Mobile payments for everyone

The world is in digitalisation overdrive. It is already normal to roam around without cash and still be able to make all our payments. Without having to make that cumbersome stop at an ATM, you can now do so much more than you ever could, courtesy of e-wallets that facilitate mobile payments like over-the-counter and online transactions, bill payments, airtime top-ups and mobile recharges. 

The mobile market has seen exponential growth in the last few years. According to a GSMA report, there are 3.6 billion (47% of the world’s population) mobile Internet subscribers at the end of 2018. Smartphones account for 60% of these connections and 64% of smartphone users have performed some sort of mobile payments in the same year. 

According to a 2019 Global Market Insights report, the mobile wallet market is expected to grow from over US$100 billion in 2017 to US$250 billion by 2024. Faster connection and better security features have contributed to this growth.

But as is often the case, there remains a number of caveats which we will discuss in detail in future articles. For now, let’s scratch the surface. 

Firstly, New York-based e-wallet firm Global Acceptance Transaction Engine, in its report on mobile wallet and mobile payment usage globally, noted that “fraud reduction and compliance regulations, which vary from country to country, play a role in the creation of new payment mechanisms”.

What this means is that the mobile wallet ecosystem, in its current iteration, is very fragmented. This often forces service providers to come up with new payment systems. Inevitably, the convolution of mobile payments continues.  Hence, promoting seamless cross-wallet collaborations, where there exists a middle person to link party A to B, to boost user experience and adoption rate seems the next best thing to do. Mobile wallet providers and fintech firms would do well to watch this space.

Secondly, as 5G becomes a reality (despite the controversies) and promises mind-blowing network performance upgrades, concerns remain. The GSMA report highlights a particularly riveting point. Should governments and authorities “allow mobile operators to roll out 5G more quickly and broadly, or wait until operators can justify 5G deployment under current regulatory conditions?” The latter, the report argues, risks holding back digital advancement.

Our argument is more straightforward. Regulators and service providers should act in tandem as enablers, not disruptors, of mobile payments.

The advantages of mobile payments are aplenty. Digital payments help users track their expenses. Discounts and cashback offers by mobile wallet providers mean more savings compared to paying with cash. There are a lot of mobile users, and based on these compelling advantages, the number is only going up. 

The world’s authorities and wallet developers should focus on making mobile transactions easier and faster wherever one is, and across all regions that currently have different wallet options, payment mechanisms and regulatory limitations.

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