Mobile Money – Will the card payment companies come to dominate?


As I mentioned in my previous post, writes Killian Clifford, Visa have indirectly come to be an important player in the mobile money market in Nigeria. In fact, the card payment companies (Visa, MasterCard et al) have been very active in this sector of late through their big name hires and acquisitions, which stands to reason – payments are their core business.

In developed markets, their moves into the mobile payments space have been defensive, in an effort to prevent newcomers from eroding their market share. They are, at least, one step ahead of their rivals with a recent survey showing that when it comes to mobile payments their brand is trusted more than entrants such as Google and Apple.

In the emerging markets it should be no surprise that the payment companies have been busy making inroads into mobile money. Even in these early days of industry fragmentation, it isn’t difficult to foresee a time when the card payments companies will come to dominate. They bring with them 50 years of experience in the payments industry, large balance sheets and deep pockets.

Whilst the card companies are defending market share in developed markets, they are expanding aggressively in emerging markets. Mobile money represents a new frontier for them. Not only is it a chance to expand into untapped markets and to establish their brand but it also gives them the opportunity to shape the payments landscape in places where there was none before.

Visa and MasterCard have taken slightly different approaches thus far. MasterCard has been busy setting up bilateral partnerships and joint ventures (JV) in different markets, such as The Philippines (Smart Hub) and Latin America (Telef