The Move to Mobile: Commerce and Payments

Part I: Where the Need is Strongest — Key Drivers and the Answers So Far

The Unbanked Population

Over 2.5bn adults do not use formal financial services to save, borrow or transfer money. 2.2bn of these live in Africa, Asia, Latin America, and the Middle East. Africa tops the mobile payment league table accounting for 52% of the world’s mobile money services. In Africa as well as other developing geographies, there is a large unbanked population prime for what mobile banking has to offer given mobile infrastructure capabilities. M-pesa, a P2P SMS payment service launched by Safaricom in 2007, has transformed the routes for trade for Kenyans in particular. The National Bank of Egypt has collaborated with MasterCard, Fawry and the Egyptian Banks Company to create ‘Phone Cash’, a mobile payment service for the banked and unbanked across Egypt and the Middle East. However, only a small percentage of the potential market in these economies is benefiting from mobile payment capabilities, so there is significant scope and pull from the market to absorb new developments.

Rapid Payment

It can never be underestimated how large a driver human laziness is. Today’s millennial customers’ loyalty is determined by ease and speed of use. Paypal provides a quick and easy online payment tool that has stood its ground dominating the mobile P2P space for years, but this technology giant knows it cannot sit still as consumers look for ever easier ways to pay. Paypal has created Venmo, its mobile app that has been gaining traction with total payment volumes rising 29% quarter-on-quarter to a startling $906m in Q4 2014. This giant realises it needs to invest in technology to stay ahead of the curve as new entrants (as well as existing providers) look to make it even easier for consumers to pay.

Personalised and Combined Services

This “trend to lazy” is so powerful — credit card companies, banks, mobile operators and retailers observe it and this has given rise to a host of collaborations to create “one-stop-shops” for buying needs. This often means combining services and pushing them out at relevant times, whilst always being available. Companies such as Proxama, Yoyo and Appflare look to make shopping easier and more enticing by pushing out relevant coupons/ content, allowing easier payments and assist in gathering consumer data to tailor the shopping experience. The personalised shopping experience has been one of the hottest topics in the evolving retail landscape and with mobile devices being so close to consumers’ hearts — both physically and in the decision making process — it is recognised that personalisation (and hence ease of payment) through mobile is key.

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