Mobile Money Market

Mobile Money Market Outlook & Key Findings

• Mobile money market likely to grow at over 24% in 2020 with adoption of digital payments offering safety during a pandemic
• Growing smart phone penetration remains instrumental to all pervasiveness of digital payments
• Mobile banking and intuitive mobile payment applications create opportunities for mobile money provider
• Mobile wallet gains popularity in rural areas of economies as cashless economies become a norm
• Use of mobile money in BFSI vertical to witness approximately 30% Y-o-Y growth from 2020 to 2021

Not a Face off but a Symbiotic Relation Between Banks and Mobile Money Companies

The relationship of e-commerce and mobile payments are intricately woven together with each of their growth directly proportional to the other. Buyer’s online purchase journey wouldn’t be possible without active role of banks. Mobile money was considered a challenge for conventional banks, but both the systems moved in a symbiotic relation. Growing number of users are opting for mobile payments with each passing purchase, which has given the market a definitive boost.

The market has been thriving with entry of nonbanking and unconventional players, who are making a show-stopping move. For instance, launch of Google Pay with a simple policy “Add a card. It’s not hard”, the company took the mobile money market by the storm. It gave away instant cashbacks to users, making it a winning strategy for luring new users even today.

Adoption of regional languages, discounts on using mobile payments for monthly bill payments, and option of clubbing multiple transactions under one roof has won mobile money a new tech-savvy clientele. The rise of mobile money, surpassing electronic banking, is also attributable the digitization of economy, especially in India. It became a defining moment in the birth of mobile money, making it indispensable to transactions thereafter. Research indicates that mobile banking is expected to witness a 13-14% growth Y-o-Y from 2020-2021.

Mobile Wallets Gaining Traction as Digitally Native Users Increase

Exemplary mimicry by mobile wallets of actual, physical wallets has won them an incredible space in daily financial transactions. From grocery purchases to money transfers, mobile wallets have been critical in expanding the role of mobile money today’s world. Future Market Insights suggests that adoption of mobile wallets will grow by 1.3X from 2020 to 2021.

Mobile wallets have given millions of end user more power and flexibility with easy transfer systems, banking systems, and e-commerce. An excellent alternative to cash, mobile wallets offer a broad usage ranging from bill payments, ticket bookings, mobile banking, and e-commerce checkout. Engaging with sellers for quick purchases with e-tailing platforms have upped the game for mobile wallets.

Winners of mobile wallet segment have been quick to adapt to the industry changes with valuable insights using data analytics that have constantly tried to understand consumer behavior. For instance, Google Pay’s referral programs for rewards, scratch cards, and show of non-Google Pay users from users phonebook to prompt a referrals have been three key instance where this wallet has truly used data for design.

Mobile wallets have also introduced the option of storing multiple card details, making it easier for selecting the card for better money management. Digitally native generations have been quick to adopt these wallets as they are safer than actual wallets as OTPs, biometrics, and tokenization, and passwords make it exceptionally personal and safe from random thefts.

QR Codes Tip the Odds in Favor of Mobile Money

QR codes or quick response codes is a unique 2-dimenstional barcode systems that only seek a scan to initiate a mobile payment. These codes have played an unforgettable role in the expansion of mobile money. The adoption of QR codes is has been the most technologically-advanced version of contactless payments.

Their affordability as compared to NFC have also made them a popular choice amongst most merchants. These do not require any additional devices other than a smartphone with a functional camera to make the payment. These codes have made it exceptionally easy to use mobile wallets. With no requirement of any additional infrastructure and backed by the deals and offers, regularly provided by the payment service providers, paying with QR codes has definitely overtaken NFC payments and has become a great means for in-store contactless payments.

Increasing Adoption for Mobile Point of Sale Driving Market Growth

Mobile point of sale or mPOS have truly harnessed the power of smartphone to accept payment on the spot. mPOS is the technology that frees all businesses from their brick-and-mortar and in-store transactions.

mPOS device restricts the liability because transactions are encrypted and card information is not stored on the mPOS device, which minimizes the risk of security breach and makes it quicker and easier to comply with regulations. Biometrics such as fingerprint and facial recognition can also be used with mPOS to confirm identities of customers during the payment, which adds another level of security to payments using mobile money.

With mPOS, staff can see past transactions, online browsing history, loyalty rewards, and other things that help staff to understand about the need of the customer. These features have not only added to customer satisfaction but also improvement in staff performance.

South Asia & Pacific Sees an Unprecedented Adoption of Mobile Money with Digitized Economies : Region Analysis:

According to Future Market Insights, North America and the Middle East & Africa dominated the mobile money market in 2019. Report suggests that the incremental $ opportunity for North America mobile money market US$ 4.7 Bn for 2020-2030.

The regional dominance will be dictated by rise in adoption of NFC mobile payments in major retail outlets in the U.S. The paradigm behind the payment volume and operational efficiency with NFC point-of-sales readers will be able to offset the investments on setting the infrastructure.

As for South Asia & Pacific the incremental $ opportunity is estimated at US$ 2.7 Bn for 2020-2030. The regional market is projected to register a CAGR of 25% during the forecast period with increasing sales of smartphones, digitization of economies, and government initiatives to support cashless transactions. Surge in e-commerce will also up the usage of mobile money.

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Money transfer among the application is estimated to hold higher market share of 43.2% in the forecast period, money transfer application includes cash in/cash out, off-net transfer, and international remittance. Money transfer is used by many people for securely paying the payments and transferring the money using mobile devices can be done in few minutes due to which helps to save time.

BFSI industry is estimated to witness high growth in the forecast period due to increasing adoption of mobile banking by customer. Banks and financial institutions are providing mobile banking services to their customers to conduct the financial transaction remotely using the smartphone or tablets. Customers are able to send and receive the money and also do remote check deposit, person to person payment, electronic bill payment.

Adoption of mobile banking is increase as it is easy to use, also provide flexibility and provide security for transactions. The BFSI segment is witnessing 29.1% Y-o-Y from 2019 to 2020 due to COVID-19 pandemic.

Mobile Money Market: COVID-19 Impact

COVID-19 pandemic has had a remarkable impact on the mobile money market as consumers and businesses are forced to change their purchasing habits. As contactless payments have become vital for purchases, there has been an incredible spike in the adoption of mobile wallets. Avoiding cash and card transactions to prevent the spread of COVID-19 has prompted many subscribers to try mobile wallets.

The increasing adoption of mobile wallets estimated to grow by 1.2X from 2019-2020 and would see a surge in demand in Q2-Q4 2020. The market for mobile money grew around 18% Y-o-Y in the past two years. However, as COVID-19 crisis complicates each day it will lead consumers to be habituated to digital payments, making mobile money important to each transaction.

Mobile Money: Mobile Money Solution Providers

Collaboration, partnership with key players and acquisition of niche players is key strategies followed by the leading mobile money solution providers in the market. The global mobile money market is fragmented in size, which remains a key factor for its dynamic competitive nature.

Some of the key players in the mobile money market are,

• Google LLC
• MasterCard Incorporated
• Visa Inc.,
• Western Union
• One97 Communications Ltd
• Mahindra Comviva
• Novatti Group Pty Ltd.
• Obopay
• Panamax Inc.,
• Alepo
• Telepin Software Services Inc.,

*The list is not exhaustive, and only for representational purposes. Full competitive analysis available in the report

Encashing Technology : Glance into the Future

Mobile Money has proved to be a viable alternative to cash.  In the coming years, it will create an opportunity to extend formal financial services to people who lack access to traditional banks. Mobile money services were initially designed for individuals, not businesses.

The growing needs of small and medium enterprise (SME) has given mobile money providers a chance to strengthen their value proposition with payment-as-a platform, which involves large number of financial institutions providing a variety of third party services to mobile money users.

Payments-as-a platform providers will enable plug-and-play access to mobile money services through API and flexible IT solutions. This platform will rely on data and analytics to monitor security of mobile payments such as fraudulent behavior. The transition to platform-based approach in order to make money transfer more sustainable, will make SMEs shift to mobile money applications.