

 

Back to mobile payment, in a typical crime investigation you might be suspected and you will discover that the mini store you stopped by to buy a coke can was actually a hidden drug dealer.

Such obsesses will be doubled and might be a real showstopper for some set of customers, and it will increase wherever political or terrorism issues exists. In some cases shopping anonymously is a real need and its absence might block possible sales targets. You may now realize how Bitcoin and similar digital currencies found their way in.

To overcome this financial institutions, banks, MNO or even vendors must ensure that they are legally authorized and entitled for such financial services, and a preset agreement with regulators and government not to disclose customer information without certain approvals.

On the other side the service provider must state clearly in their contract under what circumstances they will release the customer data, another factor is the information sharing with 3rd parties. It sounds interesting to see an offer on a new mobile device dedicated for me as I was paying for the repair shop last week. But it also means I’m hacked and I’m fully monitored on the go!

This is not simple as social media sites situation, in social media I’m submitting my data and risk my privacy on my own and I’m still able to control what to be shared, but for payment I have no alternatives to pay for the coffee or maintenance.

Vendors must pay attention to this up rising risk, and it will not make sense to hand such controls over to the customer to decide when he will use his mobile wallet and when to go with cash as it will work against the mobile payment concept!

Very complicated indeed, and going through alternatives needs a separate article to carry on!

Khaled Sayed

Photo Credit: http://p1.pichost.me/640/59/1836187.jpg

Continue reading “Mobile payment, the dark side of the moon!”

Mobile Payment, MNO VS Banks an endless dilemma

One of the most repeated questions when a mobile payment discussion starts, who will won at the end in this newly invented war Banks VS MNO -Mobile Network Operator-?

MNO VS BanksOn a very personal thoughts, I can’t see a link or even a symptom of war, both players are enriching the game and their targets are totally different.

There is a clear line that distinguish bank users from MNO users, I’ll call it the 5K line. In most countries, if you tried to open a new bank account you will be requested to deposit a sum of 5K -in average-of your local currency, while with only few cents you can get your self a new SIM card and start transacting immediately.

The 5K theory explains why normal or even advanced users may easily transfer 1,2 or 5K using their mobile phone to a relative or a friend. But we can’t imagine a user transferring 100K from his mobile, users are likely prefer to do this via bank branch or at least online banking interface.

I do imagine that MNO will attract low-mid income users and encourage them to use the banking concepts and functionalists and slowly advance them to be a real banking users. On the below selected units we will try to spot the difference and potentials for each one of the two big players.

Customer Base:

As MNO will not attract low-mid users which is more than 70% of any community, MNO will be the winner with the biggest customer base. On the other hand banks will have the elite and high value customer base with total of 30% of the population.

Transaction Volume and Count:

MNO targeted revenue is the transaction fees, and to expand their revenue MNO will keep pushing and inventing new services to push the money circulation to the maximum maximizing their revenue in reverse. MNO clear target should be minimum fees and small-mid amounts transferred in an insane and flashlight speed.

Banks will come in the second place from the transaction count, and ranked as number one in the transaction volume ,where Bank concept is to encourage users to leave their savings for as long a possible allowing the Bank to do a numerous projects and investment to generate its revenue.

Cash Flow and Circulation:

While Bank is capitalizing on the savings, MNO will circulate the money like thousand times more than Banks do, and the flow will always be at the MNO side.

Resident Balance:

Banks resident balances and saving amounts will be more than MNO, specially that MNO will keep pushing for fast money circulation and the network will keep cashing in/out rapidly.

User View:

From a user prospective MNO will offer me fast and convenient way to get a certain service and I will sacrifice with small portion as my convenience fees. As a Bank user I will expect some profit -interest- on monthly or annual bases against my savings.

Profit:

As mobile payment era just started, its still too early to answer this point and nominate the winner, we will need to wait and see how it will go but I think we will some how end with an equal situation.

Finally, mobile payment will grow specially, when we are sure that both players will adopt the mobile as an official and convenient gateway for their financial requests and we will see an unlimited options and innovative solutions that is built and based on mobile handsets.

Khaled Sayed

 

Photo Credit:

http://paymentsafrika.com/live/wp-content/uploads/2013/09/Mobile-payment2-642×419.jpg

Bitcoin explained in nutshell

As an internet user you should be familiar with the open source term. Open source OS, office tools, graphic software or utility software.

Open source as a development model promotes:

  • Universal access via free license to a product’s design or blueprint
  • Universal redistribution of that design or blueprint, including subsequent improvements to it by anyone

Satoshi Nakamoto an anonymous internet user or group of users thought to apply a decentralized financial institution where anyone could join the community and be a part of a new open source money issuing system, not related or controlled by any legal or government. Funny!

Using a traditional Peer 2 Peer network and complex encryption techniques each connected client is now part of the new issuing system and in reverse he will receive his reward in bitcoin credits.

But How bitcoin get its value?

To answer this point we may raise another question why 1$ USD has a value? and the simple answer is 1$ USD is valuable cause you may exchange it with resources like a candy, gum or a small cupcake!

It’s valuable because your are quite sure that the candy shop guy will be interested to exchange his owned candy with your 1$ USD, the candy guy will exchange his candies because he is also sure that the coffee shop owner will be interested to exchange one of his hot espresso with his new collected 1$ USD.

It’s all a bout trust, where all the traders trusts that the US government will back its issued money with resources to keep it’s value along the way.

In bitcoin world, where users participate with their computing power to collect the new digital coins, and because it’s a long process and it takes time users value the collected bitcoins and start looking for alternatives to collect bitcoins faster. May be they offer their advanced services is exchange of bitcoins rather than coins and it might be also cheaper or bundled with some promotional offers.

New attracted users will keep looking for bitcoins to benefit the price difference and the offers as well! This will soon create a cycle and community who value this digital currency and as much the community grows the bitcoin value grows in response.

Back to our previous 1$ USD and imagine that you are lost in a desert between a group of people, and you had the last and only cupcake which will give you an extra 5 life days with a wise consumption. Will you trade your life-cupcake with 1$, 10$, 20$ or a Million USD!

That’s why bitcoin has a value!