9 Key Takeaways from MEF Connects Digital Transformation

From 25^th to 27^th May 2021 we attended the MEF CONNECTS Digital Transformation virtual event. With a deep dive into best practices on identity and authentication, carrier billing, mobile wallets and more, here are our top takeaways from the event:

1. Identity Should Be Mobile Centric

Mobile globally now accounts the 54.8% of website traffic – and with that comes fraud. Digitisation is growing in day to day life and there is need for better user experience and fraud prevention.

• A smartphone is the logical place to store identity as it is something you have to hand – just like a licence or passport
• Mobile phones can prove identity in the real world and the digital world and this is a practical consideration of why mobile will play a huge role in identity
• Passwords are a big security threat and a sim card has the ability to shift security from a knowledge based factor to possession based authorisation
• If encrypted data is stored by a third party identity provider it solves the problem of lost sims and lost data
• As much as 20-30% of users drop off if they are asked to create login details after downloading an app. Verification through your sim eliminates this step, resulting in better conversions
• Recent use cases for mobile identity include gaming, gambling, ride sharing, banking, fintech, restricted retail and healthcare

2. The Mobile Operator Identity Opportunity

Mobile operators are seen as a trusted organisation and are a highly regulated industry. They can provide a trusted source of first party data for identity providers.

• Mobile operators know your location, know you pay your bills, know your activity, as well as basic information such as your name, address, DOB and age
• They have a responsibility to help protect customers from fraud and online identity theft and can authenticate customers when setting up online accounts
• Customer journeys can be improved as quick and seamless identity confirmation makes things easier online
• Now is the right time for mobile operators to get into the identity space, either by monetising data or offering identity management to third party identity providers

3. What’s Next for Carrier Billing

There are lots of new opportunities arising in the carrier billing space and raising awareness of carrier billing and its benefits for merchants is a key priority.

• The front runners in carrier billing are South Korea and Japan and South East Asia is starting to boom which will also have an impact
• More and more ewallets and digital wallets are popping up but carrier billing and ewallets will co-exist. Carrier billing still has the widest coverage and a higher number of users and it isn’t going anywhere
• App store policies are changing and gaming and mobile gaming companies are shifting back to self-managed payments because of this. We may see alternative app stores for smaller developers in the future
• When it comes to carrier billing – gaming is here to stay. There are also new verticals and opportunities e.g. micro-mobility, parking, micro-insurance, telehealth, edtech, fitness and photo editing, and subscription services are also increasing

4. Carrier Billing is Worth it for Merchants

Carrier billing removes friction, increases security, reduces cart abandonment and is convenient. And if you intend to offer choice to your customers it is definitely something to consider.

• Mobile operators are becoming more supportive of carrier billing and the quality of content and services using carrier billing is getting better and better
• No other payment option has the ubiquity of carrier billing
• There is opportunity to reach new audiences and generate sticky consumer habits
• Merchants can avoid the 30% app store margins
• There are opportunities beyond mobile e.g. web applications and set top boxes
• A challenge of carrier billing in emerging markets may be the revenue share for merchants but access to new customers is worth it  

5. Mobile Operators are Taking a Proactive Approach

Progressive mobile operators are embracing convergence beyond connectivity and core telecoms and taking a proactive approach. They know the future is payments and are seeing it as a good way to monetise.

• KYC and insights growth opportunities for mobile operators can help to build their brand
• Operators can offer value to merchants and end users through data and this is a good criteria for merchants when selecting a payment option
• Bundling of OTT services are a compelling alternative for cord-cutting consumers and can increase acquisition, increase customer lifetime value and reduce churn (video streaming and live sports from 5G expected to lead bundling in 2025)

6. People Don’t Like to Pay

In the Mobile Payments 2021 MEF Consumer Survey the top responses for why consumers use mobile payments were – it’s more convenient (39%), and it’s faster (37%).

• 30% of consumers are concerned about payment details being stolen, 15% users have experienced overcharging
• There is room for improvement in perception of mobile payment security and merchants need to make an investment into providing a trustworthy payment method
• Globally higher age bands are not using mobile payments – Two thirds of those aged 55+ are not using. However in China carrier billing is more prevalent than other countries and of those aged 55+ only one third are not using
• The more choice you offer to consumers the more will pay. Consumers use a multitude of payment methods and merchants shouldn’t focus on just one
• People don’t like to pay. Payments should be something you don’t have to think about, it’s in the background, almost invisible, doesn’t get in the way

7. The Payment Landscape in Africa

The payment landscape Africa has telco led mobile money wallets, carrier billing is very strong and premium SMS remains popular. Citizens want the ability to pay and localised content is important.

• There is a drive towards using mobile wallets for digital content
• In South Africa mobile wallets being used for things traditionally bought with cash, groceries, airtime, electricity etc. Carrier billing is less tangible and is being used for digital subscriptions

8. What Covid-19 Will Change Forever

The industry was quick to adapt to the pandemic impact and we have seen the value that increased convenience brings to the consumer.

• There has been an evolution of seamless payments and that may move into sectors such as ticketing and transport now that things are moving again after lockdowns
• There has been acceleration into a cashless society, consumers are going online where possible and using digital payments. Consumer behaviour and attitudes towards cash has also changed with fears of contamination
• The growth of mobile payments is not at the expense of credit cards, it is at the expense of cash. In some regions we have reached a level of smartphone penetration that we no longer need cash e.g. Sweden is set to be cashless by 2023

9. What Payments Could Look Like in the Next 5 Years

Mobile payment are no longer ‘alternative payments’ they have become a preferred payment method of the world. The payments industry needs to be agile enough to adjust to whatever comes next, so what might the future hold?

• Payments as a concept could disappear, with the right payment method selected for you automatically
• It will be forever important for merchants to stay consumer focused and to offer choice
• Seamless payments, no click payments, embedded payments – it is all about consumer convenience, and mobile will be the key catalyst in giving accessibility
• There is a lot of information embedded into payment history and this could be valuable information for payment providers and for advertisers. The trade-off is data for convenience and trust is an essential element here
• The industry needs to keep doing better and better when it comes to fraud. Making an investment in fraud prevention will help grow revenues in the long term
• A future focus should be on the potential for mobile to offer financial inclusion

Contact SLA Digital today to find out how we can help you accelerate revenues through carrier billing and mobile identity.