Alcatel-Lucent unifies the mobile wallet around carriers

The mobile commerce market is heating up quickly, with many wireless operators looking at how to put themselves at the heart of the action. The market is fragmented today, but equipment vendor Alcatel-Lucent (NYSE: ALU) has a solution that it says could both unify mobile commerce services and put wireless operators at the core.

The company unveiled its Mobile Wallet Service at CTIA last week -- what it is billing as a way to replace the physical wallet entirely. Connected Planet spoke with Anthony Belpaire, general manager of Alcatel-Lucent’s mobile money venture, touchatag, about how the mobile phone will could do away with the green stuff entirely.

On ALU’s vision for the mobile wallet: The vision behind Mobile Wallet service is we believe that consumers from all the regions of the planet will significantly adopt their mobile device as an extension of their wallet. There will be significant uptake of consumers using their device not only for voice or data, but also for value transactions.

On mobile money for the unbanked: There might by some differences region by region of why consumers are adopting mobile wallets. In more developing countries, we see applications supported by the mobile wallet like person-to-person money transfer or remittance as a way to solve underdeveloped banking networks. Many more consumers have a mobile device in hand compared to people who have a banking relationship or account. Accessibility of financial services – we really see that the mobile wallet can address that for consumers, so that transfers can be done in a decentralized, safe, effective manner compared to physical transfers.

On how mobile wallets differ in developed markets: If you’re looking at mobile wallet applications, it is happening more in the developed world where we already have a developed banking system. We see a tremendous opportunity for consumers for mobile wallet services, because of convenience. We all have mobile phones with us. If we go out in the morning, we have our mobile phone, keys and a wallet. Because of the convenience factor, in a couple of years, we’ll only have the mobile device. Mobile wallet services can also be used to pay in a contactless manner at physical outlets, but it can also be used for all types of mobile marketing applications, so that within one single device you have access to your payments and can also manage your fidelity points or coupons. The mobile marketing value for both the consumers and for merchants is what we see as a relevant space for developed markets.

On bridging the gap toward NFC: For proximity payments or value transactions like building up fidelity points or redeeming coupons, there is definitely infrastructure required at the point-of-sale. You need a point-of-sale reader at the merchant that can read a contactless technology like near-field communications. NFC is a technology that’s either being built into next-generation handsets or which can be also provided to existing handsets by applying a NFC sticker to the back of the phone or battery. There’s various ways to enable a mobile handset to work on contactless applications. On the POS sides, you need a POS reader that can read out those NFC identifiers.

On how NFC works when POS doesn’t: In countries where you don’t yet have contactless terminals we see that mobile network operators are engaging with a number of verticals, like retail, more closed user groups, so food grocery chains or a quick service restaurant chain. If you want to, as a merchant or retailer, benefit consumers with a convenient and fast way to pay, but in addition you can leverage that investment in a POS reader also to support your marketing program to drive traffic to your store, you are able to based on contact to deliver a coupon which is guiding a consumer to a better consumer purchase behavior within the store. That’s something the mobile network operators an offer.

On why mobile operators play a central role in the wallet: We believe that mobile network operators are very well positioned to market value-added services to a huge consumer base or huge enterprise customer base. We see them very well positioned to provide mobile wallet services to the market. That’s why what we really provide to mobile network operators is a framework solution, which helps them in a very fast time-to-market and a very scalable manner to promote those various mobile wallet apps. We provide a framework in a software-as-a-service mode, so that the mobile network operator can provide a portfolio of applications to their consumers….We definitely see the mobile network operator as being the center of mCommerce architecture.

On bringing it all together for consumers: We all have various cards in our wallet, so I have to agree that today there is fragmentation with various methods. But that’s also the value we provide with our mobile wallet solution. We call it an integrated wallet. We bring them all together in one simple wallet solution on one single device that’s always carried, the mobile. The complexity of having all those fidelity, couponing, discount and credit cards – we simply it for the user with one single access to these various types.

On why mobile network operators are keen to provide mobile wallet services: We talk every day to customers and see two important drivers. The first is revenue. This is providing new applications. Providing payment applications typically has a business model where you can earn a transaction fee or, in some countries, earn subscription revenue in various countries. The revenue streams are getting higher average revenue per subscriber to be targeted as the driver. That’s in combination with churn reduction. The two drivers are making money by having new applications, and the second is keeping that money.