The following is a guest blog post by Annie Smith, who heads Mobile Financial Services in the Pacific Region for Digicel.
As readers of this blog, we can appreciate the position mobile money has in a GSM business. Within a small group of operators, exceptional user uptake has inspired nearly 200 live and planned launches. And, in a short time frame, GSM customers now have access to banking services, loans, insurance, international remittance services and much more…. A new industry called Mobile Financial Services has emerged.
We know that mobile money isn’t a ‘one-size-fits-all’ product for users or providers. Unique cultural attributes require significant consideration on creating a service that can address user needs, behaviours and substitutes. Why did M-PESA take off in Kenya then stall in Tanzania before providers settled on an approach suited to that market?
There are no silver bullets but there is a common thread. Many of the live and planned mobile money roll-outs are in emerging and developing markets because these markets have a sweet spot for mobile money; high mobile penetration and low banking penetration. They are the same markets that have seen the fastest GSM adoption, lowest tariffing and most innovative home-grown solutions in the world. So, why have they been left out of the NFC-enabled mobile payments movement?
Wouldn’t contactless payments linked to a mobile money wallet be ideal in markets that have already introduced mobile money wallets? Users in these markets are further along the mobile wallet learning curve and already ‘get it’. Could NFC contactless payments fuel the mobile money ecosystem and make mobile money more relevant to users? With the right technology to offer ubiquitous access, could mobile money users in emerging and developing markets become the fastest adopters of contactless mobile payments?
The Kingdom of Tonga, a small island archipelago in the South Pacific is leading the way by integrating mobile money with NFC contactless payments. Less than a month ago Digicel launched the world’s first integrated NFC and mobile money solution in Nuku’Alofa, Tonga using mobile money technology and Verifone’s mWallet POS solution. Called ‘Beep & Go’, contactless payments are accepted at over 50 diverse merchants in the capital’s Central Business District. User adoption of the service has exceeded expectations and resulted in a queue of merchants wanting to join the Beep & Go acceptance network.
Contactless, mobile wallet-linked payments are posed to challenge a cash and card-based payment culture everywhere. Undoubtedly, mass market access and acceptance will drive forward mobile commerce. As a by-product, this payment solution could feed the mobile money ecosystem and be the mobile money silver bullet we’ve all been seeking.