Mobile Payments Debate- Part 2

The following document is the second of a five part series that Deloitte South Africa is publishing regarding mobile payments. The market is rife with activity and we’re taking a deeper look at the inner workings of this market space.

The following table looks at points of view from banks, mobile operators and retailers, taking into account the context of their respective industries. We’ve added in an interesting counterpoint to their points to increase the richness of the debate.




BanksTo follow or lead?

Wait for the chips to fall

  • Banks have largely dominated mobile banking and payments.
  • Contactless cards have most of the speed and convenience of NFC mobile.
  • The replacement cycle for contactless cards is quick and easy to control.
  • Banks will not be dependent on mobile operators.

Leaders of innovation

  • The risk of being dis-intermediated needs to be considered as credit cards could become downloadable applications and mobile phones the universal method of payment.
  • Most banks already offer mobile banking services, which positions them to be leaders in the mobile payments revolution and influence consumer behaviour on their terms.
  • Banks can cost effectively be good corporate citizens, as mobile payments allow banks to reduce their reliance in costly branch infrastructure to serve the bottom of the unbanked pyramid.

Mobile operatorsTo pursue or prepare?

Aggressive pursuit

  • Mobile operators have the infrastructure and can obtain higher levels of customer retention and new revenue streams.
  • This new revenue stream is particularly relevant as profits from voice calls diminish and the emergence of low cost data begins to be realised.
  • Payments can be done through a prepaid value model or the charges may be integrated into the customer’s mobile bill.
  • Due to the possibility of payments being prepaid, mobile operators have high degrees of access to the unbanked.

Steady preparation

  • Mobile operators are not as developed as banks in terms of the tax, regulatory, security and risk management surrounding mobile payments. This becomes particularly relevant with cross-border payments in Africa.
  • Mobile operators would need to comply with current regulations, which may require them obtaining a costly banking license.
  • Mobile operators often do not have the where withal to perform real time interbank clearance or payments.
  • Mobile payments are still often viewed as a valued added service (VAS) and therefore they battle to get critical mass.

RetailersGet led by customer experience or cost?

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