By Beecher Tuttle
With traditional voice and data margins diminishing, service providers have been forced to look to new avenues for revenue generation. One such opportunity exists in the form of mobile commerce services, which have been proven to help minimize subscriber churn and unearth new applications and content value chain opportunities for revenue growth.
When leveraging the assets of enhanced customer experience, identity and security, operators can take advantage of the inevitable migration toward the mobile phone as a wallet (MPAAW). This is a market that is expected to increase to more than $1.1 trillion by 2014, according to research firm Gartner, and one where Alcatel-Lucent has placed a significant stake in the ground with its Mobile Wallet Service (MWS).
In an effort to provide mobile operators with a window into this opportunity, Alcatel-Lucent’s recent market insight, “Cashing in on the Mobile Wallet Opportunity,” is instructive. It provides important findings on the appeal of mobile wallet services and consumers' willingness to pay for them. For instance, it was found that an impressive 81 percent of respondents to a survey said that they are extremely interested or very interested in secure mobile payment services that provide options like:
- Digital payments
- Financial information
- Coupon offers
- Loyalty points
In addition, nearly nine out of 10 (89%) consumers indicated that they are willing to pay a median fee of $7.77 for a MPAAW service. Most importantly, 80 percent of those surveyed said that they have a strong interest in foregoing their traditional wallet in favor of a mobile alternative.
The most common reasons for being attracted to mobile wallet were portability, convenience and the ability to organize multiple bank accounts into a singular device. Consumers also pointed toward mobile wallet features like location-based and profile-based coupons as well as the ability to use the phone's scanner to make retail price comparisons.
As for concerns, survey respondents were most worried about securing their private data and avoiding situations like identify theft, fraud, spamming and hacking. In addition, some consumers worry about combining all their sensitive information into a single device. Interestingly, savings banks and payment service providers were deemed to be the most trustworthy mobile wallet provider.
The Alcatel researchers believe the results validate the premise that consumers are very interested in MPAAW services. As importantly, the research also points to the fact that service providers are well positioned to benefit from mobile commerce evolution.
"All of these convenient mobile money services offer the opportunity to generate access and transaction fees that merchants, end users, financial institutions, and third-party service providers will pay for." The good news for the service providers is that mobile wallet services, by developing an intimate and vital relationship with customers can help SPs pull through more revenues from traditional services, such as short message service (SMS), mobile Internet and other data services that are required to enable two-way authentication of mobile payment transactions.
Alcatel-Lucent's Mobile Wallet Service (MWS) can help service providers take advantage of this burgeoning market. The solution, which recently won the "Best of 4G" award in the "Best Mobile Commerce Solution" category at 4G World, is flexible, scalable and can be deployed to market in minimal time.
With MWS in hand, mobile operators can provide flexible payment and marketing services like proximity payments, person to person money transfers, remote ticketing and online commerce – all through an SaaS model. Service providers can even leverage the solution to enable their own branded payments services as well as those provided by third parties.
A certain bank in the U.S. has a popular advertising campaign called, “What’s in Your Wallet?” Going forward, what is your wallet, and what are all of the interesting things you can do with it, will be just as important.