Tag Archive for "m-Wallet" tag

We hear a lot in the press about NFC, mobile commerce, mobile banking, m-wallets,  m-this and m-that. It can become confusing to contextualize the mobile business opportunities, their challenges and the players involved. The main aim of this blog is to simplify the stream of information and try hard to turn it into intelligence that can be used as simple background for those interested or potentially to help make informed business decisions.

Where to begin ?  Let’s start with Mobile Financial Services (”MFS”). These are simply financial products and services which are delivered, made available or enabled through the mobile channel. MFS as a whole includes pretty much anything you can already do through other channels, such as performing banking functions, buying things from merchants, paying bills, etc.  Inside MFS we have several moving parts which affect  how, where and when these services can be delivered. First the how.

MFS: How?

When we say ‘wireless’ are we referring to SMS? USSD? GPRS/EDGE/UMTS/HSPA?  WiFi?  WiMax ? UWB? LTE? Bluetooth? NFC? - and there are plenty more.  The answer is YES to all of them (more on each later).  Any series of signals traveling along any band of wireless spectrum should be considered wireless. And what about ‘mobile’ ?  Here we’re proposing a mobile device is one which is not fixed (!).  This could be a laptop, a big screen TV or a mobile phone. It would not include a building, but would include a car. This way we keep things simple. After all, if after a hard day working on my PC I may want to do my online banking on the TV. I should not be restricted by wires to do this. Concerning the technology needed to deliver MFS, we will split this into three segments :

1. The service provider’s software, hardware and integration with third parties as needed
2. The specific wireless type or types supported to deliver the service from provider to consumer
3. The end-user’s mobile device and supported technology

We’ll focus our efforts mainly on (3), as that is often the ‘variable’ piece of the technology jigsaw puzzle and turns out to also be the most challenging in delivering solutions.

MFS: Where?

Where can financial services be delivered to mobile devices ?  One answer of course might be “Any country where people have mobile phones”.  And this would only be partly right. For financial services to be available in this way we certainly need a wireless carrier (a Mobile Network Operator, MNO) but we also need one or more banks, and importantly wide availability of agents/retailers/financial institutions where cash can be put in or taken out of the solution network. Without fairly easy access to your store of money any potential solution will be destined for very low adoption. Geographies particularly suitable for these services are those which are largely rural and have a large unbanked population, and those countries where bank regulation permits the MNOs to act on their behalf to reach the consumer via their mobile phone.  The MNO agents often also act as the ‘retail bank’.

MFS: When?

The When? can be partly answered by the countries with the most need such as those described above in the Where? section. In richer countries where consumers have a wider access to alternative bank service channels such as online through their computers or ubiquitous physical bank retail locations, mobile delivery is not so important and its immediacy beneficial only to those financial services which require instant attention, of which there are few. Developing markets, emerging markets and developed markets would then be the typical order for the When?  Perhaps a better definition of When? might be when the mobile service will achieve a certain percentage of total service transactions, since the services will be available on the mobile phone long before they’re actually used in most markets.