POSITIONING OF Company Y IN THE MOBILE PAYMENT NETWORK TO LEAP AHEAD OF COMPETITION. A Strategic Commercialisation Study DANIEL CITROEN

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1 POSITIONING OF Company Y IN THE MOBILE PAYMENT NETWORK TO LEAP AHEAD OF COMPETITION A Strategic Commercialisation Study DANIEL CITROEN

2 The difficulty lies not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds. - John Maynard Keynes - 2 -

3 Supervisors TU Delft Professor First supervisor Second supervisor professor ir. W. Dik dr. ing. M.A. Zegveld dr. M.L.C. de Bruijne Student Student Daniel Citroen For the complete thesis, please refer to one of the supervisors mentioned above - 3 -

4 Executive summary Over the past centuries there have been different payment methods starting with cheques and cash money. All these years new payment methods were launched to make payments cheaper, quicker, more secure and more convenient. Nowadays, as to payments, a new technology is available which does combine all of these facilitators, i.e. Near Field Communication (NFC). It is predicted that this NFC technology, within a period of 5 years, will be incorporated in more than half of the mobile phones in the Netherlands. This will enable the launch of Mobile Payment (M-Payment). Company X is the first mover in M-Payment in the Netherlands; it even added a mobile provider in its value chain. M-Payment is different from preceding methods in a way that it is a unique new payment method, combining two completely different units namely the mobile phone and payment cards. The main actors in the M- Payment Network, which are necessary to successfully launch M-Payment in the Netherlands, are: Telco s, Banks, Credit card companies, Handset vendors, Secure Element issuers & vendors, Retailers, Transaction coordinators, the End users and a Network coordinator. Thus, the key to a success launch of M-Payment for COMPANY Y would be to find the right alliances. The best actors to take the lead in the network to launch M- Payment are banks. Because of the high Trust factor in combination with their Business Networks banks would be the best candidate to launch M-Payment and create the critical mass. Research shows that in the Netherlands payment methods are already very much developed, actually in such a way that one could question whether it would be wise to launch M-Payment in the Netherlands at all, within the near future. Nevertheless, indeed some solutions make use of the same actors in the MPBE, even though on a smaller scale but certainly are full-fledged businesses. According to the technology push approach, Company Y would be advisable to stick to the PIN payment, and in addition thereto to commercialise the Company Y Access card in accordance with the Technical Commercialisation Ecosystem (TCE) Cycle, consisting of five stages. These stages are: Stage 1 The start-up stage; create a business case, market research and a business plan Stage 2 The market entry stage; promotion to the market, form a business ecosystem Stage 3 The growth stage; create a critical mass and maintain interdependencies in the BE Stage 4 The maintaining stage; stable actors in the BE as well as stable growth to gain as much profit as possible Stage 5 The transitional stage; self-renewal or die Company Y could launch this in four progressive steps; first could issue single use access cards, than multi use cards, which later on could be incorporated in NFC enabled mobile phones together with PIN card. The last step would be a mobile phone with remotely access-granted features and more extensive payment possibilities. In this way, the M-Payment market is developed in a sustainable manner and Company Y benefits here from as having and maintaining the lead in the MPBE

5 Index EXECUTIVE SUMMARY... 2 PREFACE... FOUT! BLADWIJZER NIET GEDEFINIEERD. INDEX INTRODUCTION... FOUT! BLADWIJZER NIET GEDEFINIEERD COMPANY Y... FOUT! BLADWIJZER NIET GEDEFINIEERD PROBLEM STATEMENT... FOUT! BLADWIJZER NIET GEDEFINIEERD RESEARCH GOALS... FOUT! BLADWIJZER NIET GEDEFINIEERD RESEARCH QUESTIONS... FOUT! BLADWIJZER NIET GEDEFINIEERD RESEARCH APPROACH... FOUT! BLADWIJZER NIET GEDEFINIEERD STRUCTURE OF REPORT... FOUT! BLADWIJZER NIET GEDEFINIEERD RELEVANCE OF THE RESEARCH... FOUT! BLADWIJZER NIET GEDEFINIEERD. 2. MOBILE PAYMENT... FOUT! BLADWIJZER NIET GEDEFINIEERD HISTORY OF PAYMENT METHODS... FOUT! BLADWIJZER NIET GEDEFINIEERD PAYMENT METHODS... FOUT! BLADWIJZER NIET GEDEFINIEERD TECHNOLOGY NFC... FOUT! BLADWIJZER NIET GEDEFINIEERD ASSUMPTIONS... FOUT! BLADWIJZER NIET GEDEFINIEERD FACILITATORS... FOUT! BLADWIJZER NIET GEDEFINIEERD BARRIERS... FOUT! BLADWIJZER NIET GEDEFINIEERD PRECEDING CASES... FOUT! BLADWIJZER NIET GEDEFINIEERD. 3. METHODOLOGY AND THEORY... FOUT! BLADWIJZER NIET GEDEFINIEERD COMPOSITION OF THE REPORT... FOUT! BLADWIJZER NIET GEDEFINIEERD STATIC DESCRIPTION... FOUT! BLADWIJZER NIET GEDEFINIEERD DYNAMIC DESCRIPTION... FOUT! BLADWIJZER NIET GEDEFINIEERD APPLIED DESCRIPTION... FOUT! BLADWIJZER NIET GEDEFINIEERD DATA COLLECTION... FOUT! BLADWIJZER NIET GEDEFINIEERD. 4. STATIC DESCRIPTION; NETWORK... FOUT! BLADWIJZER NIET GEDEFINIEERD NETWORK ANALYSIS... FOUT! BLADWIJZER NIET GEDEFINIEERD BUSINESS ECOSYSTEM ANALYSIS... FOUT! BLADWIJZER NIET GEDEFINIEERD. 5. DYNAMIC DESCRIPTION; STRATEGY... FOUT! BLADWIJZER NIET GEDEFINIEERD STRATEGY SELECTION... FOUT! BLADWIJZER NIET GEDEFINIEERD SATELLITE SELECTION... FOUT! BLADWIJZER NIET GEDEFINIEERD. 6. APPLIED DESCRIPTION; COMMERCIALISATION... FOUT! BLADWIJZER NIET GEDEFINIEERD THE TECHNICAL COMMERCIALISATION ECOSYSTEM (TCE) CYCLE... FOUT! BLADWIJZER NIET GEDEFINIEERD P2P PAYMENT FROM COMPANY Y... FOUT! BLADWIJZER NIET GEDEFINIEERD ACCESS FROM COMPANY Y... FOUT! BLADWIJZER NIET GEDEFINIEERD CONCLUSION... FOUT! BLADWIJZER NIET GEDEFINIEERD. 7. CONCLUSIONS & RECOMMENDATIONS... FOUT! BLADWIJZER NIET GEDEFINIEERD CONCLUSIONS... FOUT! BLADWIJZER NIET GEDEFINIEERD LIMITATIONS... FOUT! BLADWIJZER NIET GEDEFINIEERD RECOMMENDATIONS... FOUT! BLADWIJZER NIET GEDEFINIEERD FURTHER RESEARCH... FOUT! BLADWIJZER NIET GEDEFINIEERD. REFERENCES... FOUT! BLADWIJZER NIET GEDEFINIEERD