In a hard-hitting analysis, consultancy
TowerGroup predicts cross-border person-to-person payments services
harnessing the ubiquitous mobile phone represent an “emerging
revolution” that will be “a disruptive industry force” with the
potential to undercut fee structures and traffic volume of existing
money transfer operators (MTO).
TowerGroup predicts cross-border person-to-person payments services
harnessing the ubiquitous mobile phone represent an “emerging
revolution” that will be “a disruptive industry force” with the
potential to undercut fee structures and traffic volume of existing
money transfer operators (MTO).
“We believe the rise of next-generation mobile
banking and payment solutions will forever change banks and
payments companies,” said Virginia Garcia, senior research director
in TowerGroup’s Cross-Industry practice.
banking and payment solutions will forever change banks and
payments companies,” said Virginia Garcia, senior research director
in TowerGroup’s Cross-Industry practice.
“Mobility has the potential to enable timely,
relevant, and actionable outreach that will ignite customer
engagement unlike any other channel. Ultimately, TowerGroup expects
mobile phones will do for financial services what Apple iPods did
for music – spur a sea change in the way consumers access services
and suppliers deliver them.”
relevant, and actionable outreach that will ignite customer
engagement unlike any other channel. Ultimately, TowerGroup expects
mobile phones will do for financial services what Apple iPods did
for music – spur a sea change in the way consumers access services
and suppliers deliver them.”
While MTOs stand to be the losers, banks could
be benefactors, believes Garcia and fellow researcher Charul Vyas,
an analyst in TowerGroup’s Emerging Technologies practice.
be benefactors, believes Garcia and fellow researcher Charul Vyas,
an analyst in TowerGroup’s Emerging Technologies practice.
“The inevitable convergence of remittances and
mobility offers new opportunities for banks to grow this market by
making payments faster, more convenient, more secure, and more
accessible to a greater number of senders and recipients,”
explained Garcia.
mobility offers new opportunities for banks to grow this market by
making payments faster, more convenient, more secure, and more
accessible to a greater number of senders and recipients,”
explained Garcia.
In their analysis, Garcia and Vyas concluded
that on the sending side in developed markets, mobile remittances
represent an avenue for banks to initiate relationships with
unbanked consumers, who are heavy users of both remittance products
and mobile phones, with an eye to promoting deposit inflows through
later cross-sale of traditional banking products like current
accounts.
that on the sending side in developed markets, mobile remittances
represent an avenue for banks to initiate relationships with
unbanked consumers, who are heavy users of both remittance products
and mobile phones, with an eye to promoting deposit inflows through
later cross-sale of traditional banking products like current
accounts.
On the receiving side, mobile remittances will
spur development of the financial sector in developing countries,
so that recipients can direct remittances to current accounts, bill
payments and microfinance applications.
spur development of the financial sector in developing countries,
so that recipients can direct remittances to current accounts, bill
payments and microfinance applications.
Against the background of TowerGroup’s
analysis, the wisdom of Western Union, the world’s largest
remittance service provider, in adopting an ‘if you can’t beat
them, join them’ approach is clear.
analysis, the wisdom of Western Union, the world’s largest
remittance service provider, in adopting an ‘if you can’t beat
them, join them’ approach is clear.
A key player in mobile network operator (MNO)
industry body the GSM Association’s Mobile Money Transfer
programme, Western Union is promoting the concept of a mobile
remittance payments hub whereby it acts as the global intermediary
between local MNOs, banks and other market players.
industry body the GSM Association’s Mobile Money Transfer
programme, Western Union is promoting the concept of a mobile
remittance payments hub whereby it acts as the global intermediary
between local MNOs, banks and other market players.
