There is a huge potential to launch innovative financial measures in developing nations that lack adequate access to banks and financial institutions. According to the World Bank’s Global Financial Inclusion Database, more than 2.5 billion adults do not have an account at a financial institution. At the Mobile World Congress, financial inclusion was the main theme and brought everyone who lives outside of the financial system into it. Through both public and private partnerships, for example with card brands like MasterCard or Visa, they can bring mobile money schemes to developing regions once isolated from financial services.
BBVA’s chairman, Francisco Gonzalez, stated that “thousands of banks are going to disappear slowly in coming years because of competition from non-bank players, including Internet and mobile-focused companies.” He has relentlessly invested in technology opportunities ranging from US digital bank Simple to Bitcoin startup Coinbase. The bank currently has 3,000 of its 110,000 employees working on digital banking, but Gonzalez expects that to grow to be more than half of his workforce within five years as the company re-engineers to compete with the technology companies.
A growing number of mobile money accounts now play a role in helping better connect populations to banking services. At least 300 million of mobile money accounts are registered globally in 2014. That has doubled from 2012 figures.
Digital wallet providers are growing in Asia and Europe. They deliver the two qualities that consumers want to make when making online payments – security and convenience. Raj Dhamodharan, MasterCard’s Group Head of Emerging Payments expressed, “whenever a device has internet connectivity, commerce usually follows. It has always been the case.”
As smart phones and tablets turn into mobile payment devices, observers have predicted the rise of digital wallets and the payment industry was given a boost last October such as the launch of the much talked-about Apple Pay. The new Apple’s service will have a drastic impact on the payment industry. According to Forrester Research report, in US alone, mobile payment is projected to grow from US$52 billion to US142 billion by 2019.
For example, when MasterPass digital wallet was launched in 2013, it was able to be used on computers, tablets and smart phones. It is available in 13 countries around the world such as UK, US, China, Australia, Taiwan to name a few. It is working towards making digital wallet to work across all connected devices.
In a few years to come, consumers will be able to have a wallet that is available on whatever digital device that they use. If they have a connected watch, they can conduct transaction out of it. More banks and financial services are investing in security to make sure that they understand and authenticate in a frictionless manner in order for the consumers to conduct transaction in a safe way. Consumers in developing markets will go to great lengths to have access to financial services.
There is a need for more connectivity and card acceptance infrastructure to ensure consumer’s readiness to go digital. Without infrastructure, you cannot have electronic payments, let alone mobile wallets.