The number of mobile phone subscribers around the world is approaching 4 billion; more than double the number of internet users. In absolute terms, this is the potential size for the mCommerce market. So what does the next 12 months look like for the heir apparent to eCommerce?
The trend in 2009 was very much in capturing the remittance market, led mainly by the Mobile Operators. In 2010, this will continue as there is a clear business case for mobile remittance in most markets.
Traditional remittance channels are and will continue to be challenged by mobile remittance, and a number of new avenues for remittance will be implemented in 2010. This will naturally benefit the consumers, as their cash-in and cash-out options will be increased.
While Mobile Banking is not new, what is, and what we continue to expect to see in 2010, is that the Banks are now looking at the next generation of Mobile Banking solutions. Previously, it was about launching a service.
In 2010, it will be about offering a simple to use, and useful channel for their customers. Mobile Banking has not taken off as expected, mainly because the solutions deployed were hard to use (remembering key words) and offered little functionality. Banks are now realising that and will look to fix these shortcomings in 2010 and beyond.
Both the Mobile Operators and the Banks are beginning to realise the power of marketing using the mobile channel to reach their customers. From a banking perspective, the customer will increasingly interact with the bank using the Internet and the Mobile channel, rarely visiting the Branch, and only using the ATM for cash withdrawals.
Hence, the mobile phone becomes a powerful channel with which to keep bank customers informed about services they offer. Mobile Operators as well will continue to promote new services and products using this channel. Consumers are also beginning to see an increase in mobile marketing to their handsets, and this trend is set to continue in 2010.
From both the Mobile Operator and the Bank’s perspective, offering Bill Payments via the mobile channel is an obvious revenue generator for them as the remittance business.
In 2010, we expect to see a number of Banks and Mobile Operators offer consumers the ability to pay a variety of bills via the mobile channel. Electronic Bill Payment is advantageous from all angles – reducing bill payment paper-based transactions from a cost, environment, convenience, etc, perspective.
There are a large number of pre-paid mobile accounts in the region. The ability to topup these accounts using a bank account or credit card is of interest to almost all Mobile Operators. Thus, we expect to see continued growth in this area. The cost of distribution of the pre-paid card system, as well as convenience, are factors driving this channel. Several Mobile Operators and even Banks have looked closely at providing this service in their markets.
Banks Getting Into The Business
In 2009, it was mainly the Mobile Operators who were quick to launch an array of mobile banking, mobile remittance and mobile payments initiatives. We are currently witnessing a stronger interest from the Banks. Obviously the revenue that is being generated in this space – traditionally a banking space – has forced many banks to accelerate their mobile commerce plans. We expect the playing field to even out in 2010, with a good balance of Banks and Mobile Operators launching new services.
The Micro Banking, or unbanked market, has been typically ignored by most institutions. The business case to add potentially millions of low-value customers to a Bank’s traditional and core banking infrastructure did not stack up. However, with the mobile channel, and the applications supporting this channel, Mobile Operators, Banks and Central Governments – whom are keen for all citizens to have access to banking services – are beginning to realise the true potentials of the business case.
We expect to see a number of ‘micro banks’, typically sub-brands of traditional banks exploring this opportunity in 2010. This will not be restricted to mainly Banks but includes the Mobile Operators and even third party institutions that are looking at Micro Banking.
As with Micro Banking, the ability to offer Micro Loans and Insurance services to the unbanked market was hard to justify from a return on investment point of view. With the mobile channel, branchless banking and typical branch services can be offered in the remotest parts of the region. Small value loans and insurance that are of small value become products that can be brought to market with minimum investment. Apart from the commercial benefit, there is a strong moral case to help the unbanked market with products such as Micro Loans.
Mobile retail payments offer a number of opportunities for Mobile Operators and Banks. Retail payments at the point-of-sale (POS) are one area of increased interest. Adding a mobile payment channel at existing POS is a good option; but for institutions who are thinking about mobile payments a little deeper, there is a large opportunity in offering one person retailers a mobile payment solution.
Rather than give a traditional POS device to a one person retailer who does not have a full merchant relationship with the Mobile Operator or Bank, a mobile wallet or ‘virtual POS’ can be provided to the one person retailer instead. Mobile Operators and Banks can roll out retail payments across a wide variety of retail channels and drastically increase their merchant base, as well as consumers’ payment options.
New Payment Frontiers
We see a number of institutions looking into other payment services. In 2010, we expect to see mobile payments for mass transit, car parking, payments of fines, etc. We are seeing both our Banking and Mobile Operator customers come up with a number of useful and innovative payment services for consumers. Momentum is definitely mounting, as more and more companies understand the convenience and immediate nature of the mobile channel as a payment option.