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Breaking Mobile Financial News
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NFC taking off will only happen with focused education
December 17, 2012
 Most of us belong to a group that are fascinated by new payment technology and also (often) love gadgets. This is why it comes so naturally to us to consider using our phone to tap and go. For many others this is quite a strange concept, if we want think about it for a while. In the mind of the average person, this is quite a strange way to transfer payment.
In a recent study conducted by Barclaycard in the UK, more than 80% of UK citizens now can recognize the contactless symbol (this has doubled in the past year). (Read here). Forrester research, in a recent article expects that it will still take a decade for NFC to become mainstream. They predict that it will take three to five years for critical mass (15% to 25%) to be reached (Read here).
For NFC to become mainstream, most subscribers will have to be educated. The payment mechanism will have to be explained and supported with clear instructions and guidance. Only when the average consumer understand and have been made comfortable ...
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NFC taking off will only happen with focused education
December 14, 2012
Most of us belong to a group that are fascinated by new payment technology and also (often) love gadgets. This is why it comes so naturally to us to consider using our phone to tap and go. For many others this is quite a strange concept, if we want think about it for a while. In the mind of the average person, this is quite a strange way to transfer payment.
In a recent study conducted by Barclaycard in the UK, more than 80% of UK citizens now can recognize the contactless symbol (this has doubled in the past year). (Read here). Forrester research, in a recent article expects that it will still take a decade for NFC to become mainstream. They predict that it will take three to five years for critical mass (15% to 25%) to be reached (Read here).
For NFC to become mainstream, most subscribers will have to be educated. The payment mechanism will have to be explained and supported with clear instructions and guidance. Only when the average consumer understand and ...
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The balance of non-competitive behavior in mobile payments
December 14, 2012
 Some-one recently showed me a Spanish article published in Columbia (Read here). My Spanish is almost non-existent with only a few emergency words like "cerveza", so the only way that I could understand the article was to get it translated with Google Translate. Turns out, that the local banking council has been complaining about the business practices displayed by Claro (the dominant carrier in Columbia).
According to the article (and the cryptic Google translation), Claro decided to charge between seven and thirteen times more for banking transactions on their network. If I understand the article correctly, this is to fund the additional infrastructure required to offer banking services on their network. We that work in the industry has seen this behavior in other markets where carriers use their unique position to effectively block banks to offer financial services (or even worse) to compete with them, by implementing punitive commercial tariffs to effectively keep banks out of mobile banking.
This behavior is absolutely deplorable and a reflection on the ethics of companies that follow these practices. It is probably illegal ...
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Are we seeing the start of a mobile payment bubble.
December 9, 2012
The definition of a stock-market bubble is a high activity of purchase of shares in stock that cannot support the prices being paid on the fundamentals of the business. Since the inception of stock-markets investors were warned not to invest during bubble times. In an article published in August Dan Freed alluded that one may be seeing the start of a bubble in mobile payment shares. (Read here).
In the article the following valuations/transactions are quoted as red flags:
The growth in eBay's value on the announcement of the deal between Discover and Paypal.
Square's implied valuation of $3.25B after recent fund-raising
Starbucks valuation on the back of mobile payment announcements.
Since the article, further investments in mobile payment companies have shown very high valuations (not supported by real revenue). Below are some examples:
iZettle raises $31.4M dollar Series B funding (Read here).
Paynearme (a start-up mobile payments company) raises $16M (Read here).
Braintree (a supplier of payment services - including mobile payments, to start-ups) recently raised $35M (Read here).
Paydiant (a start-up providing a white-label solution to banks) raised Series B ...
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Summer was a bit late for Isis
October 31, 2012
Isis is a wallet solution for many payment instruments that reside on your phone. It is a product supported by key mobile operators (Verizon, AT&T and T-Mobile) with the prime objective to activate the NFC capabilities in mobile phones. The drive is to create an acceptance mark (Isis Ready, Pay and Go or Pay and Save) where Isis phone app can be used to pay.
Isis were planning to have the first deployments ready and start accepting transactions at the end of summer. Austin and Salt Lake City was selected as the first cities where the solution would be trialed. But unfortunately, some snags lead to delays. (Read here). Good news was that the delay was not too long with the promised launch taking place this month - a bit late for summer (but just) (Read here).
The reason why this offering is interesting (and probably on the right track) is that the security is based on a special SIM card. (In other words, the secure element resides on the SIM). It also seems that the participating operators have ...
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What did the Olympics do to mobile payments
October 11, 2012
It has been some time since we experienced the magic of the Olympics. The thrills of competition and the drama of the opening and other events of the games will be remembered for a long time. But for payment specialists it will also be remembered as the biggest NFC payment exhibition ever undertaken. Visa (one of the sponsors of the games) invested a lot of money to rig many outlets, vending machines and taxis with proximity accepting devices. Some reports indicate as many as 140 000 outlets.
Special prepared Samsung SIII phones with suitable SIM card was distributed to athletes, representatives of the media and other interested parties. Many of these people used the NFC phones successfully to purchase various articles in London during the games. The media gave very favourable feedback on the experience (Read here and here). One factor that was disappointing was the fact that the processing speed for a payment was not seen to be fast enough (less than 500ms) for the London Underground, so the NFC technology is not yet allowed there. (Read ...
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Some worthwhile Mobile Money Blogs to read
October 11, 2012
I started writing my mobile banking blog in 2006. Since then the number of blogs or websites that published mobile banking/mobile money articles on a regular basis exploded. I have blogged about some of these in the past, but have felt that it may be a good idea to publish a collection of the best ones that I am aware of. It is almost impossible to keep track of all the blogs, as almost every month sees the initiation of another source of information.
Unfortunately, the moneyblog domain: has not got anything to do with mobile money, but rather is a blog for entrepreneurs giving tips and articles on how to make money on the mobile web.
Quite a number of mobile money vendors publish blogs. These blogs are obviously biased towards specific products, but are still interesting reads. Blogs in this category are: Telepin, Roamware and Sybase. Of course, we are all biased towards some product or service and it is important to keep that in mind when reading a blog. By stating a ...
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Big strides to replace cash with digital payments in Africa
September 15, 2012
Late in 2011, the Bill & Melinda Gates Foundation commissioned pollster Gallup to carry out face-to-face interviews with 1000 adults in a number of sub-Saharan countries (Botswana, DRC, Kenya, Mali, Nigeria, Rwanda, Sierra Leone, South Africa, Uganda, Tanzania, and Zambia). The purpose of the research was to analyse the payments and money transfer behaviour of people in these countries. The report was comprehensive and was published in June 2012. I am not aware of any subsequent research as this would show trends in the findings, but the results of the report still require some analysis. (The report can be downloaded here).
Some of the conclusions that one could draw from the findings are:
• More than half of the people interviewed (effectively representing 134 million people in these countries) had paid someone over a distance (meaning that the payer and the payee were not physically in the same place) in the past month
• The profile of each country surveyed is vastly different. For instance the percentage of people that have made a remote payment varies from 76% (in Kenya) to ...
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Buy your airline tickets with mobile money
September 9, 2012
Someone sent me a note highlighting the fact that one can now use EasyPaisa (the leading mobile payment system in Pakistan) to purchase airline tickets on Pakistan Air. I checked and this seems to be the case (Read here). The advantage of this service compared to using PAI booking offices and airline travel agents is that it is available twenty-four hours a day. I found it so fascinating that a payment service designed for low income people could also be used for purchasing airline tickets that I decided to investigate. It turns out that this service is not just offered in Pakistan ....
A similar service is available in Ghana. MTN Mobile Money subscribers who use a Starbow service can now purchase their air tickets through Mobile Money. (Read here). In Tanzania is also possible to purchase airline tickets on Precision Air (a local airline). This service is available to mPesa subscribers and tickets purchased in this way would receive a 20% discount. (Read here). Further research indicated that a similar service is available in Nigeria where tickets on ...
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Mobile banking could boost economic growth according to World Bank
August 6, 2012
The World Bank recognized the important role that mobile banking can play in the fight against global poverty. (Read here). Research based on a poll of
150 000 people in 148 countries, shows that 2.5 billion people do not have bank accounts. This is 59% of the population in developing countries.
Some of the biggest reasons why people don't have bank accounts are the high cost of traditional banking products, the distance that must be travelled to get to banks and amount of paper work involved in opening accounts. However, the report shows that these problems are increasingly being tackled with mobile phones and that mobile banking is being used more and more to solve this problem. The impact of mobile banking in the fight against financial exclusion is visible and now recognised by the World Bank.
Or, as Robert Zoellick, president of the World Bank put it: "Providing financial services to the 2.5 billion people who are 'unbanked' could boost economic growth and opportunity for the world's poor. Harnessing the power of financial services can really help people to pay for ...
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