Mobile money has come a long way in a few years. But with each passing month, the ecosystem has only become more complex, with new alliances, partnerships and solutions rolled out almost weekly.
Tuesday’s session on “Moving money” at the Mobile World Congress unfortunately didn’t add much in the way of clarity to the fragmented segment. The speakers did spotlight the huge opportunity, but in terms of moving forward, they only offered sweeping generalities like “we have to do this together”.
Michael Abbott CEO of Isis – the US mobile payment platform supported by AT&T, Verizon and T-Mobile -- explained how the company did almost everything wrong in the earlier stages, before realizing it had to work with the credit card companies and not compete with them and not expect retailers to switch out their point-of-purchase gear.
With consumers’ wallets cluttered with credit cards, loyalty cards and coupons, he said people want to use mobile phones to help simplify there lives.
Isis is an integrated app that can handle multiple credit cards, and consumers can add new a card via a bank website in near real time. Users can pay with their virtual cards, which also link to other banking services. As part of loyalty programs, retailers can deliver coupons directly to a user’s phone.
Abbott said there are now 300 million Isis capable phones, with 60 devices available. The average number of taps per user is six to seven a month. In only 90 days usage is growing 50% a month.
When asked why there aren’t more Isis-like alliances around the world, he said: “It’s hard. It took us 36 months to build alliances, build trust and security. And it can happen only at CEO level, when they understand the needs of consumers.”
He says similar mobility payment platforms will eventually emerge around the world. “It’s coming -- operators will come together.”
Ana Maria Llopis from Dia Supermarkets, said she’s not sure that NFC will be the standard moving forward. “It is in the US, but it’s not certain elsewhere.”
Of course there is demand for an international cross-border mobile payment solution, but Ajit Joshi from Infiniti Retail said additional problems, mostly vitally a regulation, arise as you go cross border.
Turning to the opportunities for digital money, Citigroup CEO Michael Corbat said that today 85% of global consumer transactions are still paper based. So just 15% is digital. To put that in perspective, Citi moves an average of $3 trillion a day in business and intuitional flows, with nearly all of that moved electronically.
“There is clearly a lot of room for improvement and growth.”
A study found that a 10% increase in the adoption of digital money would move $1 trillion worth of off-the-books transactions into the formal economy, with a corresponding $100 billion increase in global tax revenue.
He noted that while some three billion have mobile phones, just two billion have bank accounts. “In markets where banking is not well established, people are going straight to mobile payments, skipping the plastic and branch altogether.”
Citi estimates that a 10% increase in digital usage will bring an additional 220 million people into the banking systems.