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Opportunities for telcos in mobile money: 2011 - Moving beyond a cash-based society - EY - Global

Opportunities for telcos in mobile money: 2011

Moving beyond a cash-based society

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While the mix of payments instruments continues to change, the internet is redefining the very notion of money.

One of the most important considerations for mobile and electronic payments is their role in the long-term move away from a cash-based society.

The mobile advantages of electronic payment systems

Research shows that a 1% increase in card usage generates a 0.039% increase in consumption and a 0.024% increase in GDP. Excluding consumers, the social cost of cash stands at around 0.500% of GDP in many European countries.

Those countries with lower cash costs as a proportion of GDP have more diversified retail payment systems. Although the use of cash as a means of payment is declining, it still accounts for the majority of payments value in many markets.

Cash use as a proportion of total payments in selected European countries1

The advantages of a better-established electronic payment system — including mobile — are clear, in terms of convenience. The mobile handset has additional advantages in terms of convenience and functionality due to high population penetration and integration with the online world.

While the mix of payments instruments continues to change, the internet is redefining the very notion of money. Social networking sites and online gaming are witnessing a surge in payments driven by virtual currency. In addition, micropayment functionality represents a hitherto untapped area for online payment platforms.

Q. What are the three payment channels which will experience the greatest growth in importance in your country over the next five years?2



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1“SEPA FOR CASH, The Single Euro Cash Area, Towards a more efficient European cash society”, European Payments Council, Newsletter, January 2011.
2“Global Trends in Payments Systems,” Edgar Dunn, December 2009 (survey sample of 645 representing 49 countries).

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