Mobile Money: Are Operators Ready?

“Mobile money," “m-commerce," “m-payments," the “mobile wallet" – however you label it, mobile payments look set to create the next big wave in mobile services. With the mobile-payments market growing out of the developing world and expected to reach more than $600 billion globally by 2013, double that of the figure in February 2011, it is certainly something telcos in the Western world should be taking seriously. With such massive growth expected, are operators fully prepared for the mass mobile-money explosion?

Millions of subscribers in developing and developed markets are already regularly using various forms of mobile commerce through their prepaid accounts with Unstructured Supplementary Service Data (USSD), SMS or Interactive Voice Response (IVR). The use of prepaid infrastructure for micropayments has gained a lot of credibility, primarily due to the fact that the amount of money considered is small, the transaction happens in a trusted environment and a one-to-one relationship. However, as we move away from the realm of digital services to purchasing physical goods, from the cozy confines of operator infrastructure to Point of Sale and from end-to-end, controlled transactions to the multi-party ecosystem of NFC, the landscape and infrastructure required to support that ecosystem becomes vastly more complex. Operators who want to continue playing in this field must carefully examine their infrastructure to ensure they’re prepared to adopt the subscriber’s needs, adapt to their demands and create a service that goes beyond their expectations.

It’s vital that operators have the infrastructure and processes in place to support the new partnering models that underpin the availability of services in the digital marketplace. Not only does this require on-demand, scalable charging and billing platforms, but also business processes to keep cost per transaction low. Configurable business tools to adapt to a wide variety of partnership and distribution models will become an essential part of the operator landscape when providing the flexibility required to exceed subscriber demands.

While the realm of processing payments of physical goods whether via NFC or other mobile money initiatives may well remain out of scope for many operators in the tightly regulated western markets, the imperative to use these services as part of a broader services ecosystem remains. According to a recent operator survey by mobileSQUARED, 85 percent of operators said that a unified product catalog is now viewed as a commercial necessity to get the most out of the emerging digital marketplaces. A unified product catalog provides operators with a comprehensive solution for managing all products and services into a single view of all product information, allowing marketing teams to respond quickly to changing customer needs by supporting rapid creation and deployment of new service offerings and bundles across a broad and heterogeneous partner ecosystem – something that will be key for operators if they want to be seen as innovative in such a fast changing environment.

While the best approach for operators is yet to be decided, what is clear is they need to be prepared to adopt, adapt and create. Investing in the right infrastructure and processes could be the differentiator for operators, and billing and CRM are here to support the mobile money ecosystem.

Timo Ahomaki is vice president of product management at Tecnotree Corp.