Course code: BE361E MBA, Technology Management Candidate name: Christer Olsen and Rolf Skogvold Aspects to consider when introducing Mobile Payment Date: 02.12.2016 Total number of pages: 103 Index Index ............................................................................................................................................ i 1. Abstract ............................................................................................................................... 1 2. Preface ................................................................................................................................. 1 3. Summary ............................................................................................................................. 2 4. Abbreviations and Terms list .............................................................................................. 2 5. Background ......................................................................................................................... 3 6. The Problem Statement and Research Questions ............................................................... 4 7. Introduction to mobile payment .......................................................................................... 7 Mobile payment as a phenomenon ......................................................................................... 7 Mobile Payment with different technologies. ........................................................................ 8 NFC ...................................................................................................................................... 11 Mobile Payment. .................................................................................................................. 13 Contactless Payment ............................................................................................................ 15 8. Short introduction to Mobile Payment Solutions .............................................................. 17 M-PESA ............................................................................................................................... 17 MobilePay ............................................................................................................................ 17 mCASH ................................................................................................................................ 18 Vipps .................................................................................................................................... 18 ApplePay .............................................................................................................................. 19 Android Pay/Google Wallet ................................................................................................. 19 Samsung Pay ........................................................................................................................ 19 IBM Pay ............................................................................................................................... 19 Microsoft Wallet .................................................................................................................. 19 9. Limitation of the research ................................................................................................. 20 Tornatzky and Klein in relation to Rogers adoption attributes: ........................................... 23 10. Theory ........................................................................................................................... 25 Diffusion according to Rogers' theoretical platform ............................................................ 29 Compatibility and Relative advantage ................................................................................. 31 Social factors ........................................................................................................................ 31 11. Cases .............................................................................................................................. 40 “PIVO” ................................................................................................................................. 43 “ValYou” .............................................................................................................................. 44 mBanks “MasterCard Orange Cash and MyWallet by T-Mobile” ...................................... 44 EIKA “EikaSafe” ................................................................................................................. 45 12. Discussion and analysis ................................................................................................. 46 mBank Analyses and Discussion ......................................................................................... 46 Eika Safe Analyses and Discussion ..................................................................................... 61 OPBank PIVO Analyses and Discussion ............................................................................. 66 Intermediate case summary: ................................................................................................. 77 SpareBank1 ValYou Analyses and Discussion .................................................................... 77 13. Conclusion ..................................................................................................................... 93 14. Digital Sources .............................................................................................................. 96 15. Literature, References/Bibliography ............................................................................. 98 i 1. Abstract There have been many attempts over the last 20 years to introduce Mobile Payment, as a replacement where we physically use payment cards or cash, but no product has yet been a success. All these attempts have cost a lot of effort and resource, some have been cancelled. With our research, we want to see if we can get some answers that could make the introduction of NFC based Mobile Payment by other Banks and Finical Institutions to Consumers more successful when it comes to getting Consumers to adopt the technology. We interviewed five respondents from four Bank/Financial Institutions that had introduced such products to its cardholders, to learn from their experience in the process. We found that the focus had not been to give the Consumers a product that was better then what they currently were using and that these products were complex to install and start using. Introducing NFC Mobile Payment must be easier to install, faster to use, add value and be an advantage for the end-user. 2. Preface This master Thesis and final paper marks the ending of our 3-year MBA program in Technology Management, Campus Helgeland at the Nord University in Norway. The program has been very exciting and inspiring. We have built networks and we have gained new “tools” in our professional life, as well as made new friends. We would like to thank the following for their contribution to this Master thesis: Eigil Hagen for contributing to data, research and information. Tomasz Sekutowicz for putting us in contact with Joanna Erdman in Poland Tina Østrem and Ieva Gailuma for their support in this process. And Einar Rasmussen (PhD) Senior Researcher and our mentor for this paper at the Nord University The respondents of our interviews: Karl-Richard Floer, Director of Cards and Payments at Eika Kredittbank AS Kristian Luoma, Head of New Business Development at OP Financial Group Tarje Melau Sørensen, Head of Business Development and Analytics at Eika Kredittbank AS Joanna Erdman, Director, Card Business Development at w mBank S.A Øystein Lysvik, General Manager Cards at SpareBank1 Gruppen AS 1 3. Summary In this Paper, we start by introducing the reader to payment technology and mobile payment technology, to better understand and gain a platform of knowledge as we move into theory, method and analysis. Many companies have been working with Mobile payment for many years and there have been many attempts/projects. The industry is still highly focused on this, and other big companies are getting involved. We are intrigued to see why this has not been a success and will try to scratch into this in the light of innovation adoption theories. We have tried to give an insight in different technologies and products as a basis/platform to understand the history of mobile payment in general. We have focused our studies on NFC Mobile Payment, where the mobile emulates a contactless Payment Card, as this is industry standard for Contactless Payment and Mobile Payment. We have interviewed five respondents from four different Bank/Financial institutions that have introduced such products, in order to understand their challenges in getting users to adopt the product. We have used theories of innovation adoption to understand why these projects have failed to bring the product to a majority of the customers and contactless transactions. 4. Abbreviations and Terms list NFC - Near Field Communication, contactless communication POS – Point Of Sale, a payment terminal you find in shops, restaurants and other places EMV – (short for Eurocard, Mastercard, VISA) a payment card industry standard OEM Payment – Original Equipment Manufacture Payment is to describe Mobile Handset Manufacture moving into payment. ApplePay, SamsungPay, LG Pay among others. MST – Magnetic