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Mobile wallets
Mobile wallets
Mobile wallets
Mobile wallets
Mobile wallets
Mobile wallets
Mobile wallets
Mobile wallets
Mobile wallets
Mobile wallets
Mobile wallets
Mobile wallets
Mobile wallets
Mobile wallets
Mobile wallets
Mobile wallets
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Mobile wallets

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  • 1. Mobile WalletsAlternative to savings accounts ?September 2012
  • 2. Mobile phones can do almost anything these days "Im amazed at all the cool stuff I can do with my new phone. Yesterday I sent a photo to my mom, bought some music, watched a movie, trimmed my sideburns and neutered my cat!"Mobile Wallets FINAL.pptx 1
  • 3. How many of you have received SMS alerts from your bank on your phone? How many of you have a smart feature phone? How many of you have a mobile banking application installed on your phone? How many on you are aware of USSD based mobile services? How many of you have transferred money using mobile banking?Mobile Wallets FINAL.pptx 2
  • 4. Huge untapped potential for MFS in India Fundamental drivers for adoption Transactions on mobile channel of mobile payments in place remain small % % 000 cr 1 FY 12 100 72 100 % of HHs earning Younger 54 7,100 > INR 1.5 lac pa 7,077.5 Richer 50 44 46 % of popln Demographic 0 0 b/w 20-50 yrs of age 201 202 2 0 2 # / 100 150.1 150 High 200 119 Mobile 83 100 # of subscribers Penetration 0 100 per 100 pop 83.4 201 202 2 0 3 % of txns 50 Prevalence 100 46 e-payments of Paper 50 83 Payments 54 17 paper payments 1.8 0 0 201 202 NEF POS ECS Mobile 2 0 T (credit & (Debit) Source: RBI Data, Euromonitor , EIU, BCG Payments Model debit)Mobile Wallets FINAL.pptx 3
  • 5. One reason : lack of consumer awareness Penetration far lower than other Lack of awareness about channel / payment channels utility key reasons % of customers who have used the channel at-least once in past 1 year % Reasons for not using mobile channel by non-users 100 96 96 30 92 Private Sector Banks 27 26 Public Sector Banks 79 80 20 60 17 38 38 12 40 10 29 28 10 25 26 22 7 19 20 11 7 0 0 Branch ATM Debit Mobile Call Internet Mobile Don’t Not aware In- Do not Safety Hidden Card Banking center Banking Banking feel the convenienceknow how concerns charges / (SMS) (Non need to to use High fees SMS) Reasons Channels Note: Sample Size : ~13,900 customers Source: FIBAC survey 2012Mobile Wallets FINAL.pptx 4
  • 6. Despite readiness, low adoption vs other nations India scores high on readiness for Significant gap between potential and mobile financial services adoption Market Environment High Readiness Adoption & Availability 2 2 Phillipines Kenya Brazil Pakistan Tanzania Phillipines 1 Kenya India 1 Ghana Indonesia South Africa Uganda South Africa 0 0 Malaysia Indonesia Bangladesh Uganda Mexico Malaysia Afghanistan Nigeria Bangladesh Pakistan Argentina Nigeria India -1 Tanzania -1 Ghana Brazil Argentina -2 -2 Afghanistan -3 -3 -3 -2 -1 0 1 2 -3 -2 -1 0 1 2 Low Readiness Institutional Environment Market Environment Note: Country scores are based on the difference of the unweighted average country result on each of pillars included in a specific environment and the total sample mean for that environment. The difference is expressed as the number of standard deviations of a country score from the mean. Note: "Adoption and Availability" metric includes measures of adoption of MFS services, the diversity of mobile payments services and the diversity of other mobile financial services; "Market Environment" refers to combination of "Market Competitiveness" (includes measure of financial sector and telecom sector competitiveness and innovation) and "Market Catalysts" (includes govt leadership, data collecting and monitoring ); "Institutional Environment " refers to a combination of "Regulatory Proportionality" (Financial sector, telecom sector and MFS regulation) and "Consumer Protection" (includes regulation and enforcement and administration) Source: WEF Mobile Financial Services Development Report 2011 (in collaboration with BCG)Mobile Wallets FINAL.pptx 5
  • 7. Mobile financial services alive with innovationMobile Wallets FINAL.pptx 6
  • 8. Broadly, three categories of innovation 1 Mobile Banking 2 Mobile Wallets 3 Mobile POS • Channel for banked • Payments channel • Low cost card readers customers independent of bank a/c attached to mobile phone • Mobile app for smart • Store of value / card phones; USSD / information • Card based POS at BREW / SMS small merchants; • POS, fund transfer, bill home delivery • All use cases : fund payments vendors transfer, remittance, billpay, balances, etcMobile Wallets FINAL.pptx 7
  • 9. 70% spends happen through banked customers 62% of all households in India are Banked households contribute to banked today more than 70% of all spends # of HHs (mn) % of Consumption Spend 150 40 Unbanked 47% Unbanked HHs Banked Banked HHs 32% 111 73% 30 9% 26% 100 24% 77 59 3% 74% 20 19% 14% 21 5% 50 88% 38 10 21% 23% 10 16 56 52 14% 12% 2 28 0 14 0 Affluent Aspirer Next Billion Strugglers Affluent Aspirer Next Billion Strugglers % Banked A well executed mobile banking platform can address a large proportion of consumption spend in IndiaMobile Wallets FINAL.pptx 8
  • 10. Mobile wallet – primarily targeted at unbanked Several mobile wallets launched in India and abroad • Remittance solution - saves time and Examples from India money • Savings instrument Unbanked Customers Examples from other geographies • Pay using mobile wallets vs cash / card • Ring fence account Kenya Uganda Philippines for unsafe POS Banked CustomersMobile Wallets FINAL.pptx 9
  • 11. Three models have been tried globally Telco Led Collaborative Bank Led Kenya South Africa Pakistan Philippines South Africa Kenya Philippines Philippines • Distribution through • Distribution through • Distribution led by telco network telco network bank • Deposits held in • Deposits held in banks • Deposits held by prepaid account banks • Branding either joint or issued by telco with bank assuming • Banks brand • Telcos brand minor role • Telco agnosticMobile Wallets FINAL.pptx 10
  • 12. Making wallets work has not been easy 100+ mobile money services operational / being launched Few have been successful No.of mobile money services Successful 150 119 Kenya Uganda South Africa 6 0 9 100 26 Partially Successful 33 Tanzania Pakistan Philippines 50 45 Unsuccessful 0 US South Africa India Haiti Africa APA LA ME E. Total A C C Eur Success of mobile money undertaking highly dependent on environment, value proposition and execution strategy Source: Gartner, Company data, BCG analysisMobile Wallets FINAL.pptx 11
  • 13. Will mobile wallet be the next big thing in India? A solution primarily for the unbanked or for 1 Target Segment existing banked customers as well ? Are banks best placed to launch wallets ? 2 Market Structure Would the bank-telco collaborative model take off? Will it change if cash-out is allowed for telcos? 3 Regulation Does current regulation on KYC norms need to adapt to the reality of mobile wallets ? Should USSD be made ubiquitous, will it help? 4 Technology Are there security concerns ? Will mobile wallets be a tool primarily for 5 Use Cases remittance or for other payments as well? How will wallet providers build distribution and 6 Distribution awareness for mass adoption ?Mobile Wallets FINAL.pptx 12
  • 14. We have a tendency to underestimate future "I think there is a world market for maybe 5 computers" Thomas Watson, IBM chairman "640KB ought to be enough for anybody" Attributed to Bill GatesMobile Wallets FINAL.pptx 13
  • 15. Unused slides
  • 16. Mobile banking - channel for banked customers Can address all mobile payment Can serve a large existing population needs for banked users leveraging different tech platforms 1 # of HHs (mn) Fund Transfer 150 Unbanked Banked 111 2 Remittance 100 77 59 21 3 50 38 Bill Payments 10 16 56 52 14 28 4 0 Ticketing Affluent Aspirer Next Billion Strugglers 5 App Balance Enquiry USSD / BREW / SMS based Based Source: Euromonitor, BCG Indian Consumer Survey December 2010Mobile Wallets FINAL.pptx 15

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