The number of global smartphones used to make in-store contactless payments is predicted to increase by 1,000 percent this year. And as the annual Mobile World Congress comes to an end tomorrow, one thing that’s become even clearer: mobile will continue to be a remarkable driver of innovation across the globe. PYMNTS spoke with Claire Maslen, Head of Financial Services at the GSMA, the organization that puts on MWC each year, to understand the GSMA’s unique perch in the payments world. Maslen unveiled the three things that have to happen before mobile commerce truly takes off, how tokenization will have an impact and which payments technologies will be key for retailers in 2015.
The number of global smartphones used to make in-store contactless payments is predicted to increase by 1,000 percent this year. And as the annual Mobile World Congress comes to an end tomorrow, one thing has become even clearer: mobile will continue to be a remarkable driver of innovation across the globe. PYMNTS spoke with Claire Maslen, Head of Financial Services at the GSMA, the organization that puts on MWC each year, to understand the GSMA’s unique perch in the payments world. Maslen unveiled the three things that have to happen before mobile commerce truly takes off, how tokenization will have an impact and which payments technologies will be key for retailers in 2015. She also discussed the most recent GSMA State of the Industry: Mobile Financial Services for the Unbanked report (found here), released at the MWC yesterday (March 3).
With 800 members from over 200 countries, the GSMA is a trade association focused on the mobile community. Recently, as mobile increasingly becomes influential in driving innovation in payments and elsewhere, The GSMA has started to branch out even further into the ecosystem, Maslen told PYMNTS. Now, it includes banks, handset vendors, SIM vendors and technology players.
“We’re a member-led organization, and we represent the interests of our members. We aren’t a standard body, but we will often look at other people’s standards and produce implementation guides, translate them and turn them into real services,” said Maslen. She added that her role specifically is overseeing the financial services sector, driving that wider ecosystem to ensure that the GSMA offers a collaborative environment for its members to work with even the most non-traditional of organizations. In doing so, her job, she said, requires her “to break down any barriers that may come through.”
With the 1,000 percent predicted increase of global smartphones used to make contactless payments, this year will likely be the year crucial steps are made to further the adoption of mobile payments. But in order for that to happen – in order for mobile commerce to truly reach its potential – Maslen said that there are three things that need to happen when looking at new mobile services.
First, there’s the deployment and penetration of these mobile devices. Then, there’s the effort across all major players to enhance and change consumers’ behavior. Right now, said Maslen, cards work “just fine.” So from the consumers’ perspective, the challenge is getting them to “move away from something they’re comfortable with, and on to something completely different.”
“Waving your phone to pay for stuff can actually be quite alien to some people – it’s sometimes very hard to change consumer behavior,” said Maslen.
Third, there needs to be an environment in which people can use these new mobile devices. So when it comes to mobile and contactless payments, said Maslen, there needs to be retail acceptance – that network needs to be in place.
More broadly, she said that with mobile payments, not just with contactless, what will be key is when phones start to become associated with simplifying the online checkout experience – with those important tools that power and streamline online commerce.
In the U.S., NFC readers are being used by less than 10 percent of merchants. And what will ignite NFC adoption in the U.S., said Maslen, is going to be driven by fantastic customer experiences, which cuts across all different use cases.
“This isn’t just about making a payment. For example, some of the most habitual uses that people have seen with NFC has been around transit,” she said. “In the U.K., we have a unique environment in London with our transit system, where people have been using contactless services for the last 14-15 years. They have gotten used to tapping a card against a reader.”
Elsewhere, NFC use cases are all around us – in corporate environments, workers tap their building access cards to get in and out of the office. That is something that’s been happening for ages, said Maslen, so NFC adoption will happen around all of those different use cases.
As for which payments technologies will be key for retailers in 2015, Maslen said that what’s really shifted the direction has been the adoption of contactless readers now coming out into stores.
“We have to think about other options using mobile for POS, thinking about Bluetooth low energy and iBeacons – things like that. All of those things can factor into a payments use case,” said Maslen. Therefore, the focus perhaps should be more on mobile commerce adoption as a whole, rather than just NFC adoption.
Consumers, whether or not it is right or wrong, generally don’t go around worrying about how their payments are secured, said Maslen. They take that for granted, as do many consumers. Security isn’t the first thing on their mind.
“But from a business perspective, we make commitments to regulators saying that anything we offer to consumers will be secure and transparent,” said Maslen. In the mobile space, that includes considering the level of security that the SIM can offer. The SIM, she said, is as secure as chip-enabled cards, and it’s trusted, reliable and understood.
“I think it would therefore be logical to include the SIM in any model we look to deploy. Now, for many years we’ve looked at storing full payment credentials on the SIM and all of the benefits that came with that. If a consumer lost his or her handset, we’d be able to kill the SIM remotely. The consumer has a lot more trust in using these different services,” added Maslen.
Elsewhere, with tokenization, there is an opportunity for a potentially easier model for adoption – the opportunity to store tokens on the SIM rather than full card credentials. Those tokens can be part of an authentication or verification process.
How much of a role that plays, reiterated Maslen, won’t so much depend on consumers, who are not as worried about security as are businesses. But security is certainly an important topic when developing anything in the mobile world, she said.
The GSMA is a global company – and while “it is easy to get latched up in the markets that we sit in,” said Maslen, it’s important to take a look at what countries outside of the U.K. and U.S. are doing in mobile.
“I’ve seen some really fantastic innovation come from developing markets – these mobile money initiatives that are really changing people’s lives,” said Maslen. “We’ve seen in India, for example, programs rolling out for ID solutions, and these are gaining scale – far greater scale than we would see perhaps in developed markets.”
Maslen added that each year, the GSMA produces a State of the Industry report that features various facts on mobile money iniatives around the world. M-Pesa makes up just under 20 percent of Safaricom’s revenue in Kenya – that, she said, is both huge and phenomenal.
“There is definitely an opportunity for the developed markets to learn from the developing market,” said Maslen.
The most recent of these reports (found here) was released yesterday (March 3) in Barcelona at the 2015 Mobile World Congress. Maslen indicated that it covers as much information as the GSMA has available to them across the globe – that includes numbers of transactions, numbers of wallets and different financial services providers made available through mobile.
“When you read a report like that, it really shows you the massive advances that this industry has made in enabling financial services.”
Claire Maslen
Head of Financial Services, GSMA
Claire Maslen joined the GSMA in 2014 with responsibility for building relationships between the mobile technology and financial services industries. Her role is to help develop and foster collaboration in the development of mobile payment services.
Previous to the GSMA, Claire was the Senior Market Development Manager working across the O2 Money team responsible for market development in the U.K., ensuring O2 retained share of voice and a thought leadership position on m-commerce and NFC.
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