"Last Year was Boring; Not 2011" at Mobile World Congress

Lots of new technology, devices and networks are part of the reason.

Debit Card Rule Will Harm Community Bank Customers

People who use debit cards issued by community banks will face higher costs and increased restrictions if a proposed Federal Reserve regulation goes into effect, according to a new survey of members of the Independent Community Bankers of America (ICBA).

The proposed Federal Reserve rule would implement the Durbin amendment of the Dodd-Frank Wall Street Reform and Consumer Protection Act. That amendment limits interchange fees to the tune of about $12 billion a year.

That means issuers will raise other fees, and impose new charges, to recoup the losses. An end to "free checking" is among the likely changes.



Survey: Fed Debit Card Rule Will Harm Community Bank Customers - pymnts.com

Are Handset Vendors Service Providers?

There used to be a clear division of labor in the mobile business. Handset vendors and device manufacturers focused on designing the best possible hardware, using specifications provided by the mobile network operators. More recently, software has emerged as a key differentiator. But the "service" was provided by the mobile operator.

But all that is changing. Handset vendors are trying to shift in the direction of providing an "experience" for their end users that necessarily has handsets providing some "services."

Think about Apple iTunes, App Store, MobileMe, iAd and FaceTime. All are services provided directly by Apple to end users, irrespective of network.

If you are thinking there is an inevitable shift of value and revenue towards the "over the top" services and apps delivered over broadband access services, you are right. That's what a loosely-coupled network, such as the Internet, implies. That is not to say fixed or mobile operators do not have a role in the value chain. They always will. The inevitable point, though, is that there is no reason why most of the newly-created value will remain in the "access" part of the ecosystem.

Mobile operators will have an easier time of this than fixed operators, but no access provider can hope to capture much more than a fraction of the new value and revenue created by application providers. That's what "layers" mean. Applications do not have to know much about the physical layer to "work." Nor will future application provider business models need to "know" much about the physical and lower layers of the software stack.

In the evolving ecosystem, even devices will become application providers.

Are Handset Vendors About to Become Service Providers? | VoIP SurvivorVoIP Survivor

Smartphones are Top U.S. Consumer Electronics Items in 2011

Consumers in the United States are more likely to buy a smartphone in 2011 than PCs, mobile phones, e-readers, media tablets and gaming products, according to a recent survey by Gartner.

U.S. smartphone sales are expected to grow from 67 million units in 2010 to 95 million units in 2011. By comparison, mobile PC shipments are forecast to total 50.9 million in the United States. in 2011, up from 45.6 million from 2010.

Gartner Survey Shows U.S. Consumers More Likely to Purchase a Smartphone Than Other Consumer Devices in 2011

How Twitter Pitches Potential Advertisers

"Social" Business Invoicing Using PayPal

Tradeshift declares invoicing social from venturecup.tv on Vimeo.

It's part of the broader trend of experimentation with mobile remittances, mobile payments, mobile banking, online payment, online banking, online money transfer and shopping.

"Why You Shouldn't Start a Company"

By serial entrepreneur Christian Lanng, Tradeshift CEO. 

Intel Moves Ahead with MeeGo, Despite Nokia Shift

Intel says it is moving ahead to commercialize MeeGo, the smartphone operating system Nokia recently abandoned in favor of Windows Mobile.

Big changes in Mobile Carrier Billing Will Affect Payment Possibilities

In most businesses, it makes a difference whether a firm's direct costs are 40 percent or 10 percent. Up to this point, revenue splits of about 60 percent for the merchant and 40 percent for a mobile carrier have sharply limited the types of products that can be sold using the mobile device and carrier billing.

In other words, products bought and billed directly to the mobile statement have imposed higher transaction costs, by far, than use of credit and debit cards, for example. Zong knows all about carrier billing, but has been predicting there would be significant movement on the charges, as Zong volume has grown. That appears to be happening.

The carriers are dropping the revenue splits to closer to 10 percent, from 40 percent. “The carriers won’t go below 10 percent for digital or virtual goods, but they will lower their rates for physical,” says David Marcus, the CEO of Zong.

Zong Sees Mobile Payments Coming for Physical Goods Sooner Than You Think

Google Sees Both Loyalty and Advertising Angles to Mobile Payments

There's little question at this point but that Google intends to use near field communications in ways that might use the payment function, but almost certainly will focus on advertising, couponing, loyalty and other elements of the retail shopping experience.

In fact, payments as such might not be Google's primary interest in near field communications. Google might see much more upside in working with advertisers to extend offers to phones, perhaps including couponing and other offers as part of the ads.

Google's Eric Schmidt Reveals NFC Smartphone Plans: It's All About Advertising | Fast Company

Mobile Users are Task Oriented, Tablet Users More Entertainment Oriented

Research to date on tablet advertising has typically found that placements that take advantage of the full features of the device—like video, 360-degree views, striking photos and interactivity—appeal most to users. An Adobe-sponsored study found flashy iPad ads were more engaging and effective than their static print counterparts, and earlier research from UM and Time Inc. indicated that videos were the most desired feature of iPad ads.

On smartphones, by contrast, users seem to prefer to keep it simple. A Pontiflex survey conducted by Harris Interactive found that very few smartphone users preferred ads that were like commercials or that featured video. Just 15 percent of all adults liked such ads on their phone, vs. 63 percent who preferred more basic coupons, deals or newsletters.

So it appears the flashy video ads are better suited to tablets, while coupons are better suited to smartphone users.

The Differences Between Mobile and Tablet Advertising - eMarketer

Mobile Banking in Africa to Hit U.S.$22 Billion By 2015

The International Telecommunications Union estimates mobile subscriptions across Africa more than tripled to 333 million since 2005. The World Bank said Sub-Saharan Africa averages just 163 bank accounts per 1,000 adults — compared to an average 635 in developing countries.

In 2006, Kenya had only 450 bank branches and 600 automatic teller machines, or less than two bank branches per 100,000 people. Read more here.

Taking the overall population as the potential target market, the penetration rate of mobile telephony in Uganda is now 35 percent, while in Liberia, it was around 31 percent in 2009. In Cameroon, where MTN and Orange have a duopoly, the penetration rate was around 38 percent in June 2010. In Kenya, mobile penetration is 50 percent, while in Rwanda, it was about 25 percent in early 2010.

South Africa’s Wizzit is another start-up. Its operations are guaranteed by the South African Bank of Athens. Managing Director Brian Richardson will not disclose the number of subscribers, but says the operation turns a profit.

“I do believe the bank-led model will win at the end of the day,” he says.

Mobile Banking in Africa to Hit U.S.$22 Billion By 2015

Visa Likes Square

Square allows small merchants, who have traditionally been limited by paper-based payments, to accept electronic payments through a credit card reader that plugs into a phone or iPad. "This is a big deal and will help the entire payments industry’s efforts in bringing access to electronic payments to a segment that has historically not been easy to serve, namely very small merchants," Visa says.

Before, these very small merchants depended solely on the limits of cash transactions, Visa says. Now with Square’s product, these small merchants can use a mobile device as a gateway, making a transaction over Visa’s global network and gaining the security, speed and reliability that come with it.

Emerging Payment Types = New Opportunities | Visa’s Blog – Visa Viewpoints

Smartphones Increasing Call Center Volumes

More than 60 percent of 55 service providers polled by Heavy Reading believe that the volume of smartphone-related support calls has increased 10 percent to more than 25 percent over the last two years. The same percentage believe the average cost of supporting smartphones is anywhere from 10 to 50 percent above that of standard feature phones, due in part to longer call-handling times. Additionally, more than half of the incoming calls are not resolved by the initial call center representative who handles the call - further driving up costs.

Some 75 percent of service providers surveyed are looking to advanced services to increase data usage and realize additional sources of revenue from smartphone customers. But the research shows that over two thirds of customers do not use advanced services, due to lack of awareness or understanding.

Operators Want Higher Smartphone Revenues, But Need to Educate Customers on Using Advanced Features

FCC Chairman Says Net Neutrality Rules Don't Cover Comcast-Level 3 Dispute

Federal Communications Commission Chairman Julius Genachowski said the agency's net neutrality rules don't cover interconnection disputes such as the current dispute between Comcast Corp. and Level 3 Communications.

He called the Comcast-Level 3 issue a private business dispute and said he hoped the two companies could work out their differences.

Long-time observers of the interconnection business and framework will not be surprised by those views. Carrier interconnection is about the business relationship between network owners, not end user services.

WSJ: FCC Chairman: Net Neutrality Rules Don't Cover Comcast-Level 3 Dispute - WSJ.com (subscription required)