Journal of Payments Strategy & Systems Volume 9 Number 1

Social networks, game-changer for e-money? Will social networks (e-)monetise the payments industry?

Philippe Caluwaerts Received (in revised form): 6th December, 2014 Policy Officer, Audit and Credit Rating Agencies Unit, Financial Stability, Financial Services and Capital Markets Union Directorate General, European Commission, Rue de Spa 2 (SPA2 01/103), 1049 Brussels, Belgium Tel: (32-2) 2984811; e-mail: [email protected]

Philippe Caluwaerts is Policy Officer in the ecosystem lacking global standards and requir- Directorate-General Financial Stability, Financial ing enhanced collaboration between mul tiple Services and Capital Markets Union of the stakeholders including financial institutions, card European Commission. He was previously schemes, mobile network operators, service involved in the design and implementation of the providers and merchants, and the sometimes European policy on payment services and retail fragmented regulatory regimes, all have to be financial services. As part of his duties, he took addressed for e-money to be successful. This part in the design and negotiation of the revised paper describes why we may be at the forefront rules on electronic money and electronic money of a breakthrough in the e-money market, institutions (Directive 2009/110/EC), which were driven by social networks. In particular, the adopted in September 2009. Currently, he is uptake of electronic commerce, the boom of social expert in the EU regulation on credit rating agen- networks connecting families across the globe cies. Before joining the Commission, he worked and creating opportunities for money remittance, in the private sector in banking, mobile telecom- the active presence of merchants on social net- munications and consulting. He holds a degree works to advertise and sell goods online. But, in Commercial Engineering from the University next to social networks, global technology enter- of Antwerp and an MBA in general management prises are also looking into the potential of e- from the Vlerick Business School (Belgium). money services and intend to transform the e-money and wider payments industry land- ABSTRACT scape. Consequently, traditional providers The idea that electronic money (e-money) could should prepare for this new environment. change the way in which payments are made has been around for more than a decade. Keywords: social networks, electronic Despite high initial expectations, e-money has money, mobile money, electronic pay- largely remained a hype and has not reached the ments, money remittance, electronic mass consumer market. The recent boom in wallets social networks, connecting vast networks of cus- tomers across the globe, all seeking to ‘e- monetise’ their customer base, could provide new INTRODUCTION Journal of Payments Strategy & momentum for the uptake of e-money. This While wholesale payments are executed Systems Vol. 9, No. 1 2015, pp. 90–110 paper outlines the main barriers that have lim- predominantly electronically, in the retail ᭧ Henry Stewart Publications, 1750–1806 ited the uptake of e-money to date. The complex segment cash, in addition to credit and

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debit cards, remains largely the most pop- natural or legal person other than the e- ular way for retail consumers to pay their money issuer’.6 This definition of e-money bills. The idea that electronic money, here- covers a number of different concepts and after referred to as e-money, the equivalent services, including card, internet and of cash, provided by banks or non-bank mobile-centric electronic wallets. payment providers, could change the way There are a number of key elements in in which payments are made has been this definition: e-money is a liability of the around for more than a decade.1 Despite a issuer, is generally prepaid, and is a multi- number of successful experiences, mainly purpose means of payment. E-money, is in emerging economies, such as M-PESA2 different from currency, as it is a claim on in Kenya, e-money has largely remained a an issuer and, in general, an obligation of a hype and has not yet reached the mass private company rather than of the central consumer market. bank.7 This element of liability is also dis- The recent emergence of social net- tinct from decentralised virtual currency works such as Facebook, Twitter and Sina such as bitcoin, where there is no form of Weibo, all seeking to ‘monetise’ their cus- liability or claim on an issuer.8 Another tomer base, could provide new momen- features of e-money is that the total value tum for a massive take-off of e-money. of e-money is usually mirrored in a bank Social networks, which connect vast account, to ensure that, if the provider networks of customers across the globe, service were to fail, users could recover could bring the innovation necessary to their funds stored in their accounts. In transform the payment industry consider- addition, in contrast to bank deposits, e- ably. Recent announcements by money accounts can traditionally not ben- Facebook3 and Twitter4 show that they are efit from any interest.9 Furthermore, preparing to take their share of the pay- e-money services can be provided by ment industry. They have the potential to banks and by non-bank service providers bring e-money to everybody’s smartphone such as mobile telecom operators, trans- and allow payment for goods and services port operators and social networks. online as well as in physical stores. Electronic wallets, mobile money, mPOS WHAT IS E-MONEY? Continuous technical developments and Electronic wallet or e-wallet innovations make it difficult to describe An e-wallet, or electronic purse, is prob - accurately what e-money is. Furthermore, ably the most common type of e-money the term ‘e-money’ is often used to refer to date, where users store money on a to a wide variety of electronic payment physical payment card or on a payment schemes. account on the internet for making pay- In general, e-money can be defined as ments in both the physical and online monetary value stored in an electronic world. device that can be used to make pay- ments.5 In a more restrictive sense, e- Mobile wallet money is defined as ‘electronically stored An e-money account, whereby the elec- monetary value as represented by a claim tronic equivalent of cash is primarily on the issuer that is issued on receipt of stored on or accessed through (and used funds for the purpose of making payment by means of) a mobile device, can be transactions and which is accepted by a defined as a mobile wallet.10

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Mobile money Mobile point of sale The definition of ‘mobile money’ varies A mobile point of sale (mPOS)16 refers to across the industry, as it covers a wide using a consumer mobile device to facili- range of overlapping applications. In gen- tate payments and enable acceptance of eral, mobile money can be defined as a payment instruments. An mPOS refers to service that uses the mobile phone to the acceptance infrastructure for mer- transfer money and make payments.11 chants necessary for accepting payment The wide adoption of mobile phones transactions independently from the way among consumers in some emerging mar- in which the transaction itself is executed. kets, with no or very limited access to basic financial services such as a bank account, have resulted in the emergence of UNACHIEVED PROMISES new innovative mobile money services.12 A survey from the Bank of International GSMA,13 the trade association for mobile Settlement (BIS) in 2001 projected network operators, describes mobile ‘Electronic money to take over from phys- money for unbanked consumers, defining ical cash for most if not all small-value it as a service that allows the mobile phone payments’ and ‘evoked considerable inter- to transfer money and make payments to est both among the public and the various the underserved. One of the key charac- authorities concerned including central teristics is that the service relies heavily on banks’.17 But, despite high initial expect - a network of transactional points outside ations, e-money has obtained only limited bank branches that makes it accessible to market adoption in both the USA and unbanked and underbanked people. In Europe. The main reasons why e-money addition, customers should be able to use has not found its way to the mass market the service without having been previ- has been the existence of well-functioning ously banked. payment solutions, including credit and debit cards as well as credit transfers offer- Mobile remote or mobile ing limited incentives for new innovations contactless? by existing players. Furthermore, the com- Another distinction made in mobile plexity of the payments landscape, with money services is the way in which funds many financial institutions, card networks, are exchanged for the purpose of payment mobile network operators, hardware and transactions. A distinction is made between software providers, and other stakeholders, mobile contactless and mobile remote. results in a considerable challenges to build Mobile remote payments14 can be defined successful e-money solutions.18 as payments where the transaction is con- One player, PayPal,19 the payment serv- ducted over telecommunication networks ice of the popular e-commerce platform such as GSM or internet, and can be made eBay,20 has turned out to be the only e- independently of the payer’s location or its money scheme that has obtained a global equipment. Mobile contactless payments15 reach. Owing to the success of e- are defined as payments where the payer commerce in recent years, its service has and payee (and their respective equip- been growing exponentially.21 ment) are in the same location and com- In a number of markets, local successes municate directly with each other using have been launched by mobile telecom- contactless radio technologies, such as near munications and transportation operators. field communication (NFC), Bluetooth or In some Asian countries such as Japan22 infrared for data transfer. and Korea,23 e-money services and

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mobile-based payment services have use their mobile phones to deposit cash obtained considerable market adoption. In into their accounts, using as a point of Japan, 24 per cent of households hold e- deposit any of the 28,000 shops around money in stored-value cards or through the country that participate in the initia- server-based online services. Approx - tive. Among the main favourable factors to imately 150 million stored-value cards, the broad market adoption in Kenya have which are used mainly for low-value pay- been the relatively large number of ment transactions, were in circulation in unbanked consumers and the high adop- 2011.24 The main driving factors for the tion of mobile phones. M-PESA has fur- relative success of e-money in Japan have ther expanded to other markets, including been cultural preferences for paying with Tanzania and South Africa. cash over paying with credit cards, the absence of debit card schemes and a spe- Pakistan cific business climate whereby non-bank Easypaisa,29 a mobile money service providers, such as rail networks and mobile launched in Pakistan through a partner- operators, offer additional convenience to ship between Pakistan and Tameer consumers through e-money services.25 Microfinance Bank, is another example of In other emerging regions, where a large new innovations serving the needs of number of the population have little or no unbanked consumers. The service allows access to traditional financial services, the subscribers to use their mobile phones for wide dispersion of mobile phones has given payment transactions, and subscribers can rise to mobile money services for deposit or withdraw cash in Easypaisa ‘unbanked’ consumers. In these regions, shops throughout Pakistan. Since its alternative providers, mainly mobile net- launch in 2009, it has acquired more than work operators, have stepped in, providing five million customers. The large number consumers with the possibility of accepting, of unbanked consumers in Pakistan com- storing and exchanging funds and paying bined with the deployment of a mobile electronically by means of mobile phones. money dealer network contributed to its While the first successes were observed in success. sub-Saharan Africa, mobile money services have also expanded in Latin America and Paraguay Asia in recent years, contributing to the With one of the lowest rates of banking financial inclusion of the unbanked.26 For penetration in Latin America (only 22 per example, in 2013, new mobile money serv- cent of adults in Paraguay have an account ices were rolled out in Bolivia, Brazil, at a formal financial institution), Paraguay Egypt, Ethiopia, Guyana, Jamaica, Tajikistan, has a large potential for mobile money Togo and Vietnam.27 services.30 Two service providers, Tigo and Personal, have launched mobile money Examples of mobile money and services, Tigo Money and Billetera financial inclusion Personal, respectively, providing the ability to store funds in an e-wallet, conduct Kenya peer-to-peer payments and process remit- One of the most successful e-money ini- tances. These innovations offer unbanked tiatives, M-PESA,28 was deployed by consumers the ability to control their Safaricom, Kenya’s largest mobile oper- financial lives better and increase their ator. Since its launch in 2007, the system’s access to formal financial services.31 In nearly 15 million users have been able to 2014, Tigo Money was reported as having

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Figure 1 Evolution 5000 of outstanding e-money in the EU 4500 1999–2013 (end of 4000 period, in millions of euro) 3500 3000

2500 millions

e 2000

1500

1000

500

0 1998Jun 2001Jun 2004Jun 2007Jun 2010Jun 2013Jun 1997Sep 2000Sep 2003Sep 2006Sep 2009Sep 2012Sep 1999Dec 2002Dec 2005Dec 2008Dec 2011Dec 1999Mar 2002Mar 2005Mar 2008Mar 2011Mar

Source: ECB, 2014, outstanding amount of e-money, dataset BSI. M.U2.N. A.LE0.A.1.Z5.0000.Z01.E

approximately 150,000 clients paying bills data from the European Central Bank with its service, and Billetera Personal was (ECB),35 non-financial institutions issu- projected as having 23,124 bank-backed ing e-money had approximately 750 mil- Billetera Personal accounts and another lion of outstanding e-money at the end 62,796 non-bank e-wallet clients follow- of 2013. Furthermore, some initial e- ing the introduction of a new electronic money schemes, such as ‘proton’ in payments regulation in 2014.32 Belgium36 or the ‘GeldKarte’ in Germany, were not such a success stories, E-money in Europe as the relative share of these services In Europe, there has been relative growth remains small37 and the traditional e- in e-money since 2009, starting from a money purse seems to be doomed. very low base, as shown in Figure 1, Newer services, such as contactless pay- reaching 4.5 billion of total outstanding ments,38 seem on the way to bypassing e-money at the end of 2013. It has not the electronic wallet. yet lived up to its full potential, and did not become a digital replacement for cash as was expected in the early 2000s.33 POTENTIAL BENEFITS OF E-MONEY Even though a number of innovative e- Despite the limited success, there are vari- money service providers have entered the ous potential benefits of e-money and e- market, non-financial institutions have wallets for consumers and stakeholders not been able to conquer the mass con- in the e-money and wider payments sumer market of e-money.34 According to industry.

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For consumers, e-money could be a THE E-MONEY REGULATORY very convenient way to pay safely and REGIME cost-efficiently without the need to have Across the globe, e-money has received cash in hand or a debit or credit card. distinct treatment by regulators. In general, When widely accepted, e-money should the regulatory frameworks for e-money not be limited to purchasing goods remain complex, with distinct applicable online, but could also be a way of paying laws and regulation (including consumer for goods and services in physical stores. protection, anti-money laundering, pru- Furthermore, e-money could create dential requirements and data protection added value and additional convenience legislation), and have difficulty keeping up through new innovations. For example, it with continuous technological innov - could allow the transfer of money peer- ations. The regulatory intervention varies to-peer between consumers and enable from no specific regulation in the USA up new services such as sharing bills elec- to a fully calibrated regulatory regime in tronically. In emerging economies, the EU. e-money could be a driver of financial In the USA to date, there is no single inclusion, providing non-banked con- regulatory framework or regulatory sumers with access to basic financial authority governing e-money. A report by services, enabling the acceptance and the Mobile Payments Industry Workgroup storing of funds and paying bills electron- (MPIW),39 convened by the Federal ically. Reserve Banks of Boston and Atlanta For merchants, e-money services have showed that five different regulatory agen- the potential to reduce costs and risks cies40 have some oversight responsibilities related to receiving cash payments. To for mobile payments, which also applies to attract merchants, it can be expected that e-money and e-wallet solutions. the fees charged by new market entrants According to the report, the regulatory for accepting e-money would be lower agencies’ main focus has been the need for than the existing charges by debit and consumer protection, the security and effi- credit cards schemes. Furthermore, e- ciency of the payments system, data secur- money systems could be beneficial for ity and privacy, and accessibility and how merchants if they allowed the acceptance to deal with non-bank alternative of e-money without the need to acquire providers. To date, the regulatory agencies new POS devices associated with the in the USA have considered further mon- existing card schemes. itoring and clarification on how the For potential new e-money service emerging innovations fall within the scope providers such as social networks, this of existing legislation, and increased coor- business could be a new way of monetis- dination across agencies might be neces- ing their existing base of customers and sary. Recently the Consumer Financial merchants. Given their global reach, even a Protection Bureau (CFPB) proposed very limited margin on individual transac- making a rule41 on prepaid accounts tions could result in considerable revenue which, when effectively implemented, streams. In addition, payments data could could integrate e-money into the USA be a new valuable source of data for social bank regulatory regime.42 networks (or their competitors) to obtain In addition to a wide number of regula- information about the payment habits of tory agencies, the USA regulatory frame- their customers, which could be of use to work is characterised by the requirement advertisers. for non-bank e-money operators, depend-

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ing on their involvement in the payment the size of the issuer.47 A new regulatory transaction, to obtain a money transmitter regime governing mobile money was also licence to provide money transfer services adopted in Kenya in August 2014,48 cover- or payment instruments in any of the US ing consumer protection and prudential states that regulate this business activity. operations, and promoting collaboration In the EU, a specific regulatory and interoperability between market par- regime43 for e-money was designed in ticipants. Following the uptake in sub- 2000 with the intention to facilitate access Saharan countries, recent regulatory by non-credit institutions to the business changes have been introduced in a of e-money issuance. The main goal was to number of countries in Latin America, create legal certainty for e-money, build including Bolivia, Peru Brazil and confidence by safeguarding the interests of Paraguay,49 enabling non-banks to issue e- consumers and businesses, and encourage money.50 In some other Latin American new market entrants and so greater com- countries, such as Mexico,51 provisions petition. These rules created a significantly have been introduced allowing non-banks lighter regime for e-money institutions to acquire limited banking licences to compared with traditional credit institu- issue payments instruments. tions. The regime includes prudential requirements aimed to protect consumers and ensure safe operations. FRAGMENTATION OF MOBILE Potential market participants considered PAYMENTS INITIATIVES CONTINUES the European e-money regime dispropor- While various developments in the e- tionate to the risks of the activity and the money and payments industry are on- number of licences attributed did not going, in the USA, the EU and the rest of meet expectations.44 Following the lim- the world, the e-money and payments ited developments of the e-money indus- landscape remains characterised by frag- try, the regulatory framework was revised, mentation. and new rules entered into force in June A report52 by the Federal Reserve Bank 2011,45 introducing a more proportionate of Boston and Atlanta witnessed consider- regulatory regime, more in with the able changes in the US mobile payments risks of the activity of e-money. These landscape in the period 2011–2013. In revised rules allow e-money institutions to particular, the report observed ‘increasing conduct other services such as operating collaborative efforts across a diverse set of mobile telecommunication services more industry stakeholders, increased channel flexibly,46 which was considered a catalyst and technology convergence, participation for innovation and development of new e- by new non-bank entrants, and continu- money services. ous technological innovation and experi- Also in other jurisdictions where e- mentation’. Collaboration between mobile money has emerged, regulatory regimes network operators (MNOs), banks, card have been set. In Japan, where e-money networks and technology companies has services are a popular alternative to credit resulted in pilot solutions. and debit card payments, the Prepaid Card For example, some large MNOs founded a Law, which covers the main rules relating joint venture with several financial institu- to e-money, provides a simple framework tions and a card network to create a that applies equally to both bank and non- mobile wallet solution Isis, recently bank issuers and which contains a pruden- rebranded ,53 based on NFC54 tial framework considered proportional to technology. In addition, some alternative

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payment providers have developed solu- providers, banks and retailers. The market tions and applications that leverage a range potential of the services is determined by of technologies, such as cloud,55 Quick the number of potential subscribers, which Response (QR) codes56 and geo- is limited at national level to customers of fencing.57 the collaborating partners, including One of the observed blocking factors banks, MNOs, has been the slow adoption of new serv- or participating retailers. Another key fea- ices by merchants, owing to concerns on ture is the acceptance of the service by the business case for the implementation merchants, which for the reported initia- of mobile payment solutions. In the USA, tives is also limited in scope to national the slow rollout of the EMV standard58 borders, and varies from pilots with a few and NFC technology enabled POS solu- thousand of participants to 300,000 POS. tions, combined with the introduction of Also in emerging economies where the some new low-cost alternatives such as uptake of mobile money services is QR code scanning, have created more expanding, the types of services and market fragmentation. ecosystems remain widely dispersed. In Europe, despite the latest revision of GSMA reported 294 distinct services in 84 the rules on e-money, European-wide countries at the end of 2013 and 113 mobile-enabled e-money schemes have planned deployments.64 The type of serv- failed to emerge (with the exception of ices offered varies across service providers. PayPal) and the market remains highly For example, 85 per cent of the mobile fragmented. A recent report on the new money service providers allow for peer- initiatives on mobile payments in the to-peer transfers, bill payments and airtime Single Euro Payments Area (SEPA) from top-up.65 Fewer providers allow for bulk the European Payments Council (EPC)59 payments, merchant payments or interna- demonstrates that the existing market situ- tional money remittance.66 Furthermore, ation is widely diverse in terms of geo- interoperability between distinct mobile graphical scope, technological solutions, money services providers, allowing con- level of collaboration in the payment sumer to exchange funds between cus- ecosystem and size of participating mer- tomers of distinct operators, remains a chant networks. challenge to the further market uptake of The EPC reports a total of 33 distinct mobile money services.67 initiatives emerging in the period These findings in the USA, the EU and 2013–2014 in Europe, covering 14 differ- emerging economies, demonstrate that, ent countries. The geographical scope of while progress is being made, e-money all initiatives is limited to national jurisdic- and mobile-enabled payment services tions and, for some initiatives, the pilot remain fragmented, in their early stage of phase is further limited to a city. The types development. They will most likely require of initiatives surpass e-money services and considerable time and further collabora- are divided into four areas: mobile con- tion among ecosystem partners to achieve tactless payments60 (13 initiatives); mobile considerable market adoption. An easy to remote payments61 (eight initiatives); use mobile enabled service, based on mobile wallet62 (five initiatives); and common standards or solutions, accepted mPOS63 (five initiatives). Most initiatives by a vast number of merchants and avail- are based on partnerships between one or able to customers worldwide or through- more players in the mobile payment out large jurisdictions seem not yet to be ecosystem, including MNOs, payment materialising.

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WHY ARE SOCIAL NETWORKS virtual goods or charity contributions.69 DIFFERENT? This has familiarised existing users of The reports that global social networks, social networks with the idea of purchas- such as Facebook, Twitter, Sina Weibo and ing real life goods and services or con- others, are experimenting with e-money ducting peer-to-peer transactions through and electronic payment raises new expec- social networks. tations for the e-money industry. It remains to be seen how the weaknesses Money remittance and obstacles observed both in the USA In an increasingly globalised world, money and the EU can be overcome. In particu- remittance, a market mostly operated by lar, the complexity of collaboration across banks and other financial payment multiple stakeholders in the eco-system, providers such as Western Union,70 the lack of common solutions and stan- remains an important way71 to transfer dards, the diverging regulatory require- money across countries subject to rela- ments, the limitations in geographical tively high transaction fees72 Social net- scope, the cost and efficiency concerns of works such as Facebook and Twitter, merchants, and privacy and security con- which already today connect consumers cerns among consumers should be throughout the globe, could facilitate for- addressed. eign workers to send funds to family There are various reasons to believe that members in their home nations through we are at the forefront of a breakthrough their platforms at lower fees. A recent in the e-money market driven by social report of the World Bank Development networks. Research Group73 estimated that over 90 per cent of money remittance transfers are Favourable market trends sent between family members who are In both advanced and emerging also connected on social media. In emerg- economies, some market trends68 are rais- ing economies where the share of ing the potential for social networks in the unbanked consumers remains important,74 e-money and wider payments industry. In social networks are particularly growing advanced economies, consumers are their market presence.75 Consequently, becoming increasingly familiar with they could add to their services low-cost online purchasing of goods and services. solutions to serve the unbanked. While such transactions are currently To be successful, social networks would mainly executed by cards or credit trans- need to overcome some challenges that are fers, they could easily be migrated to social linked to the ‘branchless’ remittance trans- networks by offering peer-to-peer pay- fers business model.76 These challenges ment transactions on their platforms. include obtaining senders’ trust to hand Many social networks have started over funds to social networks, complying experimenting with micropayments of with regulatory requirements on anti- low value for purchasing virtual goods and money laundering and ‘Know Your services or for rewarding loyal customers. Customer’ regulation, and offering recipi- Social networks have developed their own ents convenient ways to obtain and use the virtual currencies (such as Facebook cred- funds. In particular, social networks would its, Weibo coins, Habbo diamonds), which need to provide a solution for recipients to are obtained by exchanging real money. pick up their funds. This could be facili- Consumer can use the virtual currency in tated through third-party agent networks, social gaming applications or purchasing bank accounts, mobile network top-ups or

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Table 1: Selective overview of social networks and e-money and payments initiatives

Enterprise Core business Existing or potential initiatives Potential users/size

Facebook Social network • e-wallet • peer-to-peer payments transactions • online payment transactions 1.28 billion monthly active users Twitter Social network • peer-to-peer payment transactions 625 million active users Sina Weibo79 Social microblogging • peer-to-peer payment transactions 148 million monthly active site in mainland China (weibopay) users RenRen80 Social network in • peer-to-peer payment transactions 178 million monthly active mainland China users Habbo81 Social network aimed • e-money (credits, duckets and 11 million monthly active at teenagers diamonds) users (2013)

Source: www. Facebook.com, www.twitter.com, reuters.com, www.sulake.com by developing their own e-wallets, provid- allowing peer-to-peer payments earning ing receivers of funds with connectivity to fees on money transfers.83 retailers.77 Trusted and globally loved brand Global reachable mobile enabled Social networks such as Facebook and customer base Twitter figure at 20th and 71st, respect- The largest social networks often have a ively, on the list of most valuable global global active customer base. For example, brands in 2014.84 That brings them close as shown in Table 1, large social networks, to the existing dominant market partici- such as Facebook, Twitter and Sina Weibo, pants in the payments industry, such as the have reported 1.28 billion, 625 million main cards schemes Visa (7th) and and 148 million monthly active users, MasterCard (18th), American Express respectively,78 connected to their services (24th), well beyond any other operator in through the internet and increasingly the e-money industry, with the exception through smartphones. Consequently, social of PayPal, whose former parent company networks have the potential quickly and eBay is listed 61st in the list of most valu- cost-effectively to provide customers able global brands. As a consequence of throughout the globe with an e-wallet being globally loved brands, social net- service and enable them to pay for goods works could offer confidence to con- and services through their e-money plat- sumers not only to share their personal forms wherever they go with their smart- data, but also trust their funds and pay for phones. the goods and services they need. A new application or a mere update of an Privacy issues and data security on existing one could be sufficient to upgrade social media have been a major concern,85 millions of users to the new services. As a which could make users reluctant to trust step in that direction, the social media giant money to social networks. A recent study86 Facebook announced that it would extend showed that only 14 per cent of con- the functionality of its messenger service,82 sumers trust Facebook for their personal

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data. Therefore, it will be important for extensive use of social networks through social networks to enhance their efforts to mobile devices may result in the develop- create trust in their services in order to ment and design of applications and serv- gain market adoption for e-money serv- ices that allow the e-wallet to be used in ices.87 Privacy concerns could limit physical stores. market adoption in advanced economies where many alternatives are available. Such concerns might be of less relevance in THE ROAD AHEAD: IT IS NOT ONLY emerging markets with a high number of SOCIAL NETWORKS unbanked and few alternatives. Given the interest of social networks in offering e-money solutions and payments, Global merchant reach it seems likely that a second chance will be Owing to the global reach of customers, given to e-money. Social networks’ global an e-wallet and related payment service scope of operations offers the necessary allows merchants not only to advertise on potential and network effects to make a social networks, but also to sell goods and successful e-wallet and payment service services and receive payments. As an illus- with a worldwide coverage. The large tration of this market potential, there are online customer base, the existing network already 30 million small businesses88 pro- of advertisers and knowhow in the design moting and selling their goods and serv- of easy to use online services provides the ices on Facebook. An e-wallet provides opportunity for designing attractive e- new incentives for merchants to join social wallet services for the mass market. networks (in so far they are not yet active Social networks are not the only market on social media) and also accept e-money players with the intrinsic capacity to trans- for the goods and services they provide. form the e-money industry. Technology Additionally, social networks, already con- giants such as Google and Apple have necting millions of users, have the techno- launched their respective services. In addi- logical capabilities to provide a tion, newly created payment services cost-effective and secure e-money plat- providers such as Square, and global form for merchants necessary to deal with e-Commerce undertakings such as a high flow of e-money transactions. Amazon and Alibaba are well positioned to bring innovation to the e-money or Cloud-based technological wider payments market. efficiencies New e-money services will most likely be Google fully cloud-and web-based, avoiding any Google, which has also its own social net- new hardware interfaces for both mer- work, Google+, has launched the Google chants and consumers. This will allow Wallet,89 which allows users to store debit sharing costs over global transactions and cards, credit cards, loyalty cards and gift enabling social networks to enter the cards, as well as redeeming sales promo- market by offering competitive prices tions on their mobile phone. Launched in compared with the existing card schemes. May 2013, Google announced that its e- wallet would allow for peer-to-peer pay- Linking bricks and mortar with the ment transactions to all contacts of their online world e-mail service Gmail.90 The use of an e-wallet should not neces- The service connects a user’s Gmail sarily be limited to the online world. The account with an e-wallet, and allows

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money to be sent to Gmail contacts free or numbers are replaced with a randomly gen- for a small fee if the transfer is made by a erated numbers, Apple has created one of linked bank account or from a credit card, the most secure and fraud-proof mobile respectively.91 This enables, Google to cap- payment mechanisms.97 In addition, the ture its users’ bank account and credit card ‘touch-ID’ fingerprint sensor provides information. As 66.5 per cent of Gmail users with an additional security users access their accounts online, the e- feature for ID authentication protecting wallet is a true mobile payment plat- payment information.98 form.92 Combined with Google’s Android In the US market, Apple Pay can ben- operating system for mobile devices, efit from the requirement for merchants which represents 80 per cent of all sold to upgrade their POS terminals to the smartphones in 2014,93 it has a very wide EMV technology accepting NFC by user base for its e-wallet. mid-2015, creating an incentive for mer- Using its already popular Gmail service, chant acceptance. which has a global reach of 425 million To drive adoption, Apple should entail customers,94 its e-wallet is a mobile pay- to upgrade its existing user base of more ment solution with global market poten- than 575 million users with registered tial. Until now the Google Wallet has not credit cards in Apple’s iTunes applica- achieved its market potential. In addition tions.99 Furthermore, with Passbook,100 an to the lack of devices supporting the serv- application introduced in September ice and the reluctance of merchants and 2012, which allows users to store event telecom operators, Google’s advertising tickets, loyalty cards and coupons on their business model has been an important phone, Apple has gained experience with drawback.95 The requirement for partici- an electronic wallet platform. Passbook has pating banks to provide users’ purchase now become a cornerstone of Apple Pay information, which would enable Google where customers will store their credit to refine its advertising business, created card information. Since the launch of privacy concerns and made issuing banks Passbook, Apple has established partner- reluctant to participate in the system. ships with a wide range of third parties, including airlines, railway enterprises and Apple hotels, which have linked their own sys- Apple has made a late but decisive entry tems with Passbook.101 These existing into the digital payments industry with partnerships will certainly facilitate the Apple Pay. By collaborating with the main roll-out of Apple Pay. card schemes (Visa, MasterCard and The main constraint to become a American Express) and the majority of widely adopted service is the fact that large US banks, Apple made important Apple Pay is limited to the closed Apple allies by creating a service complementary eco-system and the latest Apple devices,102 to the traditional market players.96 which limits the uptake to consumers With the focus on security and privacy, with the purchasing power to own a high- combined with an easy to use customer end mobile device. This will remain an experience, it has strong assets to convince entry barrier limiting the uptake of the consumers. In contrast to the Google service in emerging markets. Apple Pay is Wallet, Apple will not collect what con- currently geographically limited to the sumers buy with Apple Pay nor any pay- USA and should still prove itself in its tra- ment-related information. Furthermore, by ditional home market as well as in the rest the use of tokenisation, whereby credit card of the world.

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Amazon platform, but also serves other clients. Amazon, one of the world largest online Alibaba only represents 37.6 per cent of all retailers, is also interested in grasping its payments processed by on a total of share from the online and mobile pay- US$519bn payments processed in 2013.114 ments industry and has recently made an Furthermore, its Alipay Wallet service pro- important step in this direction. With 237 vides a wide range of solutions, including million active users103 and annual sales of mobile payment transactions, peer-to-peer US$74.45bn in 2013,104 an own, fast and payments and paying in physical POS. For convenient e-money or e-payments example the Alipay Wallet enables pay- scheme could enhance its overall customer ments through sound wave technology or experience and at the same time create QR barcodes115 in physical POS. new sources of revenue. Furthermore, its peer-to-peer functional- As part of this strategy, Amazon ity allows bill sharing among its users. obtained a licence as an e-money institu- In addition, Alipay is expanding to tion in Luxembourg.105 On 9th June, other services,116 which are traditionally in 2014, its e-payments intentions were the hands of banks. The Alipay Wallet is unveiled106 with the launch of its payment also a tool to be used as a current account platform ‘Amazon Payments’,107 which or to invest in Alibaba’s financial product allows for paying online at merchants Yu’ebao,117 a money-market fund. The other than Amazon. fund, where consumers are expected to For their online purchases, consumers earn higher yields compared with Chinese can access multiple merchants with one bank deposits, has raised 250 billion yuan single registration at Amazon.108 They can and became China’s largest investment save time at checkout, as they will not fund in January 2014.118 need to re-enter their credit card and ship- While Alipay is a huge success story in ment data for each purchase, which will be its home markets in China and Asia, it securely stored in the Amazon account. remains to be seen whether it will also For merchants,109 the service offers easy conquer the rest of the world. integration as well as Amazon’s security and user data. With this new servicing Square offer, available through desktops and A new market entrant that aims to trans- mobile devices, Amazon has become a form the payments industry is Square direct competitor of PayPal, which offers a Inc.,119 a merchant services aggregator and similar third-party service. mobile payments company based in San Francisco, California. Alipay Square Register, its main service, allows Alipay,110 the payments platform of China’s individuals and merchants in the USA, Alibaba,111 an online commerce site, which Canada and Japan to accept offline debit recently went public,112 is another new and credit cards, transforming smartphone emerging challenger in the payments or tablet computers into cash registers. industry. With 300 million registered users Consumers can pay by swiping their card and 100 million mobile users, and having through the Square Reader, a small device processed US$150bn in mobile transactions that is plugged into a smartphone or in 2013, it is the largest mobile payments tablet. In addition, another alternative pay- provider in the world.113 ment service, Square Cash,120 allows users In addition, Alipay’s business is not lim- to execute free peer-to-peer payment ited to its mother company’s e-commerce transactions based on a debit card.

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Furthermore, Square is also experimenting serious about putting their (e-)monetising with its own wallet service Square strategy into practice. Wallet.121 Square, which was projected to process AUTHOR’S NOTE US$30bn payment transactions in 2014,122 was valued at US$5bn beginning in 2014. This paper reflects the views only of the author and does not represent the opinion of the While Square does not have a powerful European Commission. brand compared with Facebook, Google or Apple, its innovative products could make it an important challenger, cannibalising the REFERENCES AND NOTES existing payments industry. Furthermore, it (1) ‘An Introduction to Electronic Money was reported that both Google and Apple Issues prepared for the United States were considering acquiring Square,123 Department of the Treasury Conference which could transform it into a world class Toward Electronic Money and Banking: competitor, even if they would not make it The Role of Government’, available at: a stand-alone entity. http://www.occ.gov/topics/bank- operations/bit/intro-to-electronic- money-issues.pdf (accessed 1st OUTLOOK AND WAY FORWARD November, 2014). (2) Jack, W., Suri, T. and Townsend, R. Whether it will be social networks such as (2010) ‘Monetary Theory and Electronic Twitter or Facebook, or software and Money: Reflections on the Kenyan hardware providers such as Google or Experience’, Economic Quarterly, Vol. 96, Apple, or still someone else to drive the No. 1, pp. 83–122. uptake of e-money is hard to predict. (3) ‘Facebook e-Money Transfer Service Google and Amazon have already made Europe’, available at: the leap into this market, Apple has, with http://www.theguardian.com/ the recent launch of Apply Pay, intro- technology/2014/apr/14/facebook-e- duced a considerable challenger, and money-transfer-service-europe (accessed social networks are preparing to take the 3rd November, 2014). (4) ‘Groupe BPCE Launches Twitter Money same road. Transfers’, available at: The mere fact that global, powerful http://www.nfcworld.com/2014/10/15/ technology enterprises are looking into 332017/groupe-bpce-launches-twitter- the potential of e-wallet services offers money-transfers/ (accessed 1st prospects and will definitely shake and November, 2014). transform the payments industry landscape (5) Bank of Canada (2014) ‘Electronic in the coming years. Existing e-money Money and Payments: Recent issuers and payment service providers as Developments and Issues’, available at: well as banks should rethink their business http://www.banqueducanada.ca/wp- model, as they could be easily cornered by content/uploads/2014/04/dp2014-2.pdf breakthrough innovative e-wallet services (accessed 15th November, 2014). designed and rolled out globally by these (6) Directive 2009/110/EC of the European Parliament and of the Council of 16 new powerful technology giants. 124 September 2009 on the taking up, The recent hiring of David Markus, pursuit and prudential supervision of the PayPal’s former chief executive, to lead the business of electronic money institutions extension of Facebook’s messaging serv- amending Directives 2005/60/EC and ices to payments should be a wake-up call 2006/48/EC and repealing Directive for all competitors: social networks are 2000/46/EC.

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(7) ‘Selected US Legal Issues in Issuance of (20) eBay, available at: www.ebay.com Electronic Money’, available at: (accessed 17th November, 2014). http://www.arraydev.com/commerce/ (21) In the second quarter of 2014, eBay JIBC/9702-17.htm (accessed 2nd reported a total payments volume November, 2014). increase of 29 per cent and an increase (8) Bank of Canada, ref. 5 above. of 4 million active users up to 152 (9) Penicaud, C. and Katakam, A. (2013) million. eBay Inc. Reports 2nd Quarter ‘Mobile Money for the Unbanked, State Results, available at: eBay http://investor. of the Industry 2013’, GSMA, available ebayinc.com/financial_releases.cfm at: http://www.gsma.com/mobilefor (accessed 14th November, 2014). development/wp-content/uploads/2014/ (22) Luyat, J. (2009) ‘A Tale of Regulation in 02/SOTIR_2013.pdf (accessed 5th the European Union and Japan: Does December, 2014). Characterizing the Business of (10) Ibid. Stored-Value Cards as Financial Activity (11) ‘Mobile Money, an Overview for Global Impact its Development?’ Pacific Rim Telecommunications Operators’, Law & Policy Journal, Vol. 18, No. 3, available at: http://www.ey.com/ pp. 525–546. Publication/vwLUAssets/Mobile_ (23) European Payments Council, ref. 15 Money./$FILE/Ernst%20&%20Young% above. 20-%20Mobile%20Money%20-%2015. (24) Bank of Canada, ref. 5 above. 10.09%20(single%20view).pdf (accessed (25) Luyat, ref. 22 above. 20th November, 2014). (26) Penicaud and Katakam, ref. 9 above. (12) Ibid. (27) Ibid. (13) Penicaud and Katakam, ref. 9 above. (28) Jack, Suri and Townsend, ref. 2 above. (14) Jack, Suri and Townsend, ref. 2 above. (29) ‘The Mobile Money Revolution, Part 2 (15) European Payments Council (2014) Financial inclusion’, ITU-Technology ‘Overview of Mobile Payments Watch, available at: http://www.itu.int/ Initiatives’, available at: dms_pub/itu-t/oth/23/01/T230100002 http://www.europeanpaymentscouncil. 00002PDFE.pdf (accessed 22nd eu/index.cfm/knowledge-bank/epc- November, 2014). documents/epc-overview-on-mobile- (30) ‘Financial Inclusion in Paraguay: New payments-initiatives-edition-june-2014/ Mobile Money Regulation’, available at: epc091-14-epc-overview-on-mobile- http://www.fomin.org/en-us/HOME/ payments-initiatives/ (accessed 14th FOMIN-blog/Blogs/ArtMID/8837/ November, 2014). ArticleID/2485/Financial-inclusion-in- (16) Bank of Canada, ref. 5 above. Paraguay-New-mobile-money- (17) BIS (2001) ‘Survey of Electronic Money regulation (accessed 28th November, Developments’, available at: 2014). http://www.bis.org/publ/cpss48.htm (31) Tellez, C. and McCarty, M.Y. (2012) (accessed 14th November, 2014). ‘Mobile Money in Latin America: A (18) Bradford, T. and Hayashi, F. (2007) Case Study of Tigo Paraguay’, ‘Complex Landscapes: Mobile Payments http://www.gsma.com/mobilefor in Japan, South Korea, and the United development/wp-content/uploads/2012/ States’, Payments System Research Briefing, 03/tigopyenfinal.pdf (accessed 28th Federal Reserve Bank of Kansas City, November, 2014). available at: http://www.kansascity (32) ‘Supply-Side Assessment of Financial fed.org/publicat/psr/Briefings/PSR- Inclusion in Paraguay — Draft report’, BriefingSept07.pdf (accessed 3rd http://www.incoop.gov.py/v1/wp- November, 2014). content/uploads/2014/10/Draft-Supply- (19) PayPal, available at: www..com TN-100214_for-translation-oct-15-2014 (accessed 17th November, 2014). v2.pdf (accessed 4th December, 2014).

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(33) Papadopoulos, G. (2001) ‘Electronic Currency (OCC), the National Credit Money and the Possibility of a Cashless Union Association (NCUA), and the Society’, available at: Consumer Financial Protection Bureau http://www.academia.edu/630789/ (CFPB)), the Federal Trade Commission Electronic_Money_and_the_Possibility_ (FTC) and the Federal Communications of_a_Cashless_Society (accessed 14th Commission (FCC). November, 2014). (41) ‘Prepaid Accounts under the Electronic (34) E-money Impact Assessment, available at: Fund Transfer Act (Regulation E) and http://ec.europa.eu/internal_market/ the Truth In Lending Act (Regulation payments/docs/emoney/sec-2008-2572- Z)’, available at: summary-en.pdf (accessed 14th http://files.consumerfinance.gov/f/2014 November, 2014). 11_cfpb_regulations_prepaid-nprm.pdf (35) ECB Statistics data warehouse, available (accessed 16th November, 2014). at: http://www.ecb.europa.eu/stats/ (42) ‘CFPB Issues Prepaid Account NPRM: html/index.en.html (accessed 14th Converging Prepaid into Bank November, 2014). Regulation Mainstream’, available at: (36) Proton is a card-based e-money scheme http://paybefore.com/pay-gov/cfpb- in Belgium, available at: issues-prepaid-account-nprm- http://www.proton.be (accessed 14th converging-prepaid-into-bank- November, 2014). regulation-mainstream/?sthash.BWkOD (37) E-money, niche market that may be TBE.mjjo#sthash.BWkODTBE.N2Oo expanding, available at: MGiB.dpuf (accessed 16th November, http://www.dbresearch.com/PROD/ 2014). DBR_INTERNET_EN-PROD/ (43) Directive 2000/46/EC of the European PROD0000000000288496/E-money%3 Parliament and of the Council of 18 A+Niche+market+that+might+be+ September 2000 on the taking up, expanding.pdf (accessed 14th November, pursuit and prudential supervision of the 2014). business of electronic money institutions, (38) A mobile contactless payment is a available at, http://eur-lex.europa.eu/ mobile device initiated payment where legal-content/EN/TXT/?uri=CELEX: the cardholder and the merchant 32000L0046 (accessed 14th November, (and/or his/her equipment) are in the 2014). same location and communicate directly (44) Report on the evaluation of the with each other using contactless radio E-money Directive 2000/46/EC, technologies, such as NFC, for data available at: http://ec.europa.eu/ transfer (also known as contactless internal_market/payments/docs/emoney/ payments). evaluation_en.pdf (accessed 15th (39) ‘The US Regulatory Landscape for November, 2014). Mobile Payments, Summary Report of (45) Directive 2009/110/EC of the European Meeting between Mobile Payments Parliament and of the Council of 16 Industry Workgroup and Federal and September 2009 on the taking up, State Regulators on April 24, 2012’, pursuit and prudential supervision of the available at: http://www.bostonfed.org/ business of electronic money institutions bankinfo/payment-strategies/ amending Directives 2005/60/EC and publications/2012/us-regulatory- 2006/48/EC and repealing Directive landscape-for-mobile-payments.pdf 2000/46/EC, available at: (accessed 10th November, 2014). http://eur-lex.europa.eu/LexUriServ/ (40) The five agencies are: the Federal LexUriServ.do?uri=OJ:L:2009:267:0007 Reserve System (FRS), the Federal :0017:EN:PDF (accessed 15th Deposit Insurance Corporation (FDIC), November, 2014). the Office of the Comptroller of the (46) Following the adoption of the new

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e-money directive, an e-money licence issues-in-payment-qr-code-nfc-payment/ allows mobile network operators to (accessed 15th November, 2014). conduct both their telecommunication (55) In the cloud model, payment credentials activities and issue electronic money and are stored in a remote fileserver (cloud), conduct payment service activities. not in the secure element in the mobile (47) Luyat, ref. 22 above. phone. (48) ‘Kenya’s New Regulatory Framework (56) Quick Response (QR) codes are for e-Money Issuers’, available at: two-dimensional machine-readable http://www.gsma.com/mobilefor codes usually consisting of a matrix of development/kenyas-new-regulatory- black and white squares. They contain framework-for-e-money-issuers data that can be read and displayed by a (accessed 11th November, 2014). smartphone. See ref. 54 above. (49) ‘Financial Inclusion in Paraguay: New (57) Geo-fencing leverages location-based Mobile Money Regulation’, available at: services (such as GPS and RFID) to http://www.gsma.com/mobilefor create a virtual perimeter in which a development/financial-inclusion-in- mobile device can be recognised and a paraguay-new-mobile-money-regulation notification generated. (accessed 20th November, 2014). (58) EMV stands for Europay, MasterCard (50) Almazan, M. (2013) ‘Mobile Money and Visa, and is a global specification for Regulation in Latin America: Leveling credit and debit payment cards based on the Playing Field in Brazil & Peru’, chip card technology that defines available at: http://www.gsma.com/ requirements to ensure interoperability mobilefordevelopment/mobile-money- between chip-based payment cards and regulation-in-latin-america-leveling-the- terminals. EMV chip cards contain playing-field-in-brazil-peru (accessed embedded microprocessors that provide 20th November, 2014). strong transaction security features and (51) ‘A New Wave of E-Money in Latin other application capabilities. The EMV America’, available at: specification encompasses credit, debit http://www.cgap.org/blog/new-wave-e- and contactless (card and mobile) money-latin-america (accessed 20th payment transactions. The primary use November, 2014). for these chip-based cards is to perform (52) ‘US Mobile Payments Landscape Two payment transactions that store Years Later’, available at: encryption data for authentication. As http://www.bostonfed.org/bankinfo/ part of the transaction authorisation, the payment-strategies/publications/2013/ card uses the data to prove it is mobile-payments-landscape-two-years- authentic, thus preventing the use of later.pdf (accessed 9th November, 2014). stolen or cloned cards. Available at: (53) ‘Isis Mobile Wallet App Changes Name http://www.emvco.com (accessed 14th to Softcard’, available at: http://www. November, 2014). bloomberg.com/news/2014-09-03/isis- (59) European Payments Council, ref. 15 mobile-wallet-app-changes-name-to- above. softcard.html (accessed 9th November, (60) Mobile contactless payments are defined 2014). as payments where the payer and payee (54) Near field communication (NFC) is a (and/or his/her equipment) are in the standard for close-proximity radio same location and communicate directly communication to exchange data with each other using contactless radio between devices or a device and an technologies, such as NFC, Bluetooth or unpowered chip. See ‘Hot Issues in infrared for data transfer. European Payment: QR code and NFC payment’, Payments Council, ref. 15 above. available at: http://payworks (61) Mobile remote payments can be defined mobile.com/blog/2013/09/30/hot- as payments where the transaction is

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conducted over telecommunication a 15 per cent cut of remittances. Miller, networks such as GSM or internet, and N. L. (2014) ‘Money: Facebook’s Final can be made independently of the Frontier. Why Payments Not Virtual payer’s location and/or his/her Reality Are Its Next Holy Grail’, equipment. European Payments Council, available at: http://www.fastcompany. ref. 15 above. com/3032001/money-facebooks-final- (62) A mobile wallet is a frontier-why-payments-not-virtual- accessed through a mobile device. This reality-are-its-next-holy-grail (accessed service may reside on a mobile device 15th November, 2014). owned by the consumer (ie the holder (73) World Bank (2014) ‘World Bank of the wallet) or may be remotely hosted Report: Digital Payments Vital To on a secured server (or a combination Economic Growth’, available at: thereof) or on a merchant website. http://www.worldbank.org/en/news/ Typically, the so-called mobile wallet press-release/2014/08/28/world-bank- issuer provides the wallet functionalities, report-digital-payments-economic- but the use of the mobile wallet is under growth (accessed 17th November, 2017). the control of the consumer. European (74) Nearly 2.2 billion financially unserved Payments Council, ref. 15 above. adults live in Africa, Asia, Latin America (63) A mobile point of sale (mPOS) refers to and the Middle East. Counting the using a consumer mobile device to Worlds Unbanked, available at: http:// facilitate payments and enable acceptance www.mckinsey.com/insights/financial_ of payment instruments. European services/counting_the_worlds_unbanked Payments Council, ref. 15 above. (accessed 14th November, 2014). (64) Penicaud and Katakam, ref. 9 above. (75) Facebook market penetration in 2013 (65) Ibid. was 65.7 in Latin-America, 64.4 in the (66) Ibid. Middle East and Africa, 25.2 per cent in (67) Ibid. Asia-Pacific. ‘Emerging Markets Drive (68) In particular, the rise of e-commerce and Facebook User Growth’, available at: the increasing use of smartphones to http://www.emarketer.com/Article/ access social networks in both advanced Emerging-Markets-Drive-Facebook- and emerging economies. User-Growth/1009875 (accessed 14th (69) Bradford, T. (2012) ‘Where Social November, 2014). Networks, Payments and Banking (76) ‘Does Facebook Represent the Future of Intersect’, available at: International Remittances?’, available at: https://kansascityfed.org/publicat/psr/ http://www.cgap.org/blog/does- briefings/psr-briefingdec2012.pdf facebook-represent-future-international- (accessed 14th November, 2014). remittances (accessed 17th November, (70) ‘Western Union, Moving Money for 2014). Better’, available at: http://www.western (77) Ibid. union.com (accessed 17th November, (78) ‘Evolution of Monthly Active Facebook 2014). Users’, available at: http://www.statista. (71) The World Bank estimates money com/statistics/264810/number-of- remittance US$436bn in 2014, an monthly-active-facebook-users-world increase of 7.8 per cent compared with wide/; and ‘Facebook Investor 2013, available at: http://econ.worldbank. Relations’, available at: http://investor. org/WBSITE/EXTERNAL/EXTDEC/ fb.com/releasedetail.cfm?ReleaseID=842 EXTDECPROSPECTS/0,contentMDK 071 (accessed 14th November, 2014). :23554937~pagePK:64165401~piPK: (79) ‘China’s Sina to Launch Online Payment 64165026~theSitePK:476883,00.html System in April-paper’, available at: (accessed 15th November, 2014). http://in.reuters.com/article/2013/03/ (72) For example, Western Union takes up to 22/sina-onlinepayment-idINL3N0CE5

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GP20130322 (accessed 11th November, Mobile Payment Challenge: Trust’, 2014). Ovum, 22nd April, available at: (80) ‘Renren Rides China’s Social http://www.telecomasia.net/content/ Networking and Gaming to $3.20’, facebooks-biggest-mobile-payments- available at: http://www.forbes.com/ challenge-trust (accessed 14th sites/greatspeculations/2013/05/03/ November, 2014). renren-rides-chinas-social-networking- (88) ‘Facebook Says There Are Now 30M and-gaming-to-3-20/ (accessed 17th Small Businesses with Active Pages, November, 2014). Including 19M on Mobile’, available at: (81) ‘HABBO Launches http://techcrunch.com/2014/06/03/ HABBOPALOOZA’, available at: facebook-30m-small-businesses/ http://www.sulake.com/press/releases/ (accessed 14th November, 2014). habbo-launches-habbopalooza/ (accessed (89) Google Wallet, available at: 11th November, 2014). http://www.google.com/wallet/ (82) Mark Zuckerberg, CEO of Facebook, (accessed 16th November, 2014). announced that it would extend its (90) ‘Google’s Brilliant Plan to Get Millions messenger to payments. ‘Facebook to Adopt Its E-Money System: Gmail’, Shares Surge to Record as Mobile Ads available at: http://qz.com/191496/ Fuel Gains’, available at: http://www. googles-brilliant-plan-to-get-millions-to- bloomberg.com/news/2014-07-24/face adopt-its-e-money-system-gmail/# book-poised-to-hit-record-high-after- search/e-money (accessed 16th quarterly-gains.html (accessed 17th November, 2014). November, 2014). (91) Ibid. (83) ‘Money: Facebook’s Final Frontier Why (92) ‘By the Numbers: 10 Amazing Gmail Payments Not Virtual Reality Are Its Statistics’, available at: http://expanded Next Holygrail’, available at: ramblings.com/index.php/gmail- http://www.fastcompany.com/3032001/ statistics/#.U8zYEFYVfwI (accessed money-facebooks-final-frontier-why- 12th November, 2014). payments-not-virtual-reality-are-its- (93) ‘The iPhone 6 Had Better Be Amazing next-holy-grail (accessed 17th and Cheap, because Apple Is Losing the November, 2014). War to Android’, available at: (84) ‘Brandz Top 100 Most Valuable Global http://www.businessinsider.com/iphone- Brands’, available at, https://www.mill v-android-market-share-2014-5 wardbrown.com/brandz/2014/Top100/ (accessed 12th November, 2014). Docs/2014_BrandZ_Top100_Chart.pdf (94) Ref. 92 above. (accessed 3rd November, 2014). (95) ‘Why Google Wallet Has Failed?’ (85) Crum, C. (2012) ‘Would You Trust available at: http://www.pcmag.com/ Facebook Your Money in the Real article2/0,2817,2469362,00.asp (accessed World?’, available at: http://www.web 14th November, 2014). pronews.com/you-may-soon-be-paying- (96) ‘Apple Isn’t Disrupting Credit Card for-burgers-and-gas-with-facebook- Companies, It’s Giving Them a Huge 2012-06 (accessed 16th November, Gift’, available at: http://www.business 2014). insider.com/apple-pay-and-credit-card- (86) ‘The Everyday Bank: A New Vision for companies-2014-9 (accessed 14th the Digital Age’, Accenture, p. 9, available November, 2014). at: http://www.accenture.com/ (97) ‘Apple Pay and Security: Could microsite/everydaybank/Documents/ Tokenization Be the Tool that Curbs media/Accenture-EverydayBank-New Data Breaches?’, available at: VisionforDigitalAge.pdf (accessed 16th http://www.zdnet.com/apple-pay-and- November, 2014). security-could-tokenization-be-the-tool- (87) Zoller, E. (2014) ‘Facebook’s Biggest that-curbs-data-breaches-7000033585/

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(accessed 14th November, 2014). (110)‘Alipay Payment Services Brings the (98) ‘Apple Has All The Pieces It Needs to World’s Consumers and Businesses Become a Powerful Force in Payments Together’, available at: in 2014’, available at: http://global.alipay.com/ospay/ http://www.businessinsider.com/apple- home.htm (accessed 12th November, has-all-the-pieces-it-needs-to-become-a- 2014). powerful-force-in-payments-in-2014-20 (111)Alibaba, available at: 13-12 (accessed 16th November, 2014). http://www.alibaba.com (accessed 12th (99) Ibid. November, 2014). (100)‘Passbook and Apple’s Future on Mobile (112)‘Alibaba Gains 38% on First Day of Payments’, available at: Trading’, available at: http://www. http://www.collegemobile.com/2014/ businessinsider.com/alibaba-ipo- 01/passbook-and-apples-future-for- september-19-2014-9 (accessed 15th mobile-payments/ (accessed 14th November, 2014). November, 2014). (113)‘Alipay Overtakes PayPal as the Largest (101)‘Apple Pay Is Here and It’s Going to Be Mobile Payments Platform in the Great: Why The Skeptics Have It World’, available at: Wrong’, available at: http://www. http://www.businessinsider.com/alipay- forbes.com/sites/markrogowsky/2014/ overtakes-paypal-as-the-largest-mobile- 10/20/apple-pay-is-here-and-its-going- payments-platform-in-the-world-2014-2 to-be-great-why-the-skeptics-have-it- (accessed 15th November, 2014). wrong/ (accessed 18th November, (114)‘Payment Service Alipay Holds Key to 2014). Alibaba’s Growth’, available at: (102)Ibid. http://online.wsj.com/articles/SB10001 (103)‘Amazon Annual Report 2013’, available 424052702303678404579535840686151 at: http://phx.corporate-ir.net/ 748 (accessed 15th November, 2014). phoenix.zhtml?c=97664&p=irol-reports (115)‘Wallet Wars: A Visual Peek Inside other (accessed 14th November, 2014). China’s PayPal’, January 2014, available (104)Ibid. at: http://www.techinasia.com/alipay- (105)Amazon Payments Europe S.C.A. wallet/ (accessed 15th November, 2014). (Société en Commandite par Actions) is (116)‘Alibaba Affiliate Alipay Rebranded Ant registered as Electronic Money in New Financial Services Push’, Institution, in Luxembourg, available at: available at: http://www.reuters.com/ https://payments.amazon.co.uk/help/ article/2014/10/16/us-china-alibaba- Personal-Accounts/User-Agreement- idUSKCN0I50KJ20141016 (accessed Policies/Licence-Information (accessed 15th November, 2014). 16th November, 2014). (117)‘Alipay Launches Online Current Count (106)‘Amazon Expands Middleman Role in Service Yu E Bao’, available at: Latest Online Payments Push’, available http://www.wantchinatimes.com/news- at: http://www.reuters.com/article/ subclass-cnt.aspx?id=20130620000055& 2014/06/09/us-amazon-com-payment- cid=1206 (accessed 15th November, idUSKBN0EK0HW20140609 (accessed 2015). 16th November, 2014). (118)‘Yu’ebao Becomes Nation’s Biggest (107)‘Amazon Payments’, available at: Monetary Fund’, available at: https://payments.amazon.com/home http://www.globaltimes.cn/content/ (accessed 12th November, 2014). 837721.shtml (accessed 17th November, (108)Ibid. 2014). (109)Amazon Payments Developer, available (119)‘Start Selling Today, Take Care of Your at: https://payments.amazon.com/ Business Anywhere with Square’, developer (accessed 12th November, available at: https://squareup.com/?sro=1 2014). (accessed 17th November, 2014).

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(120)‘Send a Payment With Square Cash, the context/ (accessed 16th November, Service That’s Free, for Now’, available 2014). at: http://www.nytimes.com/2014/ (123)‘Apple Considered Buying Mobile 02/22/your-money/square-cash- Payment Firm Square But Google Deal free-for-now-has-several-payment- Seen As More Likely’, available at: perks.html (accessed 16th November, http://appleinsider.com/articles/14/04/ 2016). 09/apple-considered-buying-mobile- (121)Kazmucha, A. (2014) ‘Best Payment and payment-firm-square-but-google-deal- Wallet Apps for Iphone: Square Wallet, seen-as-more-likely (accessed 16th Paypal, Passbook, and More!’, 17th April, November, 2014). available at: http://www.imore.com/ (124)Millette, E. (2014) ‘David Marcus Quits best-payment-and-wallet-apps-iphone- PayPal for Facebook — Zuck Must square-wallet-paypal-passbook-and-more Have Big Plans For Payment’, available (accessed 16th November, 2014). at: http://www.forbes.com/sites/ (122)‘Putting Squares 5 Billion Valuation into stevenbertoni/2014/06/09/david-marcus Context’, 13 January 2014, available at: -quits-paypal-for-facebook-zuck-must- http://techcrunch.com/2014/01/13/ have-big-plans-for-payment/ (accessed putting-squares-5b-valuation-into- 16th November, 2014).

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