The global mobile payments market is estimated to reach $3.4 billion by 2022, growing at a CAGR of 33.4 percent from 2016-2022. This is according to a new report from Allied Market Research. It could offer huge opportunities for communications service providers: Can they seize them?

Asia-Pacific is expected to the highest growth region. Mobile payments through short message services (SMS) mode will dominate, with near field communication (NFC) expected to expand its market share and “grow at a robust rate”.

According to the report, the increased penetration of smartphones, growth in m-commerce, lifestyle changes and the need for quick and easy transactions are the major factors driving the market growth.

"Adoption and spread of mobile payment has resulted in the entry of leading companies such as Apple, Google, and MCX into the competitive landscape. These market players have launched new generation of transactional applications that not only streamline business process, but also provide for greater transaction savings. With the growing number of end-users, focus would drift towards the security and speed of the transaction in the coming years," states Yogiata Sharma, Research Analyst, Consumer Goods Research at AMR.

To expand market share, global players such as Paytm, MasterCard, Apple, and Samsung have launched new mobile payment apps and mobile wallets that allow customers to make payments with their phones/smartphone.

There could be huge opportunities for communications service providers (CSPs) too, given smartphone penetration rates and an existing billing relationship, as well as the ability to collect demographic, identity and location data etc.

Let the games begin

To date, not all telco-led efforts have fared well, especially in the UK and North America, with Suretap, Softcard and JV Weve all shutting up shop and Semble “refocusing".

In March last year, SK Telecom launched T Pay in Korea, a hands-free mobile payment and reward service. It attracted over 100,000 subscribers in just two weeks.

In an interview late last year, L.V. Sastry, VP & Business Head, Mobile Banking and Commerce, Aircel Ltd, a provider of mobile and broadband services, was positive about the opportunities in India too, saying, “This [payment services], surely, could be the next game-changer as far as customer retention and forging stronger relationships are concerned.

“The game has only just begun and it’s a long haul. There is no better player to play this game than the telcos who already have 800 million customers.”

A 2014 EY report said mobile money is "the next wave of growth in telecom" and "an opportunity is one that no operator can afford to ignore". It offers these strategies for operators:

• Leverage established strengths and reputation in security and customer insight
  Operators have trusted consumer brands in terms of security — and this is a vital competitive advantage in a fast-evolving service environment where security concerns hinder customer take-up.


• Improve and align payments-related competencies within the organization
  This is needed to achieve the necessary blend of flexibility and focus, and should be supplemented by external hires with experience in payments and marketing. Design and development of payments services should be linked and integrated with other emerging competencies in cloud, big data and customer analytics to sustain and grow long-term differentiation.


• Engage with customers, suppliers and stakeholders in new ways
  Engaging in new ways with a widening set of ecosystem partners and stakeholders is essential to ensure that value chains are incentivized. Engagement with merchants and vendors can strengthen service creation — while greater focus is needed on the end user experience.


• Consider targeted investments to improve time-to-market
  Targeted acquisitions may prove invaluable as operators ramp up their service portfolios and may help them get to market more quickly with compelling services in high-potential areas like insurance and customer loyalty solutions.


• Reinvigorate partnerships and joint ventures to grow capabilities and improve credibility with end users
  Partnerships will remain the lifeblood of successful mobile payments and related propositions, particularly as operators look to differentiate their offerings with more sophisticated functionalities. In this light, robustly screening partners and aligning them are essential, as is leadership buy-in from organizations looking to partner.

The power of Open APIs

TM Forum’s suite of Open APIs have been adopted by nine of the world’s largest communications service providers and a range of suppliers and vendors to enable revenue growth opportunities – and mobile money could be one of them.

Here's what some of our members say:

“TM Forum is bringing different stakeholders from across industries to work together and build key partnerships to create the APIs and connections,” Laurent Leboucher, Vice President of APIs & Ecosystems at Orange said. “The reference architecture and APIs we are co-creating are critical enablers for building innovative new digital services in a number of key areas, including IoT applications, smart cities, mobile banking and more.”

“IBM is working with service providers and enterprises to accelerate their digital transformation, and open, collaborative platforms like TM Forum’s Open API initiative helps make this possible,” commented Bill Lambertson, global cloud and network leader, IBM. “Through TM Forum’s Open Hack, we’ve exposed these APIs using IBM’s API Connect offerings directly on the IBM Bluemix cloud platform, allowing developers to rapidly compose applications in a hybrid, open source environment. We continue to leverage these APIs across ecosystems to advance deployment of new technologies, including cognitive business solutions and digital innovations, such as mobile payments, commerce and data monetization.”