Bango recently gathered leading players in the mobile payments industry to discuss enabling the next 5 billion to access content through ‘The Third Wave’ of payment methods. The Bango Alternative Payments Nexus was an invite-only, one off event held at The Bloomberg HQ, London.
As a sneak-peak into this behind-closed-doors event, here is a selection of interesting learnings from the keynote speakers:
“Growth in payment card adoption is too slow”
Windsor Holden at Juniper Research kicked off stating that there is over 2.5 billion unbanked adults worldwide, with over 80 countries having an unbanked population in excess of 50%. In Latin America, Central and East Europe and Rest of Asia Pacific, smartphone penetration is already well in excess of 100%. The payment card market is not progressing fast enough to meet the needs of these consumers. In developing markets, debit and credit card ownership is often extremely low. Even in rapidly advancing economies like India or Indonesia, there will not be enough growth in card payments to serve the mobile market.
Operators cannot make DCB commercially viable in every market
The adoption of mobile wallets has been strong in LATAM, driven by operators who cannot make pre-paid Direct Carrier Billing (DCB) commercially viable. DCB and credit cards are available in Brazil, but are not used for online purchases due to regulatory issues, taxation, and most importantly, they do not meet the needs of the unbanked end-users. Where this is the case, payment providers such as POP Recarga can offer an alternative payment method which meets the market requirements in a way that operators simply cannot.
Juliano Braz, founder of POP Recarga, a cash based top-up card solution, said, “Payment solutions such as POP Recarga’s meet the needs of the market, creating a payment solution which fits the daily, trusted routines of the Brazilian smartphone user.”
Prepare for the third wave
Windsor introduced the concept of the ‘Third Wave’ of payments, where the first wave of credit card did not facilitate the unbanked consumer needs and the second wave of DCB is not viable in certain markets, the third wave of alternative payments will fill the huge gap in enabling access to paid content for the next five billion smartphone users.
App stores have big ambitions for alternative payments
“We need to ensure every customer has an effective way to pay. Microsoft is unifying the Windows 10 experience across all devices, including making payment methods as widely available as possible”, stated Grahame Riddell, Billing Director at Microsoft.
DCB is now available to PC, tablet, smartphone and Xbox One users under Microsoft’s new platform approach. Having a unified experience supported by alternative payment methods is essential to the worldwide growth of the Windows Store. Microsoft are already using wallets to serve markets such as China and Japan, with payment providers such as Alipay established in these regions.
1 in 3 mobile connections in Africa are linked to mobile money accounts
Wallets are generally positioned for making real world payments such as transportation or grocery shopping, in Africa there is great interest and progress in using them for digital content and services. Jide Akindele, founder of MMIT, a mobile money payment processing company, gave compelling details of their findings on how Africa is embracing alternative payment solutions, including how the Sub-Saharan market accounts for the highest growth of mobile money payments, currently at 52% of global markets. He reported that 1 in 3 mobile connections in Africa are linked to mobile money accounts as of December 2015.
‘Content is king’ – entertainment drives adoption of alternative payment methods
When discussing the power of entertainment, Jide stated that “Users are engaged with digital content, but the vast majority still have no means to purchase content to enrich their experiences”.
Bango has reported that new content such as the recent mobile gaming phenomenon Pokemon Go drives huge numbers of new DCB users. This has been seen with all top mobile titles and will only become more impactful as more payment methods become available to the unbanked who have no other way to access the content.
Bango is tying it all together – making local the new global
Bango is the enabler of alternative payment methods and is fully prepared for ‘The Third Wave’ of payments.
Payment Providers such as POP Recarga and MMIT can plug into the Bango Payment Platform to provide an alternative payment solution which fits the habits and needs of localized markets, offering the best payment solution on a region-specific basis.
For a brief overview, we have put together a ‘teaser trailer’, with soundbites from each speaker: