It’s the (App) Economy, Stupid!

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In the world of m-commerce, vertical services were the first movers, and for the larger part, still continue to proliferate the industry. Carriers enabled subscribers to top-up accounts directly from their phones. The next step was for subscribers to procure digital goods and services beyond airtime through catalogs, in some cases fronted by the carriers through their walled-garden network and in other cases through third-party providers.

Banks soon started to leverage the mobile channel, initially for extending select banking services like checking balances and receiving alerts related to accounts and transactions, and subsequently moving funds between accounts. Given the risk, the first accounts to come online were credit cards, cautiously followed by checking accounts, and then grudgingly by savings accounts. Today, we can trade securities, access investment portfolios, and monitor our net-worth in the palm of our hands.

Service providers and retailers were relatively late to leverage the mobile channel. There were some early entrants in Asia (mainly in the travel sector), which successfully employed smartphones for ticketing applications. This led to experimentation across channels and industries, initially between service providers and banks, followed by carriers and service providers. Eventually, service providers started to focus more on mobile, first as another channel for advertising and promotion, and eventually as a platform for transactions and broader consumer engagement.

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In the developing world, from distributing payments for government social programs to driving financial inclusion, mobile phones started to play an increasingly important role. In the developed world, applications sprung up centered around person-to-person payments — from equipping yuppies to split their restaurant bill, to enabling students to transfer money on campus, to bots fulfilling online orders, to digital gifting.

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