Mobile Payments to Determine Future of Global Economy

NEWCASTLE UPON TYNE, Nov 03 (IPS) – Half the global working age population does not have a bank account, yet six billion people have access to a mobile phone. Ninety percent of people in developing countries have mobile phone subscriptions and 84 percent have signed up to mobile broadband subscriptions.

This supports an upward trend in adoption of mobile payment technologies in developing countries, where many users now have a means to utilise previously inaccessible financial services via their mobile phones.[pullquote]3[/pullquote]

It has been predicted that mobile payment subscribers will reach almost 1.1 billion users by the end of 2015, with an annual 1.3 trillion dollars in global mobile commerce by 2017.

The growth of mobile data traffic in Africa is also expected to increase 20 times between 2013 and 2019, Latin America is forecasted to experience a 67 percent growth in mobile data traffic by 2017, and Asia Pacific will produce 47 percent of all global mobile data traffic within this same period.

On a global scale, mobile data traffic will surpass growth rates of Internet access, driven primarily by developing economies that are reliant on mobile data to access the internet. Mobile devices will continue to be more common than desktop or laptop computers in developing countries, signaling that mobile commerce will continue to dominate e-commerce.

Societies that have weaker financial systems with less regulation are quicker to accept m-payment technologies, with better consumer response than in developed economies, possibly due to different expectations than those in developed economies.

These emerging economies will face a range of growing pains as regulations and competition surface in markets where digital transactions represent the first mainstream financial system. Its unclear whether the current model will be sustainable.

Its highly likely that emerging economies will bypass diffusion of credit or debit cards completely. Current trends have demonstrated a move directly from cash to mobile. In order to get a credit or debit card, individuals must go through a lengthy process and merchants must invest in hardware to accept cards. Using mobile payments typically just requires a basic mobile phone subscription in developing countries.

Mobile payments and mobile banking in developing countries will establish a financial system which will be led primarily by private sector telecommunication companies. Read More

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