One of the most repeated questions when a mobile payment discussion starts, who will won at the end in this newly invented war Banks VS MNO -Mobile Network Operator-?
On a very personal thoughts, I can’t see a link or even a symptom of war, both players are enriching the game and their targets are totally different.
There is a clear line that distinguish bank users from MNO users, I’ll call it the 5K line. In most countries, if you tried to open a new bank account you will be requested to deposit a sum of 5K -in average-of your local currency, while with only few cents you can get your self a new SIM card and start transacting immediately.
The 5K theory explains why normal or even advanced users may easily transfer 1,2 or 5K using their mobile phone to a relative or a friend. But we can’t imagine a user transferring 100K from his mobile, users are likely prefer to do this via bank branch or at least online banking interface.
I do imagine that MNO will attract low-mid income users and encourage them to use the banking concepts and functionalists and slowly advance them to be a real banking users. On the below selected units we will try to spot the difference and potentials for each one of the two big players.
Customer Base:
As MNO will not attract low-mid users which is more than 70% of any community, MNO will be the winner with the biggest customer base. On the other hand banks will have the elite and high value customer base with total of 30% of the population.
Transaction Volume and Count:
MNO targeted revenue is the transaction fees, and to expand their revenue MNO will keep pushing and inventing new services to push the money circulation to the maximum maximizing their revenue in reverse. MNO clear target should be minimum fees and small-mid amounts transferred in an insane and flashlight speed.
Banks will come in the second place from the transaction count, and ranked as number one in the transaction volume ,where Bank concept is to encourage users to leave their savings for as long a possible allowing the Bank to do a numerous projects and investment to generate its revenue.
Cash Flow and Circulation:
While Bank is capitalizing on the savings, MNO will circulate the money like thousand times more than Banks do, and the flow will always be at the MNO side.
Resident Balance:
Banks resident balances and saving amounts will be more than MNO, specially that MNO will keep pushing for fast money circulation and the network will keep cashing in/out rapidly.
User View:
From a user prospective MNO will offer me fast and convenient way to get a certain service and I will sacrifice with small portion as my convenience fees. As a Bank user I will expect some profit -interest- on monthly or annual bases against my savings.
Profit:
As mobile payment era just started, its still too early to answer this point and nominate the winner, we will need to wait and see how it will go but I think we will some how end with an equal situation.
Finally, mobile payment will grow specially, when we are sure that both players will adopt the mobile as an official and convenient gateway for their financial requests and we will see an unlimited options and innovative solutions that is built and based on mobile handsets.
Khaled Sayed
Photo Credit:
http://paymentsafrika.com/live/wp-content/uploads/2013/09/Mobile-payment2-642×419.jpg