These are parallel worlds; fintech, cryptos, mobile payments and mobile engagement – but they’re merging into one!
The creation of legitimate digital currencies for closed group consumer environments (such as football clubs) plus the increased adoption of smart contracts and Blockchain into telecom industry processes [e.g. for international movement of handsets, data and minutes] puts Fintech at the centre of a “new world order” for the VAS, telecom and micropayment sector. So how did all this happen? And is it time for us to start taking it seriously?
PSD2 – the evolution of carrier billing applications
Whilst Payment Service Directive 2 (PSD2) opens up carrier billing for the purchase of a wider range of goods and services and continues to support consumer purchases of digital content and services, such as ticketing, music / video streaming and voice products [community chat] and text based services [interactive TV and radio]. It’s primary aim is to make financial transactions more transparent, more accessible and more secure and therefore open the market up to additional merchants and providers. Clearly this represents a massive opportunity for the Telemedia sector, which has been highly successful in driving sales of value added services, premium content and applications using a range of [primarily] carrier / mobile billing and engagement technologies.
By combining payment processing and content delivery platforms, the Telemedia industry captures essential data that helps create a deep understanding of how, where, what and why consumers “click buy”. This gives rise to the development of consumer centric aggregated services where the payment process becomes an almost seamless part of the buying activity. In short, it’s going to revolutionise the touch points of consumer living from parking to sports betting, from pizza to leisure. In amongst this revolution is the emergence of digital currencies that facilitate earning and spending in closed community environments, with the ability to top up these currencies, using operator billing and exchange the currencies across other environments. Security and transparency are enabled with Blockchain technology, while limitations applied onto consumers by over-zealous regulators fall away.
Distributed payments and retail
The Telemedia sector is clearly starting to touch Fintech by combining its advanced knowledge of payments, mobile technology and VAS into a wide range of innovative new processes that will inevitably start to impact the way traditional card payment processors, banks and MNOs operate, by removing the “clunkiness of the payment aspect away from the purchasing experience. This in turn will challenge traditional partnerships and give rise to a need to establish new ones inside these emerging “open banking” environments. That’s “distributed payments”.
Meanwhile, mobile commerce is slowly shifting away from retail apps and more towards marketplaces. Soon just using a mobile phone to capture an image of something and then simply purchasing it will become the norm – straight from an advert on TV or billboard or from seeing someone else with the product you want – that’s called distributed retail.
The combination of distributed retail and distributed payments is where the revolution in retail, commerce, payments and Fintech will occur – and it’s already starting to foster a wealth of new and exciting partnerships across organisations with loyal followings, retailers, mobile engagement companies and security organisations.
The rise of crypto currencies
When it comes to the Telemedia / VAS sector it’s not so much about bitcoins. The emergence of crypto currency – can be seen in the application and distribution of tokens, loyalty points, digital assets or coins within games or “value added sessions”. Many Telemedia companies are already pioneering this rapidly emerging sector and will certainly be focussing on how to use crypto as a way to pay and be paid. This also presents interactive media companies with a whole new business model – whereby they can start rewarding their audiences – by offering “crypo for eyeballs”. Ultimately these currencies will all have real value that can eventually be exchanged for other goods and services and / or other cryptos – and ultimately real money! With this in mind, it’s also advisable to pay close attention the emergence of crypto exchanges, which will surely hold the key to cash redemptions.
There’s revolution in the air, as Telemedia and Fintech world’s cross over and start reimagining consumer purchasing and engagement processes. To misquote a misquotation; “its payment Jim, but not as we know it”.
The World Telemedia 8-10 October 2018 conference will address these topics across a number of sessions. Visit www.wtevent.co.uk for more information.
By Jarvis Todd, Managing Director, World Telemedia