Abstract – This article is focused on high level discussion and showing what is happening in payment industry and contribution / future impact by 4 well known camps Apple, Android, Microsoft & Samsung and many many other players as now “Pay” word is very favourite word for any company to come up with payment solution so to my best of understanding and knowledge today’s time payment industry can be called a united colour of payments. Idea of this short write up to know thought process, mind set and views of different people around the globe with different cultures, different mindset, different industry, different skills, different languages, different roles, different levels of job, different classes and all sort of differences but what is common and which is the common payment method.
We all know very well that Banks in countries like Indonesia, India, China, and on African Continent don’t seem overly concerned with banking the unbanked. If they were, we’d likely be seeing more initiatives to pull in the majority demographic as customers. However, these consumers aren’t folks who will be transacting as big or as often as their more affluent middle-class counterparts. As such, profit margins reaped from this group won’t be too exciting. This article can help but only on high-level understanding. Readers who are interested to know some more details on each one of them are suggested to read them separately and get complete insight. Experts in any form of payments like mobile, Internet, paper or card should not get disappoint after reading this as said it not meant for detailed or deeper understanding.
This article explores the different mode of Mobile Payments , different types of payment colours i.e. currencies, different big brothers ApplePay, Samsung, Microsoft, Google, Facebook (I guess Its ok to call them big brothers) and many more and where we are actually and where we wanna be. Advantages of using some of it & exiting news in mobile payment space also put emphasis to the most important key point as Mobile Payments Revolution. The virtual currency aims to combine the advantages of direct cash transactions with the power of digital technology. Mobile Payments myriad ways mobile payments are which are already being used.
From shopping on phones to ditching change at the parking meter, consumers are embracing mobile payments for an ever larger number of daily tasks. There is obviously room to grow, and we’re nowhere near banishing credit cards or cash just yet, but it’s clear that paying with a mobile device is gaining traction hence creating aroma for united colour of payments. In case needs detailed information or deliberation on any part please feels free get in touch directly as to me Mobile Financial Services is (I am using “IS” not “ARE” as I feel its ONE) my passion and my thought process.
Introduction – There are various colours of mobile payments across the world, which are in use today along with all methods. Colours in terms of currencies where person sitting in US making payment for goods and services for some in India or in Africa where US dollar painted with white and black ink making payment for its pear currency in green or blue colour. “Speed to market is The King” for who consumer or service providers? Are we heading towards Cashless Payment i.e a new Society which is CASHLESS as the Future Next. if we had any global ministry of innovation for regulation and control then for sure till date cash will be only the single king but since its not and mobile payments has proven it self as economic freedom. In the current payment race/war where every one is running to get their share of this hot cake. We are now getting new arrival Android Pay announced by Google at its I/O conference.
Android pay would be available through set of APIs that will allow developers to add an Android Pay button to their app and banks to enable payments in their applications on Android devices with KitKat 4.4 and above. Contactless/NFC payments, Mobile/Digital Wallet payments, Mobile Payments in Restaurants, Retail shops etc are showing increasing Trends / Statistics only. Just imagine how powerful this central payment hub would be for consumers as the payment cake size continues to be increasing and upgrading with new ecosystem, applications and devices coming to market. Banks and Card companies are working restlessly in U.S.A (U.S.A a typical market where Credit card debt is still incredibly common— with 39% of Americans reporting unpaid credit card balances, it’s not far behind mortgages as a leading contributor to American consumer debt. While those balances are much lower than those for student loans, the high interest rates and revolving nature of credit card debt can make it a serious threat to consumers’ financial health).
To get merchant conversion for their acceptance religion from older magnetic stripe payment terminals to support NFC payments from mobile phones or smart cards and to EMV compliment cards but a complete transition will take years, pay attention to “S” at the end of word years in last statement. If you’re among the 80% of Americans with debt, the best thing you can do is focus on managing your debt and credit well. Taking out loans or using credit cards can be a great financial strategy, but it’s important to go after the balances with a plan. Regularly review your credit score so you understand how your debt affects your credit standing, and set realistic goals for paying your debt down, while saving up for your future. 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.
The other key driver for this is the inaccessibility of banking services to the general populace mainly due to poor infrastructure and lack of trust in local banks by country fellowmen and companies. Another very interesting colour of mobile payment is International money transfer through mobile or favourably called as cross border remittances in MNO domain where Mobile money remittances has proved and claimed that in Sub-Saharan Africa cross border remittances are projected to reach US$33 billion in 2015 as the services are growing above 6% in more than three countries with increasing mobile connectivity, according to WorldRemit, a United Kingdom-based online service company that lets people send money to friends and family in other countries.
Main Story – Last week I received an email asking and writing 7 continents payment style and their united or uniqueness as after all there is something in common and which is without a doubt Mobile Payments and Mobile Financial Services. The secure authentication and payment validation technology underlying Mobile Payments are now catching up and getting attention for security what technology your phone is using to ensure to transmit secure information used to electronically sign transactions. All subscriber using phones to make payments no matter what type of handset they have or which network operator they belong to. If they don’t need to modify your phone or load any special application to make payment in secured manner would be ideal and best method or solution then. A successful mobile payment should have below basic support pointers.
- Enjoy lower tariffs with flexibility to send, spend and receive money across all networks(Cross borders as well)
- Able to transact faster, easily and conveniently with any phone, at anytime, anywhere across globe.
- All transactions done should be in secured & safe manner with preventive measures to stop abuse, fraud and AML
- Auto verification for identity and location for cash-in or cash-out and payments
- Every transaction generates transaction receipt /ID each time. Using exciting new technology which brings several transacting channels together
- Able to transact with or without bank account with mobile phone as bank account, ID, Payment instrument ect.
- Transaction language should be as per subscriber preferred language and currency.
Apple Pay’s launched some additional context about the state of mobile payments in general, which includes much more than just Apple Pay now after 12 months if we see where it is answer is still in very small balloon . The hectic pace of change in payment systems. All of this is because of the fact that this physical/digital world is converging. Online, mobile, virtual wallets and smart watches, among others – means that all businesses need to remain alert to the latest trends and developments. They and their customers will almost certainly start paying for goods and services in new ways in the future. A month after Apple Pay launched, MasterCard was quick to remind analysts in the company’s third-quarter earnings call that Apple Pay wasn’t the only player innovating the mobile payments space.
All these new ways will continue to change and proliferate as time goes on. Some provider of payment solutions for the financial industry, retailers, hospitality, and e-commerce. Android Pay, ApplePay, Samsung’s, Google, Facebook and Microsoft Pay services these are from big players but here are thousands of regional trusted small brand and MFS providers who are also coming into play to claim there share of hot cake pie, and all the banks are launching their own version, then there is MasterPass and Visa Checkout. There are some proposed definitions from industry associations (e.g. GSMA and Mobey Forum) and the European Union but there is no agreement on a common definition.
Technology changes very quickly and service provider habit of now now to the market and give new ways and means to consumer quickly but on the other hand consumers style and adoption to technology move at a slower pace compare to what service provider wants. It takes a lot to create a mindset shift. Consumers may not also be ready to switch over to one payment method option simply because the trust cant be build over night in same example Apple took decades to gain that kind of trust. Leaving all other instruments of payment aside and consumer will move to just Mobile Payments will cost too much time, efforts, hard work , money and sweats from all services providers and assumption is there is no security issues around (Which is practically impossible we all know as new born baby can start dance & run on day one).
The research firm reckons the Middle East and Africa region is the biggest market for mobile money services. In Africa in particular there are large numbers of people who have no access to traditional banking services, and the mobile payments market is growing fast along mobile phone adoption. But the report said it expects increased traction for mobile money services also in the APAC and North American regions within the next five years. Financial inclusion and the concept of the unbanked has become a buzzword when it comes to mobile payments innovations. Who are the unbanked, who are the mobile money companies reaching, and where are there still gaps? And why? To some Apple critic’s points, getting consumers to change means giving a reason to stop what they are doing today and to start something new.
More than one-third of the people surveyed said that they didn’t try Apple Pay because they didn’t have a reason to change from their current payment method, and one-fifth said that they preferred an alternative method of payment. Personally I have experience working with PayPal, Stripe, Square, Google Wallet. Each has own pros & cons. I think Apple Pay will get attention in Asia. Well, it’s Apple… Everyone is crazy about iPhones here. Now iPhone users (and this number is always growing) will have an option to use their device as a digital wallet. Interesting solution is provided by Samsung in S6, but I cant comment on it’s success. I have seen cloud service for same service type, same functionality , same configuration of hardware and same support level (At-least on paper) and every other same offering but cost difference with 20 times or more so we know it very well what joy we can expect in a one dollar apple and in a 20 dollar apple that also matters.
Now after all these studies my questions to me for Which I am still looking for responses.
- All Mobile Payment Service Providers along with some Social Media Service Providers are just focusing on disrupting the market? or any action to create such market
- What all initiatives are going on by Mobile Payment Service Providers (MPSP) to create such needs where consumer feel for Mobile Payment Systems / Services
- Whom we are acquiring consumers or merchants
- And there are many many more questions are jumping ….. looking for some responses to share later on
- As said by my friend — ‘I think your questions have merits. Someone called the mobile payment industry, “a solution looking for problem” ‘. So if that is true hope we find our problem soon for the solution we have created before hand
- Are creating need now after got solution at hand
Hash Tagas : #payments, #mobilepayments, #mobilemoney, #money, #mobile
Conclusions: What are the implications of this war? Is it going to change the world (unlikely), be a significant “win”, be a nice hack, or simply serve as a road sign indicating that this path is “UNKNOWN”. Which system is useful and needed for the business considering the market you operate and synchronised with your strategies and goals. While mobile payment announcements from various smartphone makers are growing in frequency, still too much unknown & doubtful thoughts that such services will drive much interest in buying the smartphones that support it. In Countries that prefer cash as their main form of payments, it might be more difficult for mobile payment to set ground.
However, this differs per country and per part of the world. In most European countries, for example, people have adopted debit and credit card as their primary form of payment. Opposing to cash, this is an intangible form of payment, just as mobile payment. The step between paying by card and mobile payment is smaller than between cash and mobile. Therefore, in Europe, consumers are adopting many forms of mobile payment. When we look at Merchant Processing Fee which becomes the biggest issue we face. If we use some International Payment Merchants as an example, the fee for transaction is 2.9% + $0.30 per transaction(Many markets). If consider a standard physical POS retail, it can fall to as low as 1.3% in Singapore or even lower if you are an electronics store with large transactional volume. With razor thin margins, the MPF weakens the innovation factor. This MPF is on top of the other transaction costs. Mobile payments will get better once the MPF becomes more competitive.
My understanding out of everything going on around the world on mobile payments front I must say we should avoid a creative mess, stop innovating and start improving. As test, measure success and repeat that what works for me very well (Off course Innovating process does not stop completely). Developing something new on top of other “things” is not always the answer; sometimes un-developing something existing to uncover the hidden gems already there is useful. Can I say if you like Un-Develop to Innovate?
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