Bauer TRUSTING MOBILE PAYMENT

HOW THE TRUST-FACTOR FORMS THE MOBILE PAYMENT PROCESS
1. Auflage 2017
ISBN: 978-3-7439-3558-7
Verlag: tredition
Format: EPUB
Kopierschutz: Adobe DRM (»Systemvoraussetzungen)

E-Book, Englisch, 184 Seiten

In this book Andrea Bauer examines the apparently simple question of the role of trust in the development and establishment of mobile payment services. The proliferation of new payment instruments was always associated with the condition of trustworthiness. Even if the form of payment has changed constantly in the past (e.g. cowrie shells, stones, coins, paper notes, plastic cards or electronic digits), the demand for trustworthiness was always an essential factor regarding its market acceptance. What trust exactly is, which functions trust has in the use of technical solutions and which aspects and determinants of trust are crucial regarding mobile payment services, Andrea Bauer will analyze in the present work.

ANDREA BAUER is an innovation designer, tech philosopher and author. She is the founder of BEAM Studio, an innovation firm that applies novel technologies and methods, to set-up spaces and processes to create cutting-edge services, products, and business models. Always fascinated by the question how technology can improve our everyday lives, she follows a purpose-driven focus, to accelerate her efforts towards a more responsible future. Therefor she is also partner and co-founder of the business collectivekatapult:NOW and the event platform D.DAY Network, an international do- and think-thank of creative influencers, who aim for positive impact by reflecting and actively using the effects of an digital era. www.andrea-bauer.com

Autoren/Hrsg.

Bauer, Andrea

Leseproben

3 Practical Comparisons

3.1 Introduction

Having examined these theoretical considerations, this thesis will now go on to conduct a practical comparison. Company representatives were interviewed about the role of trust in the development of mobile payment services. The companies involved were, at the time, developing or employing state-of-the-art solutions in the mobile payment marketplace.

Anyone who has observed the current market activity in the mobile payment sector will have noticed how dynamic the sector is. Numerous mobile payment solutions are pouring in to the market. And its not just companies from the traditional field of finance that are competing for business – companies from the unrelated field of technology are also developing innovative solutions. Despite the variety of different mobile payment solutions on the market, the table below (Fig. 17) is an attempt to sort them and provide a rough overview of the market.174

Category

Mobile Payment Solutions

Card Reader Solutions

Square, PayPal here, goPayment, payware mobile, Zenpay, SumUp, SalesVu, payanywhere, AppCharge.

Mobile Wallet

ISIS (NFC), Google Wallet (NFC), Microsoft Wallet (Mobile Internet), Apple Passbook (mobile internet), Crowdmob, LevelUp, Vemo (mobile Internet), PayPal (card.io), mWallet (NFC), digimo (NFC), cashlog, Sprint Touch (NFC), clover (mobile internet), kuapay, dwolla, Wallby.

In-App Solutions

Starbucks, Walmart, Burger King, Touch&Travel, AirPlus.

QR Code

PayPal QR Shopping, Mr Net Group, Cleap, digimo.

Fig. 17 – Mobile payment solutions arranged by technological category.

The increasing complexity of the market seems likely to lead to increased anxiety among customers, making the trust factor even more crucial.

The following practical comparison will focus on three companies. The companies chosen were all important driving forces in the implementation of mobile payment solutions in the German market at the time when this paper was written: Deutsche Telekom, Vodafone D2 and PayPal.

The interviews were conducted with company representatives from the German market. The questions took the form of qualitative, semi-open interviews. The aim of the interviews was to find out how the company representatives viewed and how important they found the question of trust in the design of their mobile payment services and in their communications with the public.

3.2 Telekom

With 93 million mobile phone customers in Europe and the US, Deutsche Telekom AG is one of the leading service companies in the telecommunications and information technology sectors.175 Telekom is an offshoot of the stateowned company Deutsche Bundespost. In 2012, the company continued to place transformation at the heart of its business strategy.176 The telecommunications market demands a very high degree of flexibility and innovation from companies. Transformation in the sense of change implies a strategic appeal for continual rethinking and the transition from current to future business models.

3.2.1 Deutsche Telekom’s Payment Ecosystem

Deutsche Telekom clearly treats mobile payment as a strategic business field. This is clear not just from their website, but also from their strategic partnerships, such as their partnership with the MasterCard corporation, begun in July 2012.177 A study commissioned by Deutsche Telekom also states mobile payment as an upcoming strategic business area. 66% of the Germans and 86% of the Americans, who took part in the survey, were convinced that mobile payment would become widely accepted.178 The study also reached some interesting conclusions as to the kinds of goods that customers wish to purchase by mobile payment. Together with minor purchases and everyday goods, a high percentage of survey participants also mentioned clothes, tickets, gasoline and durable consumer goods. This demonstrates a wide range of uses for mobile payment.

This is perhaps one reason why Deutsche Telekom has decided on the implementation of a ‚mobile wallet’, instead of a single payment solution.179 The mobile wallet (also called m-wallet) solution is, however, only one component of Deutsche Telekom’s payment ecosystem. This will also include “Online Payment“ through the subsidiary ClickandBuy, payment cards issued by their strategic partner MasterCard und POS payment terminals with NFC readers available for transactions. In these ways, Deutsche Telekom plans to take an active part in the further development of the payment market and provide simple and secure payment solutions for mobile, online and POS transactions.

3.2.2 The Mobile Wallet

At the time of the interview, Telekom Innovation Laboratories, T Labs for short, were developing a mobile wallet (m-wallet) solution.180 The interview took place with the project manager responsible for the m-wallet, Zhiyun Ren. He provided insights into the service’s current state of development and into the importance of the trust factor in T Labs’ mobile payment solution.

Mobile wallet solutions are not simply about digitizing a method of payment. They constitute a multi-application platform. The platform is installed with various applications such as payment, ticketing, coupons, loyalty and access keys (e.g. car or house keys).181 Different kinds of cards can be activated for this purpose, such as credit, debit, prepaid, customer loyalty cards, entrance tickets or train tickets. The payment functions of the m-wallet include both remote (via mobile internet) and proximity payments using NFC technology. Universal integrated circuit cards (UICCs), the new generation of SIM cards, provide the secure element.182 This new kind of SIM card offers a number of new safety features for data storage and encoding on the card’s chip. This enables secure payment and identity management functions to be carried out on the mobile phone.183

At the time of the interview, the m-wallet solution was in the pilot phase. The first product launch is to take place in Poland in 2012.184 A product launch in Germany is planned for some time in the course of 2013.

The m-wallet will ultimately be a platform to which service providers will be able to attach the services they offer, through standardized interfaces. The standardizing of the interfaces began with the ‚E5’ association, a group of Europe’s largest mobile phone service providers, made up of Deutsche Telekom, Vodafone, Telekom Italia, Telefonica and Orange. Because of concerns about cartel-related legal issues, the E5 were asked to hold the discussion about interfaces jointly with the GSMA, so that smaller mobile phone service providers could also be involved in the discussion.185

3.2.3 An User-Oriented Approach

According to Ren, trust is regarded as an important factor in the implementation and distribution of a mobile payment service.186 Many people have little experience with the application or use of NFC technology and can quickly become unsettled by the speed of transactions. Telekom hopes to reassure customers with a user-oriented approach and win their trust through control and transparency. The unified user interface is designed to give the user a feeling of security, as it uses the familiar analogy of the stock market and incorporates and unifies different payment and authentication services. The design of the service – in the sense of the user interfaces, interactions, processes and informational architecture – will be tested in a threestage model before its launch. First, user interface experts will evaluate the wireframes. Then mockups will be constructed. Early adopters will test these and then, after reworking the model, the first programmed prototype of the app will be evaluated by average users.187

The user-oriented approach also aims to allow the customer to personalize the application’s settings. This should have a substantial effect on encouraging customer confidence. The customer can decide which payment methods or which level of security should be set as the default. If you choose the fast pay method, the mobile phone will only need to be placed on the payment terminal once in order to pay the bill, with no further confirmation required. But you will also be able to incorporate an automatic PIN number request and require authentication for each payment.

Clearly, this requires a self-explanatory user interface. If there are numerous different settings, a confusing user guide could lead to distrust and therefore to a rejection of the service. This also raises the question of how much control the user actually wants to have over the device and at what point the administrative effort required is too great and cancels out the convenience factor. This phenomenon can also be observed in the case of the social media platform Facebook. The high number and lack of transparency of the optional privacy settings can lead to suspicion and even to reduced use or to no further use at all.188 A nonstandardized design coupled with a high number of settings that are difficult to locate can turn the user’s control over the device into an annoying and tiresome administrative task.

When it comes to building trust, control must always be accompanied by transparency.189...