Today we’re looking at what’s new and innovative in online payments, financial systems and e-commerce technologies. While mobile payments have revolutionized business, Africa has 52% of the world’s mobile payment transactions, showing the potential in developing countries. A Federal Reserve Board of Governors’ March 2016 study of US mobile financial services found 24% of consumers had made a mobile payment in the previous 12 months, up from 20% the year previous. With more than 697 million users, WeChat also now has more than 300 million active user payment cards which earned more than $46 million in fees in 2015.
A yStats.com report titled “Asia-Pacific Online Payment Methods: Full Year 2015,” show mobile wallet use in developing SE Asian countries was double that of developed countries. According to MobilePayments Today, Asian telcos have an opportunity to generate new revenue from mobile payment services with their existing clients. In India, the new Unified Payments Interface (UPI) is not expected to negatively impact mobile wallet and payment systems such as Paytm, Oxigen and Mobikwik.
Pitney Bowes looks to enter the mobile payments market as a natural extension of their shipping and mailing lists business which has decreased in recent years. By the end of 2016, 80% of US consumers should have EMV chip cards but with only 0.2% of payments made by mobile in the US, mobile wallets and payment systems have big growth potential with consumers.
How mobile payments have revolutionized business
Now customers can choose from a variety of payments including in-app payments, mobile point of sale, and online payment services such as retail giant Amazon or Paypal that operate a global online payment system.
Africa has 52% of mobile payment usage in the world. In the continent alone, mobile payment solutions have revolutionised the way in which business is being done. The Kenyan M-Pesa app is an example of this.
Paying suppliers should be as straightforward as checking a bank balance online. There has been some resistance to mobile payment solutions, businesses are hesitant to invest in new point of sale devices or software implementations. Concern regarding losing insight into the consumer’s purchase behaviour if another party is handling the process also exists.
Despite the concerns, the advantages of mobile payment solutions, such as access to additional revenue opportunities, outweigh the perceived disadvantages. Via memeburn.com
Mobile Payments: Where’s the Benefit?
How and how often are consumers using mobile payments? The Federal Reserve Board of Governors’ March 2016 study of mobile financial services dug deep into the question. The results of the study, “Consumers and Mobile Financial Services 2016,” paint a picture of a market that is still working out its issues: in no way, shape, or form is paying for goods by mobile phone becoming mainstream consumer behavior.
The survey defined mobile payments as “purchases, bill payments, charitable donations, payments to another person, or any other payments made using a mobile phone. This includes using [a] phone to pay for something in a store as well as payments made through an app, mobile web browser, or text message.”
Mobile payments continue to be less common than mobile banking — more consumers are checking their bank account balances and paying utility bills online, for example, than paying for their Starbucks coffee with their phones. But there were some positive signs for mobile payments adoption: For example, 24% of all mobile phone owners reported having made a mobile payment in the 12 months prior to the March 2016 survey, up from 20% in 2015. Via ww2.cfo.com
Messaging app WeChat is becoming a mobile payment giant in China
Tencent, the company behind WeChat (known as Weixin in China), just announced impressive end of year financials (PDF) that included its highest quarterly revenue growth for three years. Among the other items disclosed, WeChat is now up to 697 million active users worldwide each month having added close to 200 million to that figure over the past year.
Beyond text messaging, voice and video calling, the service includes a social network timeline, branded accounts, shopping, games and more. Payment is another area and over the past year, Tencent has put considerable focus into its China-based service, WeChatPay, which can be used to transfer money between WeChat users (peer-to-peer) and make payments online and with participating offline retailers. Tech In Asia tested it out for a day in China and came away reasonably impressed, although it seems there’s room for improvement.
Tencent previously disclosed that 200 million user cards were attached to the payment service as of November 2015, thanks to a genius campaign that taps into China’s tradition of sending red envelopes during New Year, but now it said the figure is “safely more than 300 million” while it also gave us clues as to how large its volumes could become.
Tencent said today that it banked over RMB300 million ($46 million) from bank transfer fees from WeChatPay, almost all of which came from China. (The service did recently go live in South Africa via its first international expansion, while Tencent is offering it globally to merchants who can use it to take payment from Chinese tourists.) Via techcrunch.com
Emerging markets in Asia-Pacific ahead of advanced markets in the adoption of mobile payments
The share of individuals using mobile wallets in the emerging markets of Asia-Pacific was almost double that share in the advanced markets in mid-2015, a recent report shows. According to the research findings of yStats.com from the report titled “Asia-Pacific Online Payment Methods: Full Year 2015,” emerging markets in Asia-Pacific are ahead of advanced markets when it comes to the adoption of innovative payment methods.
For instance, in the previous year, China was the highest-ranking country worldwide in share of mobile phone users making mobile payments both for digital and non-digital goods, while India had the highest share of online shoppers who would be willing to use digital currency.
Asia-Pacific advances, therefore, as one of the leading regions worldwide in mobile payment use. Mobile payment transactions in some of the countries in this region have been growing at triple-digit rates, as shown in yStats.com’s report. Asia-Pacific is also one of the trend setters in this space. Across the region, a number of mobile messengers launched payment services, such as LINE Pay from Japan and Kakao Pay from South Korea.
To put things into perspective, the Asia-Pacific online payments market remains very dynamic, with B2C ecommerce sales growing rapidly. In China alone, the number of online payment users reached over a third of a billion in mid-2015, accounting for more than 50% of Internet users Via thepaypers.com
Appetize chooses FreedomPay for EMV and P2PE
In 2016, Asia is the driving force behind global smartphone ownership growth. The economies in the region are outperforming other emerging markets. For mobile operators, this means an opportunity to acquire subscribers with more disposable income than ever before at a rate higher than ever before.
The growing mobile population makes more calls, sends more messages and consumes more digital content, all of which drives revenue for the carriers. To handle the ever-increasing flood of data, telcos have invested heavily in building their network. At the same time, traditional telco services are increasingly eaten into by OTTs such as Skype, WhatsApp, WeChat and others, especially so in many Asian countries.
With customers getting used to services that erode into standard telecom fees, is there a way for mobile operators to make it up? Well, there is. Telcos own impressive asset base – established billing and CRM relationship with their users, ability to collect demographic, identity and location data, a strong distribution capability etc. By auditing and packaging these capabilities, it is possible to offer them to OTTs and form mutually beneficial partnerships.
Among the most valuable telco assets is the established billing relationship with end-users. The less available credit card and banking infrastructure is in a selected country, the more valuable is the telco’s ability to charge end-users. In addition to local and regional digital services, Asian users do have access to most of global content: Google Play and App Store is available in almost all countries, Netflix’s recent expansion enabled global video streaming service in the region, Spotify expanding its footprint etc. However, with credit card penetration relatively low in most countries, these services need way of monetizing their users – and that is where carriers have the opportunity. Via mobilepaymentstoday.com
Will National Payments Corp kill mobile wallets like Paytm, Mobikwik? Experts say no
When the National Payments Corporation of India (NPCI) launched the unified payment interface (UPI) earlier this month, there were apprehensions that it would kill the business of mobile wallet companies such as Paytm, Oxigen, Mobikwik and others. However, industry experts claim otherwise.
Wallet companies are likely to be beneficiaries of UPI, considering the use cases they have, friendly user interface (UI), user experience (UX) designs, and also because of lower transaction costs once UPI is adopted in large scale.
Dilip Asbe, chief operating officer, National Payments Corporation of India, told FE, “Mobile wallet have many use cases and that’s why they went on to become popular even when we had internet banking and card payments. Just because UPI is in, doesn’t mean wallets would die. The wallets are active because of discounting, convenience, valued-added services and other factors that they offer. The cannibalisation impact (of UPI) may come only after five years.” Via financialexpress.com
Pitney Bowes Looks to Get In on Mobile Payments Market
Pitney Bowes was generally known as a solutions provider for shipping and e-commerce, so it’s not too far off the mark to see it branch out into payments processing as a means to further close the loop and give itself a part of every part of online shopping: offering goods for sale, shipping goods to customers, and now, paying for those goods.
The new offering is a payments engine that operates on a cloud basis, making itself more readily available to users.
It’s part of the SendPro office shipping solution, and with all these tools together, Pitney Bowes can offer a means to help with the particularly difficult cross-border shipping market. Via paymentweek.com
Why Apple Pay and Other Mobile Wallets Beat Chip Cards
The chip technology, known as E.M.V. (for Europay, MasterCard and Visa) has been around for decades in Europe. But starting last October in the United States, banks pushed the liability of purchases made with counterfeit credit cards onto merchants.
That means if a criminal swipes a counterfeit credit card to buy something, the merchant now has to pay for it. The sweeping change has compelled many retailers to upgrade their equipment to read chips, which have stronger security than the easy-to-forge magnetic stripe. By the end of this year, about 80 percent of all credit cards in the United States should include chips, according to a new report by the fraud prevention company Iovation and the research firm Aite Group.
The chip initially may annoy consumers. For most chip transactions, you have to dip the credit card into a slot and wait for the transaction to be approved before you can remove it and scribble your signature.
Mobile payments could be a quicker alternative. Some of the biggest tech companies — Apple, Google and Samsung Electronics — released mobile wallet technologies in the last two years, though they are still a niche product. In the United States, only 0.2 percent of all in-store sales were made with phones last year, according to a survey by eMarketer, the research firm. Via nytimes.com
That was a busy week in the cashback industry around the world. Join us next week for more news you can use and enjoy your weekend!