Disruptive innovation or technology enabler? Mobile payments Alex Lee Director, Payments Markets,...
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Transcript of Disruptive innovation or technology enabler? Mobile payments Alex Lee Director, Payments Markets,...
![Page 1: Disruptive innovation or technology enabler? Mobile payments Alex Lee Director, Payments Markets, Asia Pacific, SWIFT 8 April 2011.](https://reader035.fdocuments.us/reader035/viewer/2022062422/56649f2b5503460f94c4515a/html5/thumbnails/1.jpg)
Disruptive innovation or technology enabler?
Mobile payments
Alex LeeDirector, Payments Markets, Asia Pacific, SWIFT
8 April 2011
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Mobile Payments - a banks’ perspective
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Disruptive innovationthat will disintermediate banks?
Technology enablerfor banks to serve the unbanked?
Inspired by thinkmobilemoney
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Let’s develop our thinking in five thematic steps
1. Everybody’s talking about mobile payments2. Incl. for person-to-person international money transfers3. But now, MNOs are at centre of the eco-system and if
m-wallets interconnected, where does that leave banks?4. Before achieving global adoption, some things to sort out:
regulation, cooperation, interoperability
5. What is the ideal model for global interoperability of mobile payments eco-systems, and who can take us there?
PS: hurry up - the world is changing around us
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Many types of ‘mobile payments’
Mobile banking
Use mobile phone to access your bank
account
Mobile commerce
Use mobile phone to buy products
(digital / physical, remote / proximity)
Mobile money transfers
Use mobile phone to send money to someone
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Mobile payments are ‘hot’Every week, a new mobile payments project
Some of the 360+ examples
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The irresistible ubiquity of the mobile phone for payments
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6.9 bn
people on this planet
75%
mobilephone
(5.2 bn)
30%
bankaccount
(2.1 bn)
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Mobile payments grow significantly
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Source: Gartner, May 2010
By 2014
• USD 245 billion
• 340 million users = 5% of mobile subscribers
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What if all mobile wallets interconnected?
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Source: GCASH
Global interconnectivity as seen by MNOs. There is no bank in this picture …
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Clear business case for MNOsMNOs: Mobile Network Operators
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Source: Greenwich Consulting
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Value for a bank in an MNO-led model?
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Within bank eco-system
Connecting eco-systems
Banks can lead mobile payments
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Eco-system Bank Eco-
systemMNO
Eco-systemMTO
Eco-systemBank
Eco-system Bank
MNO: Mobile Network Operator MTO: Money Transfer Operator
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Two different worlds create
Huge space for co-operation
• Reliability -> in banking: 99.9x% up, in telco: “nobody cares when you drop a call”• Security -> banks and telcos do not think the same way• AML/KYC -> in banks: heavy, big cost; at telco: in proportion to currently limited amounts• Margins -> in banking: basis points; in telco: “90%” on an SMS• Tacking -> in telco: you know where person is, when ‘payment‘ got there
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RobustnessAgility
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Build an open community,
with standards
What is the ideal model of interoperability?for international mobile money transfers
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Paymentsclearing
Settlement
Financialmessaging
Eco-system
Eco-system
MNO
MTO Eco-systemMNO
Eco-system
Eco-system
Eco-system
Bank
MTOBank
Put mobile on top
2
4
Enable existing
channels for mobile instructed payments
3
Use existing
processes
1
Mobilemessaging
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“Who can bring all parties together,
Who will be the SWIFT for mobile payments?”
• The MNO world (eg GSMA)… but can they bring Banks to the table?
• The Bank world (eg SWIFT)… but do they have the ‘agility’ mind set and can they bring MNOs to the table?
• A platform vendor (some)… but since commercial venture, can they be inclusive enough?
• A mobile standardisation body (eg Mobey Forum)… but do they have world-wide execution capability?
• An international standardisation body (eg ISO)… but can they drive adoption?
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Final thought and sense of urgency, as the world is changing around us
Who will you compete with next
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PayPal
P2P networksSocial networks
and e-commerce sites
Amazon American Express
Credit card companies
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In conclusion
• Mobile payments are reality, will become bigger• Require Banks and MNOs to work together• The ideal model builds on existing processes• Open in participation, with standards
• Banks can deploy innovative services
•Urgency to act
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Thank you