Mobile money needs innovation and partners in order to be sustainable, because mobile money is “not forever”, says research house Gartner.
Speaking at the Gartner Symposium, in Cape Town, research VP Alistair Newton said the convergence of social and mobile spaces is driving new revenue opportunities. For example, American Express offers discounts on payments linked to social media and some banks allow log-ins to Internet banking via Facebook.
Newton said there are an increasing number of start-ups offering financial services like bar code payments. The uptake of this technology will delay the rollout of near-field communications.
In addition, the industry is starting to see more banks focusing on needs-based banking and payments, Newton noted. He pointed out that PayPal developed a payment solution, Pizza Express, which allows people to pay for meals by entering a code off the till slip into PayPal and paying without the need for a point-of-sale terminal.
Customer identities are one of the challenges banks face as there are multiplicities of identities, such as Facebook user names and mobile numbers. Newton added that location-based services are becoming increasing important with mobility.
Mobile is potentially one of the last opportunities in the space from a banking point of view, said Newton. Firms need to understand where customers are transacting and where they must deliver services.
In Africa, people can do more banking on their phones than in any other country or region in the world. Everything is mobile and the dynamics are challenging the banking norms.
Newton said firms need to have a structured approach to mobile financial services due to the huge variability in the space. It is also paramount to have a coherent partner strategy and geographic sensitivity.
It is also important to have technology skills that are customer-facing as consumers are falling through the cracks, because parties do not take responsibility for fixing problems, he said.
However, Newton cautioned that it will take up to five years before companies see a return on investment in the mobile financial services space but also need to be agile enough to change direction.
* Nicola Mawson is hosted at the symposium courtesy of Gartner.
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