Publications

05 JAN 2018

The Future of Mobile Payments

There are more cell phones than people in the world and using a mobile as a wallet is faster, easier and more convenient than paying by cash or card. But the story isn’t the same across the board, as adoption rates reflect socio-economic realities around the world.

Mobile payments around the world

Mobile payments are challenging the traditional banking system around the world but it’s not the same picture across the board. The US lags behind the rest of the world when it comes to uptake in mobile wallets and payments. It shouldn’t come as a surprise that the birthplace and home to 576 million credit cards, is the same country that has been more resistant to mobile payment systems than anywhere else.

But the tide is changing. The introduction of Apple Pay Cash has helped to move things along in the States. "Apple Pay Cash might just be the spark that finally ignites mobile payments on a broad scale," says Terry Crowley, CEO of RevChip.

Meanwhile the mobile payment story in Europe and Asia paints a different picture. Mobile payments are estimated to be 50 times more popular in Asia. Developing countries like China made the direct leap to mobile instead of the traditional Western customer journey of physical shopping, to PC and then mobile.

“In China, internet users reached 668 million in June 2015, and 549 million of those users (almost 90%) access the internet primarily via their mobile devices,” writes John Milliken in his piece that explains how developing countries socio-economic conditions means they are better apt and agile for making the leap straight to mobile. Cell phones are cheaper than traditional access to the internet via a PC and so it really comes to down to the matter of wider universal access to the web.

Similarly in Africa, the continent leap frogged straight to mobile. The lack of infrastructure meant that before mobile many Africans couldn’t get online. The ease of setting up a mobile mast meant that Africans were some of the earlier adopters of mobile payments.

“In 2014, 12% of adults living in Sub-Saharan African countries had a mobile money account, compared to 2% worldwide,” according to Global Retail Tech.

In Europe things are looking just as bright for mobile payments although admittedly not to the same extent as the adoption rate in developing countries. The UK has embraced contactless payments to a degree where Apple and Android is accepted almost everywhere, whether you’re buying your morning coffee or picking up the morning paper.

Mobile Direct Carrier Billing

Mobiles are designed to make our lives simpler. And when it comes to mobile payments Direct Carrier Billing is leading the way when it comes to ease of use for the consumer.

Direct Carrier Billing (DCB) mobile payments make it possible for people to buy content, shop online, pay friends and family or make contactless payments by integrating bills with their mobile carrier. What makes direct carrier billing different is that it removes the middlemen banks and puts the consumer in direct control of their spending.

Moreover, DCB is the probably the safest and fastest method to shop today, as the user does not need to introduce his personal details or fill out never-ending forms. Direct Carrier Billing allows the consumer to group all their spending by simply telling their carrier to “put it on my bill”. One bill: Simple and effective.

The Future of Mobile Payments

Mobile payments are well set to overtake credit cards in the coming years and it’s predicted that by 2019 credit and debit cards in global payments will drop to 46%.

A study by Visa found that 69% of people between 18 and 34 have used a mobile banking app and half of them do so regularly. While the traditional banking system adds bells and whistles to their mobile apps, it’s up to the carriers to push the limits of mobile payments by making them more trustworthy and more widely used.

The sky really is the limit when it comes to mobile payments but carriers need to stay in tune with what the consumer wants in order to win the mobile payment race. They need to be prepared to adapt and incorporate new tech like blockchain if they want to stand a chance of becoming leaders in the mobile payment market. So is Direct Carrier Billing about to become the new credit card?

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