Mobile B2X: The Next Wave of Mobile Payments in Developing Markets
7 December 2009
In my coverage of the mobile payments space, I am continually amazed at how quickly the developing world is taking this technology and running with it. The "oldest" mobile payments systems in developing world countries have only been in place for about 2.5 ~ 3 years, and are experiencing phenonmenal growth. GSMA expects 120 new mobile payment program implementations in 2009, and Safaricom in Africa is now at the point where roughly half of its subscribers use its M-PESA mobile payments service. A new example of mobile payment innovation in these markets is what I call "Mobile B2X" -- companies' and other organizations' use of the mobile channel to pay other companies or individuals. What I am uncovering is that there are three main use cases for Mobile B2X services:
- Payments made by retailers to wholesalers for receipt of consumer goods
- Salary, commission and pension disbursements made by companies (and govts) to individuals
- Social benefit distributions from companies (and governments) to individuals
Given these use cases, the market potential for Mobile B2X is massive. This approach is just emerging, but market data points indicate that we may be on the verge of something big. Coca-Cola distributors in Africa were already collecting 30% of their invoices via mobile technology in 2007
. There are reports of employers converting their entire employee base over to mobile salary disbursements in one fell swoop. NGOs have realized that distributing funds via the mobile channel reduces costs and helps local economies at the same time. Mobile P2P payments serve as a great foundation for Mobile B2X, but are not enough. New technology has to be developed to fulfill the business requirements of ecosystem players. Perhaps more importantly, infrastructure issues such as mobile network operator (MNO) agent cash-in/cash-out liquidity and payment system inter-operability need to be addressed. Stay tuned, I expect to publish this report later this month...