Potential of DCB for merchants webinar
VP – Partnerships
Last month Greg Siegel, vice president for partnerships at DOCOMO Digital, appeared on Mobile World Live whose managing editor Justin Springham interviewed him about current trends in digital services partnerships within the telecommunications and payments market.
Springham: What are some of the exciting trends in digital services that you are seeing from a partnership perspective?
Siegel: In terms of trends there is a lot of activity right now. We see massive growth in streaming, different types of music and video for example, and gaming which has shifted tremendously from the old days of console and PC to console quality on mobile. Every flavour of dating even when you look at somebody like Match.com where they have Plenty of Fish, Pairs and Tinder all across the globe in different locations.
Educational technology has massively grown with people learning at home of course, that could be languages, trade, business skills. Also health and wellness is growing massively, people doing yoga at home or all types of mental relaxation techniques all on the mobile phones as well. And then you see around you every day that mobile is driving food delivery – Grubhub, Uber Eats for example. Then lastly I’d say productivity types of apps, social and video games but also security, including virtual private network (VPN) software to protect all that activity.
Springham: DOCOMO Digital works with hundreds of merchants around the world – what are merchants looking for from carrier partnerships?
Siegel: From a merchant perspective they are businesses so number one they are going to look for growth and revenue. They want to win what we call unbanked users in the market that they own – they already own credit card type users and now they want to win the unbanked users in the same market. They also want economies of scale so many times they will be looking at not just a telco partner but telco group partners as well. We work with some of the major groups around the world, somebody like a Hutchison or a Vodafone for example. They also as any other business wants the right fit with their customer base and that is critical.
In addition one of the key points that is really important to merchants is marketing. It is one thing to partner with a carrier but it is also critical to be able to have the right marketing to be able to drive customers to the application. That could be marketing from their own merchant side but also the carrier side as well. Also so important from a marketing perspective is having a seamless user experience, something that is simple and familiar to the customer, so that when they see a payment page they don’t go running off because they don’t recognise it.
Lastly, they [merchants] would rather focus on the customer and do the things they are good at rather than handle taxes, or foreign exchange or regulatory compliance – key areas that we can provide in terms of a concierge type service [that handles customer relationship and lifecycle management on their behalf].
Springham: When a merchant is looking to expand beyond its home market, what are the most important considerations they should be taking into account?
Siegel: Like any business they have to make sure it’s the right market and the right operator partner. For example we spoke earlier about productivity which is a high average revenue per user (ARPU) market, a post-paid market versus social or dating which is a lot younger, consumer growth market. I’d also like to talk about wallets versus direct carrier billing (DCB) markets targeting youth markets or growth markets, or markets where they just don’t have the credit cards or banking background for that.
Then there are niche markets versus mass markets. A mass market in music would be for example a Spotify versus a niche market like a [subscription-based music, podcast and video streaming service] Tidal for specific concerts and music types. And then the brand fit. For example the Match Group has four or five main different types of dating app [including Tinder, Match.com, Meetic, OkCupid, Hinge, Hawaya, PlentyofFish and Ourtime for example] and they will apply in different markets around the world.
We also have to think globally and act locally. That is important because understanding your local market is key from a credit card penetration perspective – the US has 70%, Indonesia 2% and Germany 46%. Then if we extend that into regulatory tax and business model perspective these are key considerations for expansion – do they [merchants] have those capabilities and how complex is that. And then again time to market and deployment costs is huge for businesses. They want to deploy quickly and work with a partner that enables them to move much faster and efficiently without having to have massive resources.
Other things to think about along those concepts are deep carrier relationships. They want a partner that knows the carriers well, has group carrier relationships. An innovative business model is very important alongside concierge type services.
I would add one thing about marketing. Marketing, data and analytics helps to really understand the customer in the world today that is changing so quickly.