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Home > Market Research > Mobile Content & Apps > Mobile Payments and Banking: Worldwide Market Analysis, Strategic Outlook & Forecasts to 2013
Mobile Payments and Banking analyses the prospects for growth of the mobile payments and banking market, examining the economic, technological and strategic drivers and constraints to overall market development, while analysing individual services markets in depth, utilising a number of detailed case studies to illustrate different strategies adopted by the key players – MNOs, banks and credit card companies, merchants and system vendors.
Key Coverage
The major industry analysis covered within the Mobile Payments and Banking includes:
Remote mPayments - the purchase of digital or physical goods and services via the mobile phone while the subscriber is not present at the point of purchase.
Local mPayments - purchases made at a ‘Bricks & Mortar’ retailer or service provider made while the subscriber is physically present at or near the point of sale, using the mobile payment mechanism as an alternative to cash or ‘plastic’ (credit or debit cards). Typically local mPayments employ the use of a Point of Sale (PoS) terminal, and the majority of these applications are likely to employ short-range radio or ‘contactless’ technologies, often referred to as Near Field Communications(NFC) technologies.
mBanking Services - messaging services to provide notifications and information regarding the subscriber’s account, and mobile access to standard on-line banking services such as credit transfers between accounts, paying bills and selling/buying stock.
mTransfer Services - the movement of money or value from person-to-person (P2P) via the mobile phone. The funds are moved between either an account on the phone in an m-Wallet or on a linked credit or debit card. The funds can then be used to pay for airtime, for goods or services or redeemed for cash at physical sites. Currently, the majority of these services are utilised for P2P transfers in domestic markets, but there are tremendous opportunities and developments in providing international P2P transfers (remittance).
forecasts
Global Forecasts to 2013:
- Mobile data subscribers by region
- mPayment subscribers by region
- mPayments subscribers by service type
- Number of mPayment transactions by region
- Number of mPayments transactions by service type
- Transaction value of mPayments by region
- Transaction value of mPayments by service type
- Service revenues from mPayments by region
- Service revenues from mobile payments by service type
Regional Forecasts to 2013:
- mPayments subscribers by service
- Average number of mPayments transactions per subscriber by service type
- Total number of mPayments transactions by service type
- Average value per mPayment transaction by service type
- Total value of mPayments transactions by service type
- Service revenues from mobile payments by service type
Key issues addressed in this edition
- How is the mobile payments and banking market segmented?
- What are the key mobile payment and mobile banking services, and what are the key technologies behind them?
- What are the key social/cultural, economic, technological and strategic drivers and barriers to growth of this market?
- What recent market and technical developments have taken place in this market, and what implications do they have for its future potential?
- Who are the key players in the mobile payments and banking ecosystem?
- What relationships do these players have and how might those relationships change?
- Where are the biggest opportunities for the key players, and what strategies should they adopt to exploit them?
- How large is this market today, and how fast will it grow in the near future?
- Which service types and geographic regions will see fastest growth, and which offer greatest potential for revenues and profits for the different players?
Countries / Sectors / Companies Covered
Mobile Payments and Banking report covers the global market including the following main geographic areas. It also includes in-depth analysis and forecasts on key countries within these regions.
- Europe
- North America
- Latin America
- Asia Pacific
- Middle East & Africa
See also:
'The Future of Payments: Prepaid cards, contactless and mobile pa' Market Study by Business Insights: published April 2008
'The Future of Payments: Prepaid cards, contactless and mobile payments ' Market Study by Business Insights: published April 2008
'Mobile Payments and Banking: Worldwide Market Analysis, Strategic Outlook & Forecasts to 2013 :: Inf' Market Study by Informa Telecoms and Media: ...
'Berg Insight's Mobile Banking and Payments market research report' Market Study by Berg Insight: published March 2009
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Table of Contents
E X E C U T I V E S U M M A R Y 1
Defining the mobile payments market 2
Figure 1.1: Segmentation of the mobile payments market . 3
mPayments and mBanking business models 3
Figure 1.2: The spectrum of remote mPayment business models 4
MNO-centric (virtual bank) 4
MNO-led partnership 4
Third party-led 4
Bank-led partnership 5
Bank-centric (MVNO) . 5
Market drivers and barriers 5
Figure 1.3: mPayment and mBanking Market Drivers and Barriers 6
The remote mPayments market 6
Remote mPayments in the mobile digital content market . 6
Remote mPayments in the physical goods and services market 7
The business case for remote mPayments 8
The local (NFC) mPayments market 9
Key issues remain to be resolved . 9
Trials show promise 10
The business case is still uncertain . 10
The mBanking market 12
Regulation is key to the mBanking (and mPayment) market . 13
mBanking slow to take-off in the developed world… 13
… but shows greater promise in the developing world 14
The mBanking business case 14
The mobile money transfer (MMT) market 15
Domestic MMT in the developing world 16
Domestic MMT in the developed world 16
International MMT 16
The business case for MMT . 17
Global forecasts and market outlook 18
Global mPayments and mBanking subscribers . 19
Figure 1.4: Global mPayments and mBanking users, by service type, 2008-2013 . 19
Global mPayments and mBanking gross transaction value 19
Figure 1.5: Global mPayment and mBanking gross transaction value, by service, 2008-2013 . 20
Figure 1.6: Global mPayment and mBanking gross transaction value, by region, 2008-2013 . 20
Global mPayments and mBanking service revenues . 21
Figure 1.7: Global mPayment and mBanking service revenues, by service, 2008-2013 21
C H A P T E R 2
M A R K E T O V E R V I E W . 23
Defining the mobile payments market . 24
Figure 2.1: Segmentation of the mobile payments market 24
Remote mPayments . 26
III
Contents
IV
Mobile digital content purchases 26
Physical goods and services purchases . 27
Local mPayments 28
Contactless or NFC payments 29
mBanking 29
Information-based mBanking services 30
Transaction-based mBanking services 30
Branchless banking 30
mMoney transfer 31
Domestic mMoney transfer . 31
International mMoney transfer (international remittance) 31
The mPayments and mBanking ecosystem and business models 32
The ecosystem 33
Figure 2.2: The mPayments and mBanking ecosystem 33
Consumers . 33
Merchants . 34
Banks 34
Payment networks . 35
Mobile network operators 35
Trusted service managers 36
Internet players 36
Mobile application service providers and solutions providers . 36
Mobile handset vendors . 36
POS terminal vendors 37
Chipset vendors 37
The banking value chain and business model 37
Figure 2.3: The banking value chain 38
Credit card value chain and business model . 38
Figure 2.4: The credit card value chain . 39
The mPayments value chain and business model 39
Figure 2.5: The mPayments value chain 40
mPayment and mBanking technologies 40
Figure 2.6: Bank channel architecture and mPayment technologies 41
Server-side applications 41
SMS (Short Messaging Service) . 41
USSD (Unstructured Supplementary Service Data) 42
WAP 42
IVR . 42
Client-side applications . 43
SIM Application Toolkit . 43
Java ME 43
Security technologies 44
Bearer-only encryption 44
End-to-end encryption 44
Terminal security 44
Market drivers and barriers 45
Figure 2.7: mPayment Market Drivers and Barriers . 45
Market drivers and enablers . 46
Ubiquity and versatility of the mobile phone 46
Poor access to financial services in developing markets . 47
Figure 2.8: Proportion of households with access to a financial institution 47
High service charges for banking and remittance services 48
Socio-economic benefits 48
Quicker ROI and new revenue streams 48
Opex savings and reduced churn 49
Market barriers . 50
Poor user experience and security fears . 50
Disproportionate regulation . 51
Distrust and uncertainty between players in the value chain . 52
Delays in technology availability and standardization 53
Credit crunch 53
Current market status and future prospects 54
Market status and key market trends 54
Remote mPayments . 54
Local or proximity mPayments 55
Mobile banking . 55
Mobile funds transfer 56
Regional trends . 57
Figure 2.9: mPayments development cycle 58
Growth potential for the mPayments and mBanking market 58
Figure 2.10: Global mPayments and mBanking users by service type, 2008-2013 59
Figure 2.11: Global mPayments and mBanking, gross transaction value by service, 2008-2013 60
Figure 2.12: Global mPayments and mBanking service revenues, by service, 2008-2013 . 60
C H A P T E R 3
R E M O T E M - P AY M E N T S 61
Market developments in remote mPayments . 61
Remote mPayments in the mobile digital content market 61
Premium SMS coming under pressure 62
Direct-to-bill/WAP billing addresses PSMS’s weaknesses . 62
Simpay – a short, and painful, history lesson 64
Figure 3.1: Simpay chronology 64
Payforit demonstrates industry wide nationally-based initiatives can work 64
Remote mPayments in the physical goods and services market 65
Mobile prepay account recharging – the dominant application for remote mPayments 66
Figure 3.2: Recharge Brazil . 67
Mobile ticketing – the fastest growing application for remote mPayments 68
Figure 3.3: Bar-code ‘symbologies’ for mobile 69
Mixed fortunes for mobile ticketing . 69
Mobile ticketing for public transport 70
Mobile ticketing for parking . 71
Mobile ticketing for airlines . 72
Figure 3.4: Mobiqa’s ‘Mobi-Pass for Airlines’ mobile boarding pass 72
Mobile ticketing for live events . 73
Mobile retailing . 74
Slow growth due to change as a result of innovation from new entrants . 74
Overlap between remote and local mPayments 74
Mobile phones used to authenticate online purchases 75
Mobile phones also used to initiate and authorize bill payments . 75
Independent e-Money issuers push the mobile wallet concept in Europe . 76
Elsewhere independent payments brokers are partnering with banks and mobile operators 78
Internet giants enter the remote mPayments market too . 79
Figure 3.5: PayPal Mobile ‘Text 2 Buy’ . 80
Figure 3.6: Google Checkout for Mobile . 82
Figure 3.7: Amazon’s TextBuyIt service 83
Business models and the business case for remote mPayments 83
For mobile digital content 83
For physical goods and services 84
Figure 3.8: The spectrum of remote mPayment business models 85
Business models 85
Figure 3.9: Examples of remote mPayment business models 87
Premium SMS business model held back early remote mPayments services 87
Sharing transaction fees will be a key driver for the remote mPayments business case 87
Figure 3.10: Payments processing fees across the value chain . 89
Remote mPayment case studies 89
Payforit . 90
Company overview and strategy 90
Service offering . 90
Figure 3.11: Payforit mobile payment framework 91
Strategic analysis 92
Mobilkom Austria/Paybox 93
Company overview and strategy . 93
Figure 3.12: Paybox payments platform . 94
mPayments service offering . 94
Strategic analysis 95
mChek . 96
Company overview and strategy . 96
mPayments service offering . 96
Strategic analysis 97
Luup 99
Company overview and strategy . 99
mPayments service offering 100
Strategic analysis . 101
Critical success factors for remote mPayments . 102
Consumer and merchant awareness and trust . 102
Simple activation/registration process . 103
Secure and reliable solutions 103
Standardization and interoperability 104
Figure 3.13: The impact of interoperability on market penetration . 104
Fair and equitable business models 105
Adopt an integrated, portfolio service approach 105
C H A P T E R 4
L O C A L M O B I L E ( N F C ) P AY M E N T S 107
Note on EMV 108
Contactless payments and NFC 108
NFC applications 108
NFC technologies . 109
ISO-compliant contactless smart cards 109
RFID token-based solutions 109
Sony FeliCa smart card technology . 109
Figure 4.1: Sony FeliCa 110
MIFARE 110
Near Field Communications (NFC) . 110
Contactless POS infrastructure 111
Visa payWave . 112
Figure 4.2: International symbol for contactless payments 112
MasterCard’s PayPass . 113
American Express’ ExpressPay . 113
Market developments in mobile NFC . 114
Figure 4.3: Mobile NFC in action . 114
Industry fora are driving the mobile NFC market 115
The GSMA’s Pay-Buy-Mobile initiative 115
The Mobile Payments (Mobey) Forum 117
Key issues remain to be resolved in the mobile NFC ecosystem . 117
The location and control of the secure element . 118
Figure 4.4: Options for the secure element location in mobile NFC phones 118
The role of the Trusted Service Manager 120
Figure 4.5: The position and role of the TSM in the mobile NFC value chain 121
NFC handset availability 121
Market reaction to mobile NFC . 122
Figure 4.6: Results from Informa’s mPayments market research . 123
Additional opportunities for mobile NFC beyond mPayments 123
Mobile NFC and marketing/promotions: smart posters 123
Mobile NFC and MMT 124
Regional developments and trials in mobile NFC 125
Japan . 125
South Korea 127
Elsewhere in Asia . 128
Europe 129
North America . 130
NFC business models and business case 131
Potential business models for mobile NFC . 131
Figure 4.7: The spectrum of potential mobile NFC business models . 132
MNO-centric (proprietary NFC infrastructure) 132
MNO-led partnership 133
Figure 4.8: NFC mobile business model: MNO-led partnership 133
Third party-led partnership 133
Figure 4.9: NFC mobile business model: third party-led partnership 133
Bank-led partnership . 134
Figure 4.10: NFC mobile business model: bank-led partnership 134
VII
Bank-centric (MVNO) 134
The mobile NFC business case . 134
For mobile operators 135
For banks 137
For merchants . 139
Mobile NFC case studies 140
NTT DoCoMo’s Osaifu-Keitai mobile wallet service, Japan 140
Company overview and strategy 140
Mobile NFC service offering 141
Figure 4.11: Osaifu-Keitai services 142
Strategic analysis . 143
Figure 4.12: Uptake of Osaifu-Keitai . 143
Payez Mobile Trial, Pegasus Group, France . 144
Company overview and strategy 144
Trial implementation 145
Figure 4.13: Payez Mobile transaction process . 146
Trial results 146
Strategic analysis 147
Beep N Go trial, Far EasTone, Taiwan 147
Company overview and strategy 147
Trial implementation 148
Figure 4.14: Beep N Go logo and promotional material used at POS 148
Trial results 149
Figure 4.15: The Beep N Go service in action . 149
Strategic analysis . 150
O2 Wallet trial, UK . 150
Company overview and strategy 150
Trial implementation 151
Trial results 152
Figure 4.16: Topping up Oyster on a mobile at an Oyster ticket machine 152
Figure 4.17: Using a mobile to make a cashless payment 153
Strategic analysis . 153
Critical success factors for mobile NFC . 155
Early availability and broad range of NFC-enabled handsets 155
Rapid development of NFC-enabled POS infrastructure . 155
Realistic value proposition for merchant and consumer . 156
Standardization and interoperability 156
Collaboration not competition . 157
C H A P T E R 5
M - B A N K I N G 159
The mBanking service portfolio 160
Information-based services 160
Transaction-based services 161
mBanking service delivery and vendor solutions 162
mPayments and mBanking solutions providers . 163
Figure 5.1: mPayments and mBanking platform vendors 164
Regulation 165
Figure 5.2: Regulatory burden for mobile network operators in mBanking 165
VIII
Anti-money laundering (AML) and combating of financing of terrorism (CFT) 166
Issuance and deposit taking 166
eMoney 167
Payments regulation 167
Cash-in/cash-out and the use of agents 168
mBanking in the developed world 168
Conflicting evidence on the consumer appeal of mBanking . 169
mBanking in Europe 170
Figure 5.3: UK: interoperability of Monilink . 171
mBanking in the US 172
Figure 5.4: Verizon’s Mobile Banking service 174
mBanking in Asia’s developed markets . 175
mBanking in the developing world – branchless banking . 176
Banking the ‘unbanked’ 176
Figure 5.5: Selected countries, penetration of mobile phones and bank accounts, 2007 177
Mobile operator-led not bank-led 178
Government intervention – a necessary evil? 180
mBanking in Africa 182
Figure 5.6: Africa: the market opportunity for mBanking . 182
mBanking in the Philippines 184
mBanking in India . 184
mBanking in China 186
mBanking in Latin America 187
Microfinance and mBanking 187
Banking services vs. payment services . 188
Open vs. closed agent networks 189
Encourage banks to participate 189
Microfinance and mBanking in practice 190
The future of branchless banking 191
Business models and the business case for mBanking 191
Figure 5.7: The spectrum of mBanking business models . 192
The different business models . 192
Mobile operator (MNO)-centric (virtual bank) 192
Mobile operator (MNO)-led partnership . 192
Third party-led 193
Third party-enabled 193
Bank-led partnership . 193
Bank-centric (MVNO) . 194
Comparison of selected mBanking services 194
Figure 5.8: Comparison of selected mBanking services 195
The mBanking business case 196
For mobile operators 196
Figure 5.9: Transaction profile for WIZZIT customers, per month 196
For banks 197
For third parties 198
mBanking case studies 198
Safaricom’s M-Pesa, Kenya 198
Company overview and strategy 198
Service offering 199
Figure 5.10: M-Pesa tariffs 200
Figure 5.11: The M-Pesa transaction system 201
Figure 5.12: The roles of M-Pesa agents 202
Strategic analysis . 202
WIZZIT, South Africa 203
Company overview and strategy 204
Service offering 205
Figure 5.13: WIZZIT mBanking charges 206
Strategic analysis . 206
FNB’s Cellphone Banking, South Africa . 208
Company overview and strategy 208
Service offering 208
Strategic analysis . 209
Figure 5.14: Transaction volume and value for FNB’s Cellphone Banking service 210
ICICI Bank’s iMobile, India 210
Company overview and strategy 211
Service offering 211
Figure 5.15: Example user interface for ICICI Bank’s iMobile service 212
Strategic analysis 213
Critical success factors for mBanking 213
Offer a compelling consumer value proposition . 213
Build partnerships, not competitors, in the mBanking ecosystem 215
Enable interoperability to widen access 216
Deploy secure, scalable and reliable mBanking platforms . 216
Develop regulation that is specific, proportionate and risk-based 217
C H A P T E R 6
M O B I L E M O N E Y T R A N S F E R . 219
Market developments 220
Domestic MMT in the developing world . 220
Mobile airtime used as a proxy for cash 220
Airtime recharge systems to be used for money transfers 221
Purpose-built MMT 222
Figure 6.1: Typical elements required in an mPayments and mBanking solution 223
Regulators control market evolution 223
Domestic MMT in the developed world . 224
International MMT . 225
The global remittance market . 225
Figure 6.2: Financial flows to developing countries, 1988-2003 226
Figure 6.3: Global: top 10 remittance receiving and sending countries in 2006 . 227
Figure 6.4: Fee charged for funds transfer from the US to selected countries for an average remittance
value of US$200, 2008 227
Figure 6.5: UK, remittance fees charged by banks and MTOs . 228
The international MMT opportunity . 228
The GSMA’s Mobile Money Transfer project . 230
Figure 6.6: The GSMA’s view of the opportunity for international MMT 231
Encouraging deployment of global hubs for international MMT . 231
Managing the proliferation of MMT platform vendors 232
Providing mobile wallet platform for MMT trials 233
International MMT in the developing world . 233
International MMT is already a reality . 233
International operator groups home in on MMT 234
International MMT in the developed world 234
Card-based remittance services will precede MMT . 235
The business case for MMT 237
For mobile operators 237
For banks . 237
MMT case studies . 238
OboPay, US 238
Company overview and strategy 238
Service offering 238
Strategic analysis . 239
Smart Money – Smart Communications, Philippines 240
Company overview and strategy 240
Service offering 241
Figure 6.7: Smart’s MBS User Interface and Smart Money Prepaid MasterCard 242
Strategic analysis 244
G-Cash – Globe Telecom, Philippines 245
Company overview and strategy 245
Service offering 246
Figure 6.8: Money Transfer and cash-in and cash-out services of G-Cash 247
Strategic analysis . 247
Western Union . 248
Company overview and strategy 248
Service offering 249
Figure 6.9: Western Union’s MMT gateway 250
Figure 6.10: Western Union’s MMT gateway service: Phase 1 commercial trial partners (announced) 250
Strategic analysis . 251
Critical success factors for mobile money transfer . 252
Simple to use and a value proposition for the consumer 252
Effective cash-in/cash-out channels at both ends of the remittance corridor 252
Risk-based and proportionate regulation 253
Interoperability and collaboration to enable international MMT . 253
C H A P T E R 7
F O R E C A S T S A N D M A R K E T O U T L O O K 255
Forecast methodology . 257
Global mobile subscriber forecasts 258
Figure 7.1: Global mobile subscribers, by region, 2008-2013 258
Figure 7.2: Global mobile data subscribers, by region, 2008-2013 . 259
Figure 7.3: Global mobile data subscribers, by regional market share, 2008-2013 259
Forecasts for mobile payments and banking 259
Global mPayments and mBanking subscriber forecasts . 260
Figure 7.4: Global mPayments and mBanking users, by service type, 2008-2013 260
Global mPayments and mBanking transaction forecasts 261
Figure 7.5: Global mPayment and mBanking transactions, by service, 2008-2013 261
Figure 7.6: Global mPayment and mBanking transactions, by region, 2008-2013 262
Gross transaction value 263
Figure 7.7: Global mPayment and mBanking gross transaction value, by service, 2008-2013 263
Figure 7.8: Global mPayment and mBanking gross transaction value, by region, 2008-2013 264
Global mPayments and mBanking service revenue forecasts 265
Figure 7.9: Global mPayment and mBanking service revenues, by service, 2008-2013 265
Figure 7.10: Global mPayment and mBanking service revenues, by region, 2008-2013 . 266
Remote mPayments forecasts . 266
Remote mPayments for mobile digital content . 266
Figure 7.11: Global remote mPayment transactions for mobile digital content,
by region, 2008-2013 . 268
Figure 7.12: Global remote mPayment service revenues for mobile digital content,
by region, 2008-2013 . 269
Remote mPayments for physical goods and services 269
Figure 7.13: Global remote mPayment users for physical goods and services,
by region, 2008-2013 . 270
Figure 7.14: Global remote mPayment transactions for physical goods and services,
by region, 2008-2013 . 272
Figure 7.15: Global remote mPayment gross transaction value for physical goods and services,
by region, 2008-2013 . 273
Figure 7.16: Global remote mPayment service revenues for physical goods and services,
by region, 2008-2013 . 274
Local (NFC) mPayments forecasts . 274
Figure 7.17: Global mobile NFC handset shipments, by region, 2008-2013 275
Figure 7.18: Global local (NFC) mPayments users, by region, 2008-2013 276
Figure 7.19: Global local (NFC) mPayments transactions, by region, 2008-2013 277
Figure 7.20: Global local (NFC) mPayments gross transaction value, by region, 2008-2013 . 278
Figure 7.21: Global local (NFC) mPayments service revenues, by region, 2008-2013 279
mBanking forecasts 279
Figure 7.22: Global mBanking users, by region, 2008-2013 280
Figure 7.23: Global mBanking transactions, by region, 2008-2013 . 281
Figure 7.24: Global mBanking service revenues, by region, 2008-2013 . 282
Mobile money transfer forecasts 283
Domestic MMT 283
Figure 7.25: Global domestic MMT users, by region, 2008-2013 284
Figure 7.26: Global domestic MMT transactions, by region, 2008-2013 285
Figure 7.27: Global domestic MMT gross transaction value, by region, 2008-2013 . 286
Figure 7.28: Global domestic MMT service revenues, by region, 2008-2013 287
International MMT . 287
Figure 7.29: Global international MMT users, by region, 2008-2013 . 288
Figure 7.30: Global international MMT transactions, by region, 2008-2013 289
Figure 7.31: Global international MMT gross transaction value, by region, 2008-2013 290
Figure 7.32: Global international MMT service revenues, by region, 2008-2013 291
For full details, please email keithw@cmsinfo.com
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