Developed markets have niche m-wallet opportunities

SINGAPORE--The benefits of banking the "unbanked" via mobile wallet services in developing markets have been frequently stated but there are also opportunities in developed, mature banking markets, albeit in niche areas, say industry insiders.

Andy Chong, senior vice president and head of group marketing at telecommunications company, Axiata Group, noted that where mobile wallet services are concerned, its main aim is to "get it out" to the market fast and be among the first to provide the service. This is true for developing economies such as Bangladesh, Sri Lanka, Thailand and Malaysia, for instance, he said.

Chong, who was in town Tuesday for the GSMA Mobile Money summit, said during a media roundtable that Malaysia's inclusion in the list is an anomaly because while it is a developing market, the nation has a fairly mature banking infrastructure in place. However, because of the "conducive environment" provided by the Malaysian government, Axiata--through Celcom, which it is a majority shareholder--is looking to pitch its mobile wallet service to foreign workers there who frequently remit money back to their homelands, he said.

Adam Kerr, head of consumer services at Ericsson, concurred. Citing Singapore as an example, he told ZDNet Asia at the sidelines that the banking and mobile infrastructures here are already quite developed.

Coupled with the significant number of overseas workers in the country, Kerr said these factors drive the provision of remittance and fund transfer services as a viable strategy the company would adopt if it were to bring its Ericsson Money services to developed markets in the Asia-Pacific region. The executive was also here for the summit and participated in the roundtable.

Asked how customers can be encouraged to move away from traditional remittances providers such as Western Union and utilize mobile wallet services, Kerr pointed to convenience and speed of transfer.

"Consumers now don't have to go down to the store to remit their money, but can do it through their mobile phones at home or on the bus while they travel," he elaborated. "Once the transfer is done, which is almost instantaneous, they would also get a SMS notification to let them know the money has reached its intended destinations."

He added that a favorable financial regulatory environment would also help companies looking to deploy mobile wallet services. The E-Money Directive in Europe, for instance, which took effect in April this year, enabled non-traditional financial service providers such as Ericsson to provide mobile money offerings to its customers, he noted.

The legislation allowed Ericsson to cap the amount of funds users can upload to their mobile wallet to 600 pounds (US$966.7) for the first year, Kerr explained. Total transactions allowed for a year is also limited to 1,600 pounds (US$2,577.8), he added, although the ceiling can be raised to 3,000 pounds (US$4,833.3) if users are willing to disclose some personal information such as their passport number to further verify their identity.

Lack of ecosystem
The industry, however, is still in its "early days", said Dickson Chu, head of global new product development and alliances at Citibank, who noted that there is currently no industry-recognized ecosystem to speak of.

Chu explained that an ecosystem would create a set of guidelines or rules that various stakeholders in the industry would need to abide by, adding that these are still non-existent now.

"We're still stuck in the early stages where the conversation is centered on whether mobile wallet deployments should be led by mobile network operators (MNO) or banks," he noted during the roundtable discussion.

He pointed out that there needs to be partnerships between payment services providers and operators to instill reliability in the system. The end goal, Chu said, would be to make mobile money payment and transfers "as easy as making a call".

A NTT DoCoMo executive, Kyoshi Mori, told ZDNet Asia in a previous report that operators should take the lead and coordinate the implementation of mobile wallet infrastructures and development of the ecosystem.