US Market Insight
What do you think is the average mindset of the US customer with regard to m-Commerce?
The average consumer in the US thinks of mobile commerce as buying games, applications, ringtones, or tickets using their phones. They don’t necessarily consider ‘WAVING & PAYING’ as mobile commerce yet. However, you see a lot about that in the press nowadays and people are becoming more aware. I think there needs to be more exposure through advertising as to what mobile commerce is and can be.
As mobile devices evolve, how will this mindset change/not change in the future?
Getting a credit card to the phone is just the beginning and by itself does not necessarily provide much value to the consumer because, for the short‑term, we’re still going to carry a physical wallet. The infrastructure is not in place everywhere because some merchants still do not have NFC functionality— so we’ll have to use both. In a consumer‑driven market, however, change will come when the consumer realizes the value of mobile commerce in terms of increased productivity.
Even as early adopters upgrade their phones to ones with NFC functionality, the US consumer will find that they have a device that is only operable at 20% of the point‑of‑sale (POS) at the current standard. The opportunity for us is to penetrate the current payment system and find the items that customers use frequently, like in Korea where Mobile Gifting is immersed into the people’s lifestyle so that you can purchase gift cards on your mobile phone and send them to other people’s mobile phones. We have to find that lifestyle impact. We need to find a way to come in and change the lifestyle of the consumer while other service providers are battling the MNOs.
What implications does this have on the m-Commerce market landscape?
Given that the upgraded POS device is not yet widely available in the US, the next logical solution is not necessarily mobile all around. Today in the US, we have something called the “remote deposit capture” where we can take a picture of a check (both front and back) for deposit in a bank. This system of remote deposit transaction is becoming more and more popular. With the mobile device and the current ecosystem that evolves around the merchant and the consumer today, we can take advantage of the upgraded technology within the current ecosystem to wrap it around in different factors, which will ultimately add value to consumers and their changing lifestyles. Then we start asking questions such as “Can we use our camera to capture coupons that are attached to our loyalty cards?”
In truth, the vehicles (payment instruments, coupons) exist today for mobile commerce solutions. SK C&C USA exists because no one has emerged in the US market that can say, “Hey, I can connect everybody.” Our job is to be able to bring the technology and lessons learned from Korea and say, “Mr. Merchant, connect your loyalty program provider to us, take your coupon provider and connect to us, Payment Processors, Credit Card Companies, etc. and connect to us.” We can stand in the middle and enable players in the ecosystem to leverage this technology. Of course, this happens through the interface. But in reality it is always the back office software that gets built behind the interface that allows the technology to happen.
Our opportunity is to stand in the middle—between the old way (like barcode) and the new way (like NFC)—and get them to come through our technology and be a service provider in that model. We did that with the payment processor (TSM) so that credit card companies can switch from plastic to electronic using our technology.
SK C&C’s current m-Commerce-related offering list includes TSM, mWallet, mBanking, mMarketing, mSecurity, and various other content services. Without regard to that list, what area, in your view, will be the key viable market in m-Commerce?
Our strategy when we started was to focus on mobile banking, but we feel the greatest potential for revenue generation will be driven by services that change and enhance the consumer’s lifestyle, such as mWallet andmobile marketing services. Because the TSM brings security and richness to mWallet and mobile marketing services, it’s still the right place to start. The challenge is that we don’t know how fast the infrastructure to enable TSM is going to ramp up or how fast or what the real playoff will be of the mWallet because there are all these UIs out there that are called wallets. But, there really is a need for a more robust concept of wallet that includes a platform and a wallet management system. To me, that’s our real opportunity—to be that wallet management system. Also, I think mobile marketing services and offers are what we really have to get to, because if we just build a wallet we’ll never monetize this business. But if we can get to the coupons and make that lifestyle change easier, we will facilitate our customer’s realization of our value. How fast we can make that happen will be our opportunity, not to create what goes in it, but to allow what goes in it.
Then, there are probably secondary markets that will open up such as hospitality, transit, and building access control. For example, why can’t we put our building access key cards into our mobile phones? Another example of building access is hotel check-in. Why do we have to go to the front desk? You made your reservation and they have your credit card on file. When you land in Atlanta, why can’t the hotel text message your check-in confirmation, and over our TSM, send the room key to the mobile phone? Then a day before checkout, the hotel can ask for extended stay. On confirmation, they can send a new key to the customer. That’s the kind of market where we’ve already built the technology for as a TSM. We only have to make the interface that enables it. That’ll be another market that opens up for us.
In terms of mMarketing and couponing, there is a lifestyle conflict in the US that opens an opportunity for us. Consumers do not always know that they’ll be out shopping for certain items or at certain stores so coupons are often left at home. If I could get the mobile phone to hold my coupons and easily redeem them when needed, this would greatly improve my productivity and provide greater value to me. A significant number of US consumers carry camera phones and loyalty cards. So why aren’t we taking pictures of coupons in the simplest form and storing them for easy access when needed?
What mainstream markets or niche markets do you think are penetrable by new entrants in US m‑Commerce?
Anywhere there’s a registration or a reservation made is an opportunity for us. We have to ask, whatever the instrument of issuance, can we digitize it and get it to the phone? The opportunities lie in existing markets and enabling them for mobile.
What markets are difficult for new entrant penetration?
As for new entrant penetration, I think card issuing or trying to become a single brand is difficult. I’m a big believer of “let the brands be the brands.” We just want to support them. Let’s make them look better, let’s make them look smarter, let’s create more value, let’s make our money when they’re making theirs, but let’s not go and try to make a brand. It’s a very time-consuming, hard-to-penetrate option. Also, we don’t want to become a bank, we don’t want to become an MNO, and we don’t want to become a merchant per se. We want to be the partner that works with all these players.
Given your working experience at SK C&C,which organizational, cultural or other difficulties have you encountered that currently, or in the future, may become a potential barrier to SK C&C’s success in the US market?
It’s all about staying focused. We won’t have to spend all of our time and resources proving our technology—we know that it works because we already have 30 million Koreans using it. Now we are focused on delivery. The ecosystem already exists—we just need to get it over here. It’s all about integrating the technology, the business, and the ecosystem to commercialize our product.