Mobile Payments – The mobile technologies discussed here are not a recent or groundbreaking development and have been in existence for many years. However, not everyone has been aware of them or may have had a different experience than myself. Mobile payments have been available for a while using various methods such as NFC, USSD, mobile apps, and SMS. However, banks and retailers have been hesitant to embrace them fully due to concerns about low adoption rates. Ironically, their unwillingness to participate is what has caused the slow uptake of mobile payments

The content of this blog post is based on actual occurrences and a comprehensive evaluation of financial services and payments through mobile devices.

Mobile Payments – Outlook

Undoubtedly, mobile payments are gaining immense popularity without any doubt or hesitation. NFC technology enables the transfer of data between two devices with NFC chips when they are brought close to each other within a few centimeters.

Payments copy 4Thanks to advancements in technology, we have made significant progress. The vanguards of the surging mobile payment movement, including MasterCard, ApplePay, AndroidPay, Europay, and Visa, are striving to establish a universal standard for this latest commerce practice.

The goal is to enhance the accessibility of mobile payment transactions on a worldwide scale. There are key factors that facilitate faster payment for services or goods and create a sense of convenience. MasterCard asserts that their technology will establish a world where the act of withdrawing money from an ATM or queuing up to buy train tickets becomes obsolete, all in the name of convenience and safety.

If we had a Ministry of Innovation for regulation and control on a global level, they would have made today’s work and innovation impossible or may have stopped it long ago. Apple Pay (as per news, 10 million handsets were sold in the first 3 days of launch) from a technology perspective was neither a new offering nor a game changer and is now followed by almost every big player in the industry. Instead, we’ll just tap a button.

Without a doubt, that launch was to set a trend for NBFTC (non-banking financial and technology companies) on how to enter into payments and did its job well, so-called banking domain, and eat the share.

Mobile Payments and Technology Advancements

Mobile technology is rapidly improving and having a significant impact on our daily lives, including how we interact with others and handle our financial affairs. It’s time to reconsider the concept of mobile payments by dispelling some of the common misconceptions surrounding them. Business growth and customer satisfaction can both be achieved by providing a secure alternative mode of bill payment.

During my Sunday evening meal at KFC, I found myself standing at the counter where I placed my order and was subsequently handed a 9-dollar bill to pay before receiving my food. It seems to be a common practice worldwide. As I rummaged through my pockets for money, I suddenly realized that my wallet was missing. Just as I was about to leave, a pleasant voice interrupted my thoughts and offered me several payment options, including debit or credit card, mobile wallet with NFC, mobile app or USSD, and mobile banking.


Mobile payments are an easy and simple concept, but sometimes they get oversimplified, along with the same reasons for payments under the mobile or simplified version as mobile payments, about which every single company on this earth is talking these days, and it is true that every single company is.

The assumption made here is that the reader is well versed in mobile payments through the mobile wallet, or mobile money, which is a solution that lets people conduct banking transactions with ease, directly from their mobile device, in a secure and convenient manner. Having a full understanding of the business case and technologies, we can now get ideas on how to merge these to gain some cost reduction, speed, and effectiveness.

To make me crazy enough, I was told whichever method I want, I can use on a separate counter, even via free phone call to my family or friend (their location can be around the globe) to ask them to pay for my meal. Finally, I paid via my mobile money account using my mobile app on my Apple phone. This whole episode told me very clearly that there is no dull day in the payments business these days, provided the buyer is willing to pay.

The unglamorous world of clearing and settlement is the recipient of generous attention due to the continuous launches of visible overlay propositions, often by non-banks. The so-called innovators and many players are constantly anxious about protecting their hard-earned franchises, thereby confirming the emergence of the ‘new normal’. I believe embedding these core elements in the proposition, operating, and delivery models will enable players to ‘play to win’ in these turbulent times.

The advancements in technology have simplified some aspects of our daily routine. The emergence of mobile money has provided a convenient and cost-effective substitute for conventional bank accounts, enabling individuals who previously lacked access to financial transactions to partake in them. Mobile payment solutions have the option of being connected to either your mobile wallet or your bank account, or possibly to neither. Crucial queries include:

  1. How to position Mobile Payments Portfolio to my consumers?
  2. What my consumer wants?
  3. How my consumer wants it?
  4. How much and when my consumer needs?

Traditional payment service providers, including banks as well as well-established big names like Mastercard, VISA, etc., have to wake up, smell the coffee, and innovate; otherwise, MNOs will “move their cheese”. Imagine what will happen when social media makes its way into the payment space. A very interesting fact in the mobile financial industry is that we usually receive funds once or twice a month as part of our salary or fee, but spending is done at least three times a day, sometimes over five times.

Payment Channels

This method of spending is known as “micropayment” or “microspending.” Putting in numbers, this can go into billions of dollars.

coverAn easy example: if we start charging 1 cent per transaction as commission for micropayments through NFC (the stored value card technology) for food, drinks, snacks, petrol, tolls, souvenirs, or any similar purchase, and each one of us spends a minimum of $5 a day (assumed at 40% of the world population), then the total commission earnings will be to the tune of $4.3 billion per month. This market has clearly not been explored that well, and this also goes straight into the mobile money market as a potential leakage plug.

The main drivers behind the success of mobile money are the explosive growth in the number of mobile devices and the fall in the cost of computing power, which have lowered the barriers to new entrants in this field. Mobile money (m-money) is quite versatile and can support a variety of services, in particular person-to-person (P2P) money transfers, which are of significant value for emerging economies.

When Apple decided to jump on board (Sept. 2014), the game changed because all of a sudden they were presented with a guaranteed massive user base for this type of technology and service. Unlike most of the MNOs, which keep on focusing and growing the mobile network in a positive way to penetrate isolated areas, millions of people are now able to connect via a mobile phone. As a result, mobile payments have become a viable alternative to traditional payment methods such as paper, plastic, online, or even bank account payments.

Mobile Payments – Key Drivers

The other key driver for this is the inaccessibility of banking services to the general populace, mainly due to poor infrastructure and a lack of trust in local banks among countrymen and companies. Payments have a share to move beyond transaction capture to enable a sale (trigger, originate) by aligning to the new ‘consumption context’ of payment services. Partnerships are an effective way to enable this. e.g., Apple Pay is a ‘device franchise’. Utilize collaborative models where available.

The inadequate infrastructure and absence of trust in local banks among citizens and businesses are the primary reasons why banking services are inaccessible to the majority of the population, leading to a significant factor for this situation. Payments can expand their role beyond just recording transactions by facilitating sales through alignment with the latest “consumption context” of payment services. Collaborations prove to be a successful means of achieving this objective. Make use of collaborative approaches wherever possible.

Key Advantages – To All

  • Expand the financial sector’s reach by leveraging mobile media.
  • Ease of use for financial services via various interfaces like IVR, USSD, SMS, and smart apps
  • expand the set of services to a larger sector of society.
  • Solution Providers (Service Providers)
  • Acquire a large number of customers for their solutions or services.

Telecom Operators

  • Drive retention, and increase ARPU to the mobile
  • Higher revenue through increased Data, USSD and SMS usage

Utility Organizations

  • Prompt payment of bills enabling better cash flow

Subscriber / Customers

  • Basic banking facility made available
  • Advantage to transact on the move.

If you require more in-depth information or additional discussion regarding any aspect, do not hesitate to contact me directly. Mobile payments can be likened to a myth in that they are a customary or renowned tale about a particular entity (either a mobile device or technology), a brave protagonist (i.e., mobile technology), or an occurrence (a payment transaction) that may or may not be verifiably rooted in reality or explained via natural causation. Such myths usually pertain to deities or semi-divine beings and elucidate certain behaviors, traditions, or natural phenomena.

Sign-tConclusion:What are the potential effects of utilizing mobile payments and solutions? Will it revolutionize the world, prove to be a major success, or simply be a clever workaround? Proximity-based payment methods such as mobile apps, SMS or USSD, and cloud or hosted mobile payments can provide worldwide support and offer financial institutions and partners more options for facilitating safe smartphone payments for consumers. It is now necessary for banks and other parties involved in financial services to work together, make use of technology, and utilize MNO infrastructure in order to gain new customers, enhance services offered, decrease expenses, and boost profits, particularly in markets where regulatory bodies have significant influence. It is widely accepted that assistance in conforming to regulations is a basic requirement.

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Posted by V Sharma

A Technology Specialist boasting 22+ years of exposure to Fintech, Insuretech, and Investtech with proficiency in Data Science, Advanced Analytics, AI (Machine Learning, Neural Networks, Deep Learning), and Blockchain (Trust Assessment, Tokenization, Digital Assets). Demonstrated effectiveness in Mobile Financial Services (Cross Border Remittances, Mobile Money, Mobile Banking, Payments), IT Service Management, Software Engineering, and Mobile Telecom (Mobile Data, Billing, Prepaid Charging Services). Proven success in launching start-ups and new business units - domestically and internationally - with hands-on exposure to engineering and business strategy. "A fervent Physics enthusiast with a self-proclaimed avocation for photography" in my spare time.

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