Migrant workers throughout Asia, who own cell phones but not necessarily bank accounts, are the main driver for mobile money in Asia according to Sybase’s director of business development Tarik Husain.
Villagers who travel from villages and farming areas into the big cities to work are increasingly using mobile money services to send cash back home, said Husain.
“Asia is absolutely leading the way,” Husain noted, adding that regions like North America and Europe may not see such an urgent need for the services owing to a highly banked and credit card laden society. This gives developing countries the chance to “leapfrog” developed markets when it comes to mobile money technologies and practices.
That doesn’t mean developed countries don’t have any use for mobile payments, it’s just a different business model, and one of convenience rather than basic necessity; paying for one’s parking space via mobile instead of finding a meter for instance.
“There is a lot of money in mobile commerce,” Husain told RCR adding that firms in the space had “barely scratched the surface.”
Transaction fees would now be the major challenge for mobile credit companies to face, said Husain, with people unwilling to pay 20 cent fees on small amounts of money amounting to just a few dollars at a time, but the process still offered financial institutions to make money from anybody, even the unbanked.
The sad fact is, said Husain, that in today’s world, it’s the unbanked who end up paying the highest percentage of transaction fees anyway, at the hands of services which charge exorbitant rates to transfer low income salaries home to their families.
The upcoming battle in mobile payments, however, would be between mobile operators and banks, claimed Husain, with carriers having taken an early role in the game and financial institutions only just starting to wake up and pay attention.
“Certainly at this stage we’re seeing everyone get into it, from the smallest players to the biggest players, everyone’s having a go, seeing how much land they can grab, this is what the gold rush looks like right now,” he said.
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