Mobile payments on the rise in developing world - survey

The survey shows that 57 percent of companies in this domain are confident that the advanced payments industry will register strong growth in 2008/09. The main causes for this process are the increasing sophistication and cost effectiveness of the technology involved. In this context, mobile phones are expected to be the next big development in payments technology. A key battleground for the industry are the emerging markets. Most respondents have mentioned Middle East, Asia and Central/Eastern Europe as most critical for their growth and Asia is considered by 64 percent of pollsters a key market for the future. This is due to the fact that emerging markets, such as bank branches, usually have less developed traditional payments infrastructures in place and this is why they have a stronger tendency to adopt a new technology. Industry players in emerging markets are particularly attracted by cross border remittances, implying transferring money across state borders. Mobile phones are useful devices when it comes to increasing reach and reducing costs. Developed countries will compete for the most compelling contactless card payments services and mobile banking systems. The evolution of contactless mobile payments will be slower, as they require collaboration between banks and telecom operators. According to the survey, other challenges that the industry will face include stimulating customer demand, almost 64 percent of respondents considering this a primary challenge. Another obstacle is finding a workable business model for many parties aiming to launch the service on the market.Because of announcements on new propositions and trials, often launched by new non-traditional players, this market becomes difficult to assess at present. The report also refers to the diversity of new players in this industry, including the Slovenian company Margento which offers a mobile payment system that requires no software or hardware change to the handset, and the Norwegian company LUUP that enables customers to pay, send and receive money via their mobile phones including international and domestic money transfers. The survey was conducted by management consultancy firm Oliver Wyman.