1. Client : PayPal Country : Singapore
Publication : The Business Times Section : Biz IT
Date : 17 December 2012 Page : 27
Topic : Digital, not mobile, wallets key to mobile
commerce (Print)
Circulation : 37,500

2. PUBLISHED DECEMBER 17, 2012
Digital, not mobile, wallets key to mobile commerce
BY
RAHUL SHINGHAL
THE highly anticipated iPhone 5 has now been in the Singapore market for several weeks, and
the new iPad mini has just arrived. Those watching the mobile payment space have observed
that neither device carries an NFC (Near Field Communication) chip as a new feature.
NFC has been the buzzword for some time now, and many would have expected the latest
iPhone and iPads to be NFC-enabled - supporting the concept of a "mobile wallet". The
question, then, is: Is NFC the key to mobile payments?
For us, the answer is no. NFC is an interesting technology that enables communication
between two devices that are close to each other. It is a way for people to pay and get paid,
but that's all it is - a technology, not a strategy.
Many are saying that once NFC is in full swing, it will lead the mobile commerce revolution,
but as far as we're concerned, the mobile commerce revolution is happening right now.
According to our data, 2012 is going to be a huge year for mobile commerce - without any
NFC. The PayPal Online and Mobile Shopping Insights 2011 study conducted by Nielsen found
that mobile commerce comprised about a quarter of online shopping in Singapore, more than
five times its share in 2010. Mobile shopping spend grew from $43 million in 2010 to $328
million, representing a 660 per cent jump in just one year.
We're seeing more of the same around the world. We have projected that PayPal would
process US$10 billion globally in mobile payment volume this year. That's an amazing 70x
increase from the US$150 million in mobile payments we processed in 2009, just three years
ago. PayPal has over 17 million customers around the world making a purchase through their
mobile phone which is more than double what we had a year back.
The rapid increase in consumers taking to mobile shopping and the success of PayPal's
mobile-optimised checkout flows have contributed to these impressive figures. With a
burgeoning smartphone and tablet market driving mobile transactions, PayPal expects mobile

3. payments to shape the future of commerce and that future is happening now.
Mobile vs digital wallets
What form of mobile payment will drive the future of commerce? Many people use the terms
"mobile wallet" and "digital wallet" interchangeably and further confuse the already-limited
idea of a mobile wallet by equating it with NFC.
The term mobile wallet is one of the most misused terms in the history of technology. The
commonly used definition of a mobile wallet refers to when all of your financial information,
such as bank account and credit card numbers, are stored on the mobile device, and you need
to have the device with you for the transaction to be possible. That is when NFC is used to
facilitate payments with the proximity of the smartphone and the payment machine.
On the other hand, digital wallets exist in the cloud. They are not bound to one specific device
such as a mobile phone, but are accessible from a variety of devices (laptop, iPad, ultrabook,
Xbox, to name a few) and in a number of ways. Sensitive financial information is stored in the
cloud, not on the actual device.
Consumers are able to make mobile payments even without NFC. The cloud approach ensures
a seamless, connected experience that follows consumers wherever they go and feeds them
what they want, when they want it. Putting your wallet in the cloud, and making it smart
enough to work out the best way to pay for you, solves a real consumer problem that mobile
wallets simply do not.
Clear trend
The commerce trend is clear - mobile devices are changing the way consumers in Singapore
shop and pay today. To stay ahead of the curve, businesses should adapt quickly and offer a
solution that meets the needs of their increasingly mobile-centric consumers.
Developing a smartphone app is a key way of engaging consumers and offering innovative
ways to shop and pay. The Sprooki iPhone app, for example, notifies shoppers of the latest
promotions in nearby malls and retail outlets. They can purchase products in-app, and collect
them at the store. FarEastFlora.com's SG Florist app gives consumers real-time access to over
1,000 choices in flowers, gifts, plants and hampers, and provides reminders ahead of special
occasions.
Smaller businesses that find it restrictive to invest in app development should consider
creating a mobile version of their website. Websites such as Agoda and BestOfferBuy notice
that you are viewing their content from a mobile device and adapt the experience to make it
mobile-friendly without needing to "pinch and scroll" in order to navigate the site.
QR-codes are a new, innovative form of mobile shopping when linked to a digital wallet. An
example of this is the PayPal-enabled QR code shopping at SMRT stations, which saw an

4. average of 500 transactions per 10,000 scans by commuters.
One of the participating merchants, Showbiz Asia, saw huge mobile sales success as they
received a five-fold increase in mobile ticket sales, compared to sales for the same period pre-
campaign. The QR-code shopping campaign enabled consumers to quickly pay in as little as
two clicks on a small mobile screen.
Without a doubt, simplicity and security are the keys to designing a consumer-friendly mobile
payment solution. For many people, the task of entering a 16-digit credit card number, an
expiry date, and a CCV number is enough to make them drop out of the conversion flow,
especially if they are on the move.
People are also concerned about losing their phones and the personal or financial data it
contains. The "digital wallet" approach relies on the inherent security of the cloud, and a
consumer's financial information is stored in the cloud, not on the phone. Even if the phone is
lost or stolen, there is no need to worry about losing your digital money.
The writer is director of mobile commerce, PayPal Asia Pacific