Mr Khoong Hock Yun, Assistant Chief Executive, IDA - Speech Mobile Payment Seminar, Oriental Hotel ...
Mr Khoong Hock Yun, Assistant Chief Executive, IDA - Speech
Mobile Payment Seminar, Oriental Hotel
Singapore, 11 March 2003
Introduction
George Bernard Shaw once said" You see things and say "why?" But I dream things that never were and I say "why not?"
Good Morning ladies & gentlemen, members of the media and friends. Many things and services that you and I have so often taken for granted in our day-to-day lives have been conceived this way. It often starts with a person who not only has a vision but the guts and tenacity to push forth often in the face of opposition and ridicule, but with perseverance, achieve great and at times life-changing results.
In the fall of 1916, 25-year old David Sarnoff, chief inspector of the Marconi Wireless Telegraph Co. of America penned a memo to the company's vice president and general manager. It read " I have in mind a plan of development which would make radio a "household reality" in the same sense as the piano or phonograph....[A] radio telephone transmitter having a range say 25 to 50 miles can be installed at a fixed point where instrumental or vocal music or both are produced...the receiver can be designed in the form of a simple Radio Music Box and arranged for several wavelengths. It is not possible to estimate the total amount of business obtainable with this plan until it has been developed and actually tried out; but there are about 15 million families in the United States alone, and if only 1 million or 7% of the amount of families thought well of the idea, it would mean a gross figure of $75 million which would yield considerable revenue". The Management's response to Sarnoff's memo? - SILENCE! Sarnoff's idea of a radio in every household seemed a little far-fetched in 1916. By the late 1920s, the radio had indeed become a household item; today, there is probably one in every home and in every car!
I cannot predict if mobile payments will go the way of the radio but what is certain is that the companies that had participated in the call for collaboration for mobile payments demonstrated the same pioneering spirit in setting out to do so. It is because of the collaborative efforts of these companies to see how they can make mobile payments a reality in Singapore that we get to see the results of these efforts today. It is through these efforts that Singaporeans are able to pay their car park fees, buy merchandise at departmental stores, purchase movie tickets, top up library card accounts and even buy sandwiches with their mobile phones.
In May 2001, our Chairman, Mr Lam Chuan Leong, announced the call for collaboration to trial mobile payments. This was the first CFC we had initiated and it sought to develop mobile payments infrastructure in Singapore through the collaboration of mobile operators, banks, payment providers, wireless equipment manufacturers and other players in the wireless industry. Before I share with you the achievements & learnings of the trials - let me first talk about the importance of conducting such trials; why companies need to continually invest in such efforts and the government's role in encouraging such trials.
Firstly, on the importance on conducting such pilots and trials. As highlighted by David Sarnoff, certain things need to be tried out before one can gauge what really works and what doesn't. This is especially crucial when we are exploring new technology areas where the promises are great but the road in realising them is long and at times uncertain.
Conducting trials will allow companies to acquire learnings that will enable them to work faster by adopting what works and reviewing what does not. Not only will less efforts and time be wasted but companies will not over invest in technologies or solutions that the market does not want.
Today, by sharing the learnings from these trials, we hope that other companies will not have to reinvent the wheel and that it will help shorten the learning cycle as well as time to market should you consider implementing mobile payments for your business.
In areas of new technology, not only is innovation and trials crucial, collaboration is just as key. Without collaboration in developing new technology, we sometimes end up duplicating resources and fragmenting the market with differing standards; in the worst case, we end up stifling the market even before it is even created and each player ends up getting 100% of nothing when they could have obtained a percentage of something. IDA's role here is to facilitate such collaborations to develop new products and services and in this case, to enable the mobile payments infrastructure. This is especially important in mobile payments - an area that straddles both the financial and wireless space. The CFC approach was our belief in the value of collaboration in this area and global developments since the CFC launch have validated this. For the past two years in Europe for example, we have seen many banks and mobile operators, launch individual m-payment services. The trend increasingly is now moving towards an emphasis on collaboration and inter-operable solutions. Most recently, just three weeks ago, four European mobile operators - Telefonica Moviles (Spain), Orange (France), Vodafone (UK) and T-Mobile (Germany) announced their intent to collaborate to develop inter-operable m-payments solutions.
Fortunately, in Singapore, we have already started to do so over a year ago.
Achievements Of Mobile Payment CFC
In Singapore, the mobile payments CFC had effectively facilitated industry collaboration between the country's three mobile operators with NETS - a payment provider owned by the three local banks.
I am pleased to announce today that four out of the five trials will be commercialised. Blink, TeleMoney and YW8 are now commercial while Go Virtual, a trial involving radio frequency-based proximity payments, will be commercialised some time in 2003. The Gemini trial, which was Asia Pacific's first Wireless PKI m-payment trial, will remain a technical trial. You will hear more details about these efforts shortly.
The trials have also spurred initial consumer adoption in the area of m-payments. 11 types of payment services were trialed and over 7000 consumers made at least one transaction each.
More than 260 infocomm professionals were also involved in these trials of which 5% were new hires. We are pleased that the CFC has also contributed to capability development and employment in the area of wireless and m-commerce.
Potential Of Mobile Payment
So what is the potential for Mobile Payments? Let me give you some examples of how it had worked in other countries. In Helsinki, the tram customers are able to send SMSs and receive "ticket messages' on their phones which they will show to the train inspector. The price of the tram ride will be added to their phone bills. From September 2001 to August 2002, over half a million tickets were purchased.
In Netherlands, mobile operator Telfort managed to increase its subscriber base by over 50% (376,000) simply by using a top up service using mobile payments.
So, what can we do here in Singapore? We have one of the highest mobile penetration rates in the world with 78% of the population owning mobile phones. How can we maximise the use of their handphones, provide greater value add, and leverage on these ubiquitous handphones in your business strategies? According to an IDC report on Mobile Commerce in the Asia Pacific, Singapore's total mobile commerce revenue can grow to about US$400million by 2005.
Delivering The Benefits of Mobility
One of the often-cited reasons for using mobile payments is the ability to transact on-the-go. Hence, one need not have to go to the cinema nor buy a copy of the newspaper to see what is showing at the movie. With mobile payments, one can book and purchase tickets practically anytime and anywhere. Paying car park fees just got a little easier. There's no need to fumble for change or stand in line at the Suntec City Shopping Mall to do this. Systems@Work together with Suntec Management allowed drivers to simply use their phones to pay for this.
These are the little steps that the industry has taken to bring the dream of mobile payments closer to reality. But when will it truly become a part of our lives? Will it become as important to us as perhaps the radio is to us? If this were the fall of 1916, how long would the inventor of radio himself think it would have taken for his dream to have become a "household reality"?
In conclusion, the Call for Collaboration to trial Mobile Payments in Singapore has been a success and the details of it can be found in our report. Today, we have in place a non-telco centric mobile payments infrastructure. Four of the five trials will be commercialised. With the infrastructure in place, the next step will be for you to see how you can leverage on this to better serve your customers and to better increase your bottom line. Whether or not m-payments becomes a part of our lives will depend on how much use you can make out of it. I invite you to stay and listen to the learnings from our partners and to be one of the pioneers in mobile payments in Singapore.
Thank you.
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