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
Welcome to world of 2099
The world of 2099 will be unrecognisable from the world of today, but it can be predicted, says one visionary. ARTHUR GOLDSTUCK met him in Singapore.
Futuristic structures tower over the landscape. Giant, alien-looking trees light up with dazzling colours amid the hundreds of plant species that grow up their trunks. Cosmetic stores sell their wares via public touch-screens, with products delivered instantly in drawers below the screens.
This is not a vision of the future. It is a sample of Singapore today. But it is also an inkling of the world we may all experience in the future.
Singapore was the venue, last week, of the World Cities Summit, where engineers, politicians, investors and visionaries rubbed shoulders as they talked about the strategies and policies that would enhance urban living in the future.
As part of the Summit, global payment technologies leader Mastercard hosted a small media briefing by one of Singapore’s leading thinkers about the future, Dr Damian Tan, managing director of Vickers Venture Partners. The company’s slogan “We invest in the extraordinary,” offers a small clue to Tan’s perspective.
“We look as far forward as 2099 because, as a venture capital firm, we invest in the long term,” he tells a group of journalists from Africa and the Middle East. “Companies explode in growth because there is value in the future. If there is no growth, they won’t explode.”
The big question that the Smart Cities Summit and Mastercard are trying to help answer is, what will cities look like in the year 2099? Tan can’t give an exact answer, but he offers a framework that helps one approach the question.
“If you want to look at 81 years into the future, and understand the change that will come, you need to double that amount and look into the past. That takes us to 1856. The difference between then and now is the difference you can expect between now and 2099.”
Click here or on the page link below to read on: Page 2: Soldiers and Health in 2099.
- Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter on @art2gee and on YouTube
Street art goes electric
Kaspersky Lab and British street artist D*Face have unveiled the first-ever “art helmet” design at the Formula E finale for electric cars in New York.
The ‘Save The World’ helmets will be raced by DS Virgin Racing’s drivers, Sam Bird and Alex Lynn, as they traverse the New York street circuit during the final races of the Formula E season.
The announcement signals the first art helmet by a Formula E team, continuing the heritage of art in motorsport and the cybersecurity brand’s commitment to contemporary art, creativity and innovation. D*Face took inspiration from Kaspersky Lab’s tagline, “A Company To Save The World”, and hopes that his colourful work will inspire people to take positive action.
D*Face will announce his first-ever art car design with a custom-made livery for the DS Virgin Racing Team. Its design will be released at the “Art Goes Green” event after Saturday’s race. The helmets and art car are the latest installations in the “Save the World” collection, following a major permanent public mural that was installed in Brooklyn, New York, in May.
D*Face, whose real name is Dean Stockton, said: “It is exciting to work with Kaspersky Lab on this project and create art with a real message of hope for a better future. After all, this is our world and we need to look after it. It will take every one of us to make a real lasting, impactful change. I love the mentality of the DS Virgin Racing Team and that of Formula E by showcasing sport in a way that doesn’t harm the environment, but is still just as exhilarating and fun.
“It is time for us all to stand together and make a change… be that stopping data steals, climate change, plastic waste or using damaging fuels. I want everyone to make a pledge to do one thing that will help make a change.”
As a sponsor of DS Virgin Racing Team, Kaspersky Lab is responsible for protecting the team’s devices against cyber threats. The company sees the technical environment in the global sport of Formula E as the next frontier in furthering its research and development of new technologies to keep vehicles secure in the digital world.
Sylvain Filippi, Managing Director at DS Virgin Racing, said: “The whole team fully supports this great initiative and our thanks got to Kaspersky and D*Face for their collaboration. It’s an honour to have such an innovative artist bring his talents to bear in our team ahead of the season-finale; the car, drivers’ crash helmets and mural all look amazing.”
Aldo Fucelli Pessot del Bo, Head of Global Partnerships and Sponsorships at Kaspersky Lab added: “There is a need for innovation on a global scale, both in contemporary art and in the fast-growing sport of Formula E. Now, for the first time ever, Kaspersky Lab is proudly bringing together the two sectors in an effort to Save the World and unleash creativity, encourage freedom of expression and further innovation.”