2015 has seen some landmark announcements around mobile money.
Proximity payments from Google, Apple and Samsung are slowly taking off, direct operator billing is increasingly popular as an app store (and in-app) payment channel option and growth markets continue to realise economic and social benefits from people transacting via their mobile device.
In Europe the payment landscape is also about to be altered with the arrival of the EU Directive, PSD2, which aims to make payments faster, safer and more transparent. Below we asked members of MEF’s Mobile Money Working Group to give us their predictions on these and other mobile money topics for 2016.
MEF’s Mobile Money Initiative, which aims to accelerate the adoption of mobile money, is already some way down the road with tackling PSD2 with its recently launched guide as well as regular mobile money bulletins and reports. To become a member and get involved click here.
Andy Bovingdon
VP Marketing
Bango
Andy Bovingdon, VP of Marketing, Bango
2016 will be THE defining year for carrier billing.
- Microsoft will roll out carrier billing across all Windows 10 devices. Billions of customers with PCs, tablets, smartphones and Xboxes will purchase everything, from games, music and video to Office apps, from their mobile account, using any phone – including iPhone or Android.
- Google will deliver a step change in carrier billing worldwide from both airtime accounts and operator wallets by leveraging partnerships with app store specialists (like Bango) rather than doing it themselves (DIY).
- After their first launch, Apple will quickly expand iTunes carrier billing availability during 2016, confirming carrier billing as mainstream as only Apple can.
The challenge all stores will face in 2016 remains one of quality at scale – how they launch a massive grid of operators quickly without compromising revenues, or customers experience and satisfaction. A platform will emerge as the preferred standard.
Srinivas Nidugondi
SVP
Mahindra Comviva
Srinivas Nidugondi, SVP and Head, Mobile Financial Solutions, Mahindra Comviva
Mobile money is at different trajectories in developed and emerging markets. While we have seen significant uptake of mobile money in emerging markets, we are still to see mainstream adoption in developed markets.
In developed markets, we are seeing a thrust in technologies like NFC, QR codes and Bluetooth low energy (BLE); however, it is HCE that is making the headlines. HCE deployments will see a boost in 2016, with many banks adopting it to counter the challenge posed by the ‘pay’ services of world (read Apple Pay, Android Pay, Samsung Pay, PayPal, AliPay….)
Today, we are talking in terms of an integrated payment experience comprising of consumer gratification and consumer delight. So far gratification has been in the form of point-based loyalty programs with the customer being rewarded after they have accumulated enough points to “deserve” the reward.
But, the millennials are impulsive, and they want instant gratification that is relevant to their needs and wants. This need for instant gratification has created a demand for bespoke mobile based reward solutions, like coupons and discounts, which are hyper-local (based on location and context). A good example of instant gratification is a customer walking in the aisle of an apparel store and getting discounts on jeans via her mobile as soon as she steps into the jeans section.
Moving to trends in emerging markets, mobile money services in these markets will break out of their silos and move towards an open approach powered by interoperability. After Rwanda, Tanzania, Pakistan, Indonesia, Bangladesh, and Sri Lanka, we will see more countries adopting interoperability in 2016.
In the new system, we will see mobile money operators, in neighbouring countries, come together on a common platform for facilitating international direct money transfers. Micro-finance services will also grow with mobile money operators increasing their focus on micro-loans, micro-insurance and group savings. Also on the cards, an increase in the use of mobile money for both business transactions as well as cash based humanitarian aid disbursements.
The other significant area will be merchant payments, which has 10 times more potential than P2P transfers. Mobile money providers will liaise with MasterCard and Visa to issue companion cards facilitating merchant payments. We will also see a growing use of NFC for merchant payments in emerging markets, simplifying and enhancing the payment experience.
Peter Cook
CEO
Novatti
Peter Cook, CEO, Novatti
Mobile money deployments will increasingly move from being seen by MNOs as a VAS that reduces churn and improves ARPU to a core infrastructure service needed by all consumers. Integration with other wallets’ (existing and competing) systems, payment systems, banks, utilities and merchants will significantly expand. Mobile Money will then start to look more like Branchless Banking.
We already see strong acceleration for mobile money in inter-payment network integrations, identity management and enabling the beneficiary to receive value from remittances directly to their mobile wallet. A collision course with many central bank regulators is highly likely as banks seek to temper the growth of MNO led mobile financial services.
USSD and SMS are still the primary access technologies – but, as cheaper smartphones gain deeper penetration worldwide, we see that apps will significantly change the user experience for those with appropriate data services. Integration capabilities and sophisticated audit and settlement processes will be a major enabler for MNOs wishing to succeed in Mobile Financial Services.
Jens Johan Schwarzer
VP Strategy
Unwire
Jens Johan Schwarzer, VP Strategy, Unwire
Crypto currency will increase in popularity in 2016, and I bet that is where we will see the most ground-breaking innovation. 2015 was all about the big players launching their services like Apple Pay, Google Pay and Samsung Pay. In 2016 we will se more local and regional players launching their own services, so we will see even more diversification. Experience shows that local players are usually more successful than the global ones.
Moving money out of peoples wallets and into their smartphone will support a multitude of services that will ultimately make the mobile phone the centrepiece of peoples lives. The mobile has for long been our main communication channel. Now it will also become the main transactional channel.
We cant expect users to choose mobile phones over the payment services they support. To achieve wide adoption, payment providers must deliver payment systems that are not tied to specific hardware. If Google, Samsung and Apple does not adapt to this, they will ultimately fail.
The enablers are the small and innovative fintech companies that are building solutions to consumer and merchant challenges. Not those who seek global mobile payment domination.
Roy Vella
Managing Director
Vella Ventures
Roy Vella, Managing Director / Consultant, Vella Ventures
While I’ve been an ardent believer in the prospects of mobile money for at least a decade now, it’s clearly remained on the cusp of mass adoption for too long… it’s the wave that, while curling, never seems to crash! Actually, that’s not really true. It only appears that way because, if you’re reading this, you’re not in a high-growth, “emerging” market but rather a slow-growth “developed” one.
In the developed world, we’ve had chips for payments for quite a while now and the question of where you embed it (in a card, in a phone, in a ring, in your arm!) is marginal and a personal choice at best. That is, it’s an incremental, “nice-to-have” improvement over the status quo.
However, in the high-growth markets (many of which remain cash-based economies), chip-based payments is a wave of digitisation that they’ve never enjoyed. Remember, they often don’t even have our “ancient” cash-digitisation system of writing checks. As such, mobile money has been making a massive difference in the lives of millions outside of Europe and the U.S. And will continue to do so, as a much, much more critical part of commerce and daily life for such economies than we will witness here for a while.
So, what’s going to be exciting in 2016 more locally? From my perspective, “mobile money” is going to continue to be about burying the money behind the mobile experience. That is, no one (except Dave Birch) wakes up excited to make a payment today. In the end, we want accurate, secure and expected payments to happen with as little interaction as possible. That’s the magic of Uber or Hailo for the passenger… when they arrive at their destination, they leave the vehicle! Wonderful. I expect to see many more deep integrations of payments into experiences such that customers choose how to pay once and nevermore.
