Issue 5 October 2008
new mobile-based banking markets, and also to grow disconnect customers’ service – so there is no demand
cross-border money transfer substantially. Moreover, for anytime, anywhere payment options.
powering stored value “mobile wallets” has the potential
to enable a truly global, person-to-person platform with Consumers are using mobile money where there is a
the phone number as the unique account identifier, very clear value proposition. So far, the predominant
which is ideal for targeting both banked and unbanked value proposition is being able to send money easily,
customers. For the currently unbanked, these accounts cheaply, and securely. In the early stages of mobile
would serve as stepping stones towards full financial money ecosystem development, the key to success
services, bringing with it significant benefits to the is obviously simplicity. It is important not to confuse
financial services providers that are willing to invest. the market with too many services, and to take the
necessary time to establish consumer trust as well as
whaT’s workInG beyond M-Pesa? the interest and collaboration of the parties that would
Today, remittances and remote payments are the most need to be involved in each new service.
common uses of mobile money. Within these categories,
different markets have adopted applications to varying The fuTure
degrees. There are many other examples of mobile-enabled
banking and commerce around the globe. The Asian
This is due in part to differences in local mobile money markets, particularly Japan and Korea, are well ahead
providers’ service offerings and marketing. For example, of Europe and the US in terms of mobile adoption and
M-PESA markets its service at a domestic level as “Send market maturity – devices are used ubiquitously for
money home” or “Send money to your loved ones,” banking, payments, access and identity. In the long
and is thus used primarily for domestic remittances term, industry experts believe that mobile financial
from relatives working in cities. In contrast, international services will lead to the first truly cashless economies,
remittances are more popular in the Philippines, where not in the developed world, but in the emerging markets.
Smart Communications’ Smart Padala (a mobile wallet At present, currency fluctuations and instability rule the
platform focused on remittances) also markets to day, and given the option, individuals prefer the more
overseas workers to send money to relatives at home. stable global currencies. Ultimately, mobile wallets
could readily allow the account holder to hold multiple
Differences in uptake of particular services across account balances in a variety of currencies and over
markets are also a function of what is relevant or time, consumers will likely choose to use their home
valuable for users in those markets. In Bangladesh, currency less and less.
people typically require 3-4 hours mid-day to travel and
queue at designated banks in order to pay utility bills. Mobile technology is shaping the future of banking
In this environment, mobile utility payments are proving in emerging economies and the entrance of the big
highly popular. In contrast, in Russia, it typically takes banks may already be dwarfed by new entrants such
6-12 months of non-payment before utility companies as Vodafone which is now becoming a major player in
12 | Perspectives on the future
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