Mobile payment is proved to be positively linked to the growth of businesses, as companies accepting mobile payment tend grow faster. Also, fast-growing companies are most likely to accept mobile payment. The system is already implemented in developing countries while the leading ones are searching for a bankcard with one hand while holding the phone in the other. How is this possible?
Developing countries
Setting up the infrastructure and technology for an ATM network and physical POS is a costly and complicated process, especially for developing countries. Thus accessing cash in countries like Kenya was quite complicated. They did not enjoy this ‘luxury’ like the leading countries until the introduction of mobile payment. The benefits are huge, as it provides them with a cheap and secure way to transfer and store data. Furthermore, it enables the people in the most rural area to have access to their money at all times. With just a simple SMS, a dairy farmer is able to receive the money for the milk he just sold, buy raw materials and pay his employees.
Developed countries
The payment industry is much more developed in leading countries, thus it seems to be logical that mobile payment would be implemented there first. In reality, the advances of the payment industry seem to be the biggest barrier. Let’s take Europe as an example. Banks have invested a huge amount of money in order to make paying as easy as possible with other good working methods, for example the introduction of contactless payment. This reason, together with the good ATM infrastructure makes a massive shift to mobile payment not directly necessary. European customers do show interest in mobile payment, but there is no reason for the banks to make this move as fast as possible. First of all, it is a huge investment for a bank to develop their own mobile payment system, while the satisfaction with the current payment methods is quite high. Collaborating with online payment companies like Chinese banks do with Wechat Pay and Alipay is the solution that banks want to avoid the most, as they will have to pay a percentage of a transaction to the intermediary.
https://www.bbva.com/en/mobile-payments-successful-developing-countries/
https://www.forbes.com/sites/tomgroenfeldt/2017/03/08/mobile-payments-can-boost-growth-and-profitability/#1cbf0a001396
https://www.raconteur.net/finance/mobile-money-puts-the-poor-on-the-road-to-prosperity
