Sector Snapshot: Mobile Banking and Payments Industry

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The mobile platform is expected to become the dominant payment platform both online and offline for a host of services. (Photo: Jeff Vergara)
The mobile platform is expected to become the dominant payment platform both online and offline for a host of services. (Photo: Jeff Vergara)

BUSINESS

  • In 2015, mobile money transfer should generate revenue from $1.2 billion to $6.2 billion
  • Users of mobile banking and associated services are expected to hit 894 million in 2015
  • By 2013, over 60% of global mobile payment transactions will come from Western Europe and Asia

The mobile banking and payments industry is poised to become the dominant banking and payment platform worldwide in the next few years. With over 4 billion people worldwide owning mobile phones, the market and opportunity are very present. The industry is presently at the take-off stage for exponential growth and offers multiple benefits for different players.

The mobile phone has evolved into a customizable banking interface incorporating smart apps that enable users to do a host of things such as remote deposits and withdrawals, account transfers, ticketing, bill payment, etc.

Mobile banking overcomes the barriers of time, location and distance associated with traditional banking channels. It offers convenience, speed and ease of use. It also presents the best scalable medium for getting unbanked people in developing countries into mainstream banking. In addition, mobile banking is a safe and secure payment platform that helps minimize economic fraud such as currency counterfeiting. Mobile transactions are also highly traceable and therefore deterrent to potential fraudsters.

The mobile platform is expected to become the dominant payment platform both online and offline for a host of services such as remittances, retail purchases, online commerce, salary payments, proximity payments (think NFC), as well as a marketing and information sharing medium. Its power lies in the fact that it can be customized to create tailor-made solutions.

Key Statistics

  • By 2015, mobile money transfer will generate revenues ranging from $1.2 billion to $6.2 billion (source: Berg Insight).
  • Active users of mobile banking and associated financial services are expected to increase to 894 million people in 2015, up from 55 million in 2009 (source: Berg Insight).
  • Mobile banking providers hope to cash in on the approximately US$ 600 billion flowing annually to developing countries and generating revenues of about US$ 60 billion in service fees (source: Berg Insight).
  • By 2013, over 60% of global mobile payment transactions will come from Western Europe and Asia (source: Juniper Research Experts).
  • US mobile banking users are expected to increase to 86 million in 2015, up from 12 million in 2009; the European market is expected to grow to 115 million users come 2015, up from 7 million in 2009 (source: Berg Insight Report 2010).
  • More than half of Americans will be mobile bankers by 2015 (source: Mercatus LLC).
  • The mobile banking industry can expect to have 38 million households as regular users by 2015, more than thrice the number in 2009 (source: Online Banking Rep).
  • Close to 80% of Americans under 35 will be regular mobile bankers by 2015 (source: Mercatus LLC ).
  • By 2015, mobile payments are expected to be in the range of $214 billion (source: Aite Group).

Latest Business News

  • Google Search top mobile site – According to an April 2011 market report by Nielsen, Google ranked the top mobile site in April attracting 55.3 million unique visitors, followed by Facebook (42 million), Google’s Gmail service (40.5 million), Yahoo Mail (36.9 million) and the Weather Channel (26.9 million).
  • Smartphones drive mobile banking growth in Europe - According to data recently collected by comScore, 20 million Europeans in UK, Spain, France, Italy and Germany - the leading mobile markets in Europe - accessed their bank accounts via a mobile handset in March 2011. Smart phone users represented 70% of the mobile banking market. Mobile banking users have increased by 40% since August 2010. The study also found the French to be the most avid mobile bankers and men twice likely to embrace mobile banking than women.
  • Mobile money services can create more than a million jobs in Pakistan - A recent study commissioned by Telenor Group and conducted by Boston Consulting Group has found that upto a million jobs can be created in Pakistan by the year 2020 if mobile financial services get wider access. The study highlighted the positive effects wide uptake of mobile banking services could have on Pakistan. These include: promoting entrepreneurship, improving women’s access to funds, boosting healthcare and education, creating new jobs, stimulating economic growth through creation of credit channels, boosting government revenue and reducing administrative costs through m-government.
  • Mobile banking proffers many benefits to institutions, individuals and government and is an affordable medium. With wide mobile banking uptake, emerging economies can develop and grow faster. However, education and promotion of mobile benefits still needs to be done in order to encourage wider mobile banking uptake.

Key Mobile Banking and Payment Providers

  • Mobile payment providers - Bango, Erickson IPX, Nokia, Obopay, Fronde Anywhere, Netsize, Luup, mBlox, Sybase 365, mChek,mPay, Mi-Pay, Upaid
  • Mobile banking providers – Comviva, Fundamo, Monitise, M-Com, Firethorn, Mshift, Fundamo, mFoundry, Utiba, VeriSign and YellowPepper

Upcoming Events

  • 2011 Mobile Money Forum – Canada: Financial industry executives, mobile operator executives, technology platform providers and other stakeholders will unite in Montreal, Canada, from Tuesday June 21, 2011 to Wednesday June 22, 2011, at the Hyatt Regency Hotel.
  • Effective Risk Management for Mobile Money Services – Africa: Organized by BSP Media Group, UK, mobile industry players and stakeholders from Africa and beyond will meet from July 19, 2011 to July 20, 2011 in Central Nairobi, Kenya.

By Patrick West for
Patrick West is a print and internet journalist who covers news and trends in business, technology, economy and finance.

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