23 May 2016

Can a national mobile payment system make sense?

In the past couple of months, the Monetary Authority of Singapore announced that it is considering a national mobile payments system for peer-to-peer (P2P) payments, whilst in  Switzerland, the sponsors of Paymit and Twint have announced that they have entered into merger discussions to create a consolidated national mobile multiple-service payment system.

Only the strong will survive In this highly fragmented sector. With so many existing and potential providers such as the smartphone OEMs, the banks with their own HCE-based mobile wallets, mobile messaging apps, PayPal & other international wallets, mobile operators with their mobile money wallets, carrier billing aggregators, and retailers with their closed-loop wallets, it is small wonder that consumers are taking a wait-and-see approach. B2C mobile payments can be broadly categorised into P2P, POS (off-line) and online/in-app payment services.

A mobile payment system that aligns with a particular community has a better chance of success. Community alignment is particularly important for P2P payments. The community could, for instance, be an international community of WeChat or Facebook Messenger users. National communities, though, are definitely important for P2P, as demonstrated in mobile money use-cases.

Tanzania was the first country in Africa to introduce an interoperable mobile money market in Africa, where the three mobile operators came together to allow their subscribers to send money across networks irrespective of their network. Tanzanian ownership of mobile money accounts surged from 1% of the population in 2009 to 32% in 2014.

A national mobile payment system can sometimes have an advantage in POS payments, where it is aligned with the POS specifics of a particular national market. In Switzerland, dominant POS terminal provider, Six Payment Services, now supports the Swiss Paymit app on its POS devices.

Another example of POS payments benefitting from the specifics in a national market is the highly successful eNETS EFTPOS service in Singapore, formed in 1985 as a subsidiary of the major banks. eNets allows consumers to use their ATM cards at merchant POS terminals, with the payment amount directly deducted from their bank account (as an alternative to Maestro or Visa debit cards settling through the card schemes). The service is ubiquitous, effective, and costs merchants less.

There are many key success factors for B2C open-loop mobile payment providers such as being a trusted provider, scale, support for multiple payment categories, better user experience, cost benefits and built-in loyalty. However, when considering national community/market alignment as a key success factor, a national mobile payments system can make sense.


  1. David Keast

    Follow-up story: Twint and Paymit announce their merger on Fridy 27/5/2016 https://www.twint.ch/content/uploads/2016/05/mm_mobilepayment_dt_270516.pdf

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