Why haven’t mobile payment systems achieved broader consumer adoption?
Payments
Asked by Question Bot03/Sep/20141 answer
1 Answer
F
Faisal Khan
Answered 03/Sep/2014
Necessity is the mother of all inventions! Add behaviour change to it and you have the answer.
In the West (eg: US, Canada, UK, etc.) there wasn't a necessity as such to hop on to the mobile platform for payments. Credit/Debit cards were plenty, and ATMs and POS machines all over the place.
Switch to say Bangladesh or Kenya, the ecosystem for payments, is entirely different. In such countries, it was out of necessity that made mobile payments take off.
The mobile phones was ubiquitous to the entire population. Wallets, cash and cards were not. This is one of the prime reasons (necessity) that made mobile payments more acceptable in the developing countries than the West.
If you look at mobile payments on a normalised per Capita basis, I would imagine you would fine higher acceptance, growth and usage rates in developing countries than say in the West.
Reason being, behaviour change. In the West mobile payment are perceived and being pushed at being more convenient. Which in some circles is debatable. They tout the fact, less in your wallet, more secure and fewer cards to carry. So, to a person like me, this definitely seems like a behaviour change, rather than a necessity change.
In Bangladesh, Pakistan or Kenya, most rural vendors will not accept cash (security/tax reasons) or accept credit cards (near zero market), etc. They will however, gladly accept money and/or pay for it, via their mobile. More necessity than behaviour.
Another big reason for their acceptance in developing countries is because Banks and Telcos are part owners /operators os such payment systems. They earn money on each transaction, on each Dollar that enters their eco-system and for each minute or SMS sent over their network. A lot many advertising Dollars have been spent by Telcos and Banks, which have seen encouragement by the Government and regional businesses.
In the US (for example), there is too much competition. Advertising is relatively expensive, customer acquisition even more so. Too many players. Telcos and Banks cannot form a consortium and market this (fear of being hounded by the FCC or some other court over being a monopoly or oligopoly.
In the West (eg: US, Canada, UK, etc.) there wasn't a necessity as such to hop on to the mobile platform for payments. Credit/Debit cards were plenty, and ATMs and POS machines all over the place.
Switch to say Bangladesh or Kenya, the ecosystem for payments, is entirely different. In such countries, it was out of necessity that made mobile payments take off.
The mobile phones was ubiquitous to the entire population. Wallets, cash and cards were not. This is one of the prime reasons (necessity) that made mobile payments more acceptable in the developing countries than the West.
If you look at mobile payments on a normalised per Capita basis, I would imagine you would fine higher acceptance, growth and usage rates in developing countries than say in the West.
Reason being, behaviour change. In the West mobile payment are perceived and being pushed at being more convenient. Which in some circles is debatable. They tout the fact, less in your wallet, more secure and fewer cards to carry. So, to a person like me, this definitely seems like a behaviour change, rather than a necessity change.
In Bangladesh, Pakistan or Kenya, most rural vendors will not accept cash (security/tax reasons) or accept credit cards (near zero market), etc. They will however, gladly accept money and/or pay for it, via their mobile. More necessity than behaviour.
Another big reason for their acceptance in developing countries is because Banks and Telcos are part owners /operators os such payment systems. They earn money on each transaction, on each Dollar that enters their eco-system and for each minute or SMS sent over their network. A lot many advertising Dollars have been spent by Telcos and Banks, which have seen encouragement by the Government and regional businesses.
In the US (for example), there is too much competition. Advertising is relatively expensive, customer acquisition even more so. Too many players. Telcos and Banks cannot form a consortium and market this (fear of being hounded by the FCC or some other court over being a monopoly or oligopoly.