Super Fast Mobile Networks and Mobile Money Services Link
The roll-out of super-fast mobile networks will aggressively drive the uptake of mobile money services, as research by MEF, the global community for mobile content and commerce, shows a quarter of users say they do not make mobile payments because "the network is too slow".
The study says the lack of faster networks in many countries, especially emerging markets, could "help explain why fewer than one in seven mobile media users have made some form of mobile payment".
Conversely, those connected to super-speedy 4G or long-term evolution (LTE) networks are much more engaged, as 64% have made a mobile payment.
Rimma Perelmuter, CEO of MEF, says in many markets, mobile money has already hit the mainstream, with Africa leading the way. Faster mobile networks will only advance its adoption further worldwide.
Mobile money is one of the value-added services that mobile operators and banks provide to clients. The success of M-Pesa in Kenya has spawned a plethora of smaller mobile money and payments services.
Operators are also turning attention to monetising customer relationships through cross-selling non-telecoms financial products, such as insurance, says research firm Analysys Mason. In South Africa, operators such as MTN, Cell C, Neotel and Vodacom have rolled out LTE or 4G networks to improve user experience and spur data usage. The roll-out is limited to major cities, but it is expected to accelerate once there is access to spectrum needed for the network.
Analysys Mason expects 4G to account for only 1.52% of the 774-million active mobile connections in Sub-Saharan Africa at the end of 2018.
The MEF report analysed data from 10,000 respondents in 13 countries including South Africa, highlighting regional and global trends in mobile money uptake and how it is stimulating growth across the mobile value chain.
Last year 15% of mobile media users made some form of mobile payment for a purchase. The largest group of these users did so via a mobile wallet, especially those based on near-field communications technology, which has not taken off in South Africa. The report highlights the importance of mobile money users to the overall m-commerce market, as this group is 26% more likely to purchase via mobile.
"Our 2014 Mobile Money Insight Report clearly highlights that early adopters of mobile money are key to accelerating the growth of mobile commerce. This is true both in terms of their propensity to spend more on individual purchases and their likelihood to engage with a wider array of mobile services," said Ms Perelmuter. The report suggests that mobile banking is already mainstream in many regions, but for different reasons.
In the US, UK and China the use of mobile apps for checking balances and paying accounts is commonplace. In Africa handsets are used to send airtime to other users, to transfer funds and to seek credit.
In Africa, the "mobile-only" culture means the mobile money account is the bank account, the reports states.
Globally, 66% of mobile users use a form of mobile banking. In Kenya, for example, the figure is 92%. South Africans do twice as much balance-checking as their African counterparts.
MEF says South African mobile media users appear to be "midway" between "developed market" and "growth market" consumers. For example, 43% of them check balances by mobile. In Nigeria, just 15% do. But 45% send airtime. That is something users in the UK, the US and China rarely do, says MEF.
Ms Perelmuter says mobile money is a key focus for MEF in 2014, with member-driven initiatives that will help drive best practice for accelerating market adoption of mobile commerce and mobile money solutions.
Christy Turner, co-founder of Webtickets, an integrated online ticketing solution, says South African audiences have high expectations and insist on interacting and doing business online via their mobiles quickly and effectively. But they also want technical advancements and features that provide them with increased functionality.
"We have noticed incredible changes in the online retail environment in South Africa over the last 10 years. Two of the biggest shifts we have experienced are mobile and the increased sophistication of the South African online audience," says Mr Turner.
He says this year the substantial increase in migration to mobile e-commerce from traditional web retailing will allow instant impulse purchases anywhere, anytime. For example, friends out at a dinner party can now book tickets online via their mobiles for that rock concert they have all agreed to attend next week, he says.
Mr Turner explains that talk becomes immediate action. Another mobile first is that the emerging middle class will leapfrog the web and complete their first e-commerce transactions on their mobiles.
"There is huge potential here as smartphones and bandwidth prices come down drastically and become more affordable for the lower LSMs (living standard measures)," says Mr Turner