Comparing mobile money in emerging and developed markets

Written by Liz Galpin Tuesday, 29 November 2011 10:14
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There is always a need to top-up your mobile wallet. In emerging markets, the ‘cash in’ methods tend to be :
-          Government payments or salaries made directly into mobile accounts
-          Loans paid directly into mobile accounts
-          By visiting the Agent and paying money into the mobile account
In developed economies, if the wallet is linked to a prepaid account, it will usually topped up by making an online transfer from an existing Bank / current account. If the wallet is linked to an existing Bank Account, then salaries have probably been paid into that account, or an online transfer has taken place. It is rare that customers would ever physically visit a Bank or Agent to transfer money.
Direct Debit Payments. To my knowledge, no mobile money system for emerging economies has provided a standing order facility, so that bills can be paid at regular intervals. I also don’t see that mobile wallets in developed countries will provide that facility – it will be assumed that you use your regular current account to do that. But in emerging economies, there is a definite need for regular bill payment, so I’m hoping that this will be introduced as a facility at some stage.

An absolute necessity in developed markets, is the use of contactless technology. We haven’t seen too many successful NFC implementations in emerging markets, but, given that NFC is merely a technology that sits on top of the wallet, there is no reason why NFC won’t become equally as popular in emerging markets, as more smartphones are sold in these countries. All NFC does, is enable the transaction to take place quickly. That same transaction could take place using SMS / a Java app (selecting an option from a menu), USSD or on a PoS device. NFC merely enables a swift and painless communication to be initiated between the mobile phone and the terminal. Because NFC only acts over a very small physical space, the chances of erroneous transactions being processed is highly unlikely (that would not be the case if wi-fi was being used – the transaction could easily be charged to the wrong mobile phone account). In developed markets, we are used to ‘chip and pin’ transactions which are swift, and anything that took longer, or required more effort, would not be well received; hence the need for NFC technology when using your phone to transact. In emerging markets, where people are used to a slightly more time-consuming ‘send money’, ‘buy goods’ or pay bill’ service, NFC readers in stores would definitely be welcomed with open arms for the ‘buy goods’ solution.

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