Mobile payment and Sonera

Finland as a Mobile Commerce Lab

•Mobile penetration 84% - no handset subsidy•Hardly at all prepayment subscribers•Premium rate services already in use from 1988 •Mobile banking already in early 90’s•Cash is less used in the world - plastic cards instead (debit and credit) no checks•Consumers expect new mobile services

The evolution path of mobile payment in Sonera

Canteen 2000

Café 2000Parking 1999

Vending 1997

POS

2001

Sonera Shopper

Vending

•Sales by premium rate numbers, billing in mobile phone bill•No need for subscription•The first application in 1997, now 800 vending machines with mobile payment•Good show case for mobile payment•Car wash “killer application” in vending•Video jukebox, golf ball machine, soft drink machines, photo booths…•From 2002 3rd party as service operator

Canteen

•Buy your lunch by mobile!•Sales for subscribers•From June 2000•Payment either by credit card or prepaid account•Good show case for replacing cash and cards in every day purchase•Regular users•Sales by calling number + IVR

Parking

•Pay your parking fee by mobile!•Sales for subscribers by premium rate number•From 1999 in Stockholm, 2000 in Helsinki•Payment by credit card •Good show case for time based billing•The best WIN-WIN -case, so far•3 rd party as service operator

Point-of-Sale

•Pay by mobile all your purchases•Sales for subscribers•Pilot from February 2001 in Pizza Hut•Payment by credit card or from prepaid account •One-time pin-code in use (SMS)•Good show case for any kind of purchases and the most potential application

Mobile Ticketing

•Sales by mobile phone using location info and end user profiling•Integration in existing ticketing systems, control, access, info, reservation•Transport Operator in full control of stock and presentation•High throughput automatic electronic ticket validation•Ticket printing possible•European pilot in the summer 2001•Calling number, IVR, SMS, RF in used

SONERA SHOPPER

• Trial from 2001 for restricted user group• Subscription needed• For any mobile operators subscribers in Finland• For any type of handset• No more billing in mobile phone bill - Credit card (Visa/Mastercard) or Shopper account (prepaid) • Secure payment method

Value proposition for the merchant

• Time savings in payment transactions • no need for signing the bill• no need for checking the identity

•More secure cash register environment•less cash handling and cash logistics

• Option for mobile marketing • Innovative image

Functionality

Usability

Experience

Sonera Shopper for the merchant

More efficient payment method

The channel between consumer and

merchant

Payment method

Value proposition for the end-user

• Secure payment method - All purchases are confirmed • Convenient payment method - Only one PIN-code to remember - No signing at cashier - No need for cash• Service management and reports by SMS or from www.sonera.net

Registration

Payment Transaction

1.

2.

3.

4.

5.

Financial Institution

Consumer

Sonera

6.

Merchant

7.

1. Consumer sends SMS: PAY XXXX to number 13130 2. One-time payment ID as response SMS, valid for next 30 min3. Consumer tells payment ID to the cashier 4. Payment information is sent from cash register system to Sonera Shopper payment platform (Merchant, payment ID, value of the purchase)5. According to default payment method billing either from Shopper account or credit card. 6. Sonera Shopper payment platform sends payment confirmation to the merchants cash register system. 7. Consumer receives confirmation of purchase from Sonera Shopper by SMS.

The Receipt

Sonera Shopper merchants