17 June 2008

Mobile Finance Adoption Drives On The Hoof Transactions

Mobile Financial Service (MFS) transactions are expected to hit 41.5 billion by the end of 2011, thanks to the high speed adoption of mobile finance facilities by consumers, according to a report.

This equates to 612 million mobile phone users generating over $587bn worth of financial transactions by 2011, according to a report by market research company, Juniper Research.

The Far East and China regions are forecast to embrace mobile finance the most, with over 250 million total mobile phone users taking up MFS by 2011

Key drivers are those currently without any access to any form of banking and bespoke payment applications for remittance purposes, according to Juniper Research. The latter, however, still has legislative issues to overcome.

The untapped market, according to Juniper Research, is the so called ‘great unbanked’. The millions of mobile phone users in developing countries, who do not currently hold bank accounts or credit cards, and would like access to accessible banking services at the right price.

In addition,  the report singles out  the millions of mobile phone users in developed countries who cannot currently access financial services due to age i.e. 13-18 year olds.

The report forecasts that in-between 2007 and 2011, the market will see an additional 517 million global mobile phone users of MFS Services, although the report does warn that a number of issues still need to be overcome.  One issue particularly for new entrants is that of legislation.

Most developed world economies have strict rules and regulation governing the financial industry, to protect both the consumer and the retailer.  Juniper Research that it can be a costly exercise to design and implement an alternative MFS payment scheme that adheres to such regulation.