As of October 2012, 26 mobile money services had launched the merchant payments product, whereby a customer can use their mobile money eWallet to pay a retailer for goods or services on the spot. Is there is a meaningful opportunity to use eWallets to pay for goods and services at shops or is this a mobile money use case which will struggle to find customer traction?
At NFC & Mobile Money Summit this debate was taken on by Annie Smith, Head of Mobile Financial Services and mCommerce for Digicel Pacific, Chidi Okpala, Director and Africa Head of Airtel Money at Bharti Airtel International and William Delylle, Director at Greenwich Consulting. The three panelists highlighted opportunities and challenges they have faced in implementing merchant payments, highlighting these key points:
- Opportunity – Merchant payments can be a convenience factor, and expands the ecosystem options of what customers can do with their eWallet. In giving the convenience, merchant payments adds a stickiness factor to the mobile money product.
- Stored value as a prerequisite to merchant payments – Customers cannot be expected to go to one shop, cash in and then go to another shop to pay for goods. Customers need an easy way to fund a wallet; Salary payments can be one such option.
- Merchant acquisition – Merchant acquisition could be a significant challenge. Some MNOs are using inhouse teams but there is a desire to outsource to dedicated merchant acquirers. However, banks who are in the merchant acquiring business for the card industry have found merchant acquisition a loss making or low margin business; Even the card industry is looking for alternative low-cost distribution channels to acquire merchants rather than the direct sales model.
- Business model – pricing proposition for eWallet merchant payments is still under debate.
- Technology - NFC technology is optimal, but not all markets may be ready for this. Companion cards are also being rolled out which can be paired with mPos devices
Video Discussion by Chapter
- Merchant payment overview: Digicel Pacific, Airtel Africa and non-MNO merchant payments
- Do eWallet linked merchant payments offer value to the customer? 09:13
- What approaches could exist for merchant acquisition? 14:52
- Business model for eWallet Merchant Payments 19:49
- Technology choice for eWallet Merchant Payments 21:15