Card Payments in Turkey: Trends in contactless and mobile payments

This is the last part of a two-part series about card payments in Turkey.  The first part of the series provided a market overview.  This post looks at trends in contactless and mobile payments.

When it comes to contactless space, Turkey is the second country in Turkey after the UK. Number of contactless credit cards have almost reach % 6 of the total number and it seems that the growth will continue. Garanti Bank leads the market here and there are unconfirmed plans that they will migrate all the card portfolio into contactless cards.

Card payments in Turkey: Market Overview

Turkey is a trend-setter in the card payments space.  Understanding what is happening in Turkey could help us understand our own markets.  

Mr Burak Ilgicioglu is the guest writer, and provides an overview of the market and trends there.  Burak has been working on card payment systems since 1994. He has worked for 4 different banks and 2 different payment processors and still working for a bank as the card payment systems analysis manager in Turkey.  He is married with 2 kids. His main areas of interest are smart cards, contactless systems, Visa & MasterCard systems, networks and regulations. He is the creator of the blog focused on contactless systems : http://contactless-world.com

Visa India

Have you heard of Visa India?  I came across a news article today referring to such a company.  When you visit the Visa site and select India, you go to Visa South Asia section.

I am not trying to make a big deal of this innocuous article.  Given the background about NPCI, quite a few folks whom I interact with suggest that a Visa India (similar to Visa Europe) is a reasonable market response. 

Interview with Prof Das re: Cashless Payment System in India

The response and discussions triggered by Cashless Payment System in India - A roadmap has been marvelous.  Discussions among payments professionals [in India] have invariably gravitated to debating either suggestions in the report or the broad press coverage the report received.  For sure, the report has helped bring the spotlight to the niche area of electronic payments and its role in an emerging market.

While Prof Das, the author of the report, has been understandably busy, he took some time off to talk with Mr Manju Murthy.  Please find below the excerpts of the conversation:

MM: Why did you feel there was need for this report?

Review of report: Cashless Payment System in India

This post reviews Cashless Payment System in India - A roadmap authored by Prof Ashish Das, IIT Mumbai and Ms Rakhi Agarwal.  This report is a well researched and comprehensive report which is a must read for payments professionals, those who focus on India and others as well.  The report is unbiased and credible as the authors objective has been to identify factors to deliver an effective and efficient retail payment tender for India.  As a professional addressing opportunities in India, I have been waiting for this report for a while now.  The 104-page report did not disappoint.  While I normally do not have much patience (or attention span) for long documents, this report was an easy and quick read.  I encourage you all to read this report.

The summary of the findings are:

Who cares about US mobile payments

The latest mobile payment announcement (Mercury NewCo) is note worthy.  AT&T and Verizon among them have over 170M subscribers, and would deploy 60M handsets annually (assuming an average of 3-year plans).  Assuming half of the handsets on offer support mobile payments, and a third of those subscribers activate their mobile payment service, we can expect about 10M new mobile payment cardholders each year.

It may not come as a surprise that nearly half a dozen banks offer MasterCard PayPass cards, and 10 issuers offer Visa PayWave cards. These banks have already deployed over 60+M contactless cards over the past 5 years.  There is a 1 in 3 chance that US readers of this blog have a contactless card in their wallet.

You might wonder why I jumped from mobile payments to contactless payments.  Elsewhere in the world, these two payments are synonymous.  I would tap my phone to pay for products/services.  Consequently, I am assuming that this latest announcement is going to be along similar lines.

Benefits of closed-loop payment networks

I was surprised to note the continual downward trend of fraud figures reported by PayPal (see graph [includes some interpolation]), including their recent figures of 0.18%, which is about 1/3rd less than comparable figures with Visa/MC.  This is one of the obvious value-adds of closed-loop payment schemes.  PayPal is an example of a [dominantly] closed-loop scheme, in which the merchant and the consumer use PayPal for payment, thereby making it easier for the scheme provider to detect fraud.

Broadening electronic payments coverage in India

Electronic payments industry requires the government to motivate laying the rails (aka necessary infrastructure).  It is heartening to note that government in India is using RBI's bully pulpit to get there.  Public Sector banks in India have signed up to bank the unbanked over the next 5 years.  I am sure the skeptical readers have been hearing about such good intentions for many years without any perceptible change in ground realities.  I think that this time it is going to be [marginally] different

• Back to back governments of the same party is providing adequate time to focus on and deploy infrastructure
• Political parties in India have figured out how to benefit from government sops being distributed electronically.

 Having said that, it will take time (5+ years) and effort to see electronic disbursements and financial inclusion (FI) make a difference in the lives of the poor, and change behavior (reduce use of physical cash).

Reserve Bank of India (RBI is the Indian Banking/Payments regulator) Deputy Governor Dr KC Chakrabarthy, among other RBI officials and Bank management shared their Financial Inclusion plans at the 23rd SKOCH Summit on Financial Deepening in Mumbai:

• 
  
  

Bridging the gap in Branchless Banking

This post is the final part in the series on branchless banking, and will provide an overview of the innovations (or gaps that need to be filled) necessary for branchless banking to be viable.  The introduction of this series set up the context.  The first part of this series provides statistics about the industry as is today, which is essentially in a fixed-cost and money-loosing phase.

The following structural changes are recommended to help the industry move from an early-adopter opportunity to a sustainable market which has the green shoots of sustainability and stability:

•  Use of Commercial Off The Shelf (COTS) hardware as a POS device.  This would preferably be a device which the agent already uses, for e.g., a mobile phone.  
• This will reduce the cost of entry for an agent
• Standardized devices will have higher uptime and lower maintenance costs
• Such devices will be interoperable with other service providers' infrastructure
• 
  

State of Branchless Banking in India

This post builds on the previous post which setup the context of this series, and will provide an overview of branchless banking as they exist today.  The next post in the series will discuss bridging gaps that exist and will provide recommendations for service providers.

Below are some of the key performance measures of branchless banking in India (based on many sources including CGAP articles from G Chen and K Krishnaswamy et al):

• Account Opening Fees paid by banks for No-Frill accounts, a major revenue stream, does not exist.  Presently, No-Frill accounts are a loss-making proposition.  Consequently, I don't see banks pushing for new no-frill accounts in their current avatar
• Custom hardware devices are provided, as POS terminals, by service providers (e.g., FINO, ALW, Eko) to their agents (e.g., merchants), in lieu of a deposit (typically INR 5000 / $115)
• 
  

Analysis of Branchless Banking in India

It is easy to agree that branchless banking is a preferred way to serve rural India.  However, I have been trying to get my business mind to arrive at the same conclusion by looking at the numbers.  I would like to go thru' such an exercise here at the risk of getting beaten up.

I am starting this exercise by leveraging the wonderful work done by CGAP, notably these two publications:
    ○ BC Banking Channels in India - G Chen
    ○ Building Viable Agent Networks in India

Visa getting into acquiring business

SBI is teaming up with Visa International and Elavon (Source) to jump start SBI's acquiring business.  It is a critical win for Visa.  In light of SBI being the 800# gorilla in the India, their choice of Visa is intriguing.  Is this the beginnings of Visa's aspirations in the acquiring space?  When Visa decided to acquire CyberSource, Visa was expected to be measured in its interaction with the merchant community so as to not offend its partners, the acquiring banks and processors.  With Visa's intentions of taking CyberSource international, and its move into acquiring business in emerging markets, we might seeing elements of Visa's strategy for the coming decade (at least in emerging markets).  With SBI's interests in mobile payments (primarily driven by financial inclusion and branchless banking initiatives), Visa's JV with SBI becomes even more significant.

What does this mean for NPCI's aspirations and the IndiaPay initiative?

Look forward to your comments on the implications of the SBI-Visa JV.

Visa's acquisition of CyberSource: Potential for growth but not quite a home run

Since going public, Visa's expansion plans had to be well calibrated to not upset a lucrative business while trying to take advantage of upcoming trends.  Visa's M&A considerations ere driven by the following factors:

Ecommerce segment is more lucrative: Prima facie it makes sense.  The interchange rates charged for  credit card payments is around 1.8%.  However, ecommerce merchants pay around 2.5%+$0.30.  This provides payment gateway providers, such as CyberSource revenues of around 70 bps.  This kind of revenue is huge, considering that the financial risk as a payment gateway service provider is minimal.  The percentage revenue to a payment gateway provider in only second to that of an issuer.

Mobile Payments are coming:  They will change the dynamics of merchant acquiring, not in as far as displacing incumbents, but as they are expected to take a significant share of future growth.  This holds true for both developed and emerging economies.

Brick-n-Mortar still rules: While ecommerce and mobile payments have folks gushing, transaction volumes from these sources account for less than 20%.  The bulk of the revenues come from brick-n-mortar stores which Visa wouldn't want to impact.

Visa's decision to acquire CyberSource met these criteria.  Having said that, it is not clear how much of the upside from ecommerce CyberSource can deliver to Visa.  It is interesting to note that CyberSource's revenue per dollar processed is only 22 bps (Revenues of $265M from TPV of $120.4B).  This is pretty small compared to expectations of over 50 bps.  However, CyberSource's TPV per merchant is also a whopping $400K/merchant/year ($120.4B from 300K merchants).  The high number is consistent with CyberSource's clientele of both high-volume retailers and SMB online merchants.  Compare this against PayPal's TPV of over $10,000 per merchant per year ($20.1B/quarter from 8M merchants).

Consequently, the opportunity then for Visa is to increase both revenues per transaction, and revenues per dollar processed.  Additionally, the mobile payments world will be dominated by lower value transactions and smaller/micro merchants which requires the payments service provider to have low acquisition, fixed and variable costs.  Both Visa and CyberSource are both used to medium and large retailers.  To effectively compete and take advantage of mobile payments, the new entity has to fill the above holes, either thru' internal capability or thru' yet another acquisition.

While the acquisition looks like a base hit, it will require a lot of chutzpah from Visa's management to convert it into a triple, which Visa really needs if it is going to be something more than a payment scheme (which its shareholders demand) and to take on PayPal in any meaningful manner.

Electronic Cash in India: A conversation with S Fareedi

I spoke with Mr Seemab Fareedi, Senior Manager, Smart cards division, Sodexo India to understand the opportunity for electronic cash instruments for micro/small payments in urban India.  India is a fast growing market holding promise for a lot of industries.  I wanted to find out from Seemab whether the broad based optimism holds for electronic cash as well.  Below are the excerpts of the conversation:

Manju: How much of a problem is cash handling for small merchants in quick serve restaurants (QSRs)?
Seemab: Merchants like to handle cash.  This is as much cultural as it reflects the high interest rates that merchants have to pay for short-term loans for informal sources.  Additionally, labor is cheap to both handle cash with customers as well as to process cash at the back end.

Manju: How practical / attractive is cash displacement (use electronic cash [payment cards] instead of physical cash) in QSRs?
Seemab: The cost of handling physical cash is not as high as it is in the west (primarily due to low labor costs).  Additionally, the special place that cash holds in the culture of small merchants far outweighs the benefits of electronic cash

Manju: How attractive is the business of acquiring transactions from QSRs?
Seemab: The MSC is pretty low in India (1.25%-1.5%).  When combined with low ticket values in QSRs of $1-$6, QSRs are not very attractive / viable to payment processors.

Editorial Note: While the interview was around QSRs, the points made are as applicable to other similar use cases, including paper/magazine stands, coffee shops...

Manju: Prepaid telecom service plans revolutionized the telecom industry in India with over 95% of all consumers using prepaid plans.  Does this success usher in similar innovation trend in the payment industry?
Seemab: Indian regulators have been very proactive in regulating the prepaid industry.  They are very specific in what a service provider can and cannot do based on the role they play in the payments value chain.  Additionally, they expect sizable balance sheets from service providers.  While this is good for consumers, it virtually eliminates startups from innovating in this space.  It is debatable whether consumers would have been the beneficiaries if startups were allowed to bring innovative products to the market (though some of them would have failed).  In addition to this, telecom operators in India are yet to gain that level of trust which a bank enjoys for handling money and subsequently payments. However there are few instances where telecom operators and banks have team-up and synergized to create very promising payment instruments like m-wallets or SMS-enabled payments.  We need to wait and see whether it is really successful.

Manju: How attractive are prepaid cards for consumers?
Seemab: While prepaid cards, like other payment cards, are attractive to consumers, the chore of loading funds into the prepaid wallet is inconvenient.  As internet penetration is still not universal, consumers have to use physical kiosks to load value which significantly reduces the utility of prepaid instruments. Indian population is fairly under-banked and it can be a hindrance & could impede the prepaid proposition here.  Sometime back India had around 403 million mobile users. About 46% of them, or 187 million, did not have bank accounts.

Manju: Mass Transit services are being deployed in a massive scale across large cities in India. Does this trend impact the perception of electronic cash?
Seemab: Mass transit has the capability to change behavior, both consumers and merchants.  Innovations coupled with transit wallets is the silver lining in the cloud.  Only time will tell how regulations will affect/impact this opportunity.

Manju: Seemab, thanks for your forthright comments and perspectives on the Indian market.  I am sure that the readers will benefit from your experience.

Note: The views expressed here by Mr Seemab Fareedi are purely personal and does not reflect company's stand or viewpoint.

Look forward to your comments, questions and observations about the above perspective and insights.

Payments Innovations: India 2010

Innovating in payments systems is hazardous anywhere in the world.  In India, the risks can be significantly heightened.  PayPal stopping P2P operations in India brought this hazard out in spades.  This established juggernaut had to apply the brakes as it is not a licensed payment systems operator in India.  This may not have been a major issue in most other countries (ask for forgiveness), but not in India.

After the financial meltdown of 2007-2008, it is abundantly clear that the regulator / government is where the buck stops.  Therefore, a proactive regulatory environment is expected and understandable.  RBI being a no-nonsense enforcer is an additional wrinkle in India.  This manifests itself in India as the bank being the only entity allowed in the payments space [in dealing with user accounts].  The RBI has been prodding banks to innovate by making noises about allowing non-banks, but nobody is taking 'RBI's threats' seriously.

In APAC (e.g, Philippines) and Africa, payment innovation has been taking place adjacent to the banking system.  CGAP states that an additional growth of 1% to the GDP contributed by financial inclusion (aka payments innovation).  Compared to the leaders, India has been a laggard in financial inclusion.  Does this mean that India is losing out because of its conservative regulatory oversight?  Alternatively, innovators need to be a little light on the gas pedal to manage burn consistent with market development (easier said than done) which gives innovators a better chance of success.  Would this throw cold water on VCs interest in this space?  If so, which is the right funding source for startups where gestation periods are long, regulatory risks are high and funding requirements are non-trivial?

Too many questions, but a lot of time to ponder as the Indian market is focused on the long term.

Happy Chinese New Year.

Higher transaction limit breathes life into a comatose market?

 Over the holidays, RBI (the Federal Regulator in India) raised mobile transaction limits to Rs50,000 per transaction (source).  A gripe by the mobile payments industry has been that the prevailing limit of Rs5000 per transaction was not sufficient, for e.g., to pay for an air ticket. What is the impact of RBI raising the limit for mobile payments in India?  I'll look at this question in the context of urban India.



A quick survey of the possible demographic segments that the new regulation would appeal to:
a. The 80% of urban India who carry cell phones were held back because of the low transaction limits
b. The upwardly mobile tech savvy Indian (early adopters) did not have access to mobile payments
c. Those who are already paying for their sundry expenses using their mobiles phones, but couldn't pay for their airline tickets though
d. None of the above

As you might have realized, this is a rhetorical question.  Mobile payments in India has been a big yawn.  Mobile payment service providers in India are struggling, or are re-inventing themselves to stay alive / relevant (related post).

In India, the dominant perception (Cash Culture) is that cash is a preferred way of living, leaving no trail behind, being anonymous and not attracting attention of the government.  This holds true for purchases related to both durable goods and consumables.  Let's look at the traditional factors driving mobile payments, cash handling costs / cash displacement) in such an Indian context.

• Merchant's perspective: Other than in exceptional cases, merchants prefer cash as they control / manipulate what is reported as sales, primarily for tax purposes (euphemism for tax avoidance)
• Consumer's perspective: Do not want to leave a trail of purchases [for tax authorities to follow]
• Significant part of India's retail economy lives in a parallel black market, some say as much as half of the economy!
  

Who would use mpayments in India
- Consumers who have and use credit cards and bank accounts, and merchants who accept them
- Organized retail
- Those interested in reducing customer service costs via self service channels

When you look at mpayments from the above perspective, there is a significant overlap between payment card users and mpayments target market. While this insight is not a revelation, in the context of India which has very few active card users (20-30 million active card users), the increase in transaction limits will do very little to the mpayment industry in India.  The change in the transaction limits has not raised the mobile payments market size which continues to be 20-30 million card holders (not the 500 million mobile phone users).

The above undercurent does not bode well for the industry.  If mobile payments changed the market size from 20 million to 500 million you get people's attention.  If the pie is only going to grow marginally bigger, there is little incentive for the various ecosystem enablers to invest resources and do the heavy lifting to deploy mobile payment technology. 

Look forward to dissenting or concurring opinions.  Have a wonderful 2010.

Indian credit card industry looks black

I have been looking at the profitability of online card payments in India, specifically from a card issuer's perspective.  This post is following up on a related post (Oct 09).  A couple of trends triggered this post:

• 2FA (Two-factor authentication), mandated by the RBI, deployed since Aug 09 seems to be a success.  The timing of this deployment is helping increase the size of the ecommerce pie in the nascent Indian market, at just the right time.  Early indicators are that both merchants and issuers are seeing reduced fraud.
  
• Stung by the credit defaults during the [temporary] recession of 2008-09, card issuers are offering credit backed by a card holder's asset (e.g., a fixed deposit / CD)
  

Recognizing that the main cost drivers for card issuers are credit risk, fraud risk and transaction processing costs, the relatively high interchange fees (3% and higher) and lower costs must be making the balance sheets of Indian credit card issuers look nice and black.

What are the implications of the above trend/development as we step into 2010? 

• Aggressively pursue new markets [in India] to get credit cards into more hands?
• Migrate to EMV [finally]?
• Any other suggestions?

Looking for dark clouds on the horizon.  India Pay initiative is a major development which could have far reaching impact.  A possible course for card issuers would be to milk the current profits while not growing the market until the picture clarifies around India Pay, and MasterCard's and Visa's reaction to it?

Though the above post has focused on the online payments space, the dynamics of the F2F / payments at stores are similar leading to the same conclusion.

This is to wish all a wonderful holiday season and a great 2010

Engines powering disruptive innovations in Payments industry

As I get to look at the payment card economics for online retailers in the US and elsewhere in the world, a couple of things jump out

• Merchant Discount Rates (MDR) are higher in the US (about 1%)
  
• Fraud rates are higher in the US (about 1%)
  

Even though online retailers are picking up the costs associated with online fraud, online retailers still pay a higher MDR.  A double whammy.

What stumps me is the basis for higher online fraud rates in the US.  In the online world, payment cards are all magstripe cards (you can't use chip-n-PIN cards onine).  Therefore, the US being a straggler in adoption of smartcard-based payment cards does not hold.  US prides itself on having a lot of intelligence in the payment network to detect fraud.  In spite of this, the US has $4 billion in online fraud.

Are the above indicators part of the landscape which can't be changed, or are the above indicators indicative of staid incumbents with little incentive to change status quo?  If it is the latter, we must be able to see evidence on innovations from challengers.

PayPal has been a disruptive innovator.  Though the MDR charged by PayPal is about the same as what the rest of the industry charges, PayPal's merchants have immunity from chargebacks (a 1% saving to merchants).  The fraud levels (transaction losses) experienced by PayPal is about 30bps (100bps = 1%).  A 1% premium MDR charged by PayPal while experiencing only 30bps of losses is a good business model.  So here we have a disruptive innovator offering a true win-win offering.  The online retailer saves 1% in chargeback costs, which is about 20% increase in net margins.  PayPal gets a 1% premium MDR while managing losses at 30bps (resulting in 70bps larger margins).

PayPal has been and expected to grow at about 18-20% CAGR while the incumbents are growing at half the rate (around 9%), which is proof of the relevance of the disruptive innovation of PayPal.

This posted started off evaluating the [possible] uniqueness of the US online payments industry, but is ending up looking at how a challenger is disruptively innovating at the cost of staid incumbents.  Please look forward to a follow-up post which examines why PayPal is an anomaly in the world of payments systems.

If the US does not go down the EMV road...

The debate over whether US should deploy EMV infrastructure or not has been intensifying of late. Some estimate the cost of deploying EMV in the US at $30B. Ms Baxley, retail payments management consultant, observed that Javelin Strategy estimates US EMV transition at a lower $5.5B. She also noted that, in lieu of EMV, leveraging contactless cards and readers [presently being deployed in the US] would adequately meet the payment card security needs while costing significantly less (even lesser than Javelin's estimates). As you might recall, contactless infrastructure being deployed in the US is based on Mag Stripe Data (MSD) fortified with dynamic CVx (in effect making a payment card number a one-time use card number). Please note that in this post, when I refer to US contactless cards/readers, I am referring to MSD with dynamic CVx (dCVx)

Debating card security aspects between EMV and US Contactless is an enticing topic, which can be set aside for another day and another blog.

Assuming that the US heads down the Contactlesspath (a significant leap of faith) as a means to enhance security of payment cards, let us look at the implications to the card payment infrastructure by fast forwarding to 2015 when US has transitioned to the brave new world.

• Cards: Cards would have to support both EMV applet and Contactless applets. Obviously, the cards would have to support both contact and contactless interfaces. Would we still need support for mag stripe on cards, for those still in the 20th century?
• POS infrastructure: Contactless readers supporting both US implementation and the EMV implementation would be necessary. Would US merchants need to offer support for EMV contact feature? Would ROW (Rest of the World) merchants need to support US contactless feature?
• Who is going to pay for retrofitting the global POS infrastructure to support both EMV and US Contactless.
• User Education: ROW consumers will have been educated (hundreds of millions of dollars of expense) of how and where to use contact EMV contact and contactless cards. It would be a very interesting consumer education experience and an expensive customer support issue of educating consumers, when they travel, about when and where contact cards are acceptable.
  

When you look at this picture, don't you long for the good-old-days of magnetic stripe cards, when one size fit all.

One of the lessons emerging from EMV deployments in Europe is that legacy support features (mag stripe on EMV cards) opens a large back door for fraudsters to take advantage of. As EMV cards reduced mail non-receipt, lost/stolen card, and counterfeit card fraud, online fraud and fraud abroad ballooned up. Card Issuers migrating to EMV were hoping for for 30% annual reduction in fraud, but realized only 10% reductions (APACS data), thereby significantly reducing ROI.

There are no silver bullets. However these are things that keep us awake at night.

As we look at the emerging economies of the world, payments card security is not a bottom-line issue (reducing fraud) but a top-line issue which communicates trust and security thereby bringing in large sections of population into the non-cash payments world, thereby growing the pie for all.

Where do you think that the payment card industry needs to be in the G-20 countries by 2015?

Impact of Nokia Money on India's mobile commerce landscape

In light of the announcement of Nokia Money, I would like to analyze this development in the context of mobile commerce in India.

Nokia Money is an attempt by the world's largest mobile phone vendor to deploy mobile commerce commercially. Before we dive deep into this post, let's have a quick background on this topic. Nokia invested $70 million in Obopay (analysis). Leveraging their investment in Obopay and the infrastructure that Obopay offers, Nokia brings Nokia Money to market. Also, you may recall that Obopay powers MasterCard Mobile MoneySend (link).

I suspect that Nokia Money will be available on every Nokia mobile phone. Considering that the mobile operator does not subsidize handsets (and consequently control mobile phone configuration) in India, Nokia will be able to take its mobile payment product to market directly.

Financial regulations are a critical piece of any mobile payments puzzle. It is no different in India. RBI, India's financial regulator, unvieled their policy on mobile payments (link). They allowed a fund transfer limit of INR5000 (approx $100) and a daily transaction limit (for goods and services) of INR 10,000 (approx $200). Considering that the biggest sector in India's ecommerce is Online Travel (over 2/3 of ecommerce market), the mobile commerce industry was up in arms claiming that these limits were too constraining [to buy air tickets?].

mChek is the leader in mobile payments in India. Airtel, India's largest mobile service provider, is mChek's first partner. mChek has been used for bill payments, charging airtime (mobile topup)... mChek crossed a million subscribers in January 2009 (link). Airtel SIM cards have mChek on its menu. Other Indian telcos are following this trend.

Obopay does not seem to have crossed the critical 1 Million subscriber mark (otherwise we would have heard about it, right?). By that measure, Obopay / Nokia Money is the challenger. Other service providers in this space include PayMate, ITZCash and NGPay.

A study (June '09) commissioned by Paymate and AC Nielsen estimates the mobile commerce market in India at 5 million users, and is primarily urban and male-centric.

Now that you are updated on history, let us look at the future. How does Nokia Money change the landscape of mobile payments in India? Is the entry of Nokia Money going to change the dynamics of mobile commerce and create a thriving marketplace for small payments (similar to what Nokia did for mobile phones in India)? Are operators better positioned to offer mobile payments?

Will this competition create confusion? For example, to an Airtel subscriber using a Nokia phone, there will be two mobile payment choices and the user can't differentiate the subtle differences between a phone offering and an operator offering. How will the message be packaged in such cases? Will Nokia Money choose to go rural and Aitel/mChek focuses on urban audience? For all the promise of mobile payments in emerging countries, 5 million users in a userbase of over 350 million is dismal.

Who and where will the mobile commerce battles be fought in India? What are your thoughts?