Tag Archives: Mobile payment

What’s behind Mobile Payment success in Asia?

When you look to Asia to replicate the success of Mobile Payments compared to other regions, you need to know what is behind. The success comes from two totally disparate markets that have little in common among themselves, and with the western world.

1. Emerging Countries.
A few years ago I visited a good customer in Cambodia. They were the leading mobile operator in country and we were discussing the upgrade of the Prepaid platform we provided. I was surprised when our country manager took me to meet the CFO and not the CTO or CIO. Why was the Prepaid platform under the management of  Finance? The CFO himself answered: The country had a total of 40.000 bank accounts, while they already had 2 million prepaid mobile users and growing. In Cambodia everyone had a mobile phone, but only a few of them could afford a bank account. Their Prepaid Accounts had transformed into Mobile Wallets.  People had started to use Airtime Transfers as a method of payment. The mobile operator was also becoming a new sort of ‘bank.’  The technical solution was based on simple USSD transactions.

The story shows that a large number of Prepaid users with ARPU‘s under $10/month will make the statistics to Mobile Payment users.

2. Japan.
I lived a few months in Tokyo. A few days after you land you realize you need a Suica card. The Suica card is a RFID wallet card that is ultra convenient when you use the wonderful railway and metro system in Tokyo. Taxis are very expensive and having a car too. Soon you notice everyone has one Suica card, only if to use the public transport system.

With eveyone carrying a Suica card, you understand why most convenient stores and any merchant that receives small payments in cash accepts it.

On the other side, the handset ecosystem in Japan is totally different from the rest of the World.  The handsets that Docomo and KDDI provides are still specific for Japan (only after iPhone 4, Apple is making significant inroads in market share). Therefore for phones to support Suica, it was only a matter of Docomo and KDDI agreeing with Suica to link their balances.

In short…
Mobile Wallets in emerging market are filling a need we might not have in western countries.

You can learn from Japan experience. Just be aware it is a market with many specificities, and that a big driver for adoption was the wide use of public transport.

You will find more statistics at Statista

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