The experimental phase of mobile payments has passed and is now turning to the unbanked market. This is according to Aletha Ling, Fundamo executive director, speaking at the ITWeb Mobile Payments conference in Bryanston, yesterday.
“Mobile adoption in developing economies has surpassed all expectations,” she said. “One reason for this is the innovative ways in which mobile operators are bringing the service to consumers and the value-added services they provide. Currently, over 60% of the South African population has a mobile phone.”
Ling explained that using airtime as a currency as part of a mobile payment system is not a sustainable model, “because at the end the consumers aren't getting much more than they were before using the system; airtime already has distribution costs and it's expensive.”
Bank, meet telco
According to Ling, to reach the unbanked in SA, mobile payment developers need to develop a partnership with a bank as well as a mobile operator. “So when we think about distribution, consumer appeal, and speed to market, we need to tap into the strength of the telcos.
“It's hard to imagine stronger brands in the emerging markets. They have distribution and a large consumer base already, which is the strongest underpin for mobile operators to take mobile financial services to the unbanked. Telcos will play a pivotal role in accelerating the market growth and for the provision of the infrastructure, which facilitates mobile financial services.”
Ling added that mobile payment developers should think big, start small and from there, scale fast and evolve. She said the unbanked market doesn't care about bank accounts and rather want to solve problems such as transferring money person to person.
“They care about ease of use, speed, safety, reliability, price and accessibility. We will not get this right until we can segment and target these services properly.”
Mobile payment users will reach 74.4 million this year, an increase of 70% over the 43 million users in 2008, according to research firm Gartner. In 2012, that number should exceed 190 million users.
According to the Mobility 2009 research report, released yesterday by World Wide Worx, the number of people banking from their cellphones has exceeded that of people banking from their PCs in SA.
While 16% of banking customers in SA use the Internet for banking, 28% use their cellphones and 34% of banking customers use one or both of these channels.
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