Sneak preview: Mobile payments 2012 – The tipping point?

Submitted by Jeroen de Bel on Mon, 08/29/2011 - 15:52 in

mobile payment

You are reading a sneak preview of ‘Mobile Payments 2012 – The tipping point’, the report that provides an overview of the current affairs in mobile payments, both on a global and regional level. The report will consist of two parts. Part 1 will present the global developments in mobile payments, including the rise of smartphones and apps as a driver for mobile payments and the high attention given to NFC. Part 2 will elaborate on the developments in various regions of the world. This second part will include case studies on the Cityzi NFC initiative in Nice, France, on mobile PoS solution Square, on Telefónica & MasterCard in Latin America, and on the activities of Orange in Africa.

One of the main questions of this report will be if we are at the tipping point of mobile payments. A tipping point is defined as the moment that a previously rare phenomenon becomes rapidly and dramatically more common. Recent developments warrant the question whether we are now at a tipping point - a revolution rapidly changing the mobile payments landscape - or rather an evolution with mobile payments growing at a much slower, more gradual rate.

The attention for mobile payments has been rising steadily over the past years. Undeniably, mobile payments continue to be hot – perhaps hotter than ever. With the rise of smartphones ever more people have access to highly advanced handsets. The advent of mobile applications (apps) has paved the way to more extensive and specific functionalities providing greater user experience to the user. With the technological advances consumers become ever more engaged to their mobile phones.

In addition, last year many new players have been attracted by mobile payments, resulting in the birth of many new initiatives. In developing markets these initiatives are building on the success of earlier ones, such as M-PESA. In developed markets new initiatives are mainly built around NFC, a technology applied to mobile payments offering a truly new method. With these current developments we are definitely seeing a change in the market place.

In developed markets the tipping point should be in consumer behaviour: consumers adopting mobile payments on a much larger scale. In order to achieve this, mobile payments must offer added value to make their use more attractive, compared to other payment methods, for both consumers and merchants: they must be easier, cheaper, safer and commonly accepted.

In developing markets mobile financial services have strong potential as they do not face competition from established payment methods. They thus have the potential to create a completely new market. Therefore the tipping point will come from the capitalization on the opportunity of the large number of unbanked and underbanked consumers. Keeping it simple is key: most devices in developing markets are basic, without advanced features.

In order to spark the tipping point now, providers need to focus on the context of the mobile payment and develop mobile payment services that best suit the user needs. Otherwise, mobile payments will still happen, but at a more gradual pace than most predictions suggest.

Share: email | LinkedIn