With everyone from start-ups to serious giants elbowing each other for an advantage in the mobile payments space, the pace of the change is eye watering. The British Banking Association (BBA) has announced that bricks and mortar branches are crumbling faster than they thought, and mobile transactions are soaring.
Users were busy doing 18.6 million transactions a week last year, looking at 457.7 million SMS banking alerts during the year, having downloaded 12.4 million banking apps.
Presumably there are regulatory restrictions on the incumbent banks, who need to address the needs of all banking customers – and therefore keep branches open – which gives the advantage to the challenger banks, as Jonathan Jensen pointed out last week. This is similar to the incumbent telcos, who need to accept payments by any and all means, which keeps their costs artificially high.
And make no mistake the telcos are in there too. Direct Operator Billing is going mainstream in markets where it is applicable, NFC initiatives – much, er, loved, by BillingViews – are not dead yet. And major operators in the States are deserting premium SMS from next year.
And, at the same time, initiatives that the industry thought might be applicable to very specific markets are being rolled out in different markets. M-Pesa, the highly successful mobile money initiative in Kenya and one or two other African countries is appearing in Romania. It seems that the profiles of some European countries is similar to that of African countries – low bank account penetration, lack of infrastructure and high penetration of mobile phones. Presumably this profile fits countries in other regions, so we may well see developments in these regions before long.
With the explosion of innovation, trialling services in different markets and the rise and rise of mobile money, it will be interesting to see who the winners and losers will be. One thing that is certain, though, is that we will be seeing a wave of mergers and acquisitions in the payments and digital money arena – and soon.