Like George Carlin used to say, opinions are like asses, everybody has one and some of them really stink. Well, here is my opinion on what is going to happen in mobile money in 2010.
Before I present my predictions for 2010, here is a recap of the biggest mobile money stories of 2009:
Gartner report: Gartner identified money transfer as the number one consumer application for mobile by 2012. They pointed to over-regulation as a key potential risk factor.
Canadian wireless carriers launch Zoompass: While Zoompass may not have a huge following nor solve very big market problems (yet) the fact that it was launched by the biggest carriers in Canada is big news. Zoompass is one reason why NFC phones my launch in Canada before they hit the US market. Of course Apple’s iPhone might beat them to it.
M-Pesa: (Pesa is Swahili for money) Kenya, Philippines and Tanzania have emerged as the true early adopters of branchless banking. Kenya alone accounts for over 2 million mobile money transactions per day. Tanzania now has over 1 million M-Pesa users. The beauty of M-Pesa is not only does it solve traditional payment problems for rural users but it also enables low cost micro-finance transactions.
Philippines: Smart and Globe have emerged as telecom leaders in mobile payments. Their SIM based solutions are secure, pervasive and really easy to use. Rural MFI has also emerged as a viable market for Filipino mobile money beyond traditional payments. This article was, by far, the most viewed posting on my blog site in 2009.
Venture funding: Several companies either launched or announced venture capital funded services in 2009 including Square, m-Via, GoMobo, mCheck, and Boku which rolled up its competitors into a new company. m-Via won the Under the Radar competition for best mobile payment company.
Here are my predictions for the most important Mobile Money stories of 2010:
1. RFID/NFC phones: A major handset manufacturer will (finally) release a phone with embedded RFID/NFC, aka contact-less, capabilities (outside of Japan). The first applications will be credit/debit card payment and mobile coupons. This first market may be the US, UK or Canada.
2. Venture funding: look for a lot of venture capital to pour into the mobile payments space in 2010. Social mobile gaming, money transfer, gambling and retail payments will lead the way.
3. USA: The US will finally emerge as a real market for mobile money. The first real market within the US will be unbanked consumers integrating with prepaid cards and cross border money transfer services. This may be followed in 2010 (possibly 2011) by NFC payment applications assuming point 1 above happens. I believe that domestic micro-finance (MFI) will become a viable business in the US over the next 5 years and mobile money will be necessary to keep the costs of MFI down.
4. Latin America: Latin America, Mexico in particular, will emerge as a big market for mobile money. As the largest recipient of cross border money transfers, Latin American countries like Mexico and Brazil and primed to take advantage of mobile money capabilities combined with branchless banking. MFI growth in Latin America will create a further dependence on mobile branchless banking over the next 5 years.
5. Lookout Paypal: Several companies will set their sights on Paypal including at least one of Visa, Mastercard or American Express in combination with bank partners. Mobile payments and social network gaming will drive the first phase of their deployment. I also expect Amazon and Google to make a much bigger push into online (and mobile) payments in 2010.
6. iPhone and Android phones as credit card terminals: following Apple’s retail changeover to iPhones as swipe terminals and announcements by Mophie and Square, look for a lot of companies to enter this space in 2010.