SWIFT is encouraging banks to recognise the importance of mobile payments for the sector and to plan for growth. In a new whitepaper entitled ‘Mobile Payments’, the bank-owned organisation encourages its members to partner with businesses’ in m-commerce activities, for example in the numerous m-wallets presently being unveiled by MasterCard and others; to invest in expanding m-banking for retail customers and corporates; and to develop a mobile money transfer business to rival M-Pesa in Kenya and other established players.
The encouragement to work together to setup a global m-payments service for international money transfers and remittances is particularly interesting. Banks should collaborate to develop a worldwide service that is mobile enabled, says SWIFT, because it can increase their market share, encourage involvement in financial services in developing markets like Africa and help address competition from non-banks.
SWIFT argues in the ‘Mobile Payments’ whitepaper that the area should be a top investment priority for banks globally since out of a world population of 7 billion, more than 5 billion people (70%) now have a mobile phone, while only 2 billion (30%) have a bank account. This fast growing market is predicted to carry US$1 trillion in transaction value by 2015.
Non-banks players, such as Mobile Network Operators (MNOs) and e-commerce companies are currently deploying many m-payment solutions faster than the banks, however, as was made obvious at this year’s Mobile World Congress show and even at the Mobey Day event.
Several banks have already embraced m-payments, but adoption is by no means universal yet and SWIFT believes banks all around the world could do more to strengthen ties with their customers in a new 'experience banking model'. SWIFT’s supranational structure would of course position it to benefit from any such cross-border cooperation but there is a lot of standardisation work to be done by the European Payments Council, GSMA, Mobey Forum and other organisations first as well.
"Banks have the power to shape the future of mobile payments,” said Wim Raymaekers, head of the banking market at SWIFT. “Collaboration with room for differentiation is crucial. All it takes is for a few leading banks to take the initiative."