Turkcell has launched a mobile wallet that it says can work on any phone, enabling person-to-person money transfers, point of sale payment, bill payments, and the integration of coupons and loyalty cards.
The wallet is available to any Turkcell user that texts the word Cuzdan ("Wallet) to shortcode 77777. Depending on the phone's features that will either install a SIM-based applet to the SIM menu, or prompt the user to download a smartphone wallet application.
The wallet app comes with a default prepaid card and users can also attach any Mastercard credit card to the wallet by texting the last six numbers of the card to the same number. (Turkcell said cards from other scheme providers could be attached in time, but its launch bank uses Mastercard.)
All secure elements are stored in the phone's SIM – giving the operator control over the application. Cenk Bayrakdar, Chief New Technology Business Officer, said that it is the SIM control element that gives Turkcell the edge. Because the technology is developed by Turkcell, the operator is not reliant on a SIM toolkit or software package from any one of the SIM providers.
It's also the reason the service is only available to Turkcell users. Non-Turkcell users can be recipients of cash transfers, but cannot activate the wallet on their own phones, as Turkcell does not have access to their SIMs. By contrast, a wallet service like O2 Wallet is available "OTT" to users of other networks.
Although the wallet will enable NFC point of sale payments, Bayrakdar said that the operator wanted to develop a non-NFC solution that would work across all handsets. The operator already has a physical prepaid card, with 500,000 users, on the market. The success of that product plus the fact that the operator has also found its NFC service "is not picking up as expected" (due to NFC-SIM logistical issues and the lack of NFC compatible handsets) meant the operator wanted to launch a more universal mobile wallet product.
The functions of the wallet include:
- Cash transfers, that allow the receiving party to enter phone numbers and a code at any ATM, to withdraw cash. If the receiving party also has a prepaid wallet, he can add the value to his card.
- Airtime top-up and phone bill payments.
- Online payments, made by entering a phone number rather than credit card details on an online store, and then entering the card PIN in a pop-up interface from the SIM applet.
- Couponing and loyalty cards can be brought into the wallet. Turkcell wants to add its "relevance engines" to the loyalty cards, to deliver targeted offers from its coupo partners, driving higher offer redemption rates.
- NFC PoS transactions at any of the 500,000 PoS terminals controlled by Garanti Bank, Turkcell's bank partner.
- In the near future non-NFC PoS capability will also be enabled, again by a user entering a phone number instead of card details. The SIM applet will pop up an on-screen notification for confirmation, and then the payment terminal will be notified payment has been made. Details will not therefore be stored locally to the retailer or on payment equipment.
- Utility bill payments will also be possible in the near future, with users selecting a utility account to add to their wallet, rather like adding a credit card.
Business model
Bayrakdar said that the service is expected to have attracted 500,000 users by the end of 2012 and 2 million users by the end of 2013. Just for comparison, it took 18 months to get 500,000 users of the physical prepaid card signed up.
The service is expected to reduce churn, but also drive direct revenues. The operator will be taking around 10% in value from any vouchers or coupons that are redeemed. It will also be taking an undisclosed commission on payments from online merchants, and a small (about 40 Euro cent) surcharge on utility bill payment.
Three of the top five loyalty card providers are signed up, Bayrakdar said, as well as 35 out of Turkey's top 50 e-commerce sites.
Turkcell, and the Turkish market as a whole, has had a reputation for mobile payments innovation, trying out NFC stickers on phones as well as SIM cards. Bayrakdar said that NFC had not taken off as the operator would have liked. But he did say that the company is about to launch a 512k SIM that would be compatible with both Visa and Mastercard's NFC payment schemes.
That sort of solution addresses only a "fraction of the market" he added. The Wallet service is mass market and, Bayrakdar said, unique. "What I'm telling you about," he said, "nobody else in the world has it."
The platform is designed by Turkcell's own technologists, and the operator would like to license it to operators in its home and other markets.