Telecom Redux incorporating Wireless Business Review

Saturday, 30 August 2008

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Moving money about

Friday, 30 May 2008

Mobile banking and transactions on a roll…

A new analysis from IMS Research suggests that the combined number of users worldwide of mobile banking, contact-less mobile payments and over the air (OTA) transactions will reach 884mn in 2012. These save- and spend-as-you-go individuals are expected to complete 62bn transactions between them in that year.

IMS Research’s ‘Mobile Wallet Applications and Services’ report notes that mobile penetration in many developing markets is far higher than that of banking or fixed line infrastructure, meaning that mobile is often the only means of access available. This contrasts strongly with more developed markets where mobile is an alternative but personalised means of access. IMS further points out that Orascom has announced a ‘unique service’ launch this year across a number of markets, probably based upon a pre-paid credit model, and that by doing so it joins operators such as NTT DoCoMo, KTF, Vodafone, Globe, Smart, TIM, AT&T and Sprint amongst others, adding to the growing momentum around mobile financial services.

“The early seeds sown by a handful of companies have started to grow and now serious backing is being provided by both the financial and operator communities,” states John Devlin, IMS Research director. “Service growth to date is already strong and taking off across a number of markets in Asia, the Middle East and Africa . When coupled with the growing volume of rollouts and service launches in Europe and the Americas , the number of new users nearly tripled in 2007.”

IMS Research reckons that the GSMA’s ‘Mobile Money Summit’ in Egypt this month has focused attention on mobile commerce, with major players from both the mobile and financial worlds in attendance. Issues discussed at the event included how the services can benefit providers and partners, not only in terms of increased revenue but also coverage and reach as well as customer service and retention. In addition to these companies, international remittance providers such as Western Union were also in attendance; highlighting the disruptiveness and growing competitiveness that mobile provides to existing incumbents.

“What this demonstrates is that there is a fundamental need for people to securely access and process financial transactions,” adds Devlin. “ Mobile is able to serve a multitude of demands across a variety of lifestyles, cultures and platforms. What is particularly interesting is the innovation being demonstrated in the use of existing technologies and tools, such as SMS, to deliver and enable these services ahead of incoming technologies such as NFC.”

Rocket in US pocket?
Echoing IMS research’s finding that users in developed world markets were also taking to opening their mobile wallets in larger numbers, a Harris Interactive study published in March found that that US mobile phone users are increasingly comfortable making banking and purchase transactions while on-the-go – a virtual taboo until now. The survey finds 16% of mobile phone subscribers already use mobile banking services, with 60% of these people using the services at least once a week. Many others presently not banking and buying on the move expressed interest in mobile banking, with 35% open to checking bank account balances and transferring funds via their mobile devices. A third of those surveyed also said they would like to receive text message alerts from their financial institutions.

The Harris survey also finds that on-the-go mobile purchases are on the rise. About 25% of mobile phone users with mobile access to the Internet now use their devices to buy goods and services online via a credit card. One in five respondents said they would like to someday use their phones like a mobile wallet, where charges would be billed directly to their mobile accounts. In addition, 10% of the survey participants said they would consider wire transfers and stock trading via their mobile phones.

"Today’s mobile devices are the springboard for a whole raft of services, with huge pent-up demand for mobile commerce capabilities,” comments Joseph Porus, vice president, Harris Interactive. “If security concerns can be quelled, the sky’s the limit with consumer acceptance of mobile banking and purchase transactions. It’s a very intriguing prospect for the near future, considering how people have already embraced a variety of mobile technologies beyond simple phone communications.”
John Williamson