Tag: mobile payment technology

By Anabel Perez – President & CEO, NovoPayment

In our world of 100%+ mobile penetration, companies in Latin America will soon need to think like their next wave of prospective customers, most of whom are unbanked. This means understanding their lifestyles, habits and needs in order to decide how to best generate value.

Similarly, recent global and regional corporate announcements regarding digital money and mobile wallets targeting Latin America’s unbanked consumers have casual and close followers wondering what this means for the region.

What exactly are they talking about?

Simply put, mobile wallets aim to create a phone-based equivalent of a physical wallet – a cloud and/or SIM-based collection of personal identification, financial and non-financial account information. The different money, payments and banking offerings refer mostly to the ability to purchase and perform other value-based transactions with a mobile handset.

In Latin America, these details are very important given the fact that more than 90% of mobile users are on prepaid plans – many of them unbanked – and use devices with varying features and capabilities. 

Who are the key players?

We’ve seen the arrival of several initiatives to improve Latin America’s mobile payment transactions and incorporate unbanked users. These include: banks, telcos, retail chains, global acquiring and acceptance networks and specialized entrepreneurs who have launched initiatives in countries such as Mexico, Argentina, Venezuela, Peru, the Dominican Republic and Haiti.

What business are they after?

What each of them shares is a common motivation: to capture the favor of the increasingly mobile-dependent user, most of whom are unbanked, and hence their relationships, transactions, and related data.

Given the way the mobile phone has gradually replaced or replicated nearly every item on our nightstands (alarm clock), desks (email, browser), briefcases, purses and pockets (agenda, reading material, games, camera) and even our televisions, it stands to reason that the wallet would be the next object of interest. 

What does this world look like? 

Look inside a typical Latin American consumer’s wallet today and imagine what their future mobile wallet might look like… 

• Better security: For the unbanked consumer, electronic money will continue to be more secure than carrying physical cash.
• More local apps: User-friendly apps are great for simplifying the delivery of information and services.
• Virtual labor marketplace: From street vendors to self-employed, blue-collar laborers, their services can be broadcast and found.
• Bill-payment simplification: Paper bills, long lines and late bills are avoided – a win-win for both payer and provider.
• More effective promotions: Mobile phones enable product promotions to bypass the challenge of a legally unrecognized residence.
• Electronic documentation: From transit passes to IDs to receipts, all documents typically carried by an unbanked consumer will be provided electronically.

What does the future hold?

The ultimate goal of this mobile era should be the creation of a payments ecosystem – where open and accessible systems, once set in motion, flourish by attracting a diversity of interconnected and interacting players. There are several regional challenges to overcome, but it can be done.

Thankfully, the wireless industry has given us some concrete examples like GSM, Bluetooth and other consortium-led efforts. If we continue at the current pace, it could take our region 15 years and millions of dollars wasted in isolated iterations. However, if done properly, 15 years can be cut to five. 2018 sounds pretty good to me.

Anabel Perez is President & CEO of NovoPayment, the leading payments technology services company in Latin America, providing prepaid “stored value” program design, implementation and Platform as a Service (PaaS). For more information, visit: www.novopayment.com.

This year will make it much easier for consumers in Australia to make purchases using smartphones.

Telcos in Australia are giving a significant kick to their intentions to bring mobile payments to consumers throughout the country so that they will be able to use their smartphones or tablets to pay for products or services at a store’s checkout counter.

This could be the first step toward making credit cards obsolete within the country.

Although mobile payments are a move that has been in the works for several years and very little action has actually been seen until very recently. Even the most recent steps have not been enormous, and the term “contactless payments” remains unknown to the majority of consumers, even among those whose devices are capable of the transactions.

Though the contactless mobile payments concept has great potential, it has been failing to gain traction.

The idea behind mobile payments is quite simple. It involves using a smartphone or tablet that is either waved over an enabled reader at a point of sale in a store, or tapped against it. This automatically transfers the funds necessary for making the purchase from the user’s credit card or bank account, into the account of the store.

The primary barrier faced by this type of mobile payments is the fact that only a small percentage of smartphones are actually enabled with the necessary NFC technology (near field communication) that allow these transactions to occur. This was held back even further by the release of the iPhone 5 by Apple, which shocked the mobile world when those chips were notably absent.

Vodafone and Telstra believe that this year will mark a difference in this trend. They believe that with many more NFC technology enabled devices entering the marketplace, it will represent a brand new opportunity for mobile payments to take off.

According to Dr. Hugh Bradlow, the chief technology officer at Telstra, “It’s been promised for a long time, but by next year many devices on the market will incorporate near field communication.” He went on to explain that in the mobile payments marketplace, “NFC has been a slow burn, but it will likely become entrenched next year and we plan to be a big part of that.”