Professional Documents
Culture Documents
FINANCIAL APPLICATIONS
WORLDWIDE
2009-2014
APRIL 2009
All Rights Reserved. Printed in the United States of America. No part of this publication may be
reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic,
mechanical, photocopying, recording or otherwise, prior to written permission of the publisher.
RECYCLED PAPER
The
Insight
Reports
2009-2014
TABLE OF CONTENTS
Chapter I
EXECUTIVE SUMMARY ......................................................... 1
1.1 Core Banking Solutions and Mobile Phones .....................................................................................1
1.2 Financial Applications for Mobile Phones .........................................................................................2
1.3 Revenue Potential of Financial Applications for Mobile Phones ......................................................5
Chapter II
TAXONOMY OF MOBILE FINANCIAL APPLICATIONS .......... 7
2.1 About Mobile Phone Functional Blocks ............................................................................................7
2.2 Mobile Phone Generations .................................................................................................................8
2.3 Mobile Phones and Financial Applications........................................................................................9
2.4 Important Concepts ............................................................................................................................10
2.4.1 Basel II .....................................................................................................................................10
2.4.2 Bluetooth ..................................................................................................................................11
2.4.3 Near Field Communications ....................................................................................................12
2.4.4 Java ...........................................................................................................................................13
2.4.5 Wireless Application Protocol ..................................................................................................14
2.4.6 Application Server ....................................................................................................................14
2.5 Mobile Banking .................................................................................................................................15
2.5.1 Introduction ..............................................................................................................................15
2.5.2 Drivers ......................................................................................................................................16
2.5.3 Modus Operandi .......................................................................................................................17
2.5.4 Challenges to Mobile Banking .................................................................................................21
2.5.5 Summary ..................................................................................................................................22
2.6 Mobile Stock Trading ........................................................................................................................22
2.6.1 Introduction ..............................................................................................................................22
2.6.2 Drivers ......................................................................................................................................22
2.6.3 Modus Operandi .......................................................................................................................24
Chapter III
ILLUSTRATIVE CASE STUDIES ............................................ 51
3.1 Mobile Banking: Chinese Construction Bank, Hong Kong ...............................................................51
3.1.1 Introduction ..............................................................................................................................51
3.1.2 Components of the Solution .....................................................................................................51
3.1.3 Perspective................................................................................................................................52
3.2 Mobile Stock Trading: Alawsat Mobile............................................................................................53
3.2.1 Introduction ..............................................................................................................................53
3.2.2 Components of the Solution .....................................................................................................53
3.2.3 Perspective................................................................................................................................56
3.4 Mobile Proximity: NREGS, India......................................................................................................57
3.4.1 Introduction ..............................................................................................................................57
3.4.2 Components of the Solution .....................................................................................................57
3.4.3 Perspective................................................................................................................................59
3.5 Mobile Retail: C1000 Supermarkets, The Netherlands .....................................................................60
3.5.2 Introduction ..............................................................................................................................60
3.5.3 Components of the Solution .....................................................................................................60
3.5.4 Perspective................................................................................................................................61
3.6 Mobile Credit Cards: Chunghwa Telecom, Taiwan...........................................................................62
3.7 Mobile Credit Cards: NTT DoCoMo, Japan ......................................................................................63
3.7.2 Introduction .............................................................................................................................63
3.7.3 Components of the Solution .....................................................................................................63
3.7.4 Perspective................................................................................................................................66
3.8 Mobile Barcoding: Protaurius AB, Sweden .......................................................................................66
3.8.2 Introduction ..............................................................................................................................66
3.8.3 Components of the Solution .....................................................................................................67
3.8.4 Perspective................................................................................................................................68
3.9 Mobile P2P: M-Pesa, Kenya ..............................................................................................................68
3.9.2 Introduction ..............................................................................................................................68
3.9.3 Components of the Solution .....................................................................................................68
3.9.4 Perspective................................................................................................................................71
3.10 Mobile Gaming and Gambling Case Study: Victor Chandler, Gibraltar ..........................................72
3.10.2 Introduction ..............................................................................................................................72
3.10.3 Components of the Solution .....................................................................................................72
3.10.4 Perspective................................................................................................................................74
Chapter IV
VENDOR ANALYSIS .............................................................. 75
4.1 Classification of Stakeholders............................................................................................................75
4.1.1 Traditional Powerhouses ..........................................................................................................75
4.1.1.1 Handset OEMs and Semiconductor Specialists.................................................................75
4.1.1.2 Mobile Network Operators ................................................................................................76
4.1.2 New Entrants ............................................................................................................................78
4.1.2.1 Financial Institutions .........................................................................................................78
4.1.2.2 Application Specialists ......................................................................................................79
4.2 Stakeholder Summary ........................................................................................................................82
4.2.1 ALittleWorld (ALW)................................................................................................................82
4.2.2 Camclic.....................................................................................................................................83
4.2.3 C-SAM .....................................................................................................................................83
4.2.4 CPNI Inc ...................................................................................................................................85
4.2.5 Financial Technologies .............................................................................................................86
4.2.6 hSenid Software International ..................................................................................................87
4.2.7 Infosys Technologies ................................................................................................................87
4.2.8 LogicaCMG ..............................................................................................................................88
4.2.9 MasterCard Worldwide ............................................................................................................89
4.2.10 Motorola ...................................................................................................................................89
4.2.11 Nokia ........................................................................................................................................90
4.2.12 NTT DoCoMo ..........................................................................................................................91
4.2.13 NXP ..........................................................................................................................................92
4.2.14 Obopay .....................................................................................................................................94
4.2.15 Oracle Financial Services Software Limited (Formerly i-flex Solutions) ................................94
4.2.16 SmartCell ..................................................................................................................................95
4.2.17 Visa Inc. ...................................................................................................................................96
Chapter V
QUANTITATIVE ANALYSIS ................................................... 98
5.1 Introduction........................................................................................................................................98
5.2 Research Methodology ......................................................................................................................99
5.3 Resources ...........................................................................................................................................100
5.4 Overall Quantitative Analysis ............................................................................................................100
5.4.1 Regional Breakdown ................................................................................................................105
5.5 Mobile Banking .................................................................................................................................108
Appendix
GLOSSARY ............................................................................ 149
Table of Figures
Chapter I
I-1 Global Total Revenue Opportunity for Mobile Financial Applications, 2009-2014 ($Millions) ......6
Chapter II
II-1 Schematic of the SMS, USSD and WAP-based Mobile Banking Solution .....................................18
II-2 The Kabu Ketai 920SH YK: The Mobile Stock Trading Friendly Phone .......................................24
II-3 Nokia Handset with iWin Stock Broking Client ..............................................................................26
II-4 Schematic of Mobile Payment Infrastructure ..................................................................................32
II-5 Front and Back Views of Mobile Phone Card Readers ...................................................................36
II-6 Working of Mobile Bar Code ..........................................................................................................40
II-7 Advantage of Two Dimensional QR-code over One Dimensional Bar Code ..................................41
II-8 Shotcode ..........................................................................................................................................41
II-9 Mobile P2P Solution Offered by Obopay ........................................................................................45
II-10 PATSend WAP-based Mobile P2P Interface..................................................................................45
II-11 Nokia N81 Handset with Gaming Applications ..............................................................................47
II-12 Infrastructure for Mobile Gaming ....................................................................................................49
Chapter III
Chapter IV
Chapter V
V-1 Global Subscriber Base for Mobile Financial Applications, 2009-2014 (Millions) ..........................100
V-2 Global Mobile Financial Application Revenue, 2009-2014 ($Millions) ...........................................102
V-3 MNO Earnings from Data Transfer Initiated by Global Mobile Financial Applications, 2009-2014
($Millions) ........................................................................................................................................103
V-4 Global Total Revenue Opportunity for Mobile Financial Applications, 2009-2014 ($ Millions) .....104
V-5 Regional Share of Global Mobile Financial Application Subscribers, 2009-2014 (Percent) .............105
V-6 Regional Share of Global Mobile Financial Application Revenue, 2009-2014 (Percent) .................106
V-7 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile Financial
Applications, 2009-2014 (Percent) ....................................................................................................107
V-8 Global Mobile Banking Subscribers, 2009-2014 (Millions) ..............................................................108
V-9 Global Mobile Banking Application Revenue, 2009-2014 ($Millions) .............................................109
V-10 MNO Earnings from Data Transfer Initiated by Global Mobile Banking Applications, 2009-2014
($Millions) ........................................................................................................................................109
V-11 Regional Share of Global Mobile Banking Subscribers, 2009-2014 (Percent) ................................110
V-12 Regional Share of Global Mobile Banking Application Revenue, 2009-2014 (Percent).................111
V-13 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile Banking
Applications, 2009-2014 (Percent) ....................................................................................................112
V-14 Global Mobile Stock Trading Subscribers, 2009-2014 (Millions) ...................................................113
V-15 Global Mobile Stock Trading Application Revenue, 2009-2014 ($Millions)..................................114
V-16 MNO Earnings from Data Transfer Initiated by Global Mobile Stock Trading Applications,
2009-2014 ($Millions) .......................................................................................................................114
V-17 Regional Share of Global Mobile Stock Trading Subscribers, 2009-2014 (Percent)......................115
V-18 Regional Share of Global Mobile Stock Trading Application Revenue, 2009-2014 (Percent) .......116
V-19 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile Stock Trading
Applications, 2009-2014 (Percent) ...................................................................................................117
V-20 Global Mobile Proximity and Retail Subscribers, 2009-2014 (Millions) ........................................118
V-21 Global Mobile Proximity and Retail Application Revenue, 2009-2014 ($Millions) .......................118
V-22 MNO Earnings from Data Transfer Initiated by Global Mobile Proximity and Retail
Applications, 2009-2014 ($Millions) .................................................................................................119
V-23 Regional Share of Global Mobile Proximity and Retail Subscribers, 2009-2014 (Percent) ............120
V-24 Regional Share of Global Mobile Proximity and Retail Application Revenue, 2009-2014
(Percent) .............................................................................................................................................121
V-25 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile Proximity
and Retail Applications, 2009-2014 (Percent) ...................................................................................122
V-26 Global Mobile Credit Card Subscribers, 2009-2014 (Millions) .......................................................123
V-27 Global Mobile Credit Card Application Revenue, 2009-2014 ($Millions)......................................123
V-28 MNO Earnings from Data Transfer Initiated by Global Mobile Credit Card Applications,
2009-2014 ($Millions) .......................................................................................................................124
V-29 Regional Share of Global Mobile Credit Cards Subscribers, 2009-2014 (Percent) .........................125
V-30 Regional Share of Global Mobile Credit Card Application Revenue, 2009-2014 (Percent) ...........126
V-31 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile Credit Card
Applications, 2009-2014 (Percent) ...................................................................................................127
V-32 Global Mobile Barcoding Subscribers, 2009-2014 (Millions) .........................................................128
V-33 Global Mobile Barcoding Application Revenue, 2009-2014 ($Millions) ........................................128
V-34 MNO Earnings from Data Transfer Initiated by Global Mobile Barcoding Applications,
2009-2014 ($Millions) .......................................................................................................................129
V-35 Regional Share of Global Mobile Barcoding Subscribers, 2009-2014 (Percent).............................130
V-36 Regional Share of Global Mobile Barcoding Application Revenue, 2009-2014 (Percent)..............131
V-37 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile Barcoding
Applications, 2009-2014 (Percent) ...................................................................................................132
V-38 Global Mobile P2P Subscribers, 2009-2014 (Millions) ...................................................................133
V-39 Global Mobile P2P Application Revenue, 2009-2014 ($Millions) ..................................................133
V-40 MNO Earnings from Data Transfer Initiated by Global Mobile P2P Applications,
2009-2014 ($Millions) .......................................................................................................................134
V-41 Regional Share of Global Mobile P2P Subscribers, 2009-2014 (Percent) .......................................135
V-42 Regional Share of Global Mobile P2P Application Revenue, 2009-2014 (Percent) ........................136
V-43 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile P2P
Applications, 2009-2014 (Percent) ....................................................................................................137
V-44 Global Mobile Gaming Subscribers, 2009-2014 (Millions).............................................................138
V-45 Global Mobile Gaming Application Revenue, 2009-2014 ($Millions) ...........................................138
V-46 MNO Earnings from Data Transfer Initiated by Global Mobile Gaming Applications, 2009-2014
($Millions) ........................................................................................................................................139
V-47 Regional Share of Global Mobile Gaming Subscribers, 2009-2014 (Percent) ................................140
V-48 Regional Share of Global Mobile Gaming Application Revenue, 2009-2014 (Percent) .................141
V-49 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile Gaming
Applications, 2009-2014 (Percent) ....................................................................................................142
V-50 Global Mobile Gambling Subscribers, 2008-2013 (Millions) .........................................................143
V-51 Global Mobile Gambling Application Revenue, 2009-2014 ($Millions) ........................................143
V-52 MNO Earnings from Data Transfer Initiated by Global Mobile Gambling Applications,
2009-2014 ($Millions) .......................................................................................................................144
V-53 Regional Share of Global Mobile Gambling Subscribers, 2009-2014 (Percent) .............................145
V-54 Regional Share of Global Mobile Gambling Application Revenue, 2009-2014 (Percent) ..............146
V-55 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile Gambling
Applications, 2009-2014 (Percent) ...................................................................................................147
Table of Tables
Chapter II
Chapter III
Chapter IV
Chapter V
V-1 Regional Distribution of Global Mobile Financial Application Subscribers, 2009-2014 (Millions) .105
V-2 Regional Distribution of Global Mobile Financial Application Revenue, 2009-2014 ($Millions)....106
V-3 Regional Distribution of MNO Earnings from Data Transfer Initiated by Global Mobile Financial
Applications, 2009-2014 ($Millions) ................................................................................................107
V-4 Regional Distribution of Global Mobile Banking Subscribers, 2009-2014 (Millions) ......................110
V-5 Regional Distribution of Global Mobile Banking Application Revenue, 2009-2014 ($Millions) .....111
V-6 Regional Distribution of MNO Earnings from Data Transfer Initiated by Global Mobile Banking
Applications, 2009-2014 ($Millions) ................................................................................................112
V-7 Regional Distribution of Global Mobile Stock Trading Subscribers, 2009-2014 (Millions) .............115
V-8 Regional Distribution of Global Mobile Stock Trading Application Revenue, 2009-2014 ($Millions)116
V-9 Regional Distribution of MNO Earnings from Data Transfer Initiated by Global Mobile Stock Trading
Applications, 2009-2014 ($Millions) ................................................................................................117
V-10 Regional Distribution of Global Mobile Proximity and Retail Subscribers, 2009-2014 (Millions) 119
V-11 Regional Distribution of Global Mobile Proximity and Retail Application Revenue, 2009-2014
($Millions) ........................................................................................................................................120
V-12 Regional Distribution of MNO Earnings from Data Transfer Initiated by Global Mobile Proximity and
Retail Applications, 2009-2014 ($Millions) .....................................................................................121
V-13 Regional Distribution of Global Mobile Credit Cards Subscribers, 2009-2014 (Millions) ..............124
V-14 Regional Distribution of Global Mobile Credit Card Application Revenue, 2009-2014
($Millions) .........................................................................................................................................125
V-15 Regional Distribution of MNO Earnings from Data Transfer Initiated By Global Mobile Credit Card
Applications, 2009-2014 ($Millions) ................................................................................................126
V-16 Regional Distribution of Global Mobile Barcoding Subscribers, 2009-2014 (Millions) ..................129
V-17 Regional Distribution of Global Mobile Barcoding Application Revenue, 2009-2014 ($Millions) .130
V-18 Regional Distribution of MNO Earnings from Data Transfer Initiated by Global Mobile Barcoding
Applications, 2009-2014 ($Millions) ................................................................................................131
V-19 Regional Distribution of Global Mobile P2P Subscribers, 2009-2014 (Millions) ............................134
V-20 Regional Distribution of Global Mobile P2P Application Revenue, 2009-2014 ($Millions) ...........135
V-21 Regional Distribution of MNO Earnings from Data Transfer Initiated by Global Mobile P2P
Applications, 2009-2014 ($Millions) .................................................................................................136
V-22 Regional Distribution of Global Mobile Gaming Subscribers, 2009-2014 (Millions) ......................140
V-23 Regional Distribution of Global Mobile Gaming Application Revenue, 2009-2014 ($Millions).....141
V-24 Regional Distribution of MNO Earnings from Data Transfer Initiated by Global Mobile Gaming
Applications, 2009-2014 ($Millions) ................................................................................................142
V-25 Regional Distribution of Global Mobile Gambling Subscribers, 2009-2014 (Millions)...................145
V-26 Regional Distribution of Global Mobile Gambling Application Revenue, 2009-2014 ($Millions)..146
V-27 Regional Distribution of MNO Earnings from Data Transfer Initiated by Global Mobile Gambling
Applications, 2009-2014 ($Millions) ................................................................................................147
CHAPTER I
EXECUTIVE SUMMARY
Early in 2009 the World Bank predicted that the global economy would shrink this
year for the first time since the Second World War as the impacts of a US housing
market implosion and the ensuing credit markets turmoil pulled the global
economy into recession. And though no one can predict when the present
recession will end, it is a safe bet that it will, and that national and international
financial systems will be all the stronger for having weathered the storm. In fact,
many of the same technologies that have been deployed to fashion this single
global market system are also likely to become part of the solution to a financial
rebound.
This study looks at technologies and markets at the intersection of mobile phones
and financial systems. We examine eight applications in which mobile phones
and various aspects of banking, finance, and consumer spending intersect.
The creation of financial applications for mobile phones is part of the larger
process of automating the financial applications themselves. The most influential
automation trend in the financial sector is undoubtedly occurring in what the
financial services industry and the banks call “core banking solutions”. “Core”
banking is the business conducted by a banking institution with its retail and small
business customers—its core customers. Core banking solutions is financial
industry jargon related to platforms that leverage the Internet and other
communications technologies to further the banks’ business reach. A physical
manifestation of this reach is the growth in the number of bank points of presence
(PoP). Core banking adds automated teller machines (ATM) and user devices
such as PCs and mobile phones to the list of bank PoPs. The influence of core
banking application automation extends beyond conventional banking functions
and encompasses the large variety of financial services offered by the institutions
including stock-broking, credit card issuance, and insurance among others.
Although the finance services vertical has traditionally been an early adopter of IT
solutions, core banking automation is not being rolled out uniformly around the
In this study we have examined the impact of the following eight mobile financial
applications:
Mobile Stock Trading—Mobile stock trading enables traders to buy and sell
financial instruments such as stock, options, futures and commodities using the
trading application client residing on their mobile phones. The key to the
applications success is the speedy availability of content related to details of listed
companies and the ability to maintain and update personal portfolios with the
handset. The ubiquity of the Java platform has played a major role in the adoption
of mobile stock trading. The Java platform is simple yet flexible from the
application programmer’s perspective. Many brokers have either engaged their in-
house teams or consulted third-party specialists to build such applications. The
architecture of mobile stock trading is a direct reflection of the fact that the
Chapter I Reproduction without permission 2
of the publisher is prohibited
The
Insight
Reports
brokerage firms are its primary drivers. To put it very simply, the architecture
involves WAP-enabling the brokerage firm’s internal servers and those that are
client-facing with dedicated applications that can optimally utilize the resources of
the mobile phone.
cards is not new. Companies such as Motorola have been propagating this idea for
close to a decade. What stalled acceptance of the mobile credit card? There was a
lack of readiness of among the stakeholders as well as the limited data capabilities
of the earlier generation of mobile phones. These hindrances have been addressed
satisfactorily in most countries and mobile credit cards seem much closer to taking
off.
Mobile Barcoding—In their conventional form, bar codes are used for
identification and authentication of objects. Mobile phones take bar-codes to the
next plane. Barcodes are comparable to URLs (uniform resource locators), but
barcodes are inhabit the real world. Photographing a barcode is akin to saving a
URL on the device. Users can click the barcode and be led to details about the
offer. The applications for mobile barcoding are immense. For example, bar code
readers embedded in a mobile handset would give customers the ability to access
pages of product information or view the most recent product discounts or
promotions just by just clicking on the photographed bar-code tag.
Troubleshooting information could be downloaded to the phone the same way.
Each of these applications would result in either direct revenues or gains due to
cost savings, so we have categorized mobile bar coding as a financial application.
Unlike mobile banking and stock trading applications, which are essentially
mobile versions of their online formats, mobile barcoding is almost exclusive to
the mobile domain for the simple reason that it is impossible to envisage the
phenomenal spread of barcode-based promotion if the reader devices were
stationary.
Mobile P2P—The term “peer-to-peer” is most often used in the context of sharing
files on the Internet; however, in our use of the term, mobile P2P applications are
geared to enabling people of very limited means in the developing economies to
participate in the organized and authorized exchange of monies. Further, the
ubiquity of mobile phones ensures ready acceptance of the application even
among those that have more mainstream banking relationships. Mobile P2P is a
hassle free way of transferring money for personal and business purposes. The
mechanism is as effective as putting the money directly in the recipient’s wallet
and it can be used to transfer monies across international borders.
mobile phones. Both the facilities are mobile extensions of their wireline
counterparts. While wireline multiplayer games have client-server architecture,
which require wireline broadband connectivity, mobile phones also add something
exclusive—the context of their location. Thus, there are games that can alter their
characteristics based on the physical location of the gamer. The mobile phone is
also an effective channel for casinos and gambling companies to expand their
customer base. Customers can place bets remotely and while on the move. While
mobile gambling is similar in implementation to mobile gaming in most aspect,
there are notable differences. For example, all mobile gambling applications may
not be interactive like gaming. Some of them may involve simple placing of bets
and checking the results. Also, mobile gambling applications are almost always
linked to payment settlement infrastructure. In this aspect, it is similar to the
mobile stock trading application.
INSIGHT Research recognizes that although all the applications run on the same
end-user device—the mobile phone—each application has unique sets of factors
that influence its market acceptance. Hence, the market prospects for each
application have been mapped and forecasted independently of each other. Our
total estimate for mobile financial applications is the sum of eight mobile phone
financial applications:
• Mobile banking;
• Mobile stock trading;
• Mobile proximity and retail;
• Mobile credit cards;
• Mobile barcoding;
• Mobile P2P;
• Mobile gaming; and
• Mobile gambling.
Figure I-1 presents our total revenue estimate for the eight applications under
discussion. The total revenue opportunity includes INSIGHT’s forecast of the
revenues accrued by the application developers for mobile finance as well as the
revenue accrued by MNOs supplying the bandwidth as well as backend hosting to
run these applications, if that is required. The application developers, as a
segment, are undoubtedly the most vibrant among all the stakeholder categories—
and the one that INSIGHT’s research suggests provides the clearest indication of
market acceptance of mobile financial applications.
Figure I-1 Global Total Revenue Opportunity for Mobile Financial Applications, 2009-2014 ($ Millions)
$35,000
$30,000
$25,000
$20,000
$Millions
$15,000
$10,000
$5,000
$0
2009 2010 2011 2012 2013 2014
CHAPTER II
TAXONOMY OF MOBILE FINANCIAL APPLICATIONS
• Mobile banking;
• Mobile stock trading;
• Mobile proximity;
• Mobile credit cards;
• Mobile payments;
• Mobile barcoding;
• Mobile P2P; and
• Mobile gaming and gambling.
The mobile phone is a sophisticated radio. Initially designed and developed for
voice communications, it is now used for sending and receiving data as well. The
mobile phone has several major functional blocks that are related to data
applications:
The enhanced data capabilities of the current generation cellular networks have
arisen as a consequence of several advances in mobile phone architecture and
design:
The MNOs have a significant sunk investment in upgrading their networks from
2G to 3G—so they are fully committed to data applications. Handset OEMs, on
the other hand are looking for applications that can serve as triggers for mass-
marketing of high-end phones. Mobile financial applications represent a
significant opportunity for both camps.
The creation of financial applications for mobile phones is part of the larger
picture of automation of the financial applications themselves. The last decade
has witnessed a transformation in the ways in which financial transactions are
conducted—and while shaky lending and risk management strategies over the past
decade has led to the worst financial debacle since the Great Depression of 1929—
many of those automation innovations remain sound and will continue to be
exercised in the decade ahead.
The most influential automation trend in the financial sector is undoubtedly that of
core banking solution implementation. Governments around the world have
concluded that the banking habits of its each country’s citizens plays a major role
in ensuring fiscal discipline at micro as well as macro levels. Core banking
solution automation is an extremely effective tool in ensuring quicker
implementations and extending the reach of the banks into its target markets. A
physical manifestation of reach is the growth in the number of bank points of
presence (PoP). Core banking adds automated teller machines (ATM) and user
devices such as PCs and mobile phones to the list of bank PoPs. The influence of
core banking application automation extends beyond conventional banking
functions and encompasses the large variety of financial services offered by the
institutions including stock-broking, credit card issuance, and insurance among
others.
practical and innovative adoptions of financial applications for the mobile phones
are being seen in the emerging markets.
This section introduces concepts that are pivotal to understanding mobile phone
financial applications. While some of these relate to the technologies adopted by
stakeholders, others refer to influential directives, guidelines and resolutions
adopted by stakeholder groups.
2.4.1 Basel II
The Basel Accords, framed by the Basel Committee for Banking Supervision, are
sets of recommendations that banking regulators of member countries can use to
draft laws and regulations. The committee was set up in 1974 by central banks of
ten countries. Its current supervisory members include Belgium, Canada, France,
Germany, Italy, Japan, the Netherlands, Switzerland, Sweden, UK, USA,
Luxembourg and Spain.
• Mobile banking;
• Mobile stock trading;
• Mobile proximity;
• Mobile credit cards;
• Mobile payments; and
• Mobile P2P.
2.4.2 Bluetooth
NFC is a short haul wireless technology with a range of 10 cm. The NFC standard
was approved in 2003 as ISO/IEC standard. The chief driver companies of NFC
are NXP, Nokia and Sony. The NFC initiative is now largely sustained by the
NFC Forum which currently has close to seventy members; the key ones being
MasterCard International, Matsushita Electronic Industrial Co, Ltd, (Panasonic),
Microsoft, Motorola, NEC Corporation, Renesas Technology Corp., Samsung,
Texas Instruments and Visa International.
NFC supports data rates up to 424 Kbit/s. It uses Manchester coding for higher
data rates and modified Miller coding for the lower rates. Designed specifically for
interfacing smart cards with mobile phones, the NFC technology clubs the
interfaces of a reader and a smart card along with P2P features in a single device.
NFC is an unlicensed waveform and operates in the 13.56 MHz band with a
bandwidth of 2 MHz. NFC can work in simplex as well as duplex modes.
• Mobile proximity;
• Mobile credit cards; and
• Mobile payments.
2.4.4 Java
Java forms the core of the majority mobile financial application clients and
servers. The Java programming language was introduced in 1995 by Sun
Microsystems. Java is an object-oriented language that can be used to prepare
universally executable files. It is this universally executable feature of Java that
has made it the programming language of choice for the mobile phone
applications. Java is freely downloadable, which brings down development costs.
The universal acceptability of Java is entirely on account of the Java byte code,
which can be read by the virtual machine, an end-device specific code interpreter.
This code interpreter can be loaded on practically any computing device as well as
all the leading browsers. Historically, universally compatible Java executables ran
slower than machine specific executables, but this discrepancy has been addressed
to a great extent by recently introduced compilation techniques such as just-in-
time compilation, dynamic recompilation and static compilation. These
compilation techniques optimally convert portions of byte code into machine
specific code in order to achieve maximum execution speed.
Java runs across leading mobile phone OSes such as Windows Mobile, Linux,
Symbian and Palm among others as well as server side platforms such as
Windows, Solaris and Linux. The Java Enterprise Edition (JEE) can be used to
build a veritable array of server side applications.
A subset of Java, Java Micro Edition (JME), is used for developing applications
that can run on browsers with small form factor devices such as mobile phones.
JME runs with mobile phone application processors such as ARM9. JME source
code is feely available under the GNU public license. Importantly, JME code can
be test run on PCs and then ported to mobile phones, unlike other mobile
application development environments. JME works with limited libraries with the
minimal amount of functionality required. This set known as connected limited
device configuration (CLDC) is the platform on which applications are built.
Java plays an important role in all mobile financial applications discussed in this
report.
WAP has been around for close to a decade, but success has come as a
consequence of the growth the 3G handsets. The running version of WAP is WAP
2.0.
WAP has practically turned the mobile phone into a computer, and it is the ability
of mobile phones to access Internet that forms the backbone of mobile financial
applications. While it is possible to implement mobile financial applications with
limited capabilities using SMS (short message service) and USSD (unstructured
supplemented service data); it is WAP that has contributed to the overwhelming
appeal of mobile financial applications.
The WAP protocol stack is analogous to the OSI model. It consists of the
following layers (from bottom to top):
WAP plays an important role in all mobile financial applications discussed in this
report.
An application server, as the name suggests, handles the processes and logic of
various applications and interfaces those applications to the larger infrastructure
ecosystem. Application servers typically have dedicated hardware and software to
run the application services, which are accessed by other infrastructural elements.
Application servers run on all major platforms including Java, Microsoft and
others.
2.5.1 Introduction
• Provide additional channel for banks and MNO for strengthening customer
relationship;
• Maintain the discrete nature required of banking;
• Enhance ubiquity of banking services; and
• Offer cost effective alternatives to traditional banking channels.
2.5.2 Drivers
• Mobile banking drastically reduces the cost of client servicing for banks,
as they don’t have to invest in physical infrastructure such as branches,
personnel and other points of interfaces. Mobile banking provides the bank
a new channel to sell its other products like personal loans, credit cards and
vehicle loans among other products. This is true, especially in price-
sensitive emerging markets. In such markets, the number of mobile
subscribers often exceeds that of banking subscribers. Unsurprisingly,
countries such as India have been receptive to mobile banking with most
banks offering extensive mobile banking services.
when mobile banking applications made their first appearance a little more
than a decade ago, it was the banking solution vendors that were
aggressively marketing them. It is apparent that the added muscle of
wireless operators has played a major role in popularization of mobile
banking in markets with a higher degree of competitiveness for wireless
operators.
• Apart from providing added channels for banks to reach customers, mobile
banking offers wireless operators with the option to enhance its brand-
value and in some cases, emerge as a bank in addition to the revenues
gained through data traffic over their networks.
Mobile banking consists of two major functions groups: account query (balance
enquiry, transaction enquiry and others) and financial transactions (fund transfer,
credit card payments and others).
Figure II-1 shows a block diagrammatic representation of SMS, USSD and WAP
based mobile banking. The host system is the core banking solution.
Figure II-1 Schematic of the SMS, USSD and WAP-based Mobile Banking Solution
Source: Infosys
The core components of SMS banking are the core banking server, the mobile
banking server, SMS service provider and the MNO in addition to e-mail and
database servers. Push and pull message request and delivery processes are
employed. The database push server is collocated with the core banking server
while the email push and pull servers are collocated with the Internet banking
servers.
The mobile banking server handles the push and pull requests from the core
banking server and the end-subscribers. The push requests originate either from
database server or the e-mail server. The mobile banking server forwards the push
request to the bulk SMS service provider over a HTTPS (hypertext transfer
protocol secure) link. In a pull operation, the subscriber keys in specified key
words and sends the SMS to the bank’s server. The e-mail push, database push and
pull requests are handled by different servers.
USSD based banking: USSD is a real time instant message delivery capability
associated with GSM phones. USSD is independent of the SMS and has faster
response time than SMS. Additionally, USSD codes can be used even while the
subscriber is roaming as the USSD commands are routed back to the HLR of the
user.
USSD1 allows only one-way communication from the subscriber to the network,
while USSD2 allows two-way communication and is hence used for mobile
banking.
The set-up for USSD based mobile banking is similar to that of SMS, where the
SMSC server is replaced by the USSD gateway. Originally used for retrieving data
such as pre-paid balance, USSD is now employed for mobile financial transactions
such as account queries. USSD functions on the basis of pre-assigned short-codes.
The important aspect of USSD is its superior support for data security. Apart from
supporting encryption methodologies, USSD does not leave a trace of the sessions
on the handsets or in the operator’s infrastructure. The only location where the
session log exists is the bank server. On the flip side, USSD sessions are hampered
by the limit on maximum number of characters (160) imposed by the handsets.
Secondly, operators play a major role in defining the session characteristics such
as time-limits per session and short code definitions. The time-limit can
compromise the effectiveness of the session.
The core banking and the mobile banking servers primarily exchange data related
to authentication, authorization and security aspects. In many cases, the mobile
server is hosted at a third party data center, in which case, a dedicated link
between the mobile banking and core banking servers is the preferred connectivity
option as compared to Internet based connectivity between these servers. Also, in
this case, the onus of mobile banking server security rests squarely on the firewall
present in the third party data center.
Unified solution: New age solutions for mobile banking aim at integrating all
mobile banking modes into a single architecture. For example, Opus Software,
partnering with Hewlett Packard, has developed the electronic financial
transaction switch (EFTS). The EFTS is employed to interface the core banking
server with the composite mobile banking server. The EFTS allows banks and
wireless operators to simultaneously operate disparate channels of service delivery
such as ATMs, POSes (points of sale), Internet banking, phone banking and
mobile banking among others.
• The same concern about physical and data security of the mobile phone is
applicable to mobile banking as an application. Mobile phones are
vulnerable to theft. And while GSM and CDMA interfaces have extremely
robust security, SMS and USSD messages are transferred without any
encryption, making them marginally vulnerable. The WAP data, on the
other hand is always encrypted lending an almost foolproof security to it.
2.5.5 Summary
Participants MNO, Banks, Bulk SMS providers, core banking solution providers
Major driver participants Core banking solution providers, banks
Role of MNOs Generic. Limited to providing data network connectivity to the
customers.
Revenue sources for participants MNOs – Data revenues, Bulk SMS providers – SMS revenues, Core
banking solution providers – royalty, licensing and implementation
revenues
Other benefits for the participants Banks – Additional channel to reach customers
Client side key technologies Java, SMS
Server side key technologies Java, SMS
2.6.1 Introduction
Mobile stock trading enables traders to buy and sell financial instruments such as
stock, options, futures and commodities using the trading application client
residing on their mobile phones. These application clients are tied to brokers who
trade in behalf of the mobile phone subscribers. The brokers may allow the
instruments to be traded on multiple exchanges.
2.6.2 Drivers
Mobile stock trading has caught on in the last half a decade as a consequence of
better network performance, improved displays and computing capabilities of the
new generation of mobile smartphones. The key to the applications success is the
speedy availability of content related to details of listed companies and the
updated business portfolio and the ability to maintain and update personal
portfolios with the handset.
The key drivers for this segment are the brokerage houses. It is not difficult to
imagine the incentives for the brokerage houses:
• Trading instruments have far outgrown the conventional stocks. The recent
meltdown notwithstanding, diverse instruments such as derivatives, futures,
options and commodities are here to stay. All these instruments can be
traded in a manner similar to stocks. Most of these instruments are based on
complex trading principles and are more lucrative for the end-traders than
regular stocks in terms of margins and brokerages. These instruments also
generate more traffic as their transaction sizes are larger than regular
stocks. However, implementing these instruments is expensive for the
exchanges and brokers. Mobile stock trading can provide the required
number of subscribers to the brokers and help them justify their
investments in building the infrastructure to trade in these instruments.
• The ubiquity of the Java platform has played a major role in the adoption of
mobile stock trading. The Java platform is simple yet flexible from the
application programmer’s perspective. Many brokers have either engaged
The level of MNO active participation in mobile stock trading is lukewarm with
the possible exception of Japanese MNOs. The Kabu Ketai 920SH YK mobile
phone, as shown in Figure II-2 offered by Softbank Mobile (manufactured by
Sharp) in Japan is a case in point. The increasing acceptance of mobile stock
trading has led to the advent of mobile phones specifically designed to enhance the
stock trading experience.
Figure II-2 The Kabu Ketai 920SH YK: The Mobile Stock Trading Friendly Phone
Source: www.gizmag.com
This phone is designed to optimize the experience for online trading and portfolio
management. The distinctive feature of this phone is the swivel 3.2 inch VGA
LCD widescreen. The phone runs on WCDMA and features a single-keystroke
enabled stock trading application launch. This application runs the stock trading
site E-Trade Securities.
The architecture of mobile stock trading is a direct reflection of the fact that the
brokerage firms are its primary drivers. To put it very simply, the architecture
involves WAP-enabling the brokerage firm’s internal servers and those that are
client-facing with dedicated applications that can optimally utilize the resources of
the mobile phone.
The stockbroker’s setup includes provision for receiving feeds about stock or
commodity information from the exchanges. This information has to be
disseminated across the customers for various end-applications in various formats.
The feed reception is handled by a functional block commonly known as ticker
plant. The ticket plant consists of feed handlers to receive feeds from different
sources such as exchanges and aggregators. They reformat the feed so that it can
be read by the downstream parties such as trader-customers, pricing applications
as well as algorithmic applications for trading.
The reformatting is the most challenging part of the architecture as the feeds have
to be obtained at high data rates in a real time manner. Moreover, there is no
uniformity in feed-formats originating from the different exchanges, necessitating
infrastructure to normalize the feed. The most commonly used feed formats are
the ones supplied by Reuters and Bloomberg. The normalization is handled by the
ticker plant. Moreover, the trading formats are non-uniform. The most commonly
used trading protocol is the Financial Information eXchange (FIX). The ticker
plant is usually structured in redundant clusters, in order to ensure high
availability.
The message bus primarily handles the management of trading orders from the end
users. These orders are sent to the respective exchanges for execution. The broker
has to offer as accurate price information to the trading customer as possible. To
ensure this happens, the latency between the trader and the broker should be
minimal. The increase in wireless data rates on account of HSDPA (high speed
download packet access) has gone a long way in correcting the relative
disadvantage faced by mobile phones compared to its wireline counterparts.
Figure II-3 shows the iWin stock broking client developed by Financial
Technologies. It is important for the mobile phone stock trading application client
to be compatible with as many phones as possible. This compatibility can be
achieved by developing the application in a widely accepted language such as
Java. Java runs on a vast majority of phones.
2.6.4 Challenges
has to re-enter the password if the application is inactive for five minutes. E-Trade
has put in place, a fraud guarantee mechanism that covers the losses of its
customers in case of misuse of the application due to handset theft/misplacement.
2.6.5 Summary
2.7.1 Introduction
RF-based transaction systems demonstrate that the mobile phone – wireless PAN
combination is as potent as the erstwhile PC-LAN combination in terms of
computing power and more effective by several degrees than the latter. A quick
glance at the memory and computing capacities of the modern smart phone
suggests that they are comparable, if not better than the PCs that were available
several years ago—and wireless connectivity options available to mobile phones
weigh favorably against a hard-wired LAN setup.
2.7.2 Drivers
The drivers for mobile proximity applications are diverse and vary from
application to application. The consistent thread in all such applications, however,
is to employ the mobile phone in order to simplifying what would otherwise be
extremely complicated transactions. The salient feature of all these applications is
that they are exclusive to mobile phones and not mobile phone derivatives of
existing online applications such as banking, stock trading and others. For
example, consider the mobile phone as a payment validation device. Here the
phone performs various functions such as subscriber authentication, transaction
co-ordination with the central database, acknowledgement generation and record
storage functions. While it can be argued that a PC can perform the same
functions, it is almost impractical to use a PC on a mass scale in far-flung areas
with limited connectivity options. Additionally, mobile phones have the form-
factor advantage. They can be used conveniently near POSes. No other device is
that versatile.
supported devices to manage a wide variety of functions, based upon the intended
usage.
NFC and Bluetooth are the key enabling technologies along with WWAN
standards.
• NFC allows the target receiving device to source power from the
transmitting source device in a passive communication mode, making it an
ideal option for smart card communication, as smart cards do not have
battery sources. This advantage opens up potentially limitless number of
NFC-enabled applications.
2.7.4 Challenges
A major drawback of NFC is its poor security. It relies mostly on the proximity of
communicating devices, and has little in the way of built-in robust security.
Security has to be provided by the devices themselves in the form of encryption
mechanisms. However, it should be remembered that the existing use-cases of
NFC are limited to proximity based transactions that are practically impossible to
snoop into on account of the short distance between communicating devices and
the very limited transaction time.
Chapter II Reproduction without permission 29
of the publisher is prohibited
The
Insight
Reports
2.7.5 Summary
2.8.1 Introduction
This application is not to be confused with the mobile enabling of online payment
options such as PayPal. The key factor about mobile phone as a payment device is
the wireless connectivity it affords the retail application, which is predominantly
based on WPAN protocols such as Bluetooth, NFC and others.
2.8.2 Drivers
The key a successful mobile retail application lies in loading credit on the mobile
phones. Figure II-4 shows the schematic of mobile retail infrastructure.
The credit could be linked to the customer’s credit or debit card, bank account, or
the customer can top up the credit by remitting cash to the provider. Whenever the
customer makes a payment using the mobile phone, the corresponding
credit/debit/bank account gets charged through a payment alert send via cellular
wireless network and the amount gets credited to the merchant account through a
secure payment gateway. The merchant account then sends a payment
confirmation to the reader terminal – this connectivity can also be wireless.
Credit card companies have a natural advantage here as they already have in place
a setup that monitors the credit and debit transactions of customers on a mass scale
on a real-time basis.
2.8.4 Challenges
2.8.5 Summary
2.9.1 Introduction
The concept of mobile credit cards is not new. Companies such as Motorola have
been propagating this idea for close to a decade. What stalled acceptance of the
mobile credit card? There was a lack of readiness of among the stakeholders as
well as the limited data capabilities of the earlier generation of mobile phones.
These hindrances have been addressed satisfactorily in most countries and mobile
credit cards seem much closer to taking off.
2.9.2 Drivers
Mobile phone enabled credit card saves the user the hassle of carrying a credit
card. Its functionality is similar to retail applications using mobile phones. But
there are important differences in the two scenarios:
• The MNOs play a much more active role in implementing mobile credit
cards unlike mobile retail applications. Any large-scale acceptance of
mobile phone credit cards requires influencing the OEMs and POSes, the
two principal participants. While credit card companies can wield their
influence on merchants operating the POSes through their well-established
business models, it is only the MNOs that can bring the OEMs on board. In
most markets, MNOs subsidize handset costs and therefore they can
influence handset vendors to embed the necessary technology in the mobile
phones for their subscribers. Any initiative involving credit cards will
succeed only if the volume of participating users is high. MNOs alone have
the muscle to ensure such high levels of participation.
NFC is the bulwark of mobile credit cards; it is the handset-embedded NFC chip
which stores subscriber credit card information. This data can be read by the credit
card readers at merchant’s terminal. Other components of the solution include:
• Interactive voice response (IVR) for navigating the customer through the
financial transaction
The mobile phone also needs to incorporate the credit card strip conforming to
ISO/IEC 14443, the specification for proximity contact-less identification cards.
(These specifications govern the following aspects:
A less frequently used approach is to embed the credit card reader into the mobile
phone, as shown in Figure II-5. This type of functionality is useful for mobile
professional and others that need to accept payments at different locations. For
example, taxi drivers might find this function very useful.
Figure II-5 Front and Back Views of Mobile Phone Card Readers
Source: www.gadget-reviews.com
The mobile phone has keypads on both sides: corresponding to the phone and card
reader functions respectively. The architecture of the mobile phone is similar to
the mobile phone with credit card embedded.
2.9.4 Challenges
Mobile credit cards face a formidable set of business challenges. If the MNOs get
behind the effort to develop this market, their acceptance would add muscle to the
efforts of credit card companies in getting more customers onboard. At the same
time, the MNOs represent a threat to the credit card companies. It is important to
remember that there is already a formidable amount of overlap between
functionality of credit card companies and MNOs in the areas of customer
verification, billing and credit limit risk assignment. This is quite evident in the
Japanese market where NTT DoCoMo is the principal driver for mobile credit
cards. NTT DoCoMo performs the function of identifying and partnering with
merchants —a function that has hitherto been the exclusive domain of the credit
cards companies.
2.9.5 Summary
Participants Retailers, Financial institutions (banks, credit card companies), Mobile Phone
OEMs
Major Driver Participants Credit card companies, Application developers, MNOs, Mobile phone OEMs
Role of MNOs MNOs are involved in activities across the board —they influence OEMs to
embed the functionality in the handsets, interface with credit card companies,
partner with merchants to accept mobile credit cards and they play a major role
in branding, billing and collections as well
Revenue Sources for Participants Credit card companies – service charges, MNOs – percentage of service
charges
Other benefits for Participants Credit card companies get a ready customer base of the MNOs where their
customer verification effort is minimal. MNOs get a foothold in the credit card
business and an additional revenue stream in the form of share in service
charges
Client Side Key Technologies NFC, Java
Server Side Key Technologies Java
2.10.1 Introduction
In their conventional form, bar codes are used for identification and authentication
of objects. Mobile phones have transported the usage of bar-codes to the next
plane by metamorphosing them into marketing and troubleshooting tools.
Barcodes are equivalent of URLs in the real world. Photographing a barcode is
akin to saving a URL on the device. User can click the barcode and be led to
details about the offer. The applications for mobile barcoding are immense. For
example, bar code readers embedded in a mobile handset would give customers
the ability to access pages of product information or view the most recent product
discounts or promotions just be just clicking on the photographed bar-code tag.
Troubleshooting information could be downloaded to the phone the same way.
Each of these applications would result in either direct revenues or gains due to
cost savings, so we have categorized mobile bar coding as a financial application.
Unlike mobile banking and stock trading applications, which are essentially
mobile versions of their online formats, mobile barcoding is almost exclusive to
the mobile domain for the simple reason that it is impossible to envisage the
phenomenal spread of barcode based promotion if the reader devices were
stationary. Mobile phones are ubiquitous and can reach the barcodes wherever
they are present – billboards, transport stations, magazines or even toys. Although
a PC based implementation is possible, and available, it is the mobile phone that
has added the winning edge to this application.
2.10.2 Drivers
Bar codes provide a foolproof authentic identification for the products they are
printed on. Mobile phones provide the reach and ubiquity that the product vendors
are looking for. Together, mobile phone bar code readers provide a cost effective
means of disseminating accurate product/service data to the vast audience of
mobile phone users.
The strongest drivers for mobile bar-codes are undoubtedly the merchants who are
trying to sell the bar-coded products. Mobile bar coding not only provides them
with greater reach and the same time as it cuts down on their marketing costs and
efforts. The reach of the product is enhanced in a completely unconventional
fashion. Traditional advertizing and promotion involves the vendor reaching out
‘to’ the customer. Thus the vendor has to take the effort and make investments in
order to ensure that the offering is closer to the user eyeballs. Vendors invest in
promotion through audio-video, print and Internet media. In the first two cases –
time and space are at a premium and the message has to be delivered in a concise,
yet effective manner. Mobile barcoding, combined with Internet access, frees the
vendors from this burden. The vendors can now offer the prospective buyer as
detailed a description of their offering as needed by just integrating a barcode in
their promotional offerings. The barcode acts as a gateway to the details.
From user’s point of view, the bar code reader enabled mobile phone is an
extremely convenient way for the customer to access the information, especially
when one considers that the common alternative is trying to remember and then
typing a long URL string. Mobile bar codes are also handy as troubleshooting
resources. Users can discover the steps to a trouble-shooting procedure by simply
clicking on a bar code tag. In this example, the mobile bar codes add value to the
vendors’ after sales support without having to invest in help-desk staff to address
troubleshooting queries.
Unlike NFC enabled handset that can be used only with specific merchants or
products, a bar code reader handset can be used wherever the barcoding format is
employed; thereby enhancing its appeal. For the mobile phone OEMs, the bar-
code reader is an added feature that has the potential to bring in additional
revenues.
The user photographs the bar code tag of the product/service of interest with the
camera phone. When the user clicks on the photographed bar code tag, the tag
links the user to the data resource available at the underlying URL (uniform
resource locator) through connectivity over the wireless operator’s network to the
index/management server and content server. Steps involved in mobile bar coding
are shown in Figure II-6.
Source: www.colorcode.com
User can take further action such as gathering product information, buying the
product/service or following the troubleshooting steps.
Mobile bar coding formats have evolved well beyond the universal product code
(UPC) bar code that appears on most goods in supermarkets and retail stores.
Among the more popular codes are:
Figure II-7 Advantage of Two Dimensional QR-code over One Dimensional Bar Code
Source: www.denso-wave.com
Source: www.xbox.com
2.10.4 Challenges
There are operational hassles such as lack of clear photographs to use the barcode
tags.
2.10.5 Summary
2.11.1 Introduction
The term “peer-to-peer” is most often used in the context of sharing files on the
Internet, and it acquired something of a negative connotation after the Napster
copyright infringement imbroglio. Mobile P2P application discussed in this
Chapter II Reproduction without permission 42
of the publisher is prohibited
The
Insight
Reports
2.11.2 Drivers
• Apart from the appeal to those with no formal banking relationship, mobile
P2P is an effective payment mechanism for regular mobile phone users to
transfer funds. Mobile P2P is a hassle free way of transferring money for
personal and business purposes. The mechanism is as effective as putting
the money directly in the recipient’s wallet.
The system can be driven by the MNO, bank or a P2P service provider. The
customer (sender) needs to carry a one-time process of downloading the P2P
application on the mobile phone followed by linking the bank/credit card account
with the application. The receiver need not have the application downloaded on
the phone. However, the receiver needs to provide the bank account information
to the P2P service provider to facilitate the remittance of funds to the account.
The setup consists of the P2P platform including application server and database
server, which is closely integrated with the bank for payment settlement.
Figure II-9 shows P2P application offered by Obopay. The P2P service provider
can accept inputs via SMS or the WAP application on the mobile phone. The
application can also be integrated with wireline web application and telephone-
based IVR applications.
Source: Obopay
The subscriber user can employ SMS or WAP application on the mobile phone to
initiate the transfer of funds. The sender needs to know only the mobile phone
number of the recipient to send the funds.
Figure II-10 shows the PATSend mobile P2P interface developed by CPNI. The
receiver gets an alert in the form of an SMS or P2P application specific
appearance.
Source: CPNI
2.11.4 Challenges
The success of mobile P2P depends on the number of banks willing to participate.
Active interest of MNOs and banks is also essential to ensure wider acceptance.
For this to happen, expectations about their respective positions in the value chain
and the payouts should be clearly set in order to avoid conflict of interest.
2.11.5 Summary
2.12.1 Introduction
Mobile gaming is the facility to play interactive games on the mobile phone
console. Mobile gambling refers to the facility to participate in gambling
applications using mobile phones. Both the facilities are mobile extensions of
their wireline counterparts.
2.12.2 Drivers
Source: www.devicearena.com
Nokia has also developed the N-gage gaming platform for its high end handsets.
Mobile network operators find gaming attractive as it presents them with a number
of revenue opportunities including data transfer during multi-player gaming as
well as gaming application downloads. Nokia and other OEMs are also acquiring
specialized mobile gaming developers to include widen their gaming portfolios.
For gaming enthusiasts, mobile gaming is much more cost-effective when
compared to PC-based gaming, which requires buying dedicated gaming consoles.
The cinema industry finds mobile gaming an effective tool to propagate and retain
the recall of their movies and other content.
The mobile phone is also an effective channel for casinos and gambling companies
to expand their customer base. Customers can place bets remotely and on the
move.
Mobile gaming has come a long way from the iconic ‘snake’ and its variants.
There are multiple ways of loading games on the mobile phone such as over the
air (OTA) using wireless operator’s network, via mobile phone Internet, from the
PC and pre-loaded by the mobile phone OEM. The OTA loading requires
extensive participation from the operator’s side.
Mobile games are developed like any other application running on mobile phone
OSes such as Symbian, Linux, Palm, BREW, Windows Mobile and others. In case
of multiplayer games, role-playing games (RPG) are turning out to be the most
popular ones. In these games, participants are assigned roles mostly based on
popular fiction or facts.
These games usually involve a gaming service platform hosted by the MNO. This
platform is connected to the various application servers that run single or multiple
games and to the gaming user database. The user database contains gamers’ user-
specific information such as scores, teams and download history. The entire setup
is closely integrated with the operator BSS.
2.12.4 Challenges
The major technology challenge for mobile gaming is the form-factor of the
mobile phone that lays down strict limitations on the gaming developer.
Additionally, computing resources are scarce and therefore mobile games are not
able to match the stylishness and graphics of their wireline counterparts. Also, the
unpredictable nature of wireless network throughput severely restricts the
interactivity levels of mobile gaming and gambling applications.
There are no foolproof means of ensuring that children are not exposed to mobile
gambling unlike wireline or conventional gambling. This risk raises a crucial
question mark over the ethicality of mobile gambling
2.12.5 Summary
CHAPTER III
ILLUSTRATIVE CASE STUDIES
3.1.1 Introduction
Chinese Construction Bank (Asia) Ltd (CCB), formerly Bank of America (Asia) Ltd
is a pioneer in WAP-based mobile banking services in Hong Kong. The service under
discussion was rolled out in 2001.
The bank has 20 branches in Hong Kong. The mobile banking services offered by
CCB support the following features:
• Account balance;
• Credit card balance;
• Portfolio status enquiry;
• Transaction results / updates;
• Currency rates;
• Fund transfers;
• Buying and selling currencies; and
• Bill payments.
Financial services platform (FSP), a product of the Toronto-based 724 Solutions Inc,
forms the backbone of the CCB mobile financial services infrastructure. Edgematrix
Pte Ltd, Singapore has supplied the Xgate WAP gateway and WAPman mobile micro
browser. Although FSP has a dedicated mobile banking module, CCB chose to select
the Edgematrix solution for the task. Xgate is compatible with all major CBSes.
Xgate is a multi-channel delivery server targeted specifically at the MNO
environment. It also helped that 724 Solutions had prior experience of interfacing the
FSP with Xgate.
The system is designed on the SUN Solaris platform. The FSP and Xgate had to be
made to interface with the bank’s legacy system. The network security is managed by
the firewall supplied by checkpoint.
3.1.3 Perspective
CCB was one of the first banks in the world to offer WAP based mobile banking
services. It ranks amongst the highest-rated banks in Hong Kong.
The mobile phone market in Hong Kong is saturated with close to 100 percent
penetration. As is to be expected in mature markets, the customers gravitate towards
differentiators and end-to-end solutions, as opposed to standalone or one-off
solutions. CCB traditionally caters to the customer base in the mid to upper
segments, medium and small businesses.
CCB wrested the first mover advantage in this market. CCB claims that being first to
the offer mobile banking solutions has resulted in the increase in the customer base.
The importance attached by CCB to a quick roll-out is evident by the project’s
timeline. It took CCB six months to design the customer interface and integrate this
design with the legacy system of the bank. This was followed by obtaining of the
statutory approvals, in this case the Hong Kong Monetary Authority, as well as
addressing security issues. CCB was followed by the Bank of China Hong Kong and
DBS Bank, who launched mobile banking services.
CCB presents an interesting example of how of the factors that shaped the
introduction of WAP-based banking in 2G networks. While it is an accepted fact that
the success of 3G hinges purely on data applications, it is equally true that most of the
Chapter III Reproduction without permission 52
of the publisher is prohibited
The
Insight
Reports
services facilitated by 3G have their origins in the pioneering efforts of the 2G era. In
that era, mature mobile markets like the ones in Hong Kong provided the banks with
a required level of confidence to introduce mobile banking.
It is important to remember that CCB (earlier called Bank of America Asia) was the
most profitable subsidiary of Bank of America, which provided the leeway to venture
into unchartered territory. This effort had its share of skeptics. The strongest skeptics
of CCB’s initiatives were its competitors, who clearly underestimated CCB’s
determination towards a quick roll-out and the subsequent customer response.
Consequently, they too had to follow suit.
This case is also interesting from a technology perspective wherein a new-age mobile
banking server has had to be interfaced with the bank’s legacy mainframe. Obviously,
such an interface would not have been possible in the timeframe had it not been for
the close co-operation between three vendors – 724, EdgeMatrix and Sun.
3.2.1 Introduction
Alawsat Mobile is a mobile stock trading service offered by the Kuwait and
Middle East Financial Investment Company (KMEFIC). The mobile stock trading
application was rolled out in 2002.
Alawsat Mobile was built upon the existing comprehensive trading product suite
the customer can access at Alawsat.com. This operator-independent service works
with any Java enabled phone. The choice of Java is significant, as almost 90
percent of the mobile phones in the Kuwaiti market support it. Other pre-
requisites for the customer are a valid account and subscription to the service. The
mobile application is designed for both J2ME (Java 2 Micro Edition) and SMS
enabled mobile phones.
The mobile application features a scrolling ticker to display real time stock quotes.
The application is available in English and Arabic languages. The client can be
downloaded and installed over the air.
Real time stock trading information such as analysis on company stocks, market
depths and market statistics is delivered to the mobile user via SMS upon request.
Additionally the application can send SMS messages to users notifying significant
changes in the stock market. Figure III-1 shows some screenshots of the Alawsat
mobile stock trading application.
Source: KMEFIC
The solution was provided by the Sri Lanka/Malaysia/India based hSenid Mobile
Solutions. The entire mobile banking infrastructure was implemented on an open
source platform to keep the total cost of ownership and the implementation costs
low. The hSenid’s mStocktrading solution was interfaced to the already existing
on-line trading product, and the mobile interfaces were made similar to the older
package in order to keep the familiarity of the interface intact for the clients.
Alawsat mobile has addressed the issue of information misuse. If the phone is
stolen there are provisions for the automatic removal of trace logs and transaction
information from the mobile phone.
3.2.3 Perspective
KMEFIC has more than 20,000 online customers, making it the largest online
stock broking service provider in Kuwait. KMEFIC wanted to take this advantage
to a new level by creating a mobile stock trading service on a pioneering scale.
Unsurprisingly, this service was first targeted at its online customer base. The
existing customers were offered the option of continuing with their existing
Internet stock trading ID, password and Trading PIN to access the mobile service
as well. There were no additional costs for the clients to sign up for the new
service. Additionally, mobile stock trading gave KMEFIC an opportunity to grow
its customer base in tandem with the growth in mobile phones. There had been a
sizeable number of customers that regularly called the company’s office to
conduct trades; using mobile stock trading, KMEFIC was able to reduce their
operating costs because fewer people were required to process these transactions
even with the number of transactions increased.
KMEFIC became the first stock brokering house to provide a comprehensive suite
of on line and mobile phone stock trading services in the region, resulting in a loss
of trades to the competitor brokers.
Kuwait is a mature market for mobile telephony. It has the required presence of
the key drivers for mobile stock trading—adequate availability of handsets with
top-of-the-line graphics, widespread prevalence of online stock-broking clients
and a vibrant capital market ecosystem. KMEFIC has tapped these drivers
skillfully in rolling out Alawsat Mobile.
On a broader note, mobile stock trading is unlikely to edge out its online wireline
counterpart, as long as the bandwidth availability for wireless and wireline media
is so disparate. For delay sensitive applications such as stock trading, a higher
bandwidth invariably translates into a better performance. However, the appeal of
mobile stock trading is in bringing the desired number of traders to the table by
leveraging the reach of the mobile phone to the hilt; something that is clearly
demonstrated by Alawsat Mobile.
Chapter III Reproduction without permission 56
of the publisher is prohibited
The
Insight
Reports
Alawsat Mobile is network agnostic, which is usually the case with mobile stock
trading applications. There are, however, examples of active MNO involvement
in mobile stock trading. Schwab Canada, another pioneer among those promoting
stock trading on mobile phones, works in a revenue sharing arrangement with
network operators such as Sprint-Nextel, and AT&T Wireless Services in
countries such as Canada, US, and Hong Kong.
3.4.1 Introduction
The system works in the following manner. The payment is handled by public
sector banks (PSB), which are managed by the Government of India as well as by
private banks. PSBs play another major role here, and that is of financial inclusion.
Financial inclusion, as the name suggests, refers to the process of bringing on
board those sections of the society that have been traditionally deprived of banking
services. Around 40 percent of the Indian population does not have access to the
financial service and are largely unbanked, meaning they do not have access to the
banks. The central bank of India, known as the Reserve Bank of India (RBI) has
allowed PSBs to be more flexible in the use of technology to achieve the targeted
financial inclusion numbers. PSBs do not have the muscle to reach the targeted
markets, which exit at the village level. They therefore, appoint business
correspondents (BC), who can help the banks extend their reach beyond their
limited reach. The BCs, in turn, get the required field force in the form of
customer service points (CSP), or local volunteers. The beneficiary (worker)
registered under the NREGS is issued a Smart Card for the storage of personal
details. The CSPs, the local volunteers, manage interaction with the end user. The
authentication of the end-users is handled using a biometric finger-print reader.
The mobile phone records the transaction (disbursal of wages, pensions, grants)
and passes it over GSM/GPRS/EDGE connectivity to the payment gateway. (India
is yet to roll-out 3G telephony). The payment gateway, named ZERO, interfaces
with the core banking solutions of the participating banks. ZERO is a new multi
bank payment network.
HTTP is the transport protocol. The transmitted data is encrypted using 3DES and
PKI is used for authentication. The printer terminal, located in the village, is
WiMAX (wireless interoperability for microwave access) enabled. WiMAX is
used to transmit the acknowledgement receipt data from the central server to the
printer in the village, which then prints the acknowledgement. The entire
transaction takes three minutes, on an average.
3.4.3 Perspective
There are tremendous social implications, as yet unexplored, related to this use of
mobility, however, from a technology perspective the greatest impact is the mobile
phone is able to function almost like a branch of the bank.
The mobile phone stores the identity details of the customer such as name,
address, photograph, fingerprint templates, and relevant data of the savings
accounts or loan accounts of the issuing bank. The payment gateway is not just
able to support the recording of fund disbursal; it can also record transactions such
as cash deposits, fund transfers and balance enquiries using the same
methodology. An idea of the effectiveness of this service can be gauged from the
fact that in the state of Andhra Pradesh, the registration for this service has crossed
250,000 and the state government’s plan is to enroll three million people by the
end of 2008.
ALW works with the banks on a revenue sharing basis. The agents take deposits
and dispense cash for a commission. Enthused by the success of this project,
ALW is planning to extend it to countries in the Latin American, African and
Asian regions.
The success of this project has triggered a slew of similar projects. Notable ones
involve the following stakeholders:
The NREGS application is an example that effectively shatters the myth that
financial applications involving mobile phones are restricted to the tech-savvy
market segment. The NREGS payment disbursal system works in the remotest
locations of India where access to traditional banking facilities is unavailable.
Furthermore, the data transfer occurs over 2G connectivity, thereby proving that
financial applications involving mobile phones do not require the cutting edge in
data connectivity.
This example also highlights the enormous potential of the mobile phone as a
social enabler. The NREGS disbursal project has mobilized stakeholders such as
the government, PSBs, private banks, payment gateways, operators, handset
manufacturers and semiconductor. Together, they have created an ecosystem that
Chapter III Reproduction without permission 59
of the publisher is prohibited
The
Insight
Reports
is extremely scalable in the current format and easily replicable for similar
activities. And, the mobile phone is at the center of it all. In the context of this
project, mobile phone offers the following advantages:
3.5.2 Introduction
The C1000 supermarkets, based in the Netherlands are owned by Schuitema N.V.
Schuitema deals in groceries supplies and services to supermarket chains in the
Netherlands along with personnel training, shop automation and shop design.
Apart from C1000, its customers include Konmar and Kopak.
C1000 carried out a pilot of debit card-based mobile phone enabled shopping at its
store in Molernaarsgraaf during October 2007 through April 2008 for about 100
customers.
be located at individual stores. The back office is built around an Oracle database
server.
The customer debit card accounts were managed by Rabobank. The Rabobank
Group, founded on co-operative principles, is a complete financial services
provider. It includes 174 independent local Dutch Rabobanks, a central
organization (Rabobank Nederland) and a large number of specialized
international offices and subsidiaries. LogicaCMG integrated the whole system
with that of Rabobank. The account data was fed into the phones manually for the
pilot purposes.
NXP provided the NFC infrastructure, including mobile phones required for the
setup. Nederland, the RFID specialist provided consultation on RFID deployment.
The networking infrastructure for the project was built by KPN International, a
Netherlands-based carrier and provider of IP (Internet protocol) and data services
to corporate customers, Internet service providers and others. KPN owns and
manages an international fiber-optic network spanning 22 European countries in
addition to worldwide connections.
3.5.4 Perspective
The C1000 supermarket claims to be the first payment systems linked to debit card
accounts. Apart from speeding up the payment at the cash register, bottle deposit
refunds, coupons and other credits can be stored on the phone and adjusted when
the final payment is to be made. C1000 also does away with swiping and pin
entry steps associated with traditional debit card payments.
On a macro level, mobile phones are a ubiquitous part of the European lifestyle,
with close to 100 percent mobile tele-density in many countries, including the
Netherlands. Such a market is ripe for the stakeholders to explore newer ways of
involving the mobile phone more closely with the life of their customers. Mobile
payments using NFC have been gaining receptivity in these markets simply
because the users are more open to accepting newer avenues of engaging the
mobile phone. This is one of the key reasons for why C1000 is postponing
complete deployment; they are waiting until the required number of NFC-enabled
mobile phones are in use in the Netherlands.
The mobile phones host the fare collection application, known as EasyCard is
stored in their flash memory. The handsets are sourced from BenQ and the chipset
is provided by NXP. This is the first instance of NFC application stored on a flash
card. The flash card is embedded in the NXP chip. The implication of storing the
NFC application in the flash card is that it opens up the flash card for allied
application client hosting.
3.7.2 Introduction
NTT DoCoMo’s DCMX mobile credit card service is the finest example of mobile
phone enabled credit cards.
NTT DoCoMo partnered with the Sumitomo Mitsui Financial Group for DCMX.
The limits and the loyalty programs are similar to any credit card issue system
criteria. Customers can check their balances any time. There is no annual fee for
DCMX, thus being competitive with the conventional credit cards. Credit card
payments have to be made along with payment of the mobile phone bill. Packet
communication charges are not applicable for the use of the credit card functions.
DCMX is available in the DCMX-mini version which has a lower credit limit.
DCMX-mini has a quicker sign-up procedure. Customers can sign-up online
using their mobile phone application (iMode) that involves just three steps.
For regular DCMX customers, NTT DoCoMo offers the option to choose VISA or
Master card brand of credit card system which come with overseas travel
insurance. In this sense the phone-cum-credit card is international, but only those
resident in Japan are able to subscribe to this service.
FeliCa IC technology was developed by Sony. It operates in the 13.56 MHz band.
Some of the features of Felica include the following:
• Forge-proof
• High speed secure (Manchester code based data encryption) data transfer
(up to 212 Kbit/s)
• Unlimited reuse
• Support multiple use-case scenarios concurrently
Making the mobile phone an extension of the user’s credit cards makes it a more
valuable device. NTT DoCoMo has adopted extra measures to ensure the security
of the subscriber data contained in the phone. These measures include the
following:
• IC card lock by
• Locking the phone by calling a number from the DCMX phone
• Remote locking through a pre registered phone other than the DCMX
phone
• Fingerprint authentication
• Face authentication
3.7.4 Perspective
Not only has NTT-DoCoMo been innovative, but most importantly they have
added a new stream revenue. The DoCoMo customer base is very gadget savvy,
so to stay in the forefront the company has to be continually innovative. DCMX is
a wonderful example of the enormous amount of thought and planning that NTT
DoCoMo has invested in ensuring the success of this scheme. The service was in
trials for over a year before introduction. NTT DoCoMo has control over every
stage of the credit card transaction including sale of card readers, development of
contactless technology (a predecessor of NFC), choosing credit card company
partners and of course, the mobile phones.
As a result, NTT DoCoMo has emerged as the real 800 pound gorilla in the
Japanese credit card business. The credit card provider for DCMX is Sumitomo
Mitsui Card Company, a relatively new provider. Sumitomo is giving the
pioneering Japanese credit card companies such as JCB and UFJ NICOS, a run for
their money. NTT DoCoMo has gone to the extent of manufacturing the ID card
readers for the co-branded card sold by it along with Sumitomo Mitsui.
Consequently the credit card pioneer majors have sided with NTT DoCoMo’s
competitors such as KDDI and SoftBank Mobile to establish the association for
the promotion of bill payment using mobile phones. This initiative aims at
developing terminals that can read the credit card enabled mobile phones offered
by NTT DoCoMo’s competitors.
3.8.2 Introduction
Each panel is custom-made for customers who are spread out globally. This
attribute poses the following challenges for Protaurius.
Camclic AB, a Swedish company, provided the platform for Protaurius’ solution.
The system works in the following manner:
3.8.4 Perspective
Mobile bar coding made good business sense to Protaurius. The systems saves the
costs associated with interactive voice response system (IVRS), having a team of
technicians to support customers, publishing dedicated product documentation,
and the need to deploy a technician for every installation or replacement. In a
niche business like Protaurius’, human expertise is at a premium. It would have
been unwise to engage skilled technicians for problems that could be addressed
satisfactorily by the customer, if access to required troubleshooting resources
could be made available. As is often the case, the customer becomes more
knowledgeable than the vendor personnel over a period of time. In this context,
Protaurius’ decision to replace humans with barcodes is in synch with the reality
of its business. Mobile phones turn out to be the ideal agents for effective
implementation of the solution.
3.9.2 Introduction
M-PESA, meaning M for mobile and Pesa for money in Swahili- the language of
Kenya, claims to be one of the world’s first mobile P2P money transfer services.
This service, offered by Safaricom, enables people who do not have access to
conventional banks to transfer money to anyone with a mobile phone. The service
was rolled out in 2007.
Safaricom is a leading MNO in Kenya and provides the usual gamut of bearer
telephony services such as GPRS, 3G, EDGE, data and fax. Originally a
Government-held monopoly, Safaricom is now a Vodafone affiliate.
The M-Pesa client application resides on the customer’s SIM card and not the
phone. An advanced SIM-card type, known as SIMEX, is provided to the
customer for this purpose. SIMEX cards do not have the associated phone number
embedded in them. The advantage of such an arrangement is that in case of a SIM
card loss, the customer can be provided with a new SIMEX card while retaining
the telephone number. The client interface enables the customer to enter details of
the transaction and to authorize transactions using a PIN as and when needed.
Safaricom pre-sets the range of services and the language subscribed by the
customer. The solution also includes a centrally managed platform which
facilitates:
The M-Pesa client application encrypts every transaction request before sending it
for authorization on the centrally managed platform.
The agent is a compulsory and an important part of the system. The agent is an
individual or business location that accepts the SIM card from the end customer
and assists in the transaction. The role of the agent is explained in greater detail in
Figure III-4.
Source: Safaricom
There are no subscription charges for M-Pesa, however, there is a charge per
transaction, which is basically a commission for the agent involved. These
commissions are fixed on the size of the transaction. Table III-1 shows the
commission rates in Kenyan Shillings.
Transaction Range Commission for Agents –Withdrawal Commission for Agents - Deposits
Source: Safaricom
The charges for buying airtime or other mobile services follow the typical billing
systems of a MNO and are not considered a part of the M-Pesa transaction.
3.9.4 Perspective
Safaricom conducted a trial over the course of one year before launching the
service commercially. The most critical challenge of the project, according to
Safaricom, was training the agents—who were the key for ensuring a successful
implementation. Among other things, the agents had to be trained to educate the
users. Safaricom was greatly helped by the Department for International
Development (DIFD), UK. DIFD is a UK Government arm that manages Brittan’s
aid to poor countries. DIFD has funded the development cost and the trial period
overheads.
M-Pesa has managed to acquire 1.7 million customers in a span of one year.
Enthused by the success of M-Pesa, Safaricom is looking to extend its reach
towards bill payments and capabilities such as e-ticket reservations, hotel
reservations, tour reservations and others in order to propagate cashless transaction
culture. In another significant initiative, Safaricom also plans to enable
international remittances by allowing Kenyans in UK to send money to M-Pesa
subscribers in Kenya.
3.10.2 Introduction
Victor Chandler is the flamboyant bookmaker whose company deals with betting
platforms like online casino and poker sites available in various international
languages and customers in over 160 countries. Some of the main gambling
opportunities available on Victor Chandler include football, golf, horse racing,
greyhound racing, cricket, snooker, NFL, NHL, NBA, baseball, tennis, Gaelic
games, darts, motor racing, boxing and rugby.
The activation is followed by the customer identifying the mobile set and
downloading the Java application from the web site to get the handset ready for
gambling.
The site then asks for the customer’s user name and PIN. Following
authentication, the customer then browses through the betting menu, selects the
desired option, previews, confirms and finally makes the payment from the
account. The customer can also check balances as well as a transaction history.
VC mobile’s offerings also include games like roulette, blackjack, virtual
greyhound, and others. The users are given the option to “Play for real” or “Play
for fun”. The latter does not involve payout, the former does.
A 64-bit private key encryption algorithm encrypts all data sent between VC
Mobile and the user's mobile phone. Every set of application data sent is encrypted
using a unique 'private' key that functions to encrypt or decrypt all sensitive data
sent between the users phone and the VC mobile.
Importantly, VC Mobile includes all its content from the main site, although it is
tweaked for mobile phone usage. The content is optimized for the small-screened
mobile phone. The Java format was chosen because of its WAP compatibility.
3.10.4 Perspective
Victor Chandler is planning to offer the services via the MNO route. The mobile
phone operator will offer VC Mobile as a value added service. The betting costs
will be a part of the periodic subscriber billing. The MNO will get a commission
on the collection. Mobile gambling does not require active participation from the
mobile phone operator. In this context Victor Chandler’s plan to involve MNOs in
its scheme of things reflects Victor Chandler’s keenness on two fronts: target
specific geographical regions and achieve confirmed leadership in these regions.
Victor Chandler has identified Asia as its key market due to its promising
demographics. On the whole, Asia has a higher proportion of young people as
compared to other provinces. VC Mobile is eyeing the first mover advantage in
this region.
CHAPTER IV
VENDOR ANALYSIS
This chapter evaluates the activities of selected vendors and stakeholders actively
engaged in developing financial applications using mobile phones.
Handset OEMs and their semiconductor suppliers are driven by largely similar
interests when it comes to mobile phone financial applications. Mobile phone
financial applications require OEMs to embed the necessary supporting
technologies in their products, and much of that support is predicated upon the
work of the semiconductor suppliers. While such technologies as NFC, J2ME,
barcode readers, Bluetooth, and infra-red support are not challenging engineering
requirements, they do add to the cost of the handset and place constraints on the
targeting a wider audience.
To their credit, handset OEMs have always lent enthusiastic support to most
initiatives aimed at popularizing mobile financial applications. These include,
among others, project pilots in areas of mobile stock trading, mobile proximity,
mobile retail, and mobile gaming and gambling.
Motorola is a frontline mobile phone vendor. Its influence over the market is
largely defined by its long track record of continual seminal innovation. Motorola
partners with specialists working on mobile phone financial applications and has
acquired stakes in a few companies in this domain, which is somewhat at variance
with the other OEMs. Motorola’s endorsement of mobile phone financial
applications portends eventual acceptance of a galaxy of mobile phone financial
applications.
Nokia recognized the potential of the handset as a gaming device more than half-
a-decade ago. Although its initiative failed then, Nokia persisted with the idea.
Learning from its failures, it has infused several key value additions that enhance
user comfort in navigating and downloading the games. Nokia has also been a key
driver for NFC.
position to mass market these applications, something that all other stakeholders
lack. MNOs can push mobile phone financial applications in numerous ways:
Barring exceptions, MNOs have largely failed to display such enthusiasm and
initiative. The following could be the likely reasons for their lack of participation:
NTT DoCoMo is a notable exception. NTT DoCoMo’s latest endeavors are all
aimed at humanizing the phone – to focus more on the utility of the phone rather
than brag about the technology running it. While NTT DoCoMo is formidable, it
should be understood that its position as an operator is somewhat unique. It has an
unquestionable leadership position in the world’s most technologically advanced
market with an average 50 percent of the market share. NTT DoCoMo has been
facing intense competition from its two key rivals—SoftBank Mobile and KDDI.
NTT DoCoMo has to keep itself substantially ahead in the race to hold on to this
share. This objective can be achieved effectively only by successfully employing
sticky applications. Osaifu-Keitai is probably the most comprehensive customer-
loyalty enhancing application. It reaches out to the customer in multiple avenues,
making it extremely difficult for the customer to dissociate from NTT DoCoMo.
Importantly, innovation is in the DNA of NTT DoCoMo. It has a history and
tradition of engaging in diverse R&D activities on a global scale.
New entrants include the financial institutions and application specialist categories
of stakeholders.
• Banks;
• Financial market participants such as exchanges and brokerage houses; and
• Credit card companies.
MasterCard has a clear-cut product line for mobile phone financial applications
such as P2P, credit cards and payments. It is pointing to the way to the rest of the
industry by integrating NFC with mobile phones. MasterCard also runs a money
transfer service for its European customers.
Visa has a critical stake in mobile phone credit cards. The revenue model of Visa
is primarily based on transaction fees. The higher the volume and value, the
higher are the revenues for Visa. It is therefore easy to surmise that Visa would
actively back mobile phone credit cards. Visa has launched forays into multiple
aspects of mobile phone credit card business, the most significant being an
interface between NFC application developers and banks. Visa has also latched
on to the Android bandwagon by developing ground-up applications for that OS
(operating system). Visa has consciously adopted the horses-for-courses strategy
by resorting to country specific alliances.
These companies are the actual developers of the mobile phone financial
applications. They are dependent on handset OEMs and semiconductor specialists
for compatible handset development, MNOs for providing bandwidth as well as
backend hosting to run these applications if that is required, as well as the
underlying financial infrastructure that provide access to the customer data to run
the mobile application. This segment is undoubtedly the most vibrant among all
the stakeholder categories.
• The customer decision making process is slow, due to lack of referral cases.
The solution provider then has to take the initiative to push things along by
engaging with each stakeholder individually; and
• The government is an important participant in such projects.
The above realities are amply reflected in the ALW example. ALW has
painstakingly tied up all the loose ends and readied several successful projects.
Camclic reflects the overriding requirement of the mobile barcoding industry; the
application developer has to show maximum initiative. Camclic has adopted the
time tested strategy and joined a consortium with a large number of potential
customers. Camclick now needs to make its application more versatile in order to
read all the more barcoding formats.
CPNI has clubbed mobile payment, P2P and mobile banking in a single solution.
While the use of technology solution is elegant, the challenge ultimately lies in
getting as many merchants as possible to participate in the initiative. In order to
Chapter IV Reproduction without permission 79
of the publisher is prohibited
The
Insight
Reports
acquire the additional muscle, CPNI has aligned with IBM, and made IBM the
primary seller of CPNI’s solutions.
hSenid is credited with developing the first mobile stock broking application in
the West Asian region wherein it was able offer information in Arabic. hSenid’s
success in being able to establish itself in the mobile stock trading domain
underlines the potential of these applications in opening the mobile application
sector wide open for companies that may not have been telecom powerhouses.
i-flex has some of the biggest banks as its customers. Mobile banking offers it an
additional channel to engage the customers. FLEXCUBE highlights its security
features. These features will stand the company in good stead for acquiring
mobile banking customers. The acquisition of i-flex by Oracle will enhance the
reach of FLEXCUBE. Additionally, as FLEXCUBE already employs Oracle
Middleware, integrating it with Oracle’s product line will be relatively seamless.
The appeal of the Obopay’s solution lies in its simplicity. It can be implemented
with minimal involvement of other stakeholders—which gives Obopay the
leverage to tailor their solution solely based on their priorities. Obopay had to
navigate through the procedures required to obtain the 40+ licenses which would
enable the company to function as a money transfer agent, but the organization is
clearly looking at the larger picture and is trying to replicate the success of
Western Union and Paypal in the mobile phone domain. Obopay has maintained
minimal fund transfer charges are minimal, encouraging customers to use it for
transmitting even smaller amounts, which is often the case related to money
transfer among family members.
The mobile phone massively multiplayer online gaming (MMOG) market has
failed to pickup for a variety of reasons such as high network latency and form-
factor limitations. SmartCell has decided to confront the challenge of
popularizing MMOG applications for mobile phones. It has adopted a dual
strategy: to develop a highly interactive user experience with top-of-the-line
graphics suitable for the mobile phone form factor, and to offer it for free. The
second part is obviously a bait to hook users and familiarize them with the gaming
features so that they opt for a paid version when one becomes available.
The most compelling use of the ZERO application has been in the disbursal of
payments and salaries to persons without bank accounts. ALW has implemented
this project in partnership with several leading public sector banks and
Government bodies in India.
4.2.2 Camclic
www.camclic.com
HQ: Goteborg, Sweden
Camclic provides a Java-based barcode reader application for mobile phones. Its
maximum resolution is 0.25 mm and its primary function is to stuff the barcode
image with hyperlink data. Camclic allows their customers to create codes for
individual hyperlinks. It supports codes such as EAN13, Code128 and QR Code.
4.2.3 C-SAM
www.c-sam.com
HQ: Oakbrook Terrace, IL
Source: C-SAM
At the heart of its offerings lies the Mobile Transaction Platform (MTP). The
platform consists of the following components:
• Wallet service center (WSC): The hub of MTP transactions, the WSC is the
server side function that handles user initialization, user registration,
information storage, information navigation and value added services.
C-SAM’s clients include Jet Airways, Vodafone, ICICI Bank, MTNL and
UAExchange among others.
PAT allows banks to offer the solution under their own brand. The mobile phone
client is based in Java. Other supported interfaces will include USSD, WAP and
SMS.
CPNI has partnered with IBM and Logica as implementation partners. The
company is privately held.
iWin is the name of the mobile stock trading application offered by Financial
Technologies. It includes multi-currency and multi-exchange trading facilities, as
well as features such as limit, market or stop-loss order. It allows creation of
multiple profiles based on the product portfolios from multiple stock exchanges
apart from providing stock alerts.
Financial Technologies recorded revenue of $270 million for the year 2007-08.
www.hsenid.com
HQ: Colombo, Sri Lanka
Infosys is one of the front-running software service providers from India. It has
expertise in multiple domains ranging from finance, telecommunications,
manufacturing and others. It is the pioneer of the famed global delivery model
(GDM), which has largely defined the way in which multinational teams work
across global locations to deliver software solutions and services. However,
Infosys has not restricted itself to software services. It has built its practices in
software product development as well as consultancy services.
Starting July 2008, Infosys launched Finacle’s SaaS edition. Its current version is
10.
Infosys counts Israel Discount Bank (Israel) and ABN Amro (China) as customers
for Finacle.
4.2.8 LogicaCMG
www.logica.com
HQ: London, UK
Logica’s activities span the entire gamut of software and consulting services. Its
services include outsourcing, consulting and solution delivery. Specific functions
include applications management, testing, and infrastructure management among
others. Logica has expertise in ECM, BI and platforms of vendors such as
Microsoft, SAP and Oracle.
LogicaCMG includes mobile payment solutions under it’s the finance vertical.
Logica is traditionally strong in the European market and in the case of the mobile
payment solution for C1000 supermarket, LogicaCMG has gone out of its regular
sphere of activities. The company hopes to leverage the success of its C1000
project into a much wider practice, and become the “go to” firm for retail chains
interested in implementing mobile retail solutions.
Logica recorded revenues of ₤1.77 billion for the year ending June 30, 2008.
MasterCard was created by a group of US-based banks, most notably the United
California Bank, in order to counter BankAmericard (the predecessor of Visa).
MasterCard went IPO in 2006, before which it was owned by the participating
banks.
4.2.10 Motorola
www.motorola.com
HQ: Schaumberg, IL
Motorola has developed M-Wallet, a solution that enabled NFC based secure and
high-speed transactions of GSM and CDMA handsets. The solution supports:
• Mobile banking;
• Mobile payments;
• Mobile P2P; and
• Mobile debit cards.
Motorola also holds a stake in the mobile banking and software services specialist
company –mFoundry Inc. It has also invested in vivoTech, a company with
activities similar to mFoundry. Apart from this, Motorola has partnered with C-
SAM for rolling out mobile stocktrading.
4.2.11 Nokia
www.nokia.com
Helsinki, Finland
Nokia is the world’s largest mobile phone OEM. It also supplies navigational
devices (NVTEQ) and cellular network equipment (Nokia Siemens Networks).
Nokia sold more than 470 million mobile phones in 2008
Nokia offers the N-Gage gaming platform for mobile phones. N-Gage is shaped
by Nokia’s vision of offering the consumer a device that can function as a gaming
console as well as a mobile phone. N-Gage had an unsuccessful start in 2003 due
to the lack user friendly features. Nokia reintroduced N-gage in several high end
smartphones since 2007 as a pre-release version. It works with the N81, N79, N81
8GB, N82, N85, N95, N95 8GB, N96 and 5320 ExpressMusic models. The full-
blown N-Gage website from where the users could download games was made
available in April 2008.
Nokia offers NFC enabled handsets such as 5140, 6131, 6212 and 3320 among
others. Figure IV-3 shows the Nokia 6131 handset with NFC functionalities.
Source: McCann
Nokia claims that the 6131 is the world’s only truly integrated NFC handset.
Nokia offers Java based NFC SDK for this handset. Features of this SDK include
tag technologies, peer-to-peer connections, branding configuration, Java API,
example MIDlets and documentation. Nokia has been among the primary drivers
of NFC and actively participates in projects related to mobile phone payments and
other NFC related applications.
NTT DoCoMo was spun off from NTT-Japan’s premier telecom operator in 1991.
NTT DoCoMo provides 2G and 3G services. Its services include the following:
• i-mode: Mobile storefront – the services also include e-mail access, new
ans weather information, games download and others.
• Osaifu Keitai: Mobile wallet.
NTT DoCoMo has firmly placed itself in several tiers of the mobile phone supply
chain. Its hold over handset OEMs is unparalleled. Moving downstream, NTT
DoCoMo is threatening even the financial service providers with its muscle. Such
a formidable position helps it keep costs down. Consequently, NTT DoCoMo’s
services are among the most cost effective in the world.
4.2.13 NXP
www.nxp.com
HQ: Eindhoven, The Netherlands
NXP also manages the MIFARE technology that is installed in smart cards,
proximity cards and reader modules. It offers MIFARE4mobile MF4M, a service
that facilitates the adoption of NFC in mobile phones. NXP acts as a service
manager and handles the installation of MIFARE-based NFC applications on
mobile phones. MF4M is available in classic, secure and premium versions. NFC
envisages itself as a gateway between application providers and MNOs.
Figure IV-4 shows the MIFARE4 mobile ecosystem.
Source: NXP
Accordingly, NXP will play a constructive role in M4FM system management that
interfaces the MNO and the MFARE service provider and client service
management.
4.2.14 Obopay
www.obopay.com
Redwood City, CA
Obopay is one of the few companies to have developed a complete mobile phone
based P2P payment ecosystem. Obopay’s payment solution allows money to be
exchanged across an entire spectrum of mobile phone users.
Obopay cites that the origin of its business model lies in the inspiration derived by
Carol Realini, its CEO, witnessing a large number people in Africa having no
access to traditional ways of payment, though many had access to mobile phones.
The result of the inspiration is a payment system that could be used by anyone
having a mobile phone.
Apart from its presence in the US market, Obopay is rolling out in emerging
economies. It has partnered with Grameen Solutions, a pioneer in microfinance,
to launch mobile banking initiatives in India and Bangladesh, especially targeted
at the lower strata of the society.
i-flex also provides a repository global banking best practices through the i-flex
process repository for banks (iPRB), which works in tandem with FLEXCUBE.
i-flex counts West Coast Bank among its declared mobile banking customers.
4.2.16 SmartCell
www.smartcell.com
HQ: Irvine, CA
Other mobile gaming options from SmartCell include AquaForce, the underwater
adventure based game for Windows Mobile handsets. This game is available for
$19.95.
SmartCell also offers mobile phone applications for weight loss management, data
storage and predictive text input tools.
Visa is one of the world’s largest credit card issuing companies. It also manages
the world’s largest retail payment network. Visa has five-decade history. It was
known as BankAmericard before it was renamed Visa.
Visa is accepted in more than 29 million merchant establishments and 1.2 million
ATMs worldwide. It boasts of a financial institution (banks) customer base in
excess of 16,000 and card base of 1.6 billion. Visa claims that the number of
annual transactions involving Visa products is more than 52 billion and value of
these transactions exceeds $4 trillion. Visa Europe is an exclusive licensee of Visa
Inc. and operates as a separate entity. Visa Inc. has five regional divisions – USA,
Asia-Pacific, Middle East and Africa, Central and Eastern Europe as well as Latin
America and Caribbean. Visa offers credit, debit and prepaid card based financial
services to its clients.
Visa has identified mobile phone based payments as a key opportunity for
enhancing its reach and increasing its transaction volumes. It has undertaken
multiple initiatives in that direction:
• Visa has partnered with Nokia to offer NFC based mobile phone credit card
services infrastructure (handset and payment gateways) to interested
financial institutions. Nokia’s contribution to this initiative is the NFC
based 6212 handset.
Visa recorded revenues of $3.7 billion for the year ending September 30, 2007.
VisaNet is Visa’s payment processing infrastructure. It operates out of four
processing centers located in three continents.
CHAPTER V
QUANTITATIVE ANALYSIS
5.1 Introduction
This chapter forecasts the market size for major mobile financial applications
according to three principal metrics:
Both the metrics are broken down according to the following geographic
segmentations:
• Mobile proximity and mobile retail are reported together as a single unit
for the following reasons:
And while mobile gaming and mobile gambling appear very similar, they are
presented separately because they have dissimilar revenue models. In the case
of mobile gaming, the application developer gets paid directly by the
subscriber; in the case of mobile gambling, the gambling service provider pays
the application developer.
Mobile banking;
Mobile stock trading;
Mobile proximity and retail;
Mobile credit card applications;
Mobile barcoding;
Mobile P2P;
Mobile gaming; and
Mobile gambling.
INSIGHT Research recognizes that although all the applications run on the same
end-user device—the mobile phone—each application has unique sets of factors
that influence its market acceptance. Hence, the market prospects for each
application have been mapped independently of each other. Some of the driver
parameters used for forecasting our market estimates include:
These driver parameters, in addition to existing shipment and value metrics for
current and past years are combined to obtain a correlation between the drivers
and the metrics. This correlation is then used to forecast the values from 2009
through 2014.
It is important to mention that the calculation takes into account the current global
slowdown.
Chapter V Reproduction without permission 99
of the publisher is prohibited
The
Insight
Reports
5.3 Resources
The following primary and secondary resources were consulted for constructing
the market model:
Figure V-1 shows the subscriber volume forecast for major mobile financial
applications.
Figure V-1 Global Subscriber Base for Mobile Financial Applications, 2009-2014 (Millions)
4,000 3,744.5
3,500
3,000
2,592.8
2,500
Millions
1,923.0
2,000
1,523.7
1,500 1,234.7
950.6
1,000
500
0
2009 2010 2011 2012 2013 2014
Our estimate of a 30 percent growth is derived from the historical take rates
associated the application prior to its being mobile-enabled. Estimates cover two
broad categories of applications:
While the growth rates may sound impressive, the fact is that most of the
applications under consideration will grow much faster than the average rate, it
will be the twin applications set of mobile gaming and mobile gambling that pulls
down the overall sector growth to a moderate CAGR to about 19 percent.
The difference in the growth rates of mobile gaming and mobile gambling on one
side versus all other applications on another side is consequence of the inherent
difference in gaming/gambling when compared to the other applications. For
example, mobile gaming (and to some extent gambling) have a comparatively
uncomplicated business model with far fewer stakeholders involved when
compared with other applications. Secondly, the transition from the PC to mobile
versions of mobile gaming and mobile gambling requires very minimal alterations
in their infrastructural set-up and business models, which is not the case with other
applications. However, this simplicity of operations does not translate into higher
growth because the gap between the demand and supply and the potential to tap
new market segments are much greater in the other mobile applications we are
discussing, whereas mobile gaming and gambling end up attracting practically the
same customer base that exists for their PC versions.
Another factor moderating the rate of application revenue growth will be the
increasing competitiveness within the sectors coupled with large scale acceptance,
which will bring down earnings per subscriber acquisition and
earnings/transaction for these application developers.
$30,000
$25,360.2
$25,000
$19,485.7
$20,000
$15,908.3
$Millions
$15,000 $13,486.9
$11,605.8
$9,591.8
$10,000
$5,000
$0
2009 2010 2011 2012 2013 2014
Figure V-3 provides a reason for the apparent lack of enthusiasm on the part of
MNOs in taking ownership of mobile financial applications. While the earnings
are substantial in the absolute sense, they represent only a small contribution to
overall MNO revenues. The primary reason for the small revenue contribution is
that mobile financial transactions are not data intensive. It should be noted,
however, that these forecasts are strictly based on the current level of MNO
participation—and it is absolutely certain that enhanced MNO participation will
translate into higher subscriber numbers and higher transactions-per-subscriber
which will lead to greater MNO earnings.
It is also important to mention that the MNO earnings would have been even more
impressive in terms of growth rate, but for the negative impact generated by
mobile gambling—its largest shareholder. It is also significant that mobile
gambling is a single download driven application, as opposed to other applications
that are transaction driven.
Figure V-3 MNO Earnings from Data Transfer Initiated by Global Mobile Financial Applications,
2009-2014 ($Millions)
$8,000
$7,000 $6,722.1
$6,000
$5,254.3
$5,000 $4,475.2
$4,050.6 $4,160.1
$Millions
$3,838.0
$4,000
$3,000
$2,000
$1,000
$0
2009 2010 2011 2012 2013 2014
Figure V-4 presents our total revenue estimate for the eight applications under
discussion. The total revenue opportunity includes INSIGHT’s forecast of the
revenues accrued by the application developers for mobile finance as well as the
revenue accrued by MNOs supplying the bandwidth as well as backend hosting to
Figure V-4 Global Total Revenue Opportunity for Mobile Financial Applications, 2009-2014 ($
Millions)
$35,000 $32,082.3
$30,000
$24,740.0
$25,000
$20,383.5
$20,000 $17,647.0
$Millions
$15,656.4
$15,000 $13,429.9
$10,000
$5,000
$0
2009 2010 2011 2012 2013 2014
Table V-1 and Figure V-5 provide the regional breakdown of the subscribers.
INSIGHT Research forecasts that while the APAC region will post the largest gains
in terms of subscriber growth, the North American and CALA regions will also
show strong growth. On a broader level, all regions will show more than 200
percent increase in the number of absolute subscribers over our forecast period.
APAC region posts the biggest gains because a large section of APAC economies
continue to show positive growth in spite of the global downturn.
Table V-1 Regional Distribution of Global Mobile Financial Application Subscribers, 2009-2014
(Millions)
Figure V-5 Regional Share of Global Mobile Financial Application Subscribers, 2009-2014 (Percent)
7% 6% 6% 6% 6% 7%
Table V-2 and Figure V-6 provide the regional breakdown of the application
revenues. These revenues are based on the presence of buyers, which include
MNOs and financial service providers. INSIGHT Research forecasts an aggressive
push on the part of these stakeholders in the APAC region, resulting in a 56
percent increase in market share for the APAC region in the year 2014 as
compared to the year 2009.
Table V-2 Regional Distribution of Global Mobile Financial Application Revenue, 2009-2014
($Millions)
Figure V-6 Regional Share of Global Mobile Financial Application Revenue, 2009-2014 (Percent)
4% 4% 5% 5% 5% 5%
25% 28% 31% 34% 36% 39%
Table V-3 and Figure V-7 present the regional distribution of MNO earnings.
Contrary to the overall trends, it is the EMEA and NA markets that show the
highest growth. The growth trends forecasted in these two regions further
emphasizes our earlier assertion about the criticality of MNO participation. It is
noteworthy that in the NA and EMEA markets, MNOs are more given to
subsidizing subscriber handsets. In effect the greater the influence of the MNOs
over subscriber experience, the greater the impact of the MNO on the subscriber’s
acceptance of mobile financial services.
Table V-3 Regional Distribution of MNO Earnings from Data Transfer Initiated by Global Mobile
Financial Applications, 2009-2014 ($Millions)
Figure V-7 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile Financial
Applications, 2009-2014 (Percent)
1%
1%
1%
20% 1% 1% 1%
17%
15%
13% 11% 10%
2% 2% 2% 2% 2% 3%
2009 2010 2011 2012 2013 2014
North America Europe, Middle East, Africa Asia and Pacific Central + Latin America
800 746.8
700
600 552.2
500
407.5
Millions
400
306.2
300 220.7
200 146.5
100
0
2009 2010 2011 2012 2013 2014
Mobile banking application developers earn their revenue predominantly from the
banks, and in some cases the MNOs. Contrary to the trend for total financial
application revenue and subscriber growth, application revenues for mobile
banking will grow faster than the subscriber growth as a result of the extraordinary
increase in the number of transactions per subscriber. This increase will offset the
decline in average revenue per subscriber. We note these trends in Figure V-9.
$1,800
$1,598.9
$1,600
$1,400
$1,200
$974.0
$Millions
$1,000
$800
$600.1
$600
$391.7
$400 $250.6
$151.8
$200
$0
2009 2010 2011 2012 2013 2014
Figure V-10 shows that the MNO earnings from mobile banking transactions will
grow more than seven times faster than the overall MNO earnings growth.
INSIGHT Research attributes this growth to the impressive increase in average
mobile banking transaction size, fueled especially by smartphone users.
Figure V-10 MNO Earnings from Data Transfer Initiated by Global Mobile Banking Applications,
2009-2014 ($Millions)
$1,000 $920.0
$900
$800
$700
$600
$Millions
$485.7
$500
$400
$300 $252.2
$200 $136.5
$34.1 $70.7
$100
$0
2009 2010 2011 2012 2013 2014
Table V-4 and Figure V-11 provide the regional breakdown of the subscribers for
the mobile banking applications. INSIGHT Research forecasts that the EMEA
region will grow slightly faster than the APAC region and gain the top spot. The
chief engine for the growth of subscribers in the EMEA region is the African
continent, which has been witnessing a spurt in low-cost mobile banking
implementations. Additionally, banks in the European region have aggressively
rolling out mobile banking to retain the increasingly mobile customers.
Table V-4 Regional Distribution of Global Mobile Banking Subscribers, 2009-2014 (Millions)
Figure V-11 Regional Share of Global Mobile Banking Subscribers, 2009-2014 (Percent)
8% 7% 7% 6% 6% 5%
Table V-5 and Figure V-12 provide the regional breakdown of the application
revenue associated with mobile banking applications. INSIGHT’s research suggests
that the EMEA and APAC region will account for more than three fourths of the
revenues. However, the APAC region will start losing share 2013 onward to the
EMEA region. EMEA region’s gains will be primarily because the banks in the
European region will be going into a mobile banking overdrive.
Table V-5 Regional Distribution of Global Mobile Banking Application Revenue, 2009-2014
($Millions)
Figure V-12 Regional Share of Global Mobile Banking Application Revenue, 2009-2014 (Percent)
5% 5% 5% 5% 5% 4%
North America Europe, Middle East, Africa Asia and Pacific Central + Latin America
Table V-6 and Figure V-13 note that while all regions will exhibit comparable
CAGRs, the APAC and EMEA regions will continue their dominance, accounting
for about 89 percent of the overall market. What works in the favor of these
regions is the presence of substantially higher number of banks as compared to
other regions, leading to increased customer acceptance.
Table V-6 Regional Distribution of MNO Earnings from Data Transfer Initiated by Global Mobile
Banking Applications, 2009-2014 ($Millions)
Figure V-13 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile
Banking Applications, 2009-2014 (Percent)
1% 1% 2% 2% 2% 2%
10% 9% 9% 9% 9% 9%
INSIGHT Research forecasts that the global community of subscribers for mobile
stock trading will grow at a compounded rate of more than 47 percent during
2009-2014 timeframe, as we note in Figure V-14. This growth will be fueled
mainly by a healthy increase in the number of retail investors worldwide.
Additionally, the advent of smartphones with their enhanced display and memory
features will further stimulate demand by enabling a plethora of applications only
possible with the advent 3G telephony. INSIGHT Research forecasts that a majority
of the growth in mobile stock trading will be driven by developed economies.
500 457.3
450
400 350.8
350
300 253.6
Millions
250
200 177.8
150 117.2
100 65.8
50
0
2009 2010 2011 2012 2013 2014
Mobile stock trading application developers will earn their revenue from their
stockbroker clients. We note the global stock trading revenue trends in Figure V-
15. The high growth rate of application revenues is a result of application
developers actively pushing their mobile stock broking feature to their clients – the
investors. The promotional hard sell will result in a high level of adoption leading
to a high number of transactions using mobile stock trading.
Figure V-15 Global Mobile Stock Trading Application Revenue, 2009-2014 ($Millions)
$800 $745.8
$700
$600
$494.4
$500
$Millions
$400
$306.9
$300
$187.7
$200
$107.9
$100 $53.5
$0
2009 2010 2011 2012 2013 2014
Mobile stock trading is also one of the faster growing applications in the context
of MNO data transfer revenues, as shown in Figure V-16. The reason for this
robust revenue growth is similar to that of mobile banking, except that the
continuing increase in the size of the transactions will not be as strong as in the
case of mobile banking.
Figure V-16 MNO Earnings from Data Transfer Initiated by Global Mobile Stock Trading
Applications, 2009-2014 ($Millions)
$1,800
$1,605.2
$1,600
$1,400
$1,200 $1,053.5
$Millions
$1,000
$800
$619.0
$600
$351.6
$400
$181.5
$200 $78.9
$0
2009 2010 2011 2012 2013 2014
Table V-7 and Figure V-17 provide the regional breakdown of mobile stock
trading subscribers. The high growth rates in the APAC and CALA regions will
be on account of the general investor confidence in companies driving their
booming economies.
Table V-7 Regional Distribution of Global Mobile Stock Trading Subscribers, 2009-2014 (Millions)
Figure V-17 Regional Share of Global Mobile Stock Trading Subscribers, 2009-2014 (Percent)
2% 3% 3% 3% 4% 4%
13% 15% 17% 20% 22% 23%
Table V-8 and Figure V-18 provide the regional breakdown of mobile stock
trading application revenues. In this particular application, Insight’s research
suggests that application revenue will follow the same trend as that of subscriber
growth
Table V-8 Regional Distribution of Global Mobile Stock Trading Application Revenue, 2009-2014
($Millions)
Figure V-18 Regional Share of Global Mobile Stock Trading Application Revenue, 2009-2014
(Percent)
2% 2% 2% 2% 3% 3%
12% 12% 14% 15% 17% 17%
Table V-9 and Figure V-19 re-emphasize the similarity between market dynamics
of mobile banking and mobile stock trading by breaking down MNO earnings
market by regions. INSIGHT forecasts that the EMEA and APAC regions will
continue to account for more than four-fifths of the overall market size.
Table V-9 Regional Distribution of MNO Earnings from Data Transfer Initiated by Global Mobile
Stock Trading Applications, 2009-2014 ($Millions)
Figure V-19 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile Stock
Trading Applications, 2009-2014 (Percent)
1% 1% 1% 1% 1% 1%
Figure V-20 Global Mobile Proximity and Retail Subscribers, 2009-2014 (Millions)
300 284.4
250
Millions 200 168.2
150
100 80.3
50 34.5
9.6 17.4
0
2009 2010 2011 2012 2013 2014
The rate of growth of the application revenues and the subscriber growth track
each other closely as we note in comparing Figure V-21 with the prior figure.
This is indicative of a market truly at the beginning of an acceptance curve, one in
which customer acquisition is the primary activity. INSIGHT Research expects this
market to only reach maturity some time beyond our forecast period, most likely
by 2015.
Figure V-21 Global Mobile Proximity and Retail Application Revenue, 2009-2014 ($Millions)
$450 $413.3
$400
$350
$300
$237.2
$Millions
$250
$200
$150 $109.6
$100 $46.3
$50 $12.7 $23.1
$0
2009 2010 2011 2012 2013 2014
Figure V-22 shows the impact of proximity and retail applications on MNO
earnings. INSIGHT is projecting that this market will grow at a breakneck 105
percent on a year-on-year basis. The challenge for MNOs, in spite of such very
Chapter V Reproduction without permission 118
of the publisher is prohibited
The
Insight
Reports
robust growth rates, is to alter the profile of transactions that involve their
networks. Currently the use of the network is restricted to the exchange of
authentication information; the MNO will want to define applications that handle
bulkier payloads in the transaction domain.
Figure V-22 MNO Earnings from Data Transfer Initiated by Global Mobile Proximity and Retail
Applications, 2009-2014 ($Millions)
$180
$158.0
$160
$140
$120
$Millions
$100 $89.0
$80
$60
$40.0
$40
$16.5
$20 $4.3 $8.0
$0
2009 2010 2011 2012 2013 2014
Table V-10 and Figure V-23 provide the regional breakdowns of the subscriber
growth. INSIGHT’s analysis suggests that EMEA and NA markets will have the
greatest number of subscribers able to exploit the potential of mobile proximity
and retail applications.
Table V-10 Regional Distribution of Global Mobile Proximity and Retail Subscribers, 2009-2014
(Millions)
Figure V-23 Regional Share of Global Mobile Proximity and Retail Subscribers, 2009-2014
(Percent)
Table V-11 and Figure V-24 provide a regional breakdown of the application
revenues. We have identified retail sales and ticketing as the two major areas in
which the application will be widely used. The greater the diversity of locations in
which mobile proximity and retail applications are deployed, the more the
opportunity for the application developer to maximize their revenue. The EMEA
region, with its large base of countries, is abuzz with mobile retail initiatives,
which explains its position as the fastest growing market for these applications.
Table V-11 Regional Distribution of Global Mobile Proximity and Retail Application Revenue, 2009-
2014 ($Millions)
Figure V-24 Regional Share of Global Mobile Proximity and Retail Application Revenue, 2009-2014
(Percent)
Table V-12 and Figure V-25 underline the dominance of the EMEA region and
highlight the benefits of building an ecosystem of key stakeholders such as
application developers, handset OEMs and influential operators in the same region
as is observed in the case of EMEA.
Table V-12 Regional Distribution of MNO Earnings from Data Transfer Initiated by Global Mobile
Proximity and Retail Applications, 2009-2014 ($Millions)
Figure V-25 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile
Proximity and Retail Applications, 2009-2014 (Percent)
6% 6% 6% 7% 5% 5%
38% 35%
47% 44% 41%
50%
50% 52%
44% 46%
40% 42%
4% 5% 5% 6% 6% 7%
2009 2010 2011 2012 2013 2014
North America Europe, Middle East, Africa Asia and Pacific Central + Latin America
INSIGHT Research is forecasting the subscriber base for mobile credit cards will
grow more than 55 times during the period 2009-2014, as we note in Figure V-26.
It is important to remember that we are considering only those applications that
embed the card strip. Naturally, the two major drivers that influence this market
will be the health of the overall credit card industry and the availability of NFC
handsets. In that context, it is worthwhile mentioning that mobile credit cards will
grow more than five times faster in percentage terms than its conventional
counterpart.
400 368.3
350
300
250
Millions
200
150
102.0
100
50 32.9
6.6 8.2 14.0
0
2009 2010 2011 2012 2013 2014
Our analysis suggests that the market for mobile credit card applications will grow
slightly slower than the subscriber growth, as we note in Figure V-27. The
closeness is again a reflection of the lack of refinement in the market. Thus far,
there have been very few successfully demonstrated implementations of mobile
credit card. Participation of the MNO is the key to the success of these initiatives,
and we believe that the MNOs will gradually warm up to the concept of mobile
credit card.
Figure V-27 Global Mobile Credit Card Application Revenue, 2009-2014 ($Millions)
$300
$248.3
$250
$200
$Millions
$150
$100 $69.8
$50 $22.4
$4.5 $5.4 $9.3
$0
2009 2010 2011 2012 2013 2014
INSIGHT is forecasting that the MNOs’ data transfer related revenues will follow
the same trend as application developers’ revenue and will only really take off in
the year 2014, as shown in Figure V-28.
Figure V-28 MNO Earnings from Data Transfer Initiated by Global Mobile Credit Card
Applications, 2009-2014 ($Millions)
$70 $63.1
$60
$50
$Millions
$40
$30
$20 $16.8
$10 $5.2
$1.0 $1.3 $2.2
$0
2009 2010 2011 2012 2013 2014
Table V-13 and Figure V-29 provide the regional breakdown of mobile credit
cards subscribers. The dichotomy between the APAC and the other regions is a
consequence of the presence of NTT DoCoMo, which has a fairly mature
implementation of mobile credit card in form of DCMX. No other MNO has had
equivalent success so far. INSIGHT’s research suggests that this is slated to change
over our forecast period.
Table V-13 Regional Distribution of Global Mobile Credit Cards Subscribers, 2009-2014 (Millions)
Figure V-29 Regional Share of Global Mobile Credit Cards Subscribers, 2009-2014 (Percent)
1% 1% 3%
6% 8% 9%
37% 31%
52%
72%
92% 88%
36%
32%
24%
13%
23% 24%
6% 18%
4% 11%
3% 5%
North America Europe, Middle East, Africa Asia and Pacific Central + Latin America
Table V-14 and Figure V-30 provide the regional breakdown of mobile credit card
application revenue. INSIGHT Research forecasts that the EMEA region will be the
market to watch for mobile credit cards. EMEA fares favorably both in terms of
the credit card subscriber base as well as NFC handset availability, and most of the
major stakeholders hail from this region.
Table V-14 Regional Distribution of Global Mobile Credit Card Application Revenue, 2009-2014
($Millions)
Figure V-30 Regional Share of Global Mobile Credit Card Application Revenue, 2009-2014
(Percent)
1% 1% 2% 4% 6% 7%
31% 26%
45%
66%
89% 85%
39% 43%
30%
18%
8% 21% 24% 24%
6% 13%
4% 6%
Table V-15 and Figure V-31 show the dominance of the EMEA region, which will
grow a t an astounding overall rate of more than 300 times over a period of five
years. Here again, the EMEA and the NA regions will have the highest CAGRs
and they will dislodge the APAC region from its numero uno position.
Table V-15 Regional Distribution of MNO Earnings from Data Transfer Initiated By Global Mobile
Credit Card Applications, 2009-2014 ($Millions)
Figure V-31 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile Credit
Card Applications, 2009-2014 (Percent)
0% 1% 2% 3% 4% 4%
36% 29%
52%
73%
92% 89%
51%
45%
34%
19%
8% 11% 15% 16%
6% 6%
2009 2010 2011 2012 2013 2014
North America Europe, Middle East, Africa Asia and Pacific Central + Latin America
Mobile barcoding on cell phones is expected to among the slower markets in terms
of subscriber growth, as we note in Figure V-32. The reason for this slow rate of
subscriber growth when compared to many of our other mobile financial
applications is the fairly widespread availability of barcode reader enabled mobile
phones globally today.
800 729.1
700
600 545.1
500 445.0
390.8
Millions
400 348.0
300 269.5
200
100
0
2009 2010 2011 2012 2013 2014
The higher application revenue growth rate, when compared to subscriber growth
rate, suggests that the stakeholders will look at more effective ways to monetize
the barcoding features of mobile phones. We note this trend in Figure V-33.
$3,500
$3,017.9
$3,000
$2,500 $2,146.2
$2,000
$Millions
$1,674.7
$1,411.8
$1,500 $1,212.9
$909.9
$1,000
$500
$0
2009 2010 2011 2012 2013 2014
INSIGHT’s research suggests that mobile barcoding is the dark horse as far as
earnings potential for MNOs through data transfer is concerned. Figure V-34
shows the forecast at current MNO participation levels. While the MNOs do not
have a direct role to play in the size or the nature of content offered by the
Figure V-34 MNO Earnings from Data Transfer Initiated by Global Mobile Barcoding Applications,
2009-2014 ($Millions)
$1,600 $1,518.4
$1,400
$1,162.7
$1,200
$971.2
$1,000 $871.7
$Millions
$792.8
$800
$626.6
$600
$400
$200
$0
2009 2010 2011 2012 2013 2014
Table V-16 and Figure V-35 provide the regional breakdown of mobile barcoding
subscribers. INSIGHT is forecasting that the APAC region will dislodge the EMEA
as the region with the most subscribers by 2010.
Table V-16 Regional Distribution of Global Mobile Barcoding Subscribers, 2009-2014 (Millions)
Figure V-35 Regional Share of Global Mobile Barcoding Subscribers, 2009-2014 (Percent)
7% 7% 7% 7% 7% 7%
Table V-17 and Figure V-36 provide the regional breakdown of mobile barcoding
application revenue. It is set to follow the same pattern as that of subscriber
growth for many of the same reasons.
Table V-17 Regional Distribution of Global Mobile Barcoding Application Revenue, 2009-2014
($Millions)
Figure V-36 Regional Share of Global Mobile Barcoding Application Revenue, 2009-2014 (Percent)
5% 5% 5% 5% 6% 6%
23% 25% 27% 30% 32% 35%
In synch with the overall trend, the EMEA and APAC regions will contribute to
the bulk of MNO earnings attributed to mobile barcoding applications— though
the NA region that will grow the fastest. The reason for the higher growth in NA
can be attributed to the increased availability of barcode reader enabled mobile
phones in that region.
Table V-18 Regional Distribution of MNO Earnings from Data Transfer Initiated by Global Mobile
Barcoding Applications, 2009-2014 ($Millions)
Figure V-37 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile
Barcoding Applications, 2009-2014 (Percent)
3% 3% 3% 3% 3% 3%
5% 5% 5% 6% 6% 6%
North America Europe, Middle East, Africa Asia and Pacific Central + Latin America
Mobile P2P payment is arguably the most discussed of the mobile financial
applications under examination. It has the potential to bring the world’s poor in
the world’s financial systems. As we note in Figure V-38, mobile financial peer-
to-peer subscribers are expected to grow more than seven times between 2009-
2014. This service will require the full co-operation on the part of MNOs.
300 273.0
250
200
161.5
Millions
150
93.4
100
61.0
35.5 43.0
50
0
2009 2010 2011 2012 2013 2014
The lower than average growth rate of P2P applications revenue is a consequence
of the typical customer profile, which is heavily dependent on remittances. We
note the mobile P2P application revenue trend in Figure V-39. Given the extreme
cost consciousness of the worldwide user base, vendors will be vying with each
other by drastic reduction in their charges, which has a corresponding downward
pressure on revenue.
$2,500
$2,150.1
$2,000
$1,500 $1,365.4
$Millions
$1,000 $837.6
$576.2
$366.1 $424.5
$500
$0
2009 2010 2011 2012 2013 2014
MNO earnings from mobile P2P applications rank among the smallest among all
the mobile financial applications examined in this study, as we note in Figure V-
40. The reason for this is the negligible data transfer/session. It is important to
remember that once the P2P client is installed, the data transfer/session is limited
to inter-changing text-based information and alerts.
Figure V-40 MNO Earnings from Data Transfer Initiated by Global Mobile P2P Applications, 2009-
2014 ($Millions)
$35
$30.3
$30
$25
$20.4
$Millions
$20
$15 $13.3
$9.7
$10 $6.9 $7.6
$5
$0
2009 2010 2011 2012 2013 2014
Table V-19 and Figure V-41 provide the regional breakdown of the subscribers.
Unsurprisingly, the APAC region will emerge as the region with the greatest
subscriber growth, as it is the recipient of highest remittance.
Table V-19 Regional Distribution of Global Mobile P2P Subscribers, 2009-2014 (Millions)
Figure V-41 Regional Share of Global Mobile P2P Subscribers, 2009-2014 (Percent)
7% 7% 8% 8% 8% 7%
Table V-20 and Figure V-42 provide the regional breakdown of the mobile P2P
application revenues. INSIGHT Research forecasts similar pattern as that of
subscriber growth.
Table V-20 Regional Distribution of Global Mobile P2P Application Revenue, 2009-2014 ($Millions)
Figure V-42 Regional Share of Global Mobile P2P Application Revenue, 2009-2014 (Percent)
3% 3% 3% 3% 3% 3%
15% 16% 17% 18% 19% 20%
North America Europe, Middle East, Africa Asia and Pacific Central + Latin America
INSIGHT Research is forecasting that the NA and EMEA regions will grow faster
than the APAC regions in terms of MNO revenues from mobile P2P applications,
as we note in Table V-21 and Figure V-43. This forecast takes into account the
changing profile of the user—from remittance driven usage to a more casual and
informal money transfer. The latter is more likely to prevalent in developed
markets.
Table V-21 Regional Distribution of MNO Earnings from Data Transfer Initiated by Global Mobile P2P
Applications, 2009-2014 ($Millions)
Figure V-43 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile P2P
Applications, 2009-2014 (Percent)
2% 2% 2% 2% 2% 2%
8% 8% 9% 9% 10% 11%
INSIGHT’s research suggests that since mobile gaming is the longest established
application, it will show the slowest growth in acquiring new subscribers, as we
note in Figure V-44.
600
515.7
500 447.6
406.3
400 370.6
337.2
292.9
Millions
300
200
100
0
2009 2010 2011 2012 2013 2014
Mobile gaming has a different revenue model than the other segments under
consideration given the fact that the application developer derives a major portion
of its revenues directly from end-user. The developer tries to recover maximum
earnings through one-time charges; there are practically no transaction-based
charges. This modus operandi, coupled with the fairly mature status of this
market, means that the mobile gaming segment is expected to have the highest
application revenue, as we note in Figure V-45.
$18,000 $16,696.4
$16,000
$13,818.9
$14,000 $12,040.6
$12,000 $10,580.8
$9,321.6
$Millions
$10,000
$7,848.1
$8,000
$6,000
$4,000
$2,000
$0
2009 2010 2011 2012 2013 2014
Figure V-46 presents the negative impact that mobile gaming applications will
have on the overall MNO earnings picture. Apart from being the only application
that will witness a decline in revenues, mobile gaming is also the application that
is the largest contributor to MNO revenues, thereby compounding its impact on
the growth rates. It is important to remember that the data transfer for mobile
gaming is not transaction dependent, but dependent on the size of the gaming
application download—a one-time activity. MNOs, therefore, can exert little
influence on subscriber habits unless the game in question happens to be a multi-
party game played on a wireless network—which presently are numerically
insignificant.
Figure V-46 MNO Earnings from Data Transfer Initiated by Global Mobile Gaming Applications,
2009-2014 ($Millions)
$3,500
$3,004.6 $2,891.2
$3,000 $2,652.1
$2,423.4
$2,500 $2,221.3 $2,128.1
$2,000
$Millions
$1,500
$1,000
$500
$0
2009 2010 2011 2012 2013 2014
Table V-22 and Figure V-47 provide the regional breakdown of global mobile
gaming subscribers. Historically speaking, mobile gaming has been popular in the
NA and EMEA regions. INSIGHT Research forecasts that the APAC region will be
the next primary market for these applications during 2009-2014 timeframe, with
developing countries in the region embracing gaming culture.
Table V-22 Regional Distribution of Global Mobile Gaming Subscribers, 2009-2014 (Millions)
Figure V-47 Regional Share of Global Mobile Gaming Subscribers, 2009-2014 (Percent)
8% 8% 8% 8% 8% 8%
Table V-23 and Figure V-48 provide the regional breakdown of mobile gaming
application revenue. INSIGHT Research is forecasting that the emergence of the
APAC region as the fastest growing subscriber region will also catapult it into first
place in respect to revenue growth. It can also be inferred that the EMEA
subscribers will continue spending more per application when compared to their
APAC counterparts.
Table V-23 Regional Distribution of Global Mobile Gaming Application Revenue, 2009-2014
($Millions)
Figure V-48 Regional Share of Global Mobile Gaming Application Revenue, 2009-2014 (Percent)
4% 4% 5% 5% 5% 5%
North America Europe, Middle East, Africa Asia and Pacific Central + Latin America
Table V-24 and Figure V-49 highlight a subtle recovery and stabilization of the
mobile gaming MNO revenues beginning in the year 2014. The extent of market
erosion is a direct derivative of the severity of the current global recession.
INSIGHT is forecasting that the decline will be arrested first in the APAC region.
Table V-24 Regional Distribution of MNO Earnings from Data Transfer Initiated by Global Mobile
Gaming Applications, 2009-2014 ($Millions)
Figure V-49 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile
Gaming Applications, 2009-2014 (Percent)
3% 3% 4% 4% 4% 4%
6% 6% 6% 6% 6% 6%
2009 2010 2011 2012 2013 2014
North America Europe, Middle East, Africa Asia and Pacific Central + Latin America
400 370.1
350
300 265.3
250
204.1
Millions
200 168.7
142.9
150 124.3
100
50
0
2009 2010 2011 2012 2013 2014
More importantly, INSIGHT Research forecasts that the revenue from the sale of
mobile gambling application will be the slowest among all applications under
consideration, as we note in Figure V-51. This revenue should not be confused
with earnings/losses made by subscriber using mobile gambling. This revenue is
accrued by gambling application developers from the gambling service provider.
INSIGHT Research forecasts a lull in the application development space.
$600
$489.6
$500
$400 $379.9
$316.4
$Millions
$283.2
$300 $245.3 $260.0
$200
$100
$0
2009 2010 2011 2012 2013 2014
Unlike its gaming counterpart, MNO revenues due to mobile gambling will
continue to grow at a positive rate, albeit lower than most other applications. This
critical fact highlights the difference between the dynamics of mobile gaming and
mobile gambling with respect to MNOs. As shown in Figure V-52, INSIGHT
Research forecasts a CAGR close to 30 percent.
Figure V-52 MNO Earnings from Data Transfer Initiated by Global Mobile Gambling Applications,
2009-2014 ($Millions)
$350
$298.9
$300
$250
$204.9
$200
$Millions
$151.0
$150 $119.7
$97.5
$100 $81.7
$50
$0
2009 2010 2011 2012 2013 2014
Table V-25 and Figure V-53 provide the regional breakdown of mobile gambling
subscribers. The CALA region is the fastest growing region in terms of mobile
gambling subscriber acquisition. It should be noted that the future of mobile
gambling will depend on the legislations adopted by governments worldwide,
which can either retard or hasten growth. Favorable legislation is likely to make
substantial difference in the NA and EMEA regions.
Table V-25 Regional Distribution of Global Mobile Gambling Subscribers, 2009-2014 (Millions)
Figure V-53 Regional Share of Global Mobile Gambling Subscribers, 2009-2014 (Percent)
3% 3% 3% 3% 3% 3%
Table V-26 and Figure V-54 provide the regional breakdown of mobile gambling
application revenues. Insight Research forecasts a relatively higher level of
interest among APAC and CALA gambling service providers as their spend-per-
customer-acquisition rate is more favorable than other regions.
Table V-26 Regional Distribution of Global Mobile Gambling Application Revenue, 2009-2014
($Millions)
Figure V-54 Regional Share of Global Mobile Gambling Application Revenue, 2009-2014 (Percent)
2% 2% 2% 3% 3% 3%
Table V-27 and Figure V-55 highlight the impact of favorable legislation on the
MNO revenues accrued out of mobile gambling initiated data transfer. INSIGHT is
forecasting favorable legislations in NA and EMEA regions, leading to a higher
than average CAGR.
Table V-27 Regional Distribution of MNO Earnings from Data Transfer Initiated by Global Mobile
Gambling Applications, 2009-2014 ($Millions)
Figure V-55 Regional Share of MNO Earnings from Data Transfer Initiated by Global Mobile
Gambling Applications, 2009-2014 (Percent)
1% 1% 1% 1% 1% 1%
6% 6% 6% 7% 7% 8%
2009 2010 2011 2012 2013 2014
North America Europe, Middle East, Africa Asia and Pacific Central + Latin America
5.13 Conclusions
APPENDIX
GLOSSARY