Nexmo Chat App APIAsian eMarketing recently met Trevor Healy, the Executive Chairman of the cloud communications platform provider Nexmo, to talk about his business ventures in the region. Nexmo has won plaudits with its innovative communication Application Program Interfaces (APIs) and Software Development Kits (SDKs) for voice and text messaging as well as phone verification services.

In a nutshell, the company enables brands to communicate with their customers reliably and with ease, no matter where in the world they are located, which Nexmo proved just last month by announcing that its Chat App API is empowering KLM Royal Dutch Airlines to engage with Chinese customers on WeChat and by starting a strategic partnership with Marketo to connect brands with audiences on chap apps. Most recently, however, the company released its Verify SDK for iOS, Android, and Java Script operating systems and programming languages, which will have an impact on every marketer’s life.


Shift from password-based ID to phone number-based verification process

Verify SDK enables developers to add phone verification with a single line of code for password replacement, 2-factor authentication, or user and transaction verification to their applications. It is a white-labeled SDK, designed to allow developers to manage user identities across multiple devices and platforms without building a complex user management backend, that complements verification APIs by linking phone numbers to unique device IDs and introducing a subscription model.

“What we are trying to do is to be like a global traffic cop for all the communications traffic around the world”, Trevor explained. “There is a lot of digestion, indigestion, and traffic jams under the 250 carrier networks we are working with, but we are trying to make sure that messages or calls are going into the right direction, at the right time, with the right efficiency, quality and over the right router. We basically let the machines decide how to get a message delivered and the machines are monitoring on a continuous basis a feedback loop of the quality. We not only monitor the messages the carriers tell us have been successfully delivered or failed, we actually check back with e.g. Airbnb or Uber to verify if this customer actually signed up for the app and used it. That way we have verification, irrespective of whatsoever the carrier is saying.”

According to Nexmo, its APIs have helped customers like Snapchat, LINE, and QQ verify over three billion phones over the past five years and has observed continued shift from password-based user identification to the more secure, and reliable phone number-based verification process. Understandably, carriers are interested in Nexmo as a strategic partner, too.

Shift from Email / SMS to Chat Apps

Nexmo Healy TrevorThe ten most popular applications, including WhatsApp, Facebook Messenger, WeChat / Weixin, Line and Viber, have by now more than two billion registered users worldwide, and besides the Top10 there are around 150 other providers in niche segments. In a short while, most of their users have switched from using SMS to the appealing Chat Apps, simply because they are cheaper, have more features and a more attractive user interface.

Therefore, “the future of customer communication belongs to Chat Apps”, Trevor Healy is convinced. "Whoever does not react now, will be left behind, because ultimately the customer decides which channel to use for communication”, he said, exemplifying: “Look how people use their phones today. Traditionally, the most important thing on the phone was the dialer. Now, look at your habits and monitor how many times a day you actually go to the dialer? It’s very seldom. The second most important function is the SMS box, which loses its attraction due to Chat Apps like WhatsApp or Viper. What’s happening in the world of communications is that the OTT (over the top) messaging apps become more popular, because today’s consumers want messages instantly as well as instant gratification. Chat Apps are super-convenient, real-time and especially two-way”, he explained.

In addition, Trevor pointed out that though it is good that chat apps confirm delivery, the concern that it is always on could be a nuisance and be very frustrating from a person-to-person perspective. “The new generation is multitasking and expects responses instantly”, Trevor said. “One of the downsides for me personally is that we are getting uber-connected and that the expectations are too real-time. For many commercial relationships it’s about time savings and benefits, but where will consumer fatigue remain? Again that’s the key - we didn’t get it right with online advertising.”

Shift from mere data collection to real eCommerce

With their huge customer databases, the providers of chat apps have begun to explore the possibilities of commercialization. For this purpose, they sold virtual products such as games and stickers first, but are going to open up new sources of revenue now with companies as their new target group.

Brands get the opportunity to have an official business account on the chat app platforms that allows them to start an authentic, personal dialogue with each customer via marketing, sales and support systems - all from one and the same chat brand account. In a timely manner, relevant information can be provided there, where the user spends a lot of time anyway.

Soon we will see how a significant part of the eCommerce business shifts to the Chat App channel, Trevor believes. Several million enterprise customers in China are now with Weixin, the Chinese sister product of WeChat, the No.1 when it comes to the number of "official accounts", offering by now - like some other chat apps - even online payments, eCommerce stores, or taxi and delivery services. Hence, both airlines, financial institutions, retailers and hotels already started to integrate their apps into WeiXin/WeChat and even Facebook Messenger announced new offers for companies earlier this year.

“Chat Apps have the potential to become the gateway to commerce and a gateway to the Internet”, Trevor said. “That’s why Facebook bought WhatsApp for 19 billion, because it had a different user base that barely overlapped with Facebook Messenger users – to eventually do eCommerce there.”

Shift of the application-to-person (A2P) messaging market

It seems as if Nexmo could become the backbone of communications for digital marketplaces, since communication is a function that everybody needs today and is no longer a feature that sits on the sideline. Smartphone technology has communication already build in and everything has an authentication for sign-up. This development undoubtedly changes the application-to-person messaging market in its current form.


“It is the customer who decides which channel to use for communication. He chooses the chat app he wants to use to make contact with a brand and decides when this brand is allowed to communicate with him. If there is a specific problem, he can apply directly in the chat app and get in contact with customer service. He no longer needs to switch from one brand app to the next to be able to make orders and call customer service in case of a problem. All interactions run directly through the chat app”, Trevor clarifies by eluding to Nexmo’s KLM deal. With its rapid dynamics, however, the chat app market poses major challenges to companies, since the different requirements of integration, the changing APIs, business contracts and the review by legal departments may delay approval for several months, he pointed out.

“Nexmo took on the role of a network orchestrator”, Trevor states. “We have become the global intermediary of, Marketo, SAP and many other strategic partners, which is a very powerful role to be in. Similar to Visa, connecting merchant banks, we are connecting brands and enterprises over CRM platforms to the OTT applications, allowing any application to talk to one another”, he explained.

Chat Apps are the new face of social media

Social communication platforms have a massive built-in audience and make up four out of the top six largest social platforms, presenting a significant opportunity for brands to engage with consumers in authentic, one-to-one engagement. According to TNS, for instance, WeChat is the most widely used chat app in China, with 68.6% a reach among internet users, followed by QQ with 59.5% of the same population. In fact, Tencent reported that WeChat had 570 million daily active users worldwide as of September 2015, which was up from 348 million a year earlier.

To integrate the new chat app channel in the central service platforms and reach customers around the world, there must be a connection to WeChat and the many other chat apps, which is where Nexmo comes into play, Trevor explained: “If you are KLM, for instance, you can’t have a situation that you have only WeChat on your CRM system. You need the appropriate Chat App in each country - WeChat in China, WhatsApp in USA etc. - and the federation to reach them all, which is us. KLM connects with us only once. Even if a new player pops up somewhere, like in Brazil, and becomes the leader in the specific market, we deal with it and KLM doesn’t have to worry about missing out. We take care of the regulations, delivery and network optimization”.


Even the chat apps themselves make use of Nexmo. According to Trevor, they all use Nexmo for different things: "WeChat, for instance, has some services, but for authentications they are still using us. Alibaba has obviously its website, but for AliPay they use us for the confirmation of the payment transaction. Line is doing its own emoji selling in Japan, but for verification of customers they are using us. It’s not a one-size fits all. Some do things on their own and some are outsourcing, but interestingly all have in common that they are global businesses that go global for things like voice and messaging, or number look-up and number provisioning, that’s something they don’t do on their own and use us”.

Trevor’s final advice is to observe well how people are using technology, pointing out that “in the past, companies analyzed how a new product should look like and be build. Today, in the world of cloud, it is recommended to develop all sorts of micro services and put them online to see how people use them”. Therefore, most likely only those who are able to integrate the variety of chat apps into their own service platforms, and can cope with the enormous volume of communication, will hold their ground In the future.

By Daniela La Marca