2. Connectivity WS IDI Expert Setup | Commercial in confidence | , Rev | 2012-10-15 | Page 2 (38)
Ericsson ConsumerLab
The Voice of the Consumer
3. Connectivity WS IDI Expert Setup | Commercial in confidence | , Rev | 2012-10-15 | Page 3 (38)
WHAT IS M-COMMERCE?
Wikipedia definition:
Mobile commerce is the ability to conduct commerce
using a mobile device, such as a smartphone or tablet
From a regulatory point of view it is the provisioning or
enabling of products and/or services via mobile phones
or devices
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Typical M-COMMERCE
services
Mobile money transfer
(P2P)
Mobile payments
(P2B, B2B)
Mobile banking
1. Airtime transfer
2. Domestic remittance
3. International remittance
1. Airtime top-up
2. Merchant payment
3. Bill payment
4. Salary payment
5. PoS payment
Transaction based
1. Loan payment
2. Cash-in/cash-out
3. Account management
Info based
1. Alerts
2. Account checking
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Method and purpose of study
Purpose of study
âșThe purpose of the study is to
understand the context for M-
Commerce specifically and consumersâ
behaviors and rituals regarding their
private economy in general
Method
âș4080 online interviews
âș30 expert interviews
âș50 indepth interviews
âșDiaries and shop alongs
âșIn home interviews
Consumption
Method of choice
Service providers
Credit
Loyalty
Services
EtcâŠ
Main
focus
Household
Economy
Income
Spending
Savings
Credit
Transfers
EtcâŠ
Area of
interest
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Regions of study
The markets in focus for the study
were chosen to achieve a mixture of
geographical location, sociocultural
factors and level of maturity of the
telecom and financial sectors and
consumer markets
BRAZIL ARGENTINA COLOMBIA CHILE MEXICO
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Key Take-aways
Convenience a key
driver for m-commerce
for both strugglers
and achievers.
1
Safety and control is
essential for Latin
Americans.
2
Consumers lack
overall trust in
institutions
and network
performance.
3
âș There are three conclusive consumer take-aways from this
m-commerce study in Latin America:
8. Connectivity WS IDI Expert Setup | Commercial in confidence | , Rev | 2012-10-15 | Page 8 (38)
Lacking
resources and
unbanked
Partially
financially
included,
partially
banked
Affluent and
financially
included
Income Pyramid
Respon-
dents
Simplified income pyramid structure for Argentina, Brazil, Chile, Colombia and Mexico
âRichâ
âUpper Middleâ
âLower Middleâ
âPoorâ
30%
70%
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Booming middle class
Source World bank 2012
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ACKNOWLEDING differences
4/106/10
Acknowledging the economic development of the region also
means acknowledging the different conditions under which
consumers live and work. On one hand there is the rising middle
class, rapidly moving towards financial inclusion, and on the other
hand there is the long tail, not yet financially included.
are struggling to make
ends meet and are
moving towards
financial inclusion
enjoy economic margins
allowing for leisure
consumption and have
reached financial
inclusion
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Opportunities for m-commerce
Source: World Bank, Measuring Financial Inclusion Report, ConsumerLab Analytical Platform, April 2012
33%
56%
42%
30% 27%
145%
134%
152%
106%
87%
0
20
40
60
80
100
120
140
160
Argentina Brazil Chile Colombia Mexico
22%
24%
29%
15%
23%
25%
10%
20% 20%
13%
Low financial inclusion + high mobile penetration makes mobile
financial services an attractive opportunity
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No, I think that cash⊠I would
pay everything in cash if I
could, because I feel it is more
reliable, I am paying for
something and thatâs all, I donât
have to think of that anymore. â
- Paula, 32, Argentina
âș Latin America can be described as a
âcashonomyâ â consumers are habituated to use
small amounts of cash on a daily basis.
âș Cash is considered a fast, convenient and
transparent means of payment that provides
great sense of control over oneâs spending.
âș Many stores and merchants donât accept other
means of payment than cash, which makes it
important to always have an amount of cash at
hand.
âș The downside of cash is that is causes safety
concerns, especially when handling large
amounts of cash.
âCashonomyâ
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Unstable incomes for informal
workers
Yenny, 42, Colombia:
âI sell emeralds and receive commisions on
the sales. It is paid either in cash or they
write me a check that I can cash in at any
bank. Sometimes I can earn 2000 pesos
and then go for 2 months without selling
any stones. I still spend money every day.
It is very unstable.â
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Safety and criminality
âș Criminality is a major concern in the everyday life of
consumers in all markets.
âș First hand experiences of crime
â Most consumers have experienced frauds, card cloning,
robberies or even kidnappings. Thus, many have developed
individual strategies that increase their sense of safety.
â Mistrust of the security of new technologies is high.
â Situations and places where fear of crime is high: ATM lines,
gasoline stations and card purchases in some situations.
âș Money laundry is a concern of regulators
â From the perspective of regulators in Latin America, money
laundry in the context of m-commerce is a current concern. SAFETY
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Carlos, 32, Colombia:
âIâve basically stopped paying for gasoline with my card. Gas
stations are where cards most commonly get cloned. If I do pay
with a card I ask the clerk to please let me use the card reader
myself.
My wifeâs card got cloned at a gas station. We were at home
watching a movie, and suddenly she received an e-mail: âYou
have just withdrawn moneyâ, so we went to a bank, but it was
obviously closed, so we had to call and cancel everything. On
Monday we went to the bank again and about 700.000 pesos
had been withdrawn. Thank god it was at the end of the month
and most bills were paid. The money was never returned.â
Card cloning example
SAFETY
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âș There is some cautiousness to debt, both
loans and credit cards, especially among low
income consumers
âș Loans are considered risky and expensive,
and it is fairly uncommon to have a loan
âș The purpose of loans differs between high
and low income consumers:
â Low income consumers take loans primarily to
cover unforeseen expenses or to cover daily
expenses when the income fluctuate.
â High income consumers use loans for larger
expenses, such as buying a home or a car.
â Both consumer groups consider buying a
home the most legitimate reason to take a
loan.
Cautiousness to debt
I donât like loans very much,
because I know you end up
paying a lot more than the
amount you requested. If I had
a big need, I would have to do
it, or I would have to look for
another solution.
- Ingrid, 40, Chile
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âș Mistrust in institutions is widespread in Latin
America.
âș The skepticism towards institutions revolve
around three common perceptions;
â Institutions are historically regarded as part of
the establishment, primarily serving the
interests of the wealthy.
â Repeated exposure to official misconduct and
corruption fuels the common perception that
institutions are not to be trusted.
â The level of service and customer friendliness
of institutions is considered low.
LACK OF SYSTEMIC TRUST
Going to the bankâŠ
[only] lures you to get
into debt.
- Lilian, 39 years, Chile
LACK OF
SYSTEMIC TRUST
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âș Consumers stress the importance of
having control over their economy.
âș Detailed accounting of household
economy.
â The need for control manifests itself in the
form of detailed accounting of household
incomes and expenditures.
âș Payment verifications are crucial.
â Payment verifications are stored for a long
time as evidence in case the payment
would be challenged in the future.
â It is common, and appreciated, to receive
an e-mail or an SMS for all withdrawals of
money from oneâs account.
Control is key
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Cash is used for
CONSUMPTION CONTROL
I am really mentally
organized on what I spend
every week with my card. If I
use my card too much I could
forget what I am spending.
So that is why I rather use
cash. I have more control
and also because of card
cloning.
- John, 30, Mexico
How much cash I bring
with me depends on where
Iâm going and how much I
need to spend. If I know that
Iâm going to spend 30, then I
take 30, if Iâm going to spend
10, I take 10. If I take more,
sometimes I donât even
spend it and return more than
I took.
- David, 22, Colombia
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Queues are a great hassle
I hate queues. Itâs a waste
of time. You leave work tired
and want to go home, take a
shower or see a movie, or
you have to pick up your
child at school. But then you
end up standing in line
looking at the clock, wishing
time would pass quickly while
the queue never moves
forward.
- Fabiana, 29, Brazil
The fact that there would
be no queues, that would be
a very positive thing about
paying with your mobile
phone. Usually when you go
to the bank thereâs a line and
you feel disappointed. Not
having to deal with crowds of
people, I think that is a big
advantage.
- Maria, 55, Colombia
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a booming m-commere market in Latin
america
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If you are Oi subscriber
with a bank account from
Banco do Brasil, wonderful,
Oiâs offer is amazing. But if you
are with Oi and Bradesco, then
it is useless.
- Mcommerce Expert, Brazil
âș All the main services are offered by partnerships
between Operators and Financial Institutions
âș The services are only offered, and only work, with
customers from both the Financial Institution and
the Operator
âș Services canât reach consumers with accounts in
companies that do not have partnerships.
âș The restriction plays a major role on the lack of
mass market services so far
Restricted services
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âș 15% of all consumers have bought something or used
a mobile phone for researching a product that was
purchased in last three months.
âș Groupon foresee strong growth in mobile, basically
with no marketing. Currently between 5-10% mobile.
âș In-store payments experience: âPayPal takes in-store
app mobile payments to Mexico â Scan and Goâ â May
2012
âș PayPal: 15% of all sales are via the mobile channel
and the share is increasing
âș Mercado Libre has developed mobile channels and
currently some 7% are sold via mobile.
âș Facebook success case: Netshoes (3.5M likes).
Transition from e- to
m-commerce
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Base: ALL
M-Commerce â Usage (Daily to Less
often
Current use of m-
commerce
Source: ConsumerLab Analytical Platform 2012
LatAm Argentina Brazil Chile Columbia Mexico
M-Commerce
Mobile Banking
Mobile Wallet
Mobile Shopping
28% 21% 30% 31% 28% 31%
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Base: Non Users
M-Commerce - Interest
Interest in
M-commerce
Source: ConsumerLab Analytical Platform 2012
LatAm Argentina Brazil Chile Columbia Mexico
M-Commerce
Mobile Banking
Mobile Wallet
Mobile Shopping
74% 60% 73% 80% 80% 79%
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Ownership - Type of phone
Source: ConsumerLab Analytical Platform 2012
Base :
Users â Currently Using the service
Interested â Interested in using the service
Consolidated
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M â Commerce: Current usage
vs. interest
Base: ALLSource: ConsumerLab Analytical Platform 2012
Interest Usage
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Online research using mobile â
Current usage
Base: All
Source: ConsumerLab Analytical Platform 2012
More than 40% used mobile shopping to compare prices
Interest Usage
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Target group 1:
Strugglers
âș Lower income, fluctuating
âș Informal workers, âindependentsâ
âș Unbanked/underbanked
âș Cash is only means of payment
âș Occasionally use credit, but donât like it
âș Feature phone or low-end smartphone
âș Low awareness and use of new
technology
Target group 2:
Achievers
âș Higher income, monthly salary
âș Formal workers, self-employed
âș Banked/financially included
âș Prefer cards over cash
âș Frequently use credit, and like it
âș High-end smartphone
âș Embrace new technology
Target Group Profiles
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Drivers to m-commerce
Achievers
âIndependence
âNo queuing
âSafety
âMobility
âControl
Prerequisites
Source: Ericsson ConsumerLab M-Commerce in Sub Saharan Africa, Consumer Insight Report 2012
Education Trust Transparency
Strugglers
âSafety
âNo queuing
âMobility
âIndependence
âControl
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Barriers to m-commerce
Achievers
âNetwork reliability
âLack of transparency
âUser interface
âSecurity
âAccessibility
Prerequisites
Source: Ericsson ConsumerLab M-Commerce in Sub Saharan Africa, Consumer Insight Report 2012
Strugglers
âLack of knowledge
âService fees
âSecurity
âNetwork reliability
âLack of transparency
âAccessibility
Affordability Support User friendly
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Important Factors When making
purchases
CONVENIENCE
SAFETY
CONTROL
DEBIT CREDI
T
Small purchases
Big purchases
Small purchases
Big purchases
Small purchases
Big purchases
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Preferred provider
Question: Which type of organization would you prefer provides the ability for your
products and services with your mobile phone? (single code)
Base: User or interested in Mobile wallet
Please note different sample characteristics
â see appendix for details
Source: ConsumerLab Analytical Platform 2012
A bank
A bank credit card
provider
A mobile network
provider/ carrier
A mobile handset
brand
A large retail store
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Restoring Trust
Operators
Banks
Regulators
A contract of trust
âșAn overall lack of consumer
confidence in institutions,
suggests that regulators,
banks and MNOâs need to get
aligned
âșA successful launch of
m-commerce would most
likely require cooperation
rather than competing
alternatives which would fuel
consumer doubt
âșThere is a joint interest for all
parties involved to create a
marketplace built on trust,
which if successful could spur
consumer spending and
economic growth, as well as
pushing financial inclusion
even one step further.
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âș There is a consensus that regulation has a primordial role to:
â establish consumer trust
â to harmonize the market
â to protect the consumer
âș Regulators to secure:
â Allow for new players to enter this market
â Right pricing
â Secure and simple
â Interoperability and interworking
âș Latin America has a bank centric regulation and Boliviaâs regulation at
this time is the only allowing others than banks to provide mobile
financial services
REGULATION FOR FINANCIAL
INCLUSION
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Key success factors
Features
Services
Awareness
Knowledge
Trust
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Expandfocus beyond the operators i.e. on banks
Influence regulators, retailers, CxOs
Featuresto provide security, usability, spending
control, transparency, planning, budgeting etc.
Advicecustomers with best in class marketing and
education, for example in âlaunch workshopsâ
Business opportunities
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Hinweis der Redaktion
Connectivity WS IDI Expert Setup 2012-10-15 , Rev
Connectivity WS IDI Expert Setup 2012-10-15 , Rev More than 1 Million respondents in more than 70 countries since ConsumerLab started 1995. Every year, ConsumerLab interview 100 000 people in more than 40 countries and 10 megacities, representing the views of 1.1 billion people
Connectivity WS IDI Expert Setup 2012-10-15 , Rev The service (m-commerce) could be: âą Transactions, payments or remittance via mobile phone âą Providing connections and enabling transactions via a mobile device from a bank account âą Simple where a mobile device is used or involved in any financial transaction It is also known as next-generation E-commerce.
Connectivity WS IDI Expert Setup 2012-10-15 , Rev A PLATFORM FOR MOBILE FINANCIAL SERVICES Ericsson Wallet Platform supports the full range of mobile money services on a single platform. This enables service providers to focus on the specific drivers in each market, and develop great mobile money experiences tailored to meet customer needs safely and with full regulatory compliance. The product is also fully integrated with Ericsson Charging System, which increases subscriber loyalty and delivers operational efficiencies.
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2012-10-15 Connectivity WS IDI Expert Setup , Rev 10/08/13 2011-10-19 10/08/13 2011-10-19 Q8. Is your current primary mobile phoneâŠ? Have MP Base:All Graf_template:4 Base: Age +15 ÂȘ Data refer to adults who report having used a mobile phone in the past year to pay bills or send or receive money
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Mcommerce user - D1_26=3 OR D1_26=4 OR D1_26=5 OR D1_26=6 OR D1_27=3 OR D1_27=4 OR D1_27=5 OR D1_27=6 OR F2=1 D1_26 /D1_27 âd like you to think about the features you have on your mobile phone. Out of these features, please tell me which of these statements best reflects your usage of that feature âMobile Wallet . (Daily to Less often) F2. In the last 3 months have you used your mobile phone to purchase something, or to help research something that you have bought (either online or in a shop)? [single code] 2012-10-15 Connectivity WS IDI Expert Setup , Rev
D2_26 /D2_27 âd like you to think about the features you have on your mobile phone. Out of these features, please tell me which of these statements best reflects your usage of that feature âMobile Wallet . AND thinking about the features you are not currently using, how interested would you be to start using in the next 12 months if available to you? Interest = Very interested to start using on my mobile phone(s) + Quite interested to start using on my mobile phone(s) F2. In the last 3 months have you used your mobile phone to purchase something, or to help research something that you have bought (either online or in a shop)? [single code] 2012-10-15 Connectivity WS IDI Expert Setup , Rev
Users: D1_27. Using Mobile wallet â where you can pay for products and services via a mobile phone app, or by touching your mobile phone to a sensor (3 to 6) E3 Thinking about the banking you have done in the past 12 months, which of the following banking services have you used? (Via your mobile phone â accessing your bank account online or via an app) F2. In the last 3 months have you used your mobile phone to purchase something, or to help research something that you have bought (either online or in a shop)? [single code] Interested: D2_27 Thinking about the mobile features which you are not currently using, how interested would you be to start using them in the next 12 months if they were available to you? (Very Interested + Interested) E3.A And which channels would you like to use in the future? [Multi code] (Via your mobile phone â accessing your bank account online or via an app) F3a Would you be interested in using any of these services on your mobile when researching or purchasing products in the future? [multi code] Connectivity WS IDI Expert Setup , Rev 2012-10-15
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F3. How did you use your phone to purchase or research the product? [multi code] Connectivity WS IDI Expert Setup , Rev 2012-10-15
2012-10-15 Connectivity WS IDI Expert Setup , Rev
2012-10-15 Connectivity WS IDI Expert Setup , Rev Drivers The main driver is Convenience and one of the reasons for that is that Mobile Money Services offers access anywhere at any time Bank offices are rather scarce whereas Agents for different Mobile Money Services are more common. Allowing consumers greater opportunities to withdraw or deposit money Also, by allowing payments and transfers by the mobile phone there is no need to visit a bank or other office, nor stand in line or adjust to specific opening hours, to pay certain bills or to send money Where the banks today take several days to transfer money, e.g. when paying a bill, the Mobile Money Service is instant Some respondents mentioned this to be a reason for choosing Mobile Money to pay for certain bills, knowing they will be paid on time The respondents are aware of the risk of being robbed. Using Mobile Money is seen as an alternative to travel or store cash. Convenience ( 46% ) and not needing to carry cash ( 39% ) is two main reason for using the mobile phone to pay for products Question: Why would you use your mobile phone to pay for products or services instead of using cash or a credit/debit card Source: Ericsson ConsumerLab Analytical Platform 2012, Base: USER OR INTERESTED IN MOBILE WALLET Barriers One disadvantages for using Mobile Money to transfer money and withdrawal is the lack of funding at the Agents Many consumers lack knowledge about Money Services which leads to some misconceptions and distrust in the system Cash is free, Mobile Money is not. Consumers are price sensitive, and if charged extra for a purchase when paying with Mobile Money, the method has a clear disadvantage compared with cash Fees for transfers are however not a huge barrier as long as the fee is reasonable for the amount of money being sent When choosing their primary service, being able to reach remotely located friends and relatives is important Prerequisites Consumers must understand why they are being charged. The benefits of Mobile Money needs to be clear. Advertising is not enough . Education might be needed Trust in the system and the users. Many transactions builds on trust between sender and receiver, where the trust is not already established cash is the preferred payment method due to it straight forwardness. Also t rustworthy technology and service design is fundamental. Quant: Question: Why would you use your mobile phone to pay for products or services instead of using cash or a credit/debit card Base Users or interested in Mobile Wallet
2012-10-15 Connectivity WS IDI Expert Setup , Rev Drivers The main driver is Convenience and one of the reasons for that is that Mobile Money Services offers access anywhere at any time Bank offices are rather scarce whereas Agents for different Mobile Money Services are more common. Allowing consumers greater opportunities to withdraw or deposit money Also, by allowing payments and transfers by the mobile phone there is no need to visit a bank or other office, nor stand in line or adjust to specific opening hours, to pay certain bills or to send money Where the banks today take several days to transfer money, e.g. when paying a bill, the Mobile Money Service is instant Some respondents mentioned this to be a reason for choosing Mobile Money to pay for certain bills, knowing they will be paid on time The respondents are aware of the risk of being robbed. Using Mobile Money is seen as an alternative to travel or store cash. Convenience ( 46% ) and not needing to carry cash ( 39% ) is two main reason for using the mobile phone to pay for products Question: Why would you use your mobile phone to pay for products or services instead of using cash or a credit/debit card Source: Ericsson ConsumerLab Analytical Platform 2012, Base: USER OR INTERESTED IN MOBILE WALLET Barriers One disadvantages for using Mobile Money to transfer money and withdrawal is the lack of funding at the Agents Many consumers lack knowledge about Money Services which leads to some misconceptions and distrust in the system Cash is free, Mobile Money is not. Consumers are price sensitive, and if charged extra for a purchase when paying with Mobile Money, the method has a clear disadvantage compared with cash Fees for transfers are however not a huge barrier as long as the fee is reasonable for the amount of money being sent When choosing their primary service, being able to reach remotely located friends and relatives is important Prerequisites Consumers must understand why they are being charged. The benefits of Mobile Money needs to be clear. Advertising is not enough . Education might be needed Trust in the system and the users. Many transactions builds on trust between sender and receiver, where the trust is not already established cash is the preferred payment method due to it straight forwardness. Also t rustworthy technology and service design is fundamental. Quant: Question: Why would you use your mobile phone to pay for products or services instead of using cash or a credit/debit card Base Users or interested in Mobile Wallet
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2012-10-15 Connectivity WS IDI Expert Setup , Rev 10/08/13 2011-10-19 ConsumerLab Focus Report M-Commerce 2012 12_9807 Uen, Rev PA8 10/08/13 2011-10-19 10/08/13 2011-10-19 E6 Which type of organization would you prefer provides the ability for your products and services with your mobile phone? (single code)