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Opportunities for telcos in mobile money: 2011 - The e-commerce revolution - EY - Global

Opportunities for telcos in mobile money: 2011

The e-commerce revolution

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As much as half of in-store shopping is influenced by the web and there are many different players who want to leverage this new type of customer experience.

Regardless of their sector origins, many players are positioning themselves for shopping using mobile devices.

Mobile players leverage the web

Taking their lesson from the e-commerce revolution, no one wants to be left behind: as much as half of in-store shopping is influenced by the web and there are many different players who want to leverage this new type of customer experience.

Online applications are also catalyzing mobile transactions. SMS-based payments are being used for micro-transactions in online gaming: the lack of marginal cost for virtual goods means that high transaction fees have been tolerated.

In this light, the risk of disintermediation for operators is rising in what is a fragmenting marketplace. Nevertheless, leading mobile players are ramping up their plans for near field communications (NFC) in developed markets.

In emerging markets, operators are repurposing existing money transfer services into person-to-business payments. In these cases, the near real-time nature of SMS and Unstructured Supplementary Service Data (USSD)-based money transfer can be repurposed for customer-to-business (C2B) payment.

Q. Which three payments technologies will experience the greatest growth in importance in your country over the next five years?1

As mobile innovation increases, so do risks

As smartphones and mobile applications spread, they also carry with them the threat of reduced data integrity. In 2010, US banks updated their smartphone apps after it was revealed that they stored account holders’ usernames and passwords on the phone in plain text.

While poorly configured apps represent one security issue, the threat of mobile software malware is an ongoing concern. How can mobile players make customers feel more comfortable?  

They need to educate the customer, making clear what data can be accessed by downloaded apps and reassure them that their data is secure.


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1“Global Trends in Payment Systems,” Edgar Dunn, December 2009 (survey sample of 645 representing 49 countries).

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