Skip to main content

Global Upside Opportunities for Mobile Commerce

Mobile money services for the unbanked, popular in emerging markets, are showing both much faster adoption than m-wallets and related services addressing those with a bank account and a steeper revenue curve.

According to the latest market study by Pyramid Research, mobile payments are becoming increasingly integrated into a broader range of mobile services. Furthermore, services such as marketing, advertising, loyalty cards, coupons and discounts are also becoming part of the broader mobile wallet.

Mobile network operators in developed markets need to make a long-term commitment to the mobile payment opportunity and have access to large financial reserves to be able to reap long-term benefits.

While adoption of NFC-capable mobile devices and readers is finally showing real growth, Pyramid believes that mobile network service providers still face major challenges in mobile contactless payments.

The mobile commerce opportunity is becoming an increasingly attractive one, and operators can take a more prominent role in this ecosystem in a number of ways. One particularly attractive strategy that operators are adopting is that of merchant aggregators.

"To be successful, an online mall or marketplace has to provide a secure, trusted and easy-to-use environment for browsing through and paying for online products and services," said Stela Bokun, senior analyst at Pyramid Research.

11th Street, which belongs to SK Telecom's SK Planet subsidiary, is one of the best examples of a well-functioning, operator-managed online mall. SK Telecom claims that 11th Street is the country's second largest online marketplace -- and the largest devoted to mobile commerce.

To date, the mobile app, also called 11th Street, has been downloaded 11 million times. During 2012, 7 percent of the total gross merchandise value (GMV), which amounted to around $3.5 billion, came from mobile. In 2013, the mobile application portion is expected to take 12 percent of total GMV.

Typically it is very challenging for a single mobile network operator to make an online mall successful, and in some cases competing operators partner up in such endeavors. This approach in particular appeals to merchants who want to gain access to all mobile users from all partner networks by forming only one business relationship.

A notable example of such a partnership is Buyster, a joint venture of all French mobile network operators that was launched in 2011. Users of Buyster can pay both through apps and on the Web -- more importantly, they can use their mobile phone number to make a payment, as each mobile phone number is linked to a bank account.

The main benefit that the partnership provides to the operators -- in addition to making the service more appealing to merchants and users and thus stimulating higher adoption rates -- is the lower cost associated with provisioning the service. Buyster earns its revenue by charging commission rates and fixed fees for each transaction -- both vary depending on the merchant’s size.

Popular posts from this blog

Trillion-Dollar Smart Power Grid Transformation

The global energy landscape is undergoing a significant transformation. Renewable energy sources like solar and wind are rapidly gaining ground as we transition towards net-zero emissions. However, this transition hinges on a crucial but often overlooked factor: the modernization and expansion of our aging power grids across the globe. For decades the backbone of our electricity delivery system has been largely static. The influx of variable renewable energy sources like solar and wind presents a new challenge. Smart Power Grid Market Development Integrating these resources effectively requires a Smarter, more Responsive grid that can handle fluctuating power generation and efficiently distribute it across vast distances. This is where a new trillion-dollar energy market growth opportunity emerges. According to a recent worldwide market study by ABI Research, global investments in public grid digitalization and transmission network expansion must exceed $4 trillion by 2030 to meet our