Monday, September 01, 2003

Mobile payments: threat or opportunity for the traditional banking sector?

Today I came across this very interesting abstract by Kathleen Declercq, about the future of mobile payments. The full thesis (in Dutch) can be downloaded here.

Till 2003, the three main actors will divide the market into a micro market, where payments with a maximum transaction volume of euro 10 are performed; a macro market (> euro 50) and a meso market (between euro 10 and euro 50). The mobile operators will control the micro market, the traditional banking sector is benefited on the macro market and the newcomers will concentrate on the meso market. After 2003, however, banks and operators will launch more advanced systems on the market, and so the convenience of mobile payment systems will improve drastically. During this phase, the simple systems of the newcomers will be eliminated and a real battle will erupt between the banks and the operators to get a hold on the meso market. The operators will obtain the statute of a bank by distributing debit cards themselves. The conclusion of this report is that the operators will eventually control the bigger part of the mobile payment market.

I would imagine her analysis to be quite correct. It puts the decision of the Rabobank to enter the market for micro-payments by developing an open system of their own into the proper perspective.