Rumble in the Jungle or simply “Mobile Payments to Rumble in the Payments Jungle”. Well the reference of this boxing match is taken here to depict the current scenario of the payment industry. Payments are becoming more and more intelligent than the payee. The amount of payment services providers we have added to the payment market in last year and how many will add in the next 2 years are actually more than combined numbers of the last 100 years. Payments market transformation is 10x faster as on date compared to the last 5 decades. PaymentIntelligence is a new phenomenon with the introduction of artificial intelligence, blockchain, machine learning and data science. This article explores the different payment options and opportunities. This post was originally published on 06-May-2015 on Linkedin (Click here).

In this post, we will not discuss anything about the event happened in October-1974 boxing match played in Kinshasa-DRC better known as “Rumble in the Jungle”. This event went down in history as the most popular/viral event of the 20th century.


Rumble in the Mobile Payment Jungle

“Mobile Payments – Industry is to explode above 3 trillion euros payments transaction value by 2020“ and it’s viral in its true sense. Artificial intelligence and its bundle technologies like machine learning and neural networks will re-invent FinTech in next few years to boost Mobile Payments. Players like ApplePay, Samsung, Alipay, Microsoft, Google, Facebook and many more will define where we are in terms of advancement of the payment space. Also where we are targeting to be.

There has been so much jostling and tussling in the payments industry, we think this article should be titled as “Rumble in the Mobile Payments Jungle.”

Payment J.png

The world should become a cashless society and that’s my thought process. I know I am not the only one who thinks/dreams along the same line and millions of others have said this before. Some exciting developments in the mobile payment space have put prominence on the most important points as Mobile Payments along with Data science and machine learning are expected to bring about a transformation for the whole of FinTech in coming years.

Virtual currencies (cryptocurrencies) aim to combine the advantages of direct cash transactions with the power of digital technology. The same question still unanswered, “Speed to market is The King” for who consumer or service providers?

Mobile Payments Industry explosion to trillion euros – Forecast needs revenue models and market strategies which can examine the predominant service & revenue models in the mobile payments arena. Also how this will fold when this thing will get exposed to new technologies like 5G etc. as well as the market approach of selected players, in order to identify effective strategies and key success factors.


Different Mobile Payment Options

The analysis should prove, show and build upon in-depth case studies of selected mobile payments services around the world, including Alipay, Apple Pay, Boku, Samsung Pay, Microsoft Pay, Dwolla, LevelUp, RURU, Paym. The below analysis tries to brief not conclude with recommendations on best strategic approaches to maximize the mobile payments revenue opportunity.

PaymBitcoin (a form of digital currency, created and held electronically. No one controls it – to be a very dangerous payment instrument in some specific countries) known as “a Peer-to-Peer Electronic Cash System” is making huge impact and lots of discussion rounds but where does it fit in Mobile Payment Industry of 3 trillion euros by 2020 or it has its own separate segment on top of 3 euros trillion stash.

Some background on Mobile Payments, a new convenient scheme for customers to perform transactions, and is predicted to increase as the number of mobile phone users increases. The use of mobile devices to make payments is increasingly common, particularly in Africa and Europe. Mobile payments can be defined as any payment transaction, which involves a mobile device. There are wide ranges of options available to perform mobile payments due to the availability of network technologies.


 Contributing factors/reasons 

The mobile payment industry has emerged over the past few years through the convergence of services provided by financial & Mobile Network Service institutions.

  • Prepaid Airtime top-ups through mobile money
  • Loans of Airtime through Mobile Money
  • Along with many players in the payment jungle, it is very easy to conclude that cash is expensive to handle and cheques are due to be phased out very soon. Individuals and corporates need electronic methods of completing payments, most of which will involve mobile technology which is easy, fast, low cost and quick.
  • Smartphones will contribute and penetrate this area of transactions and most of the payment services offered will be online i.e USSD, SMS, Mobile App.
  • Utility bill payments, the third most commonly offered product by mobile money providers which represents the second largest contribution to the global product mix by value. Bill payments like water, electricity, internet, gas, school fees
  • A number of small card readers and associated applications are being developed for smartphones this means the big and bulky POS machines which are costly in CAPEX and OPEX might soon be phased out (Not Sure)
  • Cross Border remittances in under a minute, which should be very cheap and flexible in terms of inaccessibility.
  • Merchant Payments a very important and crucial key success factor for this 3 trillion euros hot cake.
  • Contactless payment systems based on near field communication (NFC), QR or scan codes will contribute and offer a viable alternative for low-value transactions in developed countries.
  • Hospitals, schools and colleges will need to provide alternative payments technologies, as cash, internet and cheques will be phased out due to speed & cost.
  • Railway stations, bus terminals, movie theatres, game show, events and all mass sales need to come on mobile payments.
  • How to ensure all daily sales of water bottles, cokes and all micropayments comes to mobile.

Apple Pay boasts about its mobile payment growth, and at the end of the day, yes, they’ve done a great job and it’s excited the market, but it’s still a very small percentage of what the total number of transactions are and now they already have competition from other players (FB & MS etc). To build a viable business amidst the wealth of competing solutions and applications for mobile payments, players must take a strategic approach to the market. The source of the above information is through market & internet research.


Convergence of MNO, Banks and FinTechs

Mobile Network Service providers, Banks and credit/debit card companies and now BitCoin. Critical to the development of the industry has been the creation of technical standards by a number of international standards bodies to enable cross-industry collaboration.

Because of the concern by the financial and telecommunications industries about encroachment from each other into important new sources of business, key standards have relied upon the development efforts of start-up firms. These firms are independent of both industries and form a catalyst to collaboration and a conduit for mutually acceptable standards formation.

There are a number of best practices to generate consumer uptake of mobile payments services and build transaction volume. Focused on four key elements specific to the end-user and merchant’s value proposition, the use case strategy and cross-border partnerships examples here are EcoCash Zimbabwe & World Remit UK & Western Union. Airtel across Africa have opened cross border remittances (Few are in flow some of them are about to flow).


Rumble in Payments Market – Examples

Korea- has one of the most advanced mobile payments industries after the USA in the world, and a start-up Korean company. Theories of industrial development need to account for the importance of start-up firms, which fail, yet are critical to the creation of important technologies and standards. The case study shows how the contribution of start-up firms is strongly influenced by specific national and cultural factors. As more technologies emerge, these factors need increasingly to be taken into account in analyses of industrial development.

Dwolla (a United States-only e-commerce company that provides an online payment system and mobile payments network) launched a new feature called “Proxy” which allows users to send and receive cash-based mobile payments based on their current proximity to another connected device. The technology bypasses the need for special hardware, like Square’s plastic dongles or NFC chips built into a phone, in order to make mobile payments.

Brixton Pound- Businesses across the London district of Brixton were equipped with Bluetooth beacons that allowed residents to make mobile payments using the Brixton Pound, a local currency designed to encourage consumers to spend their money on independent local businesses.

 E-Commerce: Payments through Mobile, Internet & Cards – This has vastly transformed the way businesses are being transacted these days. Within the past few years, online businesses have grown rapidly with business-to-consumer electronic-commerce (e-commerce) sales growing 21.1 per cent. E-commerce hit US$1 trillion for the first time in 2012, also the forecast that the growth in China’s digital shopper will be expanding enormously as the number of people who buy goods online is expected to double between 2012 and 2016.

According to an independent market research company eMarketer. According to data released by China E-Commerce Research Centre (CECRC) recently, e-commerce in China grew by 31.4 per cent last year, reaching a total market value of more than US$2.1 trillion in 2014.


Few Highlights

  • Presently, the major challenge or issue we are facing in the mobile payments market is the high level of market fragmentation meaning it has basic flow in terms of usability technology which is not very friendly with normal user even though technology should befriend and secondly defined both by the multiplicity of platforms/solutions technologies are being deployed and the increasing range of service configurations being offered. This slows down merchant acceptance and makes it difficult for providers to gain scale. We expect the market to reach a point where consolidation among players and solutions becomes the best way to drive address this issue.
  • Mobile Money Service providers have to take a wide range of approaches (based on conditions mentioned before) to roll out merchant network for their mobile payment strategy in their markets. In Indonesia or the even US what makes sense and work very well will never work in Kenya or Tanzania as services in the region offering merchant payments issue companion cards to their customers, leveraging the existing payment card industry infrastructure.
  • In Africa (Example as Kenya or Tanzania), where card payments or card penetration/bank penetration is almost in ZERO, most merchants have merchant lines which separate from their regular line and merchant codes are associated with it to accept payments and interfaces they use again depends on their capability, volume and business type ie. Maybe POS, MPOS, Cheap Smart Phone or connection to their PC and some time even 30-50 dollar Chinese device meant only for touch and pay capabilities, example buying a bottle of water or a pack of cigarettes would be about 0-3 dollar transaction or toll gate fee 1-2 dollars needs transaction time of 5 – 10 seconds.
  • Few central banks observed that under the new regime of Mobile Payments pricing, transactions conducted through online banking & Mobile Payment channels will attract the lowest fee, followed by transactions carried out at automated teller machines (ATMs) and lastly transactions performed over-the-counter (OTC). This allows and enforces Partnerships with ecosystem participants from all sectors (banks, retail, service providers and public sector) are essential to building a ubiquitous network of acceptance points.

In addition, having a well-defined pipeline of compelling use cases is key for mobile payment providers to leverage the ecosystem to grow their user base and drive transaction volume.


Points to Note:

All credits if any remains on the original contributor only. In the post above, I covered all the basics around Mobile Financial services and Mobile Money and the importance of the quality network (Agents, business and distribution). In the next upcoming post will talk about implementation, usage and practice experience for markets.


Books + Other readings Referred

  • Research through open internet, news portals, white papers, notes made at knowledge sharing sessions and from live conferences & lectures.
  • Lab and hands-on experience of  @AILabPage (Self-taught learners group) members.


Feedback & Further Question

Do you have any questions about AI, Machine Learning, Telecom, Data Science or Big Data Analytics? Leave a question in a comment section or ask via email. Will try best to answer it.


Conclusion –  Few vital questions, which need responses – What is the total strength of world Payment Market irrespective of mode & means then we drawSign-t the pie and start slicing the modes. Use of pool accounts/wallets/funds are now growing where people come together and save money for future incidents like funeral, births, medical expense or marriage expense where it helps lower segment of society to keep running their life as usual without any problems but In a pragmatic sense, however, the distinction between shared and secret accounts remains a very real one. Now the question is can this transaction will part of the same pie.


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Posted by V Sharma

Technology specialist in Financial Technology(FinTech), Photography, Artificial Intelligence. Mobile Financial Services (Cross Border Remittances, Mobile Money, Mobile Banking, Mobile Payments), Data Science, IT Service Management, Machine Learning, Neural Networks and Deep Learning techniques. Mobile Data and Billing & Prepaid Charging Services (IN, OCS & CVBS) with over 15 years experience. Led start ups & new business units successfully at local and international levels with Hands-on Engineering & Business Strategy.

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