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Opportunities and challenges of mobile payment services: The perspective of service providers
KTH, School of Electrical Engineering and Computer Science (EECS), Communication Systems, CoS.ORCID iD: 0000-0001-8350-9440
2018 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

 Mobile payments are transforming the payments industry. These services open up the opportunity for non-banking actors to enter the market. In order to embrace this challenge, banks, traditional payments market players, are forced to launch mobile payments. However, in Europe and most developed economies, a big number of launched services get terminated soon after their introduction in the market. Hence, the ability of different actors to act locally calls for additional research.

The main objective of this thesis is to broaden knowledge and understanding about the ways mobile payment service providers address the opportunities and challenges of mobile payment services. In order to investigate this problem, this research (i) explores factors stimulating and hindering the introduction of mobile payments using perspectives of different types of service providers (i.e., banks, independent providers, direct operator billing providers, retailers, and public transport companies) and (ii) seeks to explain the importance of these factors for each type of provider.

The primary data collected using interview method. More than 40 industry representatives in six countries were contacted. The Service, Technology, Organisation, and Finance (STOF) model was used as a theoretical research framework. This is a business modelling framework that specifies a set of critical design issues that have to  be considered within each model’s domain.

Research findings highlight that the organisation domain is the key domain, which  affects all other domains and has an impact on the general viability of the business model. A comparison of the approaches used by different service providers to address each of the critical design issues helped to identify the factors that are most important within each domain. These factors stimulate or hinder development of a viable business model within each category of service providers.

This research contributes to a better understanding of challenges and success factors associated with the design of business models for new mobile services and uses the lens of the STOF model. The contributions to the academic research on mobile payments are: (i) collection and analysis of a rich empirical data set on mobile payment services implemented in six Northern European countries, (ii) discussion of a bigger picture by connecting research findings to the context of the existing payment system, (iii) extension  of knowledge on business models for mobile ticketing, and (iv) extension of knowledge on the value of mobile ticketing services in the business-to-business (B2B) context.

Abstract [sv]

Uppkomsten av mobila betalningslösningar förändrar betalningsindustrin. Tjänsterna erbjuder möjligheter för nya aktörer att komma in på marknaden. Detta utmanar traditionella aktörer såsom banker vilka börjat att införa mobila betalningstjänster. I Europa och andra utvecklade länder visar det sig att ett stort antal av dessa nya tjänster dras bort från marknaden strax efter att de lanserats. Därför behövs fördjupad forskning kring olika aktörers förmåga att agera på lokala marknader.

Det övergripande syftet med denna avhandling är att bredda kunskap och förståelse om hur tjänsteleverantörer hanterar möjligheter och utmaningar med mobila betalningar. Forskningen har fokuserat på att: (i) identifiera faktorer som stimulerar eller försvårar  lansering av betalningslösningar för olika typer av tjänsteleverantörer (banker, oberoende betalningsleverantörer, telekomoperatörer, detaljhandel och kollektivtrafikföretag) och  (ii) förklara inverkan av olika faktorer för varje typ av leverantör.

Forskningen baseras på primärdata insamlad från intervjuer med drygt 40 aktörer i sex länder. Som teoretiskt ramverk används den s.k. STOF modellen (Service, Technology, Organisation, and Finance) som är ett verktyg framtaget för analys av affärsmodeller. Den anger olika kritiska faktorer och problem som bör beaktas inom affärsmodellens olika domäner.

Resultaten pekar på att “Organisation” är den viktigaste domänen i affärsmodellen, denna påverkar de övriga domänerna samt affärsmodellens allmänna bärkraft. En jämförelse av de strategier som olika tjänsteleverantörer använder för att hantera kritiska designproblem har använts för att peka ut de faktorer som är de viktigaste inom varje domän.

Denna forskningen bidrar till en bättre förståelse av utmaningar och framgångsfaktorer i samband med utformningen av affärsmodeller för nya mobila betalningstjänster. Bidragen till den akademiska forskningen om mobila betalningslösningar är: (i) insamling och analys av ett brett empiriskt material om mobila betalningslösningar i sex nordeuropeiska länder, (ii) en diskussion av helhetsbilden genom att koppla forskningsresultaten om nya betalningslösningar till det befintliga betalningssystemet,  (iii) utökad kunskap om affärsmodeller för mobila biljetttjänster, och (iv) breddad kunskap om värdet av mobila biljetttjänster inom business-to-business (B2B).

Place, publisher, year, edition, pages
Stockholm: Kungliga Tekniska högskolan, 2018. , p. 131
Series
TRITA-EECS-AVL ; 2018:31
Keywords [en]
Mobile payments, Mobile ticketing, Business model, STOF, Service provider, Payment services provider
Keywords [sv]
Mobila betalningstjänster, Mobil biljettjänster, Affärsmodeller, STOF, Tjänsteleverantör, Leverantörer av betalningstjänster
National Category
Communication Systems Business Administration
Research subject
Business Studies; SRA - ICT
Identifiers
URN: urn:nbn:se:kth:diva-226555ISBN: 978-91-7729-745-1 (print)OAI: oai:DiVA.org:kth-226555DiVA, id: diva2:1199256
Public defence
2018-05-30, Ka-Sal C (Sal Sven-Olof Öhrvik), KTH, Kistagången 16, Kista, 13:00 (English)
Opponent
Supervisors
Note

QC 20180420

Available from: 2018-04-20 Created: 2018-04-19 Last updated: 2018-04-20Bibliographically approved
List of papers
1. Stakeholder’s expectations: The case of mobile public transport ticketing in Sweden
Open this publication in new window or tab >>Stakeholder’s expectations: The case of mobile public transport ticketing in Sweden
2014 (English)In: 13th International Conference on Mobile Business, 2014 (ICMB 2014), London, June 4-5, 2014, 2014Conference paper, Oral presentation only (Refereed)
Abstract [en]

One of the main areas of mobile payment application in Sweden is mobile public transport ticketing. The main stakeholders involved in this service are mobile network operators, mobile payment service providers, SMS ticket’s “technology solution” providers, public transport companies, and consumers.

Traditionally, mobile operators have had a strong position in this niche since the mobile phone bill or pre-paid subscriptions were used for end-user billing. Due to financial regulation, this situation was changed in February 2013 when new SMS payment solutions were introduced for all public transport companies in Sweden. A number of new actors entered the scene, and the position of existing actors changed dramatically. At the same time, the Swedish mobile operators formed a joint venture, 4T Sweden, offering a new mobile payment solution – WyWallet.

The main focus of this paper is on the change of expectations of different stakeholders taking part in provisioning of SMS payment services. Analysis has been performed by comparison of the initial expectations before the introduction of the new SMS payment system and the real outcome in approximately half a year time. Analysis revealed the fact that expectations of a number of stakeholders about mobile payment services did not come true. Moreover, due to barriers set by the mobile payment solution, mobile payment transactions in public transportation is dramatically lower than what SMS payments were before the market changed.

Keywords
Mobile Payment Services, Public Transport, Public Transport Ticketing, m-Ticketing, SMS ticketing, Consumer Expectations of a Service, Stakeholders’ Expectations
National Category
Telecommunications Business Administration
Research subject
Business Studies
Identifiers
urn:nbn:se:kth:diva-159106 (URN)
Conference
13th International Conference on Mobile Business,(ICMB 2014) London, June 4-5, 2014
Funder
Wireless@kth, 6469
Note

QC 20150123

Available from: 2015-01-21 Created: 2015-01-21 Last updated: 2018-04-19Bibliographically approved
2. An exploratory study of consumer attitudes towards mobile ticketing in Sweden
Open this publication in new window or tab >>An exploratory study of consumer attitudes towards mobile ticketing in Sweden
2013 (English)In: 24th European Regional Conference of the International Telecommunications Society: Technology, Investment and Uncertainty, ITS , 2013Conference paper, Published paper (Refereed)
Abstract [en]

Swedish public transport organizations have set an objective to double usage of the public transport during the next coming five years. This study attempts to investigate if the current ticket solutions support the goal of the public transport companies, and if the available mobile phone solutions can lower barriers for consumers. In order to do that, critical travelling moments for users of different market segments were estimated during a pre-study stage. The following focus group discussions helped to validate problems identified during the pre-study. At the same time, focus groups provided deeper consumer insights on general consumer perception of the transport service, ticketing, mobile payment, quality of service, consumer expectations related to the public transport services, and consumer satisfaction and loyalty.

The conducted research helped to identify problems existing in public transport ticketing and mobile payment areas, which have the negative impact on the usage of the public transport service and contribute with additional barriers for users. Moreover, this conclusion is supported by multiple examples that clearly illustrate what does not work, and why it does not work. Hence, mentioned solutions do not support the overall objective of the public transport operators. The comprehension of these problems and barriers can contribute to a better understanding of consumer needs and expectations, and help the public transport service providers to improve the service.

Place, publisher, year, edition, pages
ITS, 2013
Keywords
Mobile Payment Services, Public Transport, Public Transport Ticketing, m-Ticketing, Focus Group, Consumer Expectations of a Service, Perception of a Service, Quality of Service, Customer Satisfaction, Loyalty
National Category
Communication Systems Business Administration
Research subject
SRA - ICT
Identifiers
urn:nbn:se:kth:diva-134025 (URN)
Conference
24th European Regional Conference of the International Telecommunications Society, Florence, Italy, 20 - 23 October 2013
Funder
Wireless@kth, 6507
Note

Qc 20131217

Available from: 2013-11-14 Created: 2013-11-14 Last updated: 2018-04-19Bibliographically approved
3. Stakeholders’ Expectations of Mobile Payment in Retail: Lessons from Sweden
Open this publication in new window or tab >>Stakeholders’ Expectations of Mobile Payment in Retail: Lessons from Sweden
(English)Manuscript (preprint) (Other academic)
Identifiers
urn:nbn:se:kth:diva-172777 (URN)
Note

QS 2015

Available from: 2015-08-28 Created: 2015-08-28 Last updated: 2018-04-19Bibliographically approved
4. Mobile ticketing services in the Northern Europe: Critical business model issues
Open this publication in new window or tab >>Mobile ticketing services in the Northern Europe: Critical business model issues
2018 (English)In: Internet of Things Business Models, Users, and Networks, 2017 / [ed] Morten Falch, Copenhagen, Denmark: IEEE, 2018, p. 1-8Conference paper, Published paper (Refereed)
Abstract [en]

Started as SMS ticketing, today, mobile ticketing services become a platform for combined mobility solutions that integrate mobile ticketing, bike renting, car sharing, and parking payment services. Mobile ticketing services provide a number of benefits for public transport companies and passengers, however, in some Northern European countries, the share of mobile ticket sales does not exceed 10 percent. In this paper, we analyse business models of three types of mobile ticketing services (SMS, in-app, and “Be-In Be-Out” (BIBO)) in order to identify factors that negatively affect wider penetration of mobile ticketing. In order to do so, we use STOF (Service, Technology, Organisation, and Finance) model. The research reveals that there are a number of challenges related to service, technology, and finance domains of mobile ticketing. Due to this, with the help of price policy, many public transport companies push choices of their customers towards use of plastic travel card.

Place, publisher, year, edition, pages
Copenhagen, Denmark: IEEE, 2018
Keywords
mobile ticketing, business model, STOF
National Category
Business Administration Communication Systems
Identifiers
urn:nbn:se:kth:diva-226551 (URN)10.1109/CTTE.2017.8260939 (DOI)
Conference
Joint 13th CTTE and 10th CMI Conference
Note

QC 20180420

Available from: 2018-04-19 Created: 2018-04-19 Last updated: 2018-04-20Bibliographically approved
5. The value of mobile ticketing from a public transport perspective
Open this publication in new window or tab >>The value of mobile ticketing from a public transport perspective
2018 (English)In: Journal of Payments Strategy & Systems, Vol. 11, no 4, p. 292-305Article in journal (Refereed) Published
Abstract [en]

Within the field of mobile payments, the market segment for mobile ticketing services is expected to grow, driven by the public transport sector. Although a large number of studies have explored the value of mobile payments to customers (ie service end users), there is a lack of research exploring the value of mobile payment and mobile ticketing for business customers (ie transport companies and retailers). This paper aims to address this gap and to explore the kinds of value that mobile ticketing services create for public transport companies. The research considers mobile ticketing services in six Northern European countries. The research findings suggest that within the business-to-business context, mobile ticketing services create multiple dimensions of value, namely enhanced technical functionality; financial value; better working environment; operational value; and reputational and customer relationship value. For passengers, meanwhile, value takes the form of convenience and service enhancement. These benefits are factors driving adoption of mobile ticketing and mobile payment services by public transport companies.

Place, publisher, year, edition, pages
London: , 2018
Keywords
benefits; mobile payments; mobile ticketing; value
National Category
Business Administration
Research subject
Business Studies
Identifiers
urn:nbn:se:kth:diva-226550 (URN)
Note

QC 20180420

Available from: 2018-04-19 Created: 2018-04-19 Last updated: 2018-04-20Bibliographically approved
6. Mobile payments: a proposal for a context-oriented approach based on socio-technical system theory
Open this publication in new window or tab >>Mobile payments: a proposal for a context-oriented approach based on socio-technical system theory
(English)In: Journal of Innovation Management, ISSN 2183-0606Article in journal (Refereed) Submitted
Abstract [en]

A recent review on mobile payment research by Dahlberg et al. (2015) concludes that there is a need to synthesise this research area by studying contexts in which innovation is done as well as to integrate different aspects of research. This article aims to provide a proposal for how to achieve such integration and context-orientation by building on previous studies as well as an additional review. Our systematic literature review of mobile payments research is focused on papers published during 2006–2016. The main objective is to examine how mobile payments research has been conducted from the methodological and theoretical perspectives. Our findings show that research on mobile payments is a multidisciplinary research. Three main themes, which are in line with previous studies, in research are: customer adoption, technological aspects, and business aspects. Moreover, research is mainly analytical based on deductive approach. To meet the challenge formulated in the previous research, we propose and apply a socio-technical system framework to achieve synthesis and context-specific consideration in future research on mobile payments.

Keywords
Literature review, Mobile payments, m-Payments, Socio-technical systems
National Category
Business Administration
Research subject
Business Studies
Identifiers
urn:nbn:se:kth:diva-226553 (URN)
Note

QC 20180420

Available from: 2018-04-19 Created: 2018-04-19 Last updated: 2018-04-20Bibliographically approved
7. Primary data collection: Approaches of service providers towards mobile payments
Open this publication in new window or tab >>Primary data collection: Approaches of service providers towards mobile payments
2018 (English)Report (Other academic)
Abstract [en]

Mobile payments are new services enabled by evolution of information and communication technologies. These services can be provided by different types of actors both banks and non-banks. The understanding of capabilities and limitations of different service providers to act in local markets requires further understanding. Implemented research seeks to extend knowledge in this area. I have implemented research focused on approaches used by different types of service providers including banks, independent providers, operator billing providers, retailers, and public transport companies in six Northern European countries.

Exploratory part of the research aims to address the following research question: What factors stimulate and hinder the introduction of mobile payments? The main objective of this report is to present primary data collected during the research through interviews with contacted companies.

The collected primary data is classified and organised using the STOF (Service, Technology, Organisation, and Finance) model. Evidence is presented in tables. This primary data is further used for explanatory study. At the same time, this data can be used by other researchers studying the same area. The collected data is reach in facts and presents the overview of different strategies. 

Place, publisher, year, edition, pages
Stockholm: , 2018. p. 49
Series
TRITA-EECS-RP ; 2018:2
Keywords
Mobile payments, Contactless payments, NFC payments, Mobile ticketing
National Category
Business Administration
Research subject
Business Studies
Identifiers
urn:nbn:se:kth:diva-226554 (URN)978-91-7729-749-9 (ISBN)
Note

QC 20180420

Available from: 2018-04-19 Created: 2018-04-19 Last updated: 2018-04-24Bibliographically approved
8. The Effect of Innovation on Business Networks
Open this publication in new window or tab >>The Effect of Innovation on Business Networks
2014 (English)Conference paper, Published paper (Refereed)
Keywords
ARA analysis, ARA model, Innovation, Business networks, Mobile payment, Mobile payment service, Retailing, Public transport, Mobile ticketing
National Category
Business Administration Telecommunications
Research subject
Business Studies
Identifiers
urn:nbn:se:kth:diva-172778 (URN)
Conference
IMP Conference, KEDGE Business School,Bordeaux Campus, France, 1st –6th September 2014
Note

NV 201508

Available from: 2015-08-28 Created: 2015-08-28 Last updated: 2018-04-19Bibliographically approved

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Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf