Which Mobile Operator Will Win the Payment Race?

Asia's communications and telecommunications industry had its annual pinnacle event a few weeks ago, CommunicAsia in Singapore. This year I was invited to share my thoughts as a part of the Mobile Payments stream. It was such a pleasure to take the stage with one of the 25 most influential and quirky people in the telecom industry, Tony Poulos, of TM Forum. Under his watch was one of the most unique group of panelist I've ever had the pleasure of joining. The line-up included:

  • Areehan Abdullah, General Manager, mCommerce, Celcom Axiata Berhad
  • Anju Aggarwal, Deputy Director Strategy, SingTel Group
  • Shirish Wadivkar, Global Head - Public Sector Products & Payables Management & Global Product Management - Transaction Banking & Wholesale Banking, Standard Chartered Bank
  • and myself... Scott Bales, Chief Mobile Officer, Movenbank

In true Poulos style we set out to tackle one of the most challenging questions in the Mobile Payments space today... How do you plan for success, and who is going to win in the long run. A topic that would eventually show the true passion of my fellow panelists, while we shared experiences, perspectives and the occasional joke.

Abdullah of Celcom in Malaysia shared his wealth of experience based the the multiple experiments and pivots Celcom has made in the mobile payment arena of the past few years, in a true hybrid market. The wealth of Kuala Lumpur, but the emerging needs of rural communities. Highlighting the still unresolved questions of customer ownership, and the lack of clear ROI evidence for mobile operators. Aggarwal, of Singtel Group, has seen similar trends across multiple Singtel operations, which includes Indian Goliath Airtel. When compared against the revenue of airtime and SMS, mobile payments ROI is yet to show its true worth. Hence operators around the globe enter the space with hesitation, only heightening the risk of unrealised ROI. While I am not entirely sure Aggarwal made the comment, but she has been quoted by ZDNet has saying mobile payments is a "new opportunity" for market players, citing a KPMG study in April that predicted global mobile payments industry to hit US$900 billion by 2015. But she has learnt the need for User Centred design, stating that without knowing customers' full buying behavior, this would hinder efforts to develop value-added mobile payments services.

Seeing a clear gap  and a need for me to voice my thoughts, I inserted a sentiment that has now been quoted several times over, 'Stop Coming M-Pesa.' As I referenced the multiple operations that have looked to simply copy and apply M-Pesa's business model into different markets, with limited or no success, raising uneccessary doubt on the industry. I won't shame any individuals, but the number of times I have heard individuals refer to something M-Pesa did, or a component of their business, would reach into the dozens. The reality is, no Mobile Operator in the world starts their Mobile Payments journey in the exact same position as SafariCom, a dominate market share, completely non-existent payments networks and unintrusive regulator. Couple this with a completely different consumer market, behavoural norms and cultural differences, Kenya is not even close to other global markets. Which was a great segway into a overwhelming point of view by our panel... User Centered Design is key to Mobile Payments success. Think about the user, and connect your business planning deeply to solving a problem in their lives.

Even with a 'A list' of of panelist, I am doubtful though that any of them have what it takes to truly drive transformational success. This is not me questioning their ability, merely a casual reference to the challenges that large consumer organisations have faced during the rapid digital of industry over the past 10 years.. One of the greatest challenges many large Mobile Operators or Banks have is that their decision making frameworks and processes mean that key strategic decisions are made by Executives that have very limited exposure to the true consumer, hence would struggle to connect to a User Centered Strategy. This in the face of the universal acceptance that Mobile Payments still remains a unrealised opportunity.

It's definitely pleasing to see Mobile Payment mature...  build experience and gain scale globally. Panels like the one assembled at CommunicAsia continue to show promise. But who will rise from the expérimentation to show clear leadership in driving scale in a industry that still clinches to the successes of Kenya.

So what are my thoughts when faced with the million dollar questions... who will win in the Mobile Payments race? Banks or Mobile Operators. Start-ups will own m-payments market in 10 years, not banks or mobile operators. Startups have one major advantage, their businesses are built on putting the User first. So I predict the players that will dominate mobile payments in 10 years, don't exist today. Look out!