Mobile payments competing with cards, checks

MANILA, Philippines - Mobile payments will make up 15 percent of all cashless transactions globally, reducing further the use of checks and plastic money or credit cards.

The World Payments Report 2011 also indicated that mobile payments would grow globally from 4.6 billion to 15.3 billion transactions between 2010 and 2013 – at a rate of 48.8 percent per year.

The Royal Bank of Scotland, the European Financial Management Association (EFMA), and Capgemini are the co-authors of the payments report.

The non-profit EFMA encourages research and disseminates knowledge about decision-making in all areas of finance, and is made up of academics, practitioners and students from Europe and the rest of the world interested in the practice of sound financial management techniques. Operating in 40 countries but headquartered in Paris, France, Capgemini is a global consulting firm that emphasizes people-centered approaches through technology.

The World Payments Report 2011 further reported that cards remain the preferred method of non-cash payments, with a market share of more than 40 percent in most markets. In contrast, check usage around the world accounted for just 16 percent of all non-cash transactions in 2009, and it is expected to shrink on an annual basis.

According to the research firm Gartner, in just one year the value of payments made via mobile devices worldwide has increased 75.9 percent, or from $48.9 billion in 2010 to $86.1 billion in 2011.

The total value of the mobile payments market is forecast to reach $670 billion by 2015.

In fact, three million impoverished people living in Africa and South Asia will gain access to a cashless banking experience, with the help of the United Nations Development Programme (UNDP).

United Kingdom-based technology firm Movirtu’s commitment to support the Business Call to Action (BCtA), a global initiative supported by UNDP and other international organizations, aims to encourage private sector efforts to fight poverty.

Instead of sharing a phone number with family members or neighbors, those provided with a Movirtu cloud phone number will be able to use any mobile phone to log in with their own unique number to make and receive individual calls and access critical information and services such as banking or agriculture support.

Movirtu plans to bring the phone technology to at least 12 markets in Africa and South Asia by early 2013, giving at least 50 million people in both continents access to the technology.

In the Philippines, basic mobile phone banking services among the rural banks is valued at P12 billion ($250 million) in the past five years. Data from thrift and commercial banks are still unavailable.

Meanwhile, Capgemini said the entry of the US market to the mobile payment bandwagon would be a critical factor.

Capgemini banking principal Deborah Baxley reported that 2011 is the breakthrough year of the US market for mobile payments.

Reports show that Google launched its electronic wallet, made available on the Sprint Nexus S 4G phone. Initially, the Google Wallet app will let consumers pay by tapping their Citi MasterCard account, but the service will soon support Visa, Discover and American Express.

Isis, a mobile payment joint venture formed by AT&T,T-Mobile and Verizon, announced in July that Visa, MasterCard, Discover and American Express are backing the venture. Isis will get its first big trial during the first half of 2012 in Salt Lake City. Visa and other companies are scrambling to get their digital wallets to market and industry experts expect Apple to announce something soon.

Meanwhile, in a conference held in Nairobi, Kenya led by the MMT Global Gateway, it was surmised that mobile payment market for goods and services, excluding contactless NFC transactions and money transfers, is expected to exceed $300 billion globally by 2013.

The combined market for all types of mobile payments is expected to reach more than $600-billion globally by 2013.

Mobile money participants agreed that whether it is in the fields, or buying the most expensive airline ticket, designers cloth or a simple newspaper on the streets, mobile money presents itself as a the wild card of economics. The conference participants were mobile money pioneers of global mobile giants such as Safaricom, Zain, MTN, Orange and Orascom.