Who will be the winners and losers in the battle for mobile payments market share?

This paper looks at the potential for mobile payments in emerging markets, the benefits for consumers and merchants, and the business opportunities available to mobile operators, banks and other financial institutions. Today, some 3.5 billion people, mainly in emerging markets around the world, have no access to formal financial services. They exist by using cash, which is well established and simple, but inconvenient, inefficient and often unsafe. In contrast, there are now more than 5 billion mobile connections worldwide. The mobile phone has evolved from a simple device into a mini-computer with the same security capabilities as many PCs. Using mobile phones for financial transactions is clearly an opportunity to bring major benefits to the world’s unbanked population and, since 2003, many mobile banking schemes have been launched. Yet most of these systems are closed, limited to one bank or one operator, dooming them to limited growth and ultimately losing out to the newer, more open mobile payment business model. Mobile payment offers a practical, convenient and easy-to-use alternative to cash that is safe and opens up terrific new possibilities for consumers, from remote purchasing to access to more advanced financial products. The winners in the race for market share of the mobile financial industry will be those promoting open mobile payment schemes.