I’m chairing a session this afternoon on Mobile Money at the Digital Money Forum 2011. Should be interesting with the speakers being:
Mark Hartley, American Express
John Conlon, Barclaycard
Elisabeth Berthe, Grameen Foundation
The current session is looking at the way that cash is being replaced in different jurisdictions. Richard Johnson from Monitise is chairing the session. He introduced the session, by considering why cash might be replaced. The digitisation of cash creates new commercial opportunities for market players, but more significantly if you link payment transactions with data about the transactions there are opportunities to make the experience ‘ten times better’. In that context the ubiquity of mobile devices and integration of tap and go technology is starting to transform the user experience, and can enable the seamless linking of physical and virtual world payments.
First speaker is Douwe Lycklama from Innopay, talking about the Dutch experience. He started by explaining that he saw the Internet as splitting into different ecosystems – Facebook, Google, Apple,PayPal and eBay, Twitter, etc. In his view each of these ecosystems intermediate between online buyers and sellers and their off-line banks. Mobile applications create additional intermediate payment ecosystems. These multiple ecosystems create a lot of complexity and relationships.
Second speaker is Jane Zavashalina, Yandex, Russia. She started by explaining that their banking infrastructure is very young – retail banking perhaps less than 20 years old. However, great progress as 138 million cards with 140 million people. However, 90 per cent of payment are still made outside banking system. She explained that telecoms carriers had developed faster than banks, and that from pre-paid mobile accounts they had expanded into providing de facto banking and that a lot payments were mediated via this type of account. However charges could be as high as seven per cent so great opportunity for banks, but their reaction was not to compete but to complain to government.
The third speaker is David Steed, PayPoint UK. He started explaining that cheques were declining, cards increasing and PayPoint rapidly increasing and likely to soon exceed cheque payments. Users want low cost and universality, and that was driving PayPoint growth. They have moved into mobile phone payments in areas such as car parking where cash collection costs very high.
Final speaker in this session is Erich Ringewald from Boku. He explained their business which was to enable payments on Facebook by debited users’ mobile telephone bills. Very significant growth, demographic was young and therefore growing.
Summary of session is that cash is already under challenge from a variety of different business models.