Saturday, August 16, 2008

13 Mobile Banking Platforms

Financial research firm Javelin Strategy & Research ( released today a new study that analyzes 13 global vendors offering U.S. mobile-banking platforms for SMS text, mobile browser and downloadable applications. The report, titled, Mobile Banking Vendor Analysis, compares product features, partnerships and overall strategy for each provider. “As banks and credit unions begin to roll out mobile banking solutions for customers, they have to manage a complex landscape of vendor offerings,” said Jim Van Dyke, president of Javelin Strategy & Research. “With this report, we developed a useful profiling tool—which we call Javelin’s Target Grids—to help financial institutions better understand the various offerings available in order to determine best short-and-long term strategies.”

The study finds that many mobile vendors have different philosophies about how mobile banking should be shaped and how it will evolve. Banks and credit unions are challenged to balance what consumers want most from mobile banking against practical issues such as, infrastructure limitations, costs, vendor strengths and weaknesses. In the midst of this complex arena exist overarching concerns about the potential threat that wireless carriers pose as mobile banking evolves into mobile payments. Report author and multi-channel financial services analyst, Mark Schwanhausser suggested that ultimately, financial institutions should offer a mix of all three platforms, but most will be wise to roll out mobile banking in stages.

Finnish Gaming Companies - The List
A good list for job seekers, partner-hunters or business developers.

The real value of virtual dung and other online items

Vili Lehdonvirta Why do people pay real money for virtual items?

This is a question that has intrigued Vili Lehdonvirta for years. A researcher at the Helsinki Institute for Information Technology in Finland, Lehdonvirta approaches the market for virtual goods the way economists study the market for copper or clothing.

He estimates that people spent $2.1 billion on virtual items, including all manner of weapons and fantasy outfits for their virtual avatars in 2006 (the most recent year for which he and a colleague Tuukka Lehtiniemi compiled stats). Some of the more unusual items include virtual horse manure and colored "contact lenses" for avatars.

Lehdonvirta is an advisory board member for Live Gamer, a New York company that offers a sanctioned marketplace for players who want to buy or sell digital items for virtual worlds. Until the recent arrival of Live Gamer and Sony's Station Exchange service, most of the buying and selling occurred via shadowy websites or on EBay, making estimates of actual spending difficult. Now that the trading is gaining popularity and legitimacy, Lehdonvirta's studies are beginning to carry real world value for companies hoping to cash in.

In a recent interview with The Times, Lehdonvirta gave us some insight into the market for virtual goods.

Q: Why do people pay so much money on items that aren't tangible?

A: People pay real money for virtual items for the same reason they pay real money for any consumer commodity, namely ...

... status, identity, membership, class and performance. If you think about the clothes that you buy today, how much of the value of that $100 shirt is based on the material properties of the shirt to protect and keep your body warm? It’s probably very small. It’s not so amazing that virtual items can convey the same symbolic payload.

Q: What determines the value of virtual items?

A: One thing is performance. You can buy sharper swords and faster steeds. But then you have less obvious things like aesthetics. I don’t mean it in the common language -- aesthetically pleasing. I mean it in the sense of creating social distinctions. In one game, Maple Story, they sell different colored rubber boots. If you buy an expensive pair of boots, the only thing you get is different colored pixels. For someone who doesn’t understand the value system of that world, it may not make any difference. But to someone in that world, those few pixels can carry tremendous meaning. The same applies to everyday clothing where logos or details make a huge difference. The social world develops its own aesthetic code about what is tasteful and tasteless. And the difference can be very subtle.

Q: You also mentioned prestige as a driver of value. Do you have an example for that?

A: In Habbo Hotel, you have trophies that anyone can purchase. They all look exactly the same. But a virtual trophy that was given to a famous user by the publisher is valued many times higher than the equivalent trophy with no history. In the case of the trophy, it has a tangible record. If you click on it, you see who it was awarded to. If that’s a celebrity, the trophy will command a much higher price. What if it was possible for players to record the provenance of their virtual items? What if a sword was owned by the guild master of the leading guild when they first conquered a particular monster? I’m positive it would command a higher price.

Q: Many gamers believe items should not be made for sale, because it gives people an unfair advantage and drains the fun out of games by letting people buy their way in. What do you think?

A: There will be places where trading is simply not appropriate. At the same time, there's a lot of room for trading where it increases value. Let's go to a sports analogy. No one says it's bad to have a market for sports equipment even though they can enhance performance. But there are things that should not be traded -- human relationships, honor, achievements and skill.

Q: What's the oddest virtual item you've seen sold?

A: Virtual horse dung in the game Ultima Online, which sold for several hundred dollars. The value was driven by its scarcity. It was a rare item. There were only a few of them on each server in the game.

-- Alex Pham

Webkinz International eStore is All Wrong

Ganz Interactive has expanded the Webkinz brand internationally via it "estore" on a geographical basis. There are 20 countries (with such gigantic markets like Bahamas, Bermuda, Antigua, Cayman and British Virgin Islands ... while other "niche" markets like the entire European Union are missing) covered where you can buy virtual items and pets via credit card This is really weird. Rather than just simply making language versions and payment methods available for buyers around the world, Ganz appears to think they need some legal permissions "per country" to sell virtual items. Absolutely incorrect! There is no requirement for a country by country approval to sell virtual goods or items to residents or citizens on the internet. The Ganz Legal Dept. had better rethink this one as they are probably losing tonnes or money and new Webkinz signups with this flawed approach.

Friday, August 15, 2008

Sears CMO Richard Gerstein on Marketing in Virrtual Worlds

From VWN; "Last month Sears launched an ambitious back-to-school campaign across seven different youth-oriented virtual worlds and avatar sites. It's a new direction for a major brand. While some, like Scion, have run multiple campaigns in different virtual worlds, this is the first to aim for this wide of a reach as a part of a cohesive campaign. It's still early, but the kids are starting to head back to school, so we caught up with CMO Richard Gerstein for an email Q&A about the early results, why Sears took this approach, and what virtual worlds offer to the department store giant.

Thursday, August 14, 2008

500 Posts!

PaymentGuy is happy to have reached 500 posts this morning! Thanks to all my readers for making this blog such a success! PaymentGuy appreciates each and every email you send.

ClickandBuy CTO's Resign

Just a note to let my readers know that

Rafael Otero Fandino, who quit as ClickandBuy's Vice President of Technology, also served as its interim CTO after ClickandBuy CTO Fabien Siegel quit

Sulake Extends HABBO Payment Network to Philippines

Good news but long overdue on Sulake extending its prepaid card payment method reach in Southeast Asia. What is even more interesting but disappointing is how Sulake with its HABBO franchise has dropped the prepaid card opportunity in other markets like US, Canada, France and Spain by doing extremely odd things like promoting Premium SMS over this clearly superior payment method. Not to mention its failure to capitalize on its extensive prepaid payment network to commercialize IRC Galleria more fruitfully. PaymentGuy will be blogging more about that in the near future so stay tuned. Anyway, the story on the Philippines expansion; "Singapore-based video game distributor New Era Digital Interactive Media Inc. is refreshing its business in the Philippines in measured steps, as it prepares to introduce two online games in the coming weeks. The company is also preparing to launch two “huge titles” that will target gamers in Internet cafes, the company said. Allan Carbonell, newly appointed New Era Digital Interactive Media country manager, told hackenslash that the company will introduce the virtual social networking game Habbo, owned by Finnish firm Sulake Corporation, soon. The game, which plays like the first Philippine online game OZWorld, uses configurable avatars to represent account owners. Players can open their own pages called Habbo Homes and customize these with widgets, stickers and backgrounds. They can also form group pages where members can lounge. Just like any other social networking sites, Habbo has “virtual hotel rooms” where players can communicate with other avatars. Habbo is touted as one of the most popular social networking sites. It has over 100,000,000 registered users worldwide with 9.5 million unique visits per month. Most users are between 13 and 18 years of age. Carbonell said New Era will distribute and promote the game in the Philippines but the game will be hosted in Singapore. “By September we’re introducing prepaid cards for players of Habbo. These will be in denominations of P50 and P100. These will allow them to buy items and virtual furniture but the game itself will be free-to-play,” he said. Apart from Habbo, the company will also distribute boxed online game, called “Age of Conan: Hyborian Adventures,” which is similar to online game “Guild Wars” already distributed in the country. Carbonell said that the company is in the process of opening up an office in Ortigas Center, Pasig City.

Wednesday, August 13, 2008

Behind MasterCard’s soaring stock

Two of the best stocks in the universe this year have been MasterCard (MC) and Visa (V). MasterCard went public in May 2006 and has rocketed from its offering price, $39 a share, to $231. That’s a six-fold increase. Visa, which scored the biggest IPO in history last March, has seen its stock rise from $44 to $73. Ironic, isn’t it, that these two companies are sailing along when so many U.S. consumers are in credit hell? Meanwhile, the big banks are reeling from lending money to too many deadbeats. MasterCard and Visa make money by processing payments, not extending credit. And since millions of people around the world are replacing cash with credit cards, these companies’ profits are expanding dramatically, with minimal risk from the multiplying credit crises. On Tuesday I had lunch with some MasterCard folks at Michael’s in midtown Manhattan (and paid with my American Express (AXP) corporate card, sorry to say). We talked about the global migration from cash to credit — about Asian and Middle Eastern consumers snapping up elite MasterCards studded with diamonds and, more darkly, desperate debtors in Turkey and Korea committing suicide. (The New York Times ran a front-page story on Sunday about this.) We also talked about what may be the most exciting trend: mobile payments. MasterCard has experimented for years, largely abroad, with “contactless payments” via mobile phones. This year, MasterCard partnered with U.S. Bank and Nokia (NOK) for a pilot program in Spokane, Washington. If you live in New York, next year you’ll likely be able to stand in front of a movie theater, tap your cell phone on the poster of the movie you want to see, pay for your ticket, and even buy your popcorn.

Even as MasterCard’s stock has multiplied, there’s room for more gains, many analysts say. Morgan Stanley (MS) put a price target of $320 on the stock and forecasts double-digit organic revenue growth, operating margins in the 30-40% range, and net income gains of more than 20% annually over the next three years. Of course, as MasterCard and Visa clean up from consumers borrowing aggressively, there’s ever more risk for the banks who put up the money. Byron Wein, a Morgan Stanley alum who is now chief investment strategist at Pequot Capital Management, warned in a Morgan Stanley report last month: “There is too much credit card debt. Holders of credit cards should have to put up a deposit before they can use their cards, like the renter of an apartment puts up security. No credit card borrowing should be allowed. Naturally that would cut consumption way down, but that is what is needed.” Wise words, but as we know, sanity doesn’t drive businesses or markets either.