After years of hype, the mobile commerce bandwagon may have just rolled into town. And if projections are anything to go by, the days of the traditional wallet might be numbered, writes MUSTAPHA ZAOUINI, CEO of PayU.
The global mobile wallet market is projected to grow at an annual compounded growth rate of 36.8% over the next four years, according to research by RNR Market Research.
Additionally, Statista predicts that the global mobile payment transaction volume is expected to reach US$721 billion in 2017, up from US$235 billion in 2013.
Paypal, the leading provider of wallet services, now has circa 162 million active wallets.
A further look at mobile money growth from around the world reveals the fruits of unprecedented user engagement and device proliferation.
A 2014 report by Hamburg based yStats.com revealed that in China, where more than 200 million people already use mobile payments, third-party mobile payments grew by 800% last year and are forecasted to more than double this year. Meanwhile, USA mobile payments are growing at three-digit percentage rates.
Banking apps in the U.K. were used 10.5 million times a day across the country in March, surpassing the 9.6 million daily log-ins to internet banking services, according to data from the British Bankers’ Association.
Impressive numbers, but will South Africans be as keen to replace their physical wallets?
In my view, current local market factors support mobile wallet adoption. The mobile phone user adoption curve is at a point where we have a sufficiently large group of consumers in SA who are comfortable with making payments online, as well as enough mobile devices to make the mobile wallet service viable. However, the value proposition must be relevant to both the consumer and merchant, both online and offline.
The high rate of mobile phone users in South Africa – approximately 59 million according to Wikipedia – suggests that user education is not a barrier. This is further supported by a 2015 World Wide Worx survey that found internet browsing via phones to be at 40% in South Africa.
Moreover, we have seen that payment infrastructure is improving and a sufficient density of wallet pay points has been reached thanks to incumbent Wallet initiatives acting as enablers of point of sale devices.
Homegrown wallet offerings like Snapscan, Zapper, Flickpay and eWallet are gaining momentum despite the backdrop of modest e-commerce growth.
FNB’s mobile wallet is an example of banks looking to ensure that they scale through low cost access channels to serve the under and un-banked customers with higher profitability. A key focus for wallet providers will be on the seven million people in South Africa who earn salaries but do not have their own bank accounts, according to Vodacom’s estimates.
I agree with FNB’s eWallet’s CEO Yolande Steyn’s sentiments that the success of eWallet has shown that there is still massive scope for mobile money remittances as an entry point for mobile money in a country. The challenge lies in creating further financial services adoption off the back of it.
Last month’s go-ahead for remittance exchanges between SA and Zimbabwe’s Econet by the SA Reserve Bank may be an omen for mobile money.
Yolande Steyn also maintains that using supplementary technologies such as self-service terminals, ATMs and other mobile applications can further augment the value proposition.
A 2015 Forrester report suggests that the future of mobile wallets may lie beyond payments. The research points to the fact that in the next five years mobile wallets will resemble marketing platforms.
A diversified offering will unlock value in a South African Market that is socially savvy and has an appetite for integrated services. It is an inevitable progression for large third-party players like Apple or PayPal to offer a suite of services through their wallets. In China, for example, the Alipay Wallet already lets brands reach consumers via mobile banner ads.
Thomas Husson, Principal Analyst at Forrester perhaps summed it up best in a recent mobile wallet report: “Offering faster or more-secure payments is not enough; wallet providers will have to solve real pain points, such as giving consumers the ability to see how much is on stored value cards at any moment in time, access loyalty points, or automatically receive digital copies of payment receipts.”
The Forrester Report highlights the top functionality that people interviewed want in a mobile wallet. Loyalty points and rewards ranked highest among US respondents (57%) and second for EU respondents (34%). Coupons discounts and special offers came in a close second for both groups (56% and 36% respectively).
Other items making the list were price comparisons, relevant product info, the ability to make reservations, split-billing, as well as digital tickets.
If the mobile wallet, in conjunction with cash and credit cards, can provide the means for all South Africans to access the digital world then the traditional alternative’s time may be up.
For me, it’s a question of when the wallet will cross the chasm, rather than if.
* Follow Gadget on Twitter on @GadgetZA
Earth 2050: memory chips for kids, telepathy for adults
An astonishing set of predictions for the next 30 years includes a major challenge to the privacy of our thoughts.
By 2050, most kids may be fitted with the latest memory boosting implants, and adults will have replaced mobile devices with direct connectivity through brain implants, powered by thought.
These are some of the more dramatic forecasts in Earth 2050, an award-winning, interactive multimedia project that accumulates predictions about social and technological developments for the upcoming 30 years. The aim is to identify global challenges for humanity and possible ways of solving these challenges. The website was launched in 2017 to mark Kaspersky Lab’s 20th birthday. It comprises a rich variety of predictions and future scenarios, covering a wide range of topics.
Recently a number of new contributions have been added to the site. Among them Lord Martin Rees, the UK’s Astronomer Royal, Professor at Cambridge University and former President of the Royal Society; investor and entrepreneur Steven Hoffman, Peter Tatchell, human rights campaigner, along withDmitry Galov, security researcher and Alexey Malanov, malware analyst at Kaspersky Lab.
The new visions for 2050 consider, among other things:
- The replacement of mobile devices with direct connectivity through brain implants, powered by thought – able to upload skills and knowledge in return – and the impact of this on individual consciousness and privacy of thought.
- The ability to transform all life at the genetic level through gene editing.
- The potential impact of mistakes made by advanced machine-learning systems/AI.
- The demise of current political systems and the rise of ‘citizen governments’, where ordinary people are co-opted to approve legislation.
- The end of the techno-industrial age as the world runs out of fossil fuels, leading to economic and environmental devastation.
- The end of industrial-scale meat production, as most people become vegan and meat is cultured from biopsies taken from living, outdoor reared livestock.
The hypothetical prediction for 2050 from Dmitry Galov, security researcher at Kaspersky Lab is as follows: “By 2050, our knowledge of how the brain works, and our ability to enhance or repair it is so advanced that being able to remember everything and learn new things at an outrageous speed has become commonplace. Most kids are fitted with the latest memory boosting implants to support their learning and this makes education easier than it has ever been.
“Brain damage as a result of head injury is easily repaired; memory loss is no longer a medical condition, and people suffering from mental illnesses, such as depression, are quickly cured. The technologies that underpin this have existed in some form since the late 2010s. Memory implants are in fact a natural progression from the connected deep brain stimulation implants of 2018.
“But every technology has another side – a dark side. In 2050, the medical, social and economic impact of memory boosting implants are significant, but they are also vulnerable to exploitation and cyber-abuse. New threats that have appeared in the last decade include the mass manipulation of groups through implanted or erased memories of political events or conflicts, and even the creation of ‘human botnets’.
“These botnets connect people’s brains into a network of agents controlled and operated by cybercriminals, without the knowledge of the victims themselves. Repurposed cyberthreats from previous decades are targeting the memories of world leaders for cyber-espionage, as well as those of celebrities, ordinary people and businesses with the aim of memory theft, deletion of or ‘locking’ of memories (for example, in return for a ransom).
“This landscape is only possible because, in the late 2010s when the technologies began to evolve, the potential future security vulnerabilities were not considered a priority, and the various players: healthcare, security, policy makers and more, didn’t come together to understand and address future risks.”
For more information and the full suite of inspirational and thought-provoking predictions, visit Earth 2050.
How load-shedding is killing our cellphone signals
Extensive load-shedding, combined with the theft of cell tower backup batteries and copper wire, is placing a massive strain on mobile network providers.
MTN says the majority of MTN’S sites have been equipped with battery backup systems to ensure there is enough power on site to run the system for several hours when local power goes out and the mains go down.
“With power outages on the rise, these back-up systems become imperative to keeping South Africa connected and MTN has invested heavily in generators and backup batteries to maintain communication for customers, despite the lack of electrical power,” the operator said in a statement today.
However, according to Jacqui O’Sullivan, Executive: Corporate Affairs, at MTN SA, “The high frequency of the cycles of load shedding
An additional challenge is that criminals and criminal syndicates are placing networks across the country at risk. Batteries, which can cost R28 000 per battery and upwards, are sought after on black markets – especially in neighbouring countries.
“Although MTN has improved security and is making strides in limiting instances of theft and vandalism with the assistance of the police, the increase in power outages has made this issue even more pressing,” says O’Sullivan.
Ernest Paul, General Manager: Network Operations at SA’s leading network provider MTN, says the brazen theft of batteries is an industry-wide problem and will require a broader initiative driven by communities, the private sector, police and prosecutors to bring it to a halt.
“Apart from the cost of replacing the stolen batteries and upgrading the broken infrastructure, communities suffer as the network degrades without the back-up power. This is due to the fact that any coverage gaps need to be filled. The situation is even more dire with the rolling power cuts expected due to Eskom load shedding.”
Loss of services and network quality can range from a 2-5km radius to 15km on some sites and affect 5,000 to 20,000 people. On hub sites, network coverage to entire suburbs and regions can be lost.
Click here to read more about efforts to combat copper theft.