United Colours of Payments

Colours of Payments – Disruption brought in payment industry by Apple, Android, Microsoft & Samsung and many players as now as “Pay”. “Pay” word is a very favourite word for any company to come up with payment solution so to my best of understanding and knowledge in today’s time. So it would not be wrong to call the payment industry as the best example of the United colour of payments. The idea of this short write up is to know thought process, mindset and views of different people around the globe. People with different cultures, mindsets, industries, skills, languages, and different levels of job etc. What is the common payment method among them?

 

Banks  & Currencies

We all know very well that Banks in countries like Indonesia, India, China, and on the 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 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 it’s 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 & exciting news in mobile payment space also put emphasis on 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.

 

Transformation of Payment Methods

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 an aroma for the 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.

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 the 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 it’s not and mobile payments have proven itself as economic freedom. In the current payment race/war where everyone 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 a 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 the 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).

 

Merchants and Billers – Acceptance of eMoney

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 the 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 has 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.

 

Mobile Financial Services & Payment Intelligence

Payment methods do have uniqueness and commonalities which is without a doubt can be mobile payments under 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. A successful mobile payment should have below basic support pointers.

• Enjoy lower tariffs with the 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 any time, anywhere across the globe.
• All transactions done should be in a 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 a bank account with a mobile phone as the bank account, ID, Payment instrument etc.
• Transaction language should be as per subscriber preferred language and currency.

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 a secured manner would be ideal and best method or solution then.

 

Apple Pay – Presenting Old Technology In a New Wrapper

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 the answer is still in a 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 smartwatches, 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 to 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 there 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.

 

Technological Advancements in Payments

Technology changes very quickly and service provider habit of 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 compared 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 can be built overnight in the 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 are no security issues around (Which is practically impossible we all know as newborn 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.

 

What People Buy

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. An interesting solution is provided by Samsung in S6, but I can’t comment on its a 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 a problem” ‘. So if that is true hope we find our problem soon for the solution we have created beforehand
• Are creating need now after got solution at hand

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 the 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?

 

Food For Thought

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 a transaction is 2.9% + $0.30 per transaction(Many markets). If a standard physical POS is considered as 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.

 

Points to Note:

All credits if any remains on the original contributor only. We have covered all basics around FinTech Payments, its working models and the importance of quality financial services to the masses. 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 and imparted knowledge via live conferences & lectures.
• Lab and hands-on experience of  @AILabPage (Self-taught learners group) members.

 

Feedback & Further Question

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

 

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. Countries that prefer cash as their main form of payments, it might be more difficult for mobile payment to set ground.

 

Hash Tags : #payments, #mobilepayments, #mobilemoney, #money, #mobile

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