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Money in Mobile - European Transactions
Frost & Sullivan, Oct 2009, Pages: 63
Mobile Money Transactions Increase in Europe
Both mobile operators and banks are turning to mobile transactions to foster loyalty and drive revenues. Ranging from vouchers and bank balance checks to remittance and top-up payments, mobile money is finally coming to fruition in both the banked and unbanked sector, while near field communication (NFC) promises to be the pot of gold at the end of the rainbow. 'Solutions targeting the developed world require a long-term strategy, even as providers will need to find a viable solution for retail payments (B2C),' notes the analyst. 'NFC is potentially a solution, but hardware costs and mass market availability still remain key challenges for its widespread adoption.' In the meantime, SMS-based services will drive growth.
Much of the success to date has been primarily on servicing the unbanked mobile subscriber. The global ratio of mobile phone users to bank accounts is about 4:1.5. Remittances between specific markets, for example, Philippines-Hong Kong and India-UAE, have also been very popular. Currently, in the developed world, it is about getting users comfortable - such as, for instance, checking balances and portfolio performances. Operators and banks alike are still building consumer trust in terms of transferring money and paying bills over the phone. 'Transaction costs and ease-of-use will drive money transfers and P2P transactions,' adds the analyst. 'The gap between financial institutions and mobile operators is beginning to narrow, but there is still need for greater education both on the supply and demand side.'
Trust, Security and Greater Interoperability to Support Market Expansion
Several trials and small-scale deployments can be seen in key Eastern European markets. The high number of banks in the region foresees interoperability as a key challenge. 'Growth will be driven by high frequency and low-value transactions supported by widespread, cashless transaction systems that are cost-effective and secure,' observes the analyst. 'Increased cross border cooperation will drive the high growing remittance transactions.'
However, five primary concerns remain. These include security issues, the lack of regulation on mobile transactions, quality of service, limited collaboration between different participants and the high cost of solutions. There is great risk in the industry in the context of point solutions, in particular, not being scalable/suitable for wide scale deployments. Success stories to date reveal that no one solution fits all. For instance, M-PESA will not necessarily work in India. Services have to be customised to suit the culture, regulation and competitive landscape of a particular region even as skill sets and distribution requirements will vary. 'Once there is trust, security and greater interoperability, only then will there be growth in proximity transactions and m-commerce,' concludes the analyst.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following application sectors in this research:
- Non-NFC based m-payments
- Mobile banking
- Remittance
- NFC based m-payments
Technologies
The following technologies are covered in this research:
- NFC
- Barcodes
- SMS
- GSM
This Frost & Sullivan research service titled Money in Mobile - European Transactions focuses on mobile money in Europe, looking at both the banked and unbanked segments. This research segments mobile money into four areas, namely: non-NFC based m-payments, mobile banking, remittance and, NFC based m-payments. The research examines various mobile money platforms, solutions, services and alliances that are available currently. Various challenges and restraints are compared alongside significant market opportunities. Based on this, a forecast of the Western European market opportunity is presented.
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