Mobile phones are becoming preferred smart payment devices. 87% of the world owns a mobile phone and according to Gartner Research estimates, sales of smartphones will continue to grow by 75% each year. In 2009, 4.7 Billion people owned a mobile phone; by the end of 2011, this number had reached 6 Billion, an increase of 1.3 Billion subscriptions in only 2 years.
The first Billion mobile subscriptions took over 20 years, while the last Billion took only 15 months.
With these numbers in mind, the question arises, which markets will be most affected by this mobile revolution and which regions; the developed countries, attracted by the comfort of additional financial services and trendy gadgets, or the unbanked developing markets, led by the emerging BRICS (Brazil, Russia, India, China, South-Africa)? Giant Telco operators and hardware providers initiated this m-Payments revolution. Major stakeholders have engaged in exciting joint ventures, but heavily funded start-ups, led by young innovators are ready to compete with these industry giants.
We expect that innovative start-ups, in alliance with financial institutions, will drive this mobile payments revolution into the next phase.
Marketing research confirms that mobile users tend to trust m-Payment solutions which are driven by financial institutions, banks and/or credit card companies. There are several factors contributing to the adoption of an innovative mobile payment method; trust and transparency are crucial for customer acceptance. A product needs to prove its added value by being cost-saving, while adding to the user’s comfort; the interface has to be both intuitive and multifunctional.
User friendly APIs are more appealing than solutions which require additional (vulnerable) hardware and/or complex installation and integration procedures.
Old and new technologies are being explored; secure SD cards hidden in stickers, Quick Response Codes (QRC), Near Field Communication (NFC), Mobile Wallets, a variety of hardware plug-ins, to be attached to smartphones and innovative mobile solutions based on image recognition. JUMIO NetSwipe offers consumers the possibility to pay by simply scanning their credit card in front of their webcam. A webcam converts mobiles into a payment device, without having to install or plug-in additional tools. Some start-ups, such as Jumio and Stripe, are heavily funded by smart investors. Another indication that the “Davids” may be in a favorable position to compete with the “Goliaths”. With market leaders focusing on the needs of technologically developed regions, we will see how the masses in the developing regions are pushing this mobile revolution in yet another direction. In order to be successful, both industry giants and small innovative startups, have to be aware of huge differences in regional user’s needs, concerns and expectations. This Paper explores these regional differences and sheds light on the challenges and business opportunities ahead.