Mobile Money, the next BIG revolution

WHY m-Payments ?

The spread of mobile phone use across the globe has given new impetus to the world of mobile payments. By 2010 there will be four billion mobile phones globally almost four times the number of bank accounts. There will be millions of people working overseas funding an $800bn-a-year remittances market. Many of those workers will not have bank accounts, nor will their families back home. However, they do have mobile phones and banks that exploit this link for financial flows will earn a fortune.

Today, the ubiquitous nature of the mobile phone across the globe and its role as a prime or sometimes sole banking channel in many developing countries has given mobile payments a new lease of life. There are two different types of mobile payment: First is remote payments, where we use the mobile as a device to initiate payments online. In this case, the mobile is an alternative channel to the PC. The other one is what we call proximity payments, where the mobile is used as a payment tool at point-of-sale, using near-field-communications (NFC) technology for contactless payments, where the mobile is replacing plastic cards.

Major role to play
In its dual role for both remote and contactless payments, the mobile can play a significant role in important areas such as cross-border remittances and direct person-to-person payments, as well as new business applications such as mobile ticketing and transport. And, if expatriate workers could send money back home via their mobile phones, the growing remittance market could be transformed. US researcher Celent estimates that the market will officially reach $345bn by 2008 and unofficial estimates are as high as $800bn, a huge market. The all-pervasive mobile phone looks set to be the financial hub of the future.