Mobile Commerce Insider Featured Article

May 04, 2015

How to Go Global: Use Mobile to Extend Financial Inclusion Worldwide

The GSMA estimates that global smartphone penetration in emerging markets will continue to accelerate in years to come, with use in Sub-Saharan Africa rising to 32 percent by 2017 (compared to 19 percent in 2012) and to 20 percent in Latin America (up from 4 percent in 2012), yet payment barriers are preventing many organizations and brands from successfully penetrating emerging markets in growth regions such as Africa and India. Although mobile is an efficient channel to reach consumers, the majority of mobile users in these markets cannot access banks and cannot use credit card payment methods. With mobile payments not yet a reality in every region, specifically in emerging areas, organizations must expand their payment offerings to effectively remove significant barriers to entry in these regions.

Increase mobile commerce efforts

In emerging markets, traditional commerce is often not a possibility due to logistical restrictions. Therefore, mobile commerce presents a prime opportunity for organizations to expand their reach to populations in these areas. While physical retail presents many challenges, mobile offers a seamless experience which makes it a preferred channel. Specifically, organizations can utilize mobile operator billing systems to overcome the barrier presented by credit cards, as they allow consumers to pay directly via their phone bills. By giving users feasible payment options for mobile commerce, brands can better reach global consumers.

Offer a variety of payment solutions

One of the most significant barriers to entry for organizations is limited access to banking facilities, evidenced by the fact that 21 percent of consumers in emerging markets cannot reach credit or banking facilities. Additionally, recent data from the World Bank demonstrates that although U.S. penetration of financial services such as credit and debit cards is 72 percent, in Nigeria it is only 19 percent and in Ghana, just 11 percent. With these obstacles in mind, it is imperative brands eliminate these barriers to allow emerging regions to better access financial services.

Understanding that the issue of payment obstacles is detrimental to global expansion, many organizations are already pursuing efforts to offer diverse payment options for consumers in emerging markets. As an example, Visa’s Visa Ready initiative allows mobile point-of-sale (mPOS) stakeholders to navigate payment processes to ensure the security of card transactions. Similarly, Samsung Pay leverages Loop technology that makes Samsung devices compatible with NFC-free magnetic card readers. Solutions of this kind effectively limit significant barriers to entry, including payment obstacles and financial restrictions. More alternative payment solutions must be presented to consumers if brands want to expand to emerging markets.

In conclusion

While mobile has become more widespread, payment methods are still an obstacle in many rapidly evolving regions. If payment methods are transformed to fit the specific needs of consumers in emerging markets, brands can better infiltrate these emerging areas. Organizations have a variety of viable payment options for consumers worldwide due to the widespread adoption of mobile – it is merely a matter of choosing the most suitable payment for each market. 

About the Author: Marco Veremis is founder and CEO of Upstream, where he sets the company’s strategic direction and spearheads expansion. He has also been chairman of the board since 2002. Veremis is a mentor for Endeavor and Openfund, and serves as vice president of the board of HAMAC and as an angel investor and board adviser for Workable HR.




Edited by Dominick Sorrentino




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