July 2012


Authors    Joao Sousa - Partner
  Daniel Pimentel - Senior Associate

Filipe Barros - Analyst

  Pavel Duzhnikov - Research Analyst   










  • The M-Payments ecosystem is a US$120-130 billion opportunity, driven by NFC • and digital payments, of which emerging markets represent only 10%
  • Financial inclusion and smart devices enable Visa, MasterCard and OTT / • Internet players to capture most of the M-Payments opportunity, limiting the opportunity for operators to US$40-50 billion (about 4-5% of global mobile operators revenues)
  • Most operators have lost the window of opportunity for controlled ‘M-Payments • Wallets’ as their initiatives lacked ambition, focus, resources as well as a thorough understanding of the payment industry dynamics and stakeholders
  • NFC M-Payments and digital payments are still untapped opportunities in • most developed markets but require operators to partner with OTT / Internet players, banks, and payment networks such as Visa or MasterCard
  • The M-Banking opportunity, ‘powered’ by smart devices, enables operators • to achieve similar objectives as with M-Payments, without having to deploy expensive agent networks





Mobile Financial Services (MFS) is a broad concept that includes M-Payments, M-Banking and M-Insurance.


M-Payments are a hot topic, with multiple worldwide conferences, industry announcements and declarations of intent from mobile operators. The Kenyan, Philippine and Japanese M-Payments success stories as well as the battle between Visa and MasterCard for partnerships with operators and Internet companies are fuelling the interest.


Mobile operators across emerging markets believed that capturing the US$120-130 billion M-Payments opportunity was going to be as easy as growing mobile penetration. Everyone has been talking about the ‘billions’ of unbanked people who already have SIM cards and the distribution advantage of operators versus banks. These and other factors led operators in emerging markets to roll out controlled ‘M-Payments Wallet1‘ platforms, targeting the unbanked consumer, with minimal investment commitments.


According to Gartner, there are currently more than 160 million M-Payments subscribers in the world2. However, most operators simply do not disclose performance of their respective M-Payments initiatives and the few that do, focus on subscribers3 rather than financials. Could it be that most subscribers were ‘forced’ into M-Payments contracts as part of the SIM registration process, and do not use the service? Or, perhaps the impact on financials is negative, as the revenue from the M-Payments services does not justify the substantial distribution and operational back-office costs?


The reality is that the controlled ‘M-Payments Wallet’ window of opportunity for most operators is either closed or closing fast. The banks, rising to the occasion and helped by governments’ policies, have significantly increased the world’s banked population while Visa and MasterCard are driving electronic payments growth across the world.


The positive news is that not everything is lost. There are already 2.5 billion banked adults, 0.8 billion credit card users, 0.6 billion online banking users and more than 0.5 billion iPhone and Android users. The rapidly growing base of banked smart-device users creates three opportunities: 1) Digital payments; 2) Near Field Communication (NFC) payments; and 3) M-Banking, including access to bank services through apps and joint operator-bank commercial approaches.


Operators interested in capturing these opportunities need to, in the nearest future, commit adequate resources and establish partnerships with payment network players as well as banks banks to explore M-Payments, M-Banking and M-Insurance.


The white paper has three main objectives:

  • Assess and size the M-Payments landscape and the current approaches of the mobile operators
  • Zoom in on M-Banking as key area of opportunity within the MFS landscape for mobile operators
  • Define a cooperation framework for mobile operators and banks to seize the MFS opportunity


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