RCS is here to stay and doing well

RCS has been touted as a saviour when the SMS value has been destroyed by OTT messaging services, but without much success, but it may finally have find its moment.

Mavenir, the software company, presented on day 1 of MWC 2019, promoting its rich communication solutions offered by Rakutan. The key benefits, or the main use cases that RCS can differentiate from OTT messaging actually are less to do with taking consumers back to texting each other, or P2P messaging, but rather the communication between businesses and consumers, or A2P messaging.

This view is corroborated by Infobip, a Croatia-based messaging platform that provides aggregated OTT messaging services (e.g. WhatsApp, LINE, Viber, KakaoTalk, etc.) for their corporate clients, which the clients then can use for customer service and CRM. However, the company told Telecoms.com that its dominant business, which it has seen annual growth of between 30% and 40%, is SMS and RCS based services.

One of the use cases is helping businesses improve customer engagement. Despite that on feature comparison RCS is mostly playing catching up on OTT messaging services, SMS and RCS tramp OTTs in consumer trust. To quote Guilliaume Le Mener, Manevir’s SVP for Enterprise Business, RCS is a “clean channel”, not tarnished by the privacy scandals committed by Facebook and co, or the over monetisation by others. Research shared by Mavenir showed 97% of SMS / RCS are opened within 3 minutes.

In one case, Infobip was hired by Twitter to reengage the inactive users, after the social media giant failed the mission with its early efforts through email. Thanks to its rich features, RCS messages can enable users to explore the content directly. For those users on phones not compatible with RCS, brands can choose to fall back on SMS with a web line. The results were much more improved also owing largely to the capability of producing rich analytics to evaluate the campaign effectiveness and make quick decisions on any changes needed.

In addition to A2P messaging, RCS is also being used by brands to engage consumers in P2A, that is engaging directly with the brands through messaging. On the brand side the service can be handled by bots. This will then need to be supported by AI and analytics which will be another business opportunity for the RCS solution providers. With OTTs also actively moving into the P2A domains, again this is an area that operators need to have a stronghold for RCS before it is too late.

For Rakuten, RCS may be particularly meaningful, as, coming from an internet service and MVNO background, Rakuten has a big range of digital service tied to a user’s Rakuten ID. RCS will be a key instrument to maintain and strengthen customer engagement when it builds out its 5G network from ground up.

Half of British millennials are getting sick of the internet – report

A new EY report shows 50% of 25-34-year olds are looking to ‘digital detox’, the highest proportion of all age groups.

The “Decoding the digital home 2019” report, published by EY, the professional service firm, was done based an online survey of 2,500 British households in late 2018. In addition to the high proportion of youth wishing to increase their time away from smartphones and other internet connected devices, more people are spending less time online. The percentage of households spending more than 30 hours online per week has gone down from 34% a year ago to 28%, while those spending less than 10 hours online has slightly increased from 18% to 21%.

There are also other surprises. For example, more consumers are happy with their fibre connections (59%, up from 54% a year ago) but also higher number of young people are ready to ditch the fixed broadband (43%). 42% of 18-24-year olds are happy to pay a premium to get the latest gadgets, but only 18% of the 25-year olds and above, who would have more disposable income, are prepared to do so.

The key message that the telecoms and internet industries should take away from the survey, however, is that consumers want simplicity, proof of trust, and assurance of security.

Both service and content providers are confusing consumers with over-complex packages, causing anxiety among users, including the youth. 46% of households think there are too many different broadband, mobile, and content bundles, so most of them will not add anything new to the packages they already subscribe to. Content providers are trying to maximise the distribution channels they can use, therefore making their content available across different packages, platforms, and apps. However, nearly a quarter of all surveyed households found it hard to track their favourite content. This number rose to close to 40% among the 18-24-year olds, the so-called “digital natives”.

The high-profile cases of comprised private data have instilled more caution to consumers. 72% of respondents said that even when dealing with brands they trust they would be very cautious about disclosing their personal financial information online.

On the other hand, the heated debates over “fake news” have driven more consumers less confident in the “new media”. 44% of households responded that they now only trust the traditional news sources. In a teaser to an upcoming report, EY disclosed that over half of all households only watch the five traditional channels on TV.

But it is not all bad news especially for the mobile industry. In 15% of the households surveyed, smartphones are now the main devices to go online with (up from 11% in 2017), at the expense of laptops (down from 44% to 39%). When it comes to consumer spending, slightly more are willing to pay for ad-free streaming (up from 16% to 18%) and slightly fewer are holding their purse strings as tightly as possible when it comes to spending on communication services (down from 55% to 53%)

“Our latest survey highlights both opportunities and challenges for TMT providers. They will be pleased to see that consumers are willing to pay for premium services, but they will also be concerned that customers are overwhelmed and confused by the variety of bundles available,” said Praveen Shankar, EY’s Head of Technology, Media and Telecommunications for the UK & Ireland. “Looking ahead, it is essential for providers to simplify their propositions and offer easier to understand and clearly communicated product and services.”

ey-decoding-the-digital-home-2019

 

Commuters account for 14% of UK online spending – research

A new report into commuters’ spending habits reckons they drop £23 billion per year of stuff via their mobile devices while on the move.

The research was conducted by media agency Kinetic and media owner Exterion, who both apparently specialise in OOH. Disappointingly this doesn’t mean they spend all their time exclaiming in amazement at stuff. Instead OOH stands for out-of-home and refers to the kind of advertising you get hit with when, you guessed it, you’re away from your house.

Across the whole country commuters apparently blow £89 per week on their phones one average, which seems remarkably high. London commuters spend £153 per week, we’re told which is bordering on mania and we can only assume this average is skewed by city types buying Lamborghinis on their phones or something. Across the board clothes seem to be the most popular purchase, which tallies with another recent report on this sort of thing.

“Our research shows that in today’s age of time-poor consumers, the everyday commute is fast becoming a valuable opportunity to make purchases,” said Stuart Taylor, CEO of Kinetic. “At a time when footfall is declining on our high streets, these findings confirm that retailers can nevertheless reach a valuable urban audience in a physical environment.”

“Commuters are the lifeblood of the UK, and hugely important to the economy, businesses and advertisers; they keep our nation moving and growing, as they travel,” said Nigel Clarkson, Chief Revenue Officer at Exterion. “Our research proves the commercial impact of the Commuter Economy, through the billions contributed to online retail annually.”

Both of them banged on about OOH advertising but laboured the point far too much for us to burden you with their unvarnished propaganda. That doesn’t mean they’re wrong, however. It stands to reason that people would use the dead time taken up by commuting to get other stuff done and it’s worryingly easy to buy stuff on your phone these days.

Giesecke+Devrient lands Swatch contactless payment gig

Mobile security company Giesecke+Devrient is helping Swiss watch company Swatch with its own contactless payment technology.

Rather annoyingly called SwatchPAY!, the contactless platform was launched in China back in 2017 and is now available in Switzerland. It involves sticking an NFC chip in a watch, which you can then sync with your credit card. In that respect it’s pretty much a contactless card embedded in a watch.

Whether it functions just as easily is unclear, but Swatch seems to have partnered with all the right companies, including Mastercard, Credis Suisse, UBS and G+D. The latter is doing what it does best in providing the secure element for these watches, which also enables the activation of the contactless payment function in-store, when you buy one. Here’s how it works.

Swatchpay chart

“Continuous innovation is a key strand of the Swatch DNA,” said Carlo Giordanetti, Swatch Creative Director. “This latest advance, with the introduction of the fastest and simplest tokenization, makes it easier than ever to pay ‘forever’ – token up your Swatch, swipe it and you’re done. SwatchPAY! is simple, stylish and swatchy.”

“We are thrilled to be Swatch’s partner for this payment-enabled watch, which has been a huge success in China,” said Carsten Ahrens, CEO of Giesecke+Devrient Mobile Security. “The unique mix of iconic Swatch design and a payment functionality makes this a very appealing product, and we are proud to have contributed our extensive expertise in security, mobile payment and wearables technology.”

The Swiss watch industry has been in a flap about smart watches for a while, so it’s sensible to see one of them develop its own contactless payment platform. They’re fortunate that the killer use-case for smart watches hasn’t been found yet, but it presumably will be eventually. The key to this alternative being a success will be its ease of setup and use and it looks like they might have got that right.

UK mobile commerce is exploding – research

New research from price comparison site uSwitch.com reveals that the use of mobile devices to go shopping in the UK is growing rapidly.

They got market research firm Opinium to chat to 2,000 adult Brits about their mobile commerce habits and intentions. The survey concluded that we will blow £25 billion buying stuff with our phones and tablets this year, up from £15 billion last year. Furthermore they reckon 30 million of us will use our phone to shop this year, which will represent a 66% annual increase.

“With smartphone and tablet shopping now a £25 billion industry, it’s hardly surprising that  major retailers have long adopted a mobile-first approach to their websites and have even introduced their own apps to make the user experience as easy as possible,” said Ru Bhikha. “Cleaner user journeys and the ease of one-click purchasing will only add to the number of people shopping on their phones and tablets.”

The main appeal, unsurprisingly, is simple convenience, with the ability to shop at any time coming in a close second. Other prominent reasons given for shopping over your phone seem to apply to all e-commerce, including the ability to compare prices, greater choice and better prices.

The survey also asked questions about e-commerce habits in general. As you can see in the table below Amazon and eBay have a clear lead over the online manifestations of bricks-and-mortar retailers, although the latter seem to be doing a decent job of trying to keep up. Somewhat surprisingly clothes are by far the most bought type of product online, followed by books, groceries and cinema/theatre tickets. The living room is by far the most popular location for blowing all this cash.

Website % of shoppers to have used website last year
Amazon 89%
eBay 63%
Argos 41%
Tesco 35%
Marks and Spencer 25%
Asda 25%
Sainsbury’s 22%
John Lewis 20%
Currys PC World 17%

Source: uSwitch.com

Brits can’t be bothered with Black Friday

Americans like to spend a whole day giving thanks for stuff and then spend the next day buying loads more if it. Over here, not so much.

Thanksgiving is a national holiday in the US that seems to be some kind of harvest festival, complete with traditional feast. For some reason they like to spend the next day engaged in a retail frenzy that has become known as Black Friday due, apparently, to the fact that this is the first time retailer’s balance sheets move into positive territory (in the black, as opposed to the red).

Because retailers like nothing more than calendar imperatives to buy stuff, such as Christmas, Valentine’s Day, etc, UK ones have been keen to import this compulsion over here. But according to new research from Genesys 80% of UK consumers won’t bother to hit the high streets this Friday, with the majority of them paradoxically saying they’ll stay away because things get too busy.

“This year, the vast majority of British consumers are planning to stay away from stores on Black Friday because it’s not worth the bother,” said Richard McCrossan, digital lead for Genesys. “They prefer shopping online in the comfort of their own home – or whatever location is convenient –  to the chaos of dealing with crowded high-street stores.

“Shopping has become as much about the experience as the purchase – and during the holidays, that means speed is of the essence and convenience is king. Only 5% of respondents said a low standard of customer service is a reason to avoid physical stores, so it’s other aspects that put consumers off.

“With an estimated 14 stores per day closing in the UK, retailers must meet consumers’ expectations for hassle-free experiences at every touchpoint – from making payments to finding answers to questions, to getting personalised, friendly service. It’s not just about the purchase – it’s about making the experience great.”

So it remains possible that we will buy loads of stuff on Friday, but over the internet. US etail giant Amazon tends to go big on Black Friday and the internet arms of UK companies may be tempted to follow suit. In semi-related news it looks like the use of smartphones to make contactless payments is exploding in the UK, with recent research revealing they now account for 7% of all such transactions.

Amazon Pay acquires app aggregator platform Tapzo

Amazon has acquired Indian app company Tapzo in a deal to bolster its digital payments offering.

According to the Economic Times, the deal will be valued between $40-45 million, while co-founders Ankur Singla and Vishal Pal Chaudhary will be brought onto the Amazon team to continue development of the offering. While the acquisition is yet to be confirmed by either party, sources state Amazon is after a shortcut to get in on the mobile money bonanza.

“It would have taken Amazon Pay up to two years to build an entire stack of service offerings to enable efficient use-cases for its payment platform,” one source familiar with the deal stated. “So this acquisition helps them save time and also enables them to spread their cashback offers across a host of services immediately.”

Tapzo is an aggregator platform that allows users to access over 35 apps including Amazon, Flipkart, Ola and Uber through a single screen, but also allows for mobile payments, to pay bills, order cabs and food and book flights and hotels. The most popular service for users to date has been bill payments and recharges, with about 15,000 transactions per month across the two services.

Integrating the Tapzo capabilities into the Amazon Pay business will offer the team plenty of ammunition as the battle for domination in the Indian payments market warms up. While there are several local firms are controlling market share for the moment, PhonePe and Paytm for example, the continued digital revolution in India is attracting the interest on the international scene.

Aside from Amazon, Google has also been carving itself a new revenue stream in India. Its Tez offering has recently been rebranded to Google Pay, and will start offering new services such as pre-approved loans.

Google rebrands payments app ahead of international assault

Google has announced it will rebrand its Indian digital payments app, Tez, to Google Pay as the team readies a launch into new international markets.

Only two years ago many would have considered India a distant, slow-follower of the digital revolution, with the economy still largely being governed by cash (imagine that) and smartphone penetration exceptionally low for its stature. The inspiration of Reliance Jio seems to have tempted the country into the virtual society, and the digital appetite of consumers has been almost insatiable. Not only have data consumption rates sky rocketed, the craving for digital services is clearly apparent.

Google is one of the companies which has benefited considerably with the desire to be digital. Having launched last September, Tez has been adopted by 22 million people in 300,000 cities, towns and villages across the country. During this period, Tez users have made more than 750 million transactions, worth more than $30 billion. The app currently supports 2,000 apps and websites, though this number is set to be supercharged, tying up with digital services such as Uber as well as offline channels including the likes of Big Bazaar, e-Zone, and FBB.

Aside from retail and partner push, the team will also expand to cover micro-loans. Partnerships with banks such as HDFC Bank, ICICI Bank, Federal Bank, and Kotak Mahindra Bank will enable customers to have pre-approved loans paid directly into Google Pay.

While these might seem like incredible numbers, the Telecom Regulatory Authority of India released figures recently suggesting there are 1.14 billion, with Android holding more than 80% of the market share. With only 22 million users currently, the potential for Google’s digital payment app here is massive. And this is only one country. Admittedly it is the second largest in the world by population, and one of the most lucrative when you look at mobile payment adoption, but the decision to rebrand the payment solution is with expansion in mind.

“We have learnt that when we build for India, we build for the world, and we believe that many of the innovations and features we have pioneered with Tez will work globally,” said Caesar Sengupta GM of the Payments business and Next Billion Users Initiative at Google.

“The world has certainly taken notice of India’s digital payments success and our deep investments here with Tez. Many governments are asking us to work with them to bring similar digital payments innovations to their countries.”

Google Payments already exists in 20 markets, though Tez is designed for the Indian market, and this seems to be what has interested the currently un-named governments. To launch a business on the international scene, it makes sense to have a single brand, and it would also be a smart bet to leverage one of the most powerful and influential brands worldwide; Google. According to Brand Finance, Google has the third most valuable brand worldwide, only falling behind Amazon and Apple, explaining the decision.

There might be some stories regarding misinformation and suspect privacy settings, but the Google brand is still one of the most recognisable and trusted worldwide. Ditching the Tez tag is a sensible idea.

Payments challenger Adyen post strong growth following June IPO

In its first earnings release since going public in June, payments firm Adyen is proving it can live up to the hype.

After pricing its shares at €240 each ahead of the launch, it opened for trading on June 13 on Amsterdam’s Euronext exchange at €400 a share. With such a leap, a lot would have been expected from the firm, and it certainly delivered.

For the first six months of 2018, Adyen generated €156 million in total revenue, up 67.3% year-on-year, processing more than €70 billion of transactions, and collecting €48.2 million in net income up 74.6% year-on-year. Investors will certainly be pleased with growth at the company which counts the likes of Uber, Spotify and Cathay Pacific as customers.

Europe is still the major earner for the company, accounting for more than half of the processed transactions and roughly 65% of net revenue, though growth in other regions was incredibly healthy. Asia Pacific was a significant boost for the business, 147.5%, though the North American region was also incredibly positive, 142.9%.

“In the first half of the year we saw a continuation of the transformation of commerce, leading to an increased merchant focus on accepting payments across channels and geographies,” the firm said in a letter to shareholders. “This trend, coupled with changing shopper behaviour, the rise of mobile payment methods, and the increasing pressure on retailers’ operations, highlighted the benefits of our single platform, and consequently driven significant growth in the first half of 2018.”

The success has been attributed not only to doing what it does traditionally very well, but also branching out into new verticals such as hospitality, restaurant chains and supermarkets. While these might be different environments, all are experiencing the same increase in demand for mobile payment from customers.

Another key aspect of growth here seems to be the single platform. Many businesses around the world will use different payment solutions dependent on the environment, some of which will be legacy systems. The complications come with marrying the data to customers across the different platforms when trying to generate some sort of business insight from the data. A single platform, encompassing both online and offline transactions, allows the formation of data sets which can be used to inform future business decisions.

“Through our single platform, we provide a holistic view of payments, regardless of sales channel, delivering unique shopper insights while combating fraud and improving payment authorization rates,” the firm states.

While it all looks positive right now, another statistic which will keep investors happy is the recruitment efforts. Over the first six months, staff head count went up almost 40%, with 47.3% of these recruits taking up tech roles. While bolstering the sales team is certainly a positive move, such a focus on continuing the development of the platform will certainly add to the generated momentum.

Softbank and Yahoo team up to crack mobile money in Japan

Softbank and Yahoo Japan have announced the formation of a new joint venture, PayPay, to launch a QR-based smartphone payment services in Japan by November.

The joint venture will lean on the experience of Paytm, India’s largest digital payment brand and a SoftBank Vision Fund portfolio company, for technology and expertise in mobile payments in the latest efforts to move Japan away from a cash-based society. As it stands, less than 20% of payments across the country are cashless, one of the lowest worldwide for a ‘developed’ economy.

“The Japanese government is taking measures to raise the cashless payment ratio to 40% by 2025, with a long-term goal of 80%, the highest level globally,” Softbank said in a statement. “To aid these efforts, SoftBank and Yahoo Japan established PayPay Corporation in June 2018 and will launch its user-oriented payments platform in the fall 2018.”

With the experience of Paytm, the brand has 300 million customers and 8 million merchants, combined with the presence of SoftBank and Yahoo Japan, the PayPay business certainly has a promising to start to disruption. The Yahoo! Wallet which has approximately 40 million accounts, will act as the foundation, with Softbank leading the sales strategy, while also developing a localised service leveraging Paytm’s technology. Once the new service has been launched, Yahoo Wallet will cease to exist, though a time-frame has not been laid out.

While the adoption of this technology is far from given, the venture does demonstrate the power of the Softbank ecosystem. While it might have looked like a side-project to keep billionaire CEO Masayoshi Son busy, the Softbank Vision Fund offers a wealth of technology expertise for family members to lean on and launch new services. Of course, Vision Fund employees will be looking to find investments which will make money in the long-run, but complementary businesses and technology to aid the progression of current new services would certainly play some role in the decision making.