5G SIM cards to enable crypto-currency payments by 2025
By 2025, half of smartphone owners who do not have a bank account will use a mobile-accessible crypto-currency account for their day-to-day financial transactions.
This was the word from Miriam Burt, managing VP at Gartner, delivering a keynote presentation titled: “Gartner’s Strategic Predictions for 2020 and Beyond”, at Oracle OpenWorld 2020. Hundreds of delegates from across the globe filled the auditorium at the Dubai Trade Centre Arena this week.
To remain competitive and optimise customer satisfaction, financial leaders responsible for digital commerce must anticipate the future of consumer payments that is centred on crypto-currency, she noted.
As the crypto space rapidly matures across the globe, payments of the future have the potential to be entirely cashless, with crypto-currencies expected to transition into a new role in financial services, predominantly targeting the unbanked population.
“In the Middle East and North Africa (MENA) region, two-thirds of people have no bank accounts; however, more than half of the countries have a mobile subscriber penetration rate of 70% of the population. This means we have more people who have phones than bank accounts. An estimated 23% of these people are under-banked, so they have access to smartphones, but don’t have access to traditional financial services.”
This will create huge opportunity for crypto-currencies to be at the centre of mobile payment and digital wallets, to increase financial inclusion initiatives not only across MENA, but also globally, Burt pointed out. She predicted China would be at the forefront of this service offering.
“China Telecom is one of the largest operators in China and they are working on huge blockchain projects which use 5G SIM cards to trade in crypto-currency. If they pull this off, the platform is going to be the largest in the world. This will have superior safety features which will become standard, such as digital authentication and decentralised authentication, to enable these kinds of crypto unit transactions.”
According to research firm Statista, 72% of e-commerce sales will take place on a mobile device by 2021.
Stafford Masie, GM of WeWork SA, last year predicted crypto-currency wallets, while misunderstood and misrepresented, will revolutionise international trade by decentralising the payment system and enabling transactions for millions of unbanked consumers in the third economy.
Facebook’s Libra to persevere
New market opportunities, continued Burt, will create the need for crypto-centric apps and we can expect to see customer-centric mobile apps that can accept crypto-currency payments, gain traction in the next few years.
“By 2022, payments through Facebook, Uber, Airbnb, eBay, PayPal and other digital e-commerce players will support over 750 million customers across the globe. This will be driven by a large youth population with high social media engagement, and consumers who are eager to use 5G via their smartphones,” she explained.
Financial services companies PayPal, Stripe and eBay were the first members to pull out of the Libra Association, the entity managing the Facebook-led effort to build Libra, a global digital currency.
Since announcing the Libra project, Facebook has been under intense scrutiny from regulators around the world, with France and Germany declaring they will block the project in Europe. Despite this, Burt maintains the initiative along with other crypto-payment projects have great potential.
“Yes, we know that some companies have pulled out of Facebook’s Libra, but this is normal for a technology that is introduced at this early stage and we expect that kind of scrutiny and volatility. But make no mistake, PayPal has not pulled out of crypto-currency; they have a collaboration with TIM Blockchain, a company that is looking at crypto-currency fraud, and we can expect some interesting outcomes from this.”
In his crypto-currency predictions for 2020, Marius Reitz, Luno GM for Africa, is of the view that despite the bashing, Libra has persevered and by October last year, 21 organisations had officially signed the Libra Association charter at the project’s inaugural meeting in Geneva.
“There are several major events anticipated in 2020 which will allow crypto-currencies to transition into global financial services. The flagship project for this change has been the Libra project, which drew criticism from all sides, but will be a game-changer, despite the bashing, as they have persevered.
“The South African Reserve Bank is expected to announce crypto regulation in the first quarter of 2020. We anticipate that more institutional investors – banks, hedge funds, pension funds and endowments – will buy into crypto-currencies as they diversify their portfolios,” noted Reitz,