Presentation on theme: "Italian Mobile Operators Enabling Digital Coupons"— Presentation transcript:
1Italian Mobile Operators Enabling Digital Coupons GRUPPO TELECOM ITALIAGS1 Global Standards EventRome. October, 7th 2014Italian Mobile Operators Enabling Digital CouponsJacopo CorridoniPM of “Mobile for Retail Project” Strategy & Innovation, Telecom ItaliaConfidential
2Summary Mobile Payment is a Reality in Italy Mobile Payments and Mobile Wallets Fostering Retail ServicesHow Mobile Network Operators are Enabling Digital CouponsA Real Life Use Case of an End to End Digital Coupon LifecycleConfidential
3EASY TO SAY: M-Payment Means Paying Using Your Smartphone What M-Payment is. Enabling customers to pay at physical stores using the credit/debit card “stored” in their phones.The tech underneath. NFC is the proximity technology certified by banks, CC circuits and POS makers for its securityWhat Customers need to m-payAn NFC-capable smartphone and a special NFC SIM provided by the telco operatorAn NFC POS at the storeA credit card issued by customer’s bank that has been virtualized on the SIM’s secure elementA simple gestureEasy, isn’t it?
4Complexity of M-Payment could be behind the curtain Moving a credit card on a smartphone theoretically implies:Each Bank issuing the card needs an agreement and a technical integration with each Mobile Operator to manage the virtualized credit card lifecycle.Each Bank and each MNO should adopt their own Trusted Service Management Platform (TSM) to manage the lifecycleThe certification process must be replicated every time a new issuer wants to “go mobile”Bank 1Bank 2…Bank nSP-TSMSP-TSMSP-TSMNot scalable &Hyper fragmentedMNO -TSMMNO -TSMMNO -TSMMNO 1MNO 2…MNO nConfidential
5Italian Telco’s Cooperate to Boost M-Services Italian MNO’s decided to cooperate in order to avoid fragmentation and make m-payment real.They have chosen a hub approach to integrationStandard. The hub approach leverages on standards and reusability of interfacesScalable. Onboarding of new banks requires small effort in terms of engineering and testingMulti-operator. Each operator can autonomously sign their own partnershipsThe hub approach has proven its efficacy, since the onboarding of banks has become less and less time consuming.Bank 1Bank 2…Bank nScalable &StandardTSM-SP HUBMNO 1MNO 2…MNO nConfidential
6All Components for M-Payment Success are in Place in Italy 1. Consumer Interest2. Devices3. Acceptance Network4. Integration of Players:Mobile OperatorsBanksCredit cardsHub and Technology Integrators211 Millions NFC Smartphones5 Millions SIM by end of 20153200,000 NFCPOS in Italy1Acceptance network grown to 200,000 NFC POS in ItalyMost retail chains, including supermarkets, have massively deployed NFC POSWith the NFC chip on iPhone6 Apple recognizes it as the standard for transactions and this will help the acceptance network to continue growingAs of September 2014, Italy shows 11 Millions certified SIM based NFC smartphones and their number is increasingOperators will distribute 800,000 NFC SIM by the end of 2014, stressing its effort in 2015, when it forecasts to ship 5M SIMThe other Italian operators are developing the same exponential roadmap of SIM distribution.4HUB ArchitectureConfidential
7M-Payment Has Gone Live in Italy during 1H2014 Telecom Italia – TIM WalletMediolanum Credit Card (Live)Cobranded card TIM SmartPAY (Oct.)Cards by BNL, UBI, Intesa Sanpaolo (Oct.)Vodafone – Vodafone WalletSmart Pass (Live)Mediolanum Credit Card (Oct)UBI Cards (Dec.)
8The Mobile Wallet as the UI Metaphor All Telecom Operators have adopted the metaphor of Mobile Wallet as the container for payment services, in order to provide a consistent user experience.The message is easy to convey: “move the cards from your wallet to the m-wallet”The M-Wallet is not simply a metaphor: it is a technical containerIt can host 3rd party applicationsIt provides 3rd party applications access to secure storage on the SIMIt provides 3rd party applications access to NFC standard API’s
9Mobile Wallet as Service Container RETAILMobile Wallet as Service ContainerCouponsLoyalty“Emptying the wallet to go mobile”, means that the m-wallet is designed to become a real container of services.In the Retail Market it meansCoupons and Retailer OfferingsDigital Coupons are directly available in the walletTheir redemption at stores is just one tap awayUser experience is similar to payment experienceLoyalty CardsWe move loyalty cards to the phone.Never leave the card homeBuild an always on communication channel with the customerTicketsDigital ID
10Importance of Mobile for Retail Business Prediction #5:“$2.5B in online shopping will be performed by mobile digital assistants”Prediction #6:“US mobile engagement behavior will drive mobile commerce to 50% of US digital commerce revenue”Prediction #10:“by 2018 retail businesses will utilize targeted messaging & internal positioning”(Gartner Symposium - Oct, 6)Confidential
11CouponingCoupons are mainly printed on physical supports, distributed through traditional channels and redeemed at the stores belonging to the acceptance network.PlayersBrands (ex. Kraft, Nestlé, Ferrero): create the offer to promote their productsClearinghouses (ex. Valassis): publish the coupon, collect the redeemed coupons from the retail stores and refund themRetail Stores (ex. Auchan): accept coupons and apply the nominal discountDigitalization brings advantagesConsumers never lose their preferred coupons and have them in their m-walletRetailers demultiply the effort required by managing collection and delivery of coupons and get refunded far earlierBrands acquire knowledge about behaviors of coupon users. The coupon can become profiledClearinghouses simplify their operations and develop a data warehouse service for the brandsConfidential
12Digital Coupons: The Advantages of Mobile Distribution Coupons go digital and the smartphone becomes the mobile always-on distribution channelCoupons simply pop-up in the application hosted in the wallet, or the customers can grab them using QR and barcodes.Coupons never get lost or forgotten at homeFrauds decrease because coupons are secured and not replicable and personalCoupons not only reach a specific retailer’s customer base but also prospect clients.Geolocalization helps retailers to drive customers to their stores
13Digital Coupons: The Advantages of NFC Redemption Coupon redemption is easy at the teller: just one tap at the POSNo big infrastructural change, since we use the same NFC POS that most large retail chains have already in placeCheck out time does not increaseUsing NFC we bypass physical problems like barcode readers not reading smartphone displaysUser experience of coupon redemption becomes identical to payment experience. The customer will only use his phoneRedemption will have no fraud issues since the coupon will be encrypted and associated to user.
14Digital Loyalty Cards: The Advantages Loyalty cards go mobile by exploiting the features that mobile operator offer to app developers: Security and standard NFC InterfacesThe m-wallet adds visibility to retailer’s loyalty app, because customers get used to access the walletDigital Loyalty Cards become secure since they use security features provided by the m-walletEasy to use at the cashierIt becomes the channel to communicate with customerCombining Digital Identity, MNO’s and Retailers can create a trust mechanism to ease customers’ subscrition to loyalty programs.
15The Building Blocks for Mobile Digital Coupons Coupon Issuers(Brands, Retail Store)Coupon Issuers(Brands, Retail Store)Coupon ValidatorCoupon Issuers(Brands, Retail Store)Coupon Issuers(Brands, Retail Store)Coupon Distributor& AggregatorRetail backendsystemWe need a standard format for couponsMNO’s Tech Platform(HUB)StandardNFC I/FMobile customer
16The Italian Mobile Operators’ Contribution to Couponing The Italian MNOs decided to cooperate with GSMA in order to deliver a common technical solution and user experience for the national retail scenario.The joint work is aimed at providing standard building blocks that each player can exploit for their commercial purposes. The building blocks are:NFC standard applet on the phone that hosts coupon id’sNFC standard app on the POS that receives coupon id’sAn optional disintermediation hub enabling apps on the phone to dialogue with couponing backend serversTelecom Italia has proposed a standard for the NFC interface between the smatphone and the POS used to convey the coupon and loyalty card codesFirst implementation have been agreed to start 4th Quarter 2014As of October 2014, the interface between phone and POS has been proposed and implemented in the trials that will be described later
17The MNO’s RoleMNO’s simply propose themselves as a technological enabler for the digital couponing ecosystem, by:Defining how every smartphone transmits the coupon or the loyalty id to the POSProviding certification for devices and SIM that ensure adequate security levelCommercially, the large amount of customers using operators’ wallets will enable a privileged display channel for coupon providers.Operators’ goal is not gathering usage profile information, which must remain the business of retailers.
18Real Life TrialTelecom Italia has launched a real life trial in order to proof all the aspects of the ecosystem.Technical AspectsUsabilityUser Feedback
19TIM Mobile Couponing Service In June 2014 TIM has started a real life trial of mobile couponing: “Gli sconti di TIM” (TIM Discounts)The trial is active in all Bennet stores in Lombardy and Turin and has been opened to internal trialistsThe TIM Wallet includes the new couponing app that receives digital discount coupons issued by ValassisTIM customer can redeem the coupons when checking out at Bennet supermarkets by simply tapping on their NFC POSThe system has been developed in partnership with major Cashier System Provider NCRThe solution can be rapidly deployed at other retail stores.Confidential
21The new user experience for m-couponing Redeem the coupons directly at the cashier by tapping on the NFC POSSelect the Coupons directly on the WalletFind the nearest StoreConfidential
22All Italian Operators are Performing Trials All Italian Operators have agreed onsame technical approachSame user experienceThey have started testing the digital coupon solution with different players as shown below.Coupon DistributorMobile OperatorRetail System IntegratorRetail StoreConfidential
23What’s NextTelecom Italia has successfully tested its NFC application with both NCR and Konvergence powered till systems.In 4Q2014 Telecom Italia will broaden its trials to other retailers than Bennet.Before 1H2015 Italian MNO’s plan to launch the commercial solution within their mobile wallets.Confidential