Nick Ogden, CEO of Voice Commerce, is one of the Management World 2010 keynote speakers on the subject of mCommerce: What's taking so long? He is a serial entrepreneur and as former CEO of WorldPay, now part of the Royal Bank of Scotland, knows a thing or two about digital commerce.
Ogden founded WorldPay in 1997, which guarantees Internet transactions worldwide, and led the company through its growth to over 270 employees with 20,000 merchants in 120 countries, processing transactions worth more than $2 billion a year. WorldPay was acquired by the Royal Bank of Scotland in 2002.
Then he went on to found The Voice Commerce Group, a regulated financial service provider that operates and delivers mobile financial, payment, identity and verification services to consumers and businesses. Clearly he is hoping to replicate the staggering online success of WorldPay in the mobile arena.
Ogden says he has high hopes that the reintroduction of e-money regulation in the European Union will speed the progress of mCommerce and this will be one of his major topics, along with hammering home the message that there is still great scope for operators to make money from payments, rather than simply carrying transaction traffic.
The new E-Money Directive, which came into force at the end October 2009, must be transposed into national law by the EU's 27 member states by the end of April 2011. The old Directive was much criticized, and few companies were interested in offering e-money services as there were too many barriers to market entry. For example, the new Directive lowers the capital requirement of a would-be e-money service provider from €1 million to €125,000, so the hope is there will be a lot of new, innovative market entrants.
Ogden says coinciding with this loosening of payment strictures, there is a growing awareness of the potential of mCommerce in the market. He explains, "I'll be flying into Nice straight after visits to the Middle East and Far East where I'll have been talking to bank governors, who are very interested in mobile and e-money. I also sense a big change among TM Forum's members. Operators are always talking about mobile payments, but I think that's about to change to doing something about it. There is genuine recognition that here is a unique opportunity for them and the banks, for collaboration between the banks and operators."
He adds, "Why the big change now? Because telcos are finally realizing they can't do it on their own. The issues are above technology; this is not the same as providing SMS or MMS, operators have been disintermediated from their customers by pay-as-you-go services, while smartphone development is phenomenal and will continue. There is no doubt that people want to make secure transactions on the move," and of course the human voice is almost as individual as fingerprints, and therefore a powerful authentication tool, especially to someone already holding a phone.
Ogden believes validation by voice overcomes the worries about security, which has been a major stumbling block to the progress of mCommerce so far. He also argues that he has the answer to the second big question that has held things up: What role are operators going to play in mCommerce, and how can they make money from mobile payments?
Voice Commerce offers a range of white label services to operators from which they make money. He explains, "We know which operators generate traffic onto our network, and we pay them commission for carrying that transaction – and they don't have to do anything beyond promoting our service to their customer."
He thinks that the interoperability of payments services between networks is key, arguing, "That's why Vodafone's payments initiative failed – they wanted every retailer to set up yet another account, and that simply won't happen. A merchant will not be prepared to have a different account for every network operator," in addition to the card schemes, loyalty cards and so on. Validation is an important part of acceptance by the retailer too, because if they are guaranteed to accept payment for validated transactions and therefore protected again fraud: WorldPay became huge in online payments in the 1990s because it invented the Internet payment guarantee to overcome the widespread belief that the Internet was not a safe environment for transactions. This was followed by Verified by Visa and MasterCard SecureCode, which Ogden acknowledges are "horrible consumer experiences," but insists there will be big changes there too in the very near future that will also have implications for mobile.
He points out that major network upgrades mean that voice quality across mobile networks has never been so good, and therefore never so suited to voice authentication of transactions, and observes that the coming age of femtocells has also done much to push voice quality via mobile up operators' agendas. "There is still the opportunity for operators to play a pivotal role in payments and make money from them, and finally we are seeing real interest in them trying to take first mover advantage – after all, the operators will always have their greatest asset, the network," he concludes.