Paym mobile payments latest – analyst view
Enrique Velasco-Castillo, Analyst for Analysys Mason’s Digital Economy research programme, comments:
What does the Paym mobile payments initiative mean for mobile operators?
This is the latest development in a trend whereby other players in the mobile payments ecosystem completely bypass mobile operators and reach customers directly through their own apps (as is the case with Paym, in which users can make money transfers from the mobile banking app provided by their corresponding bank), or through the provision of cloud-based payment mechanisms that do not require a secure element in the SIM (called HCE or Host Card Emulation).
Among the three main mobile payments options – money transfers, purchasing physical goods, and purchasing digital goods—Paym mainly services the money transfer market. Operators still have a direct play in the ‘Purchasing digital goods’ space through direct carrier billing (DCB), in which customers pay for digital goods from their phones and get charged on their mobile phone bill. Purchasing physical goods is now beyond DCB (mainly due to regulation and security reasons) and Paym—but both these techniques can be leveraged for physical goods purchases.
Will mobile payments remain an area of interest to mobile operators in spite of this?
Yes. Analysys Mason’s Digital Economy research shows that 90% of the top 30 global operators by revenue have implemented mobile financial services initiatives across the countries where they operate.
Mobile payments will remain an area of intense activity particularly in emerging markets where operators stand to fulfil a gap that has yet to be met by traditional financial institutions. This is the reason why mobile payments initiatives are especially successful in markets with low financial services penetration and high mobile penetration, and where a significant proportion of the population lives in rural areas where banking infrastructure is not widespread.
In developed countries like the UK, however, a significant proportion of the population has access to ATMs, online and mobile banking, and diverse payment channels. We expect initiatives like Paym to complement these services, rather than overtake them in the medium term.
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