Mobile phone payment systems on the rise
I remember when i first started selling online there was no paypal to make it easy for you. Most merchants had to go through their local bank which was costly and time consuming. Now there are so many payment methods out there that cover just about anything.
Mobile payments is one of those. It is relatively new and over the last few years a few players such as Boku (formally Paymo), Daopay and Zaypay are taking a hold of the micorpayment market by offering merchants a chance to access a whole new customer base – those that don’t have credit card or bank account.
I am from Australia and we like USA, Canada, South Africa, New Zealand and Europe take for granted the access we have to bank accounts and credit cards. I remember having a bank account when I was 5 years old and depositing a few bucks a month into my account. But what about the mass markets of Russia, Asia and South America? Many people in those countries don’t have bank accounts let alone credit cards so how are they suppose to purchase online? Well previously this market was hard to tap – not any more.
Mobile payments systems now make it possible to access people who own a mobile even if they don’t have any banking facilities. Services such as Boku let consumers buy products with the payment going onto their phone bill. This means instead of having a potential customer base of 1.5 billion you have a customer base of 4 billion and rising.
The merchant fees are high, as much as 75% in cases, because the telecommunication company takes the risk and they don’t like doing that. But as former corporate banker I can see this changing as the telecommunication companies begin to manage the risk better and learn to flick it off to those to banks and the like.
granted you can’t sell $1000 items using mobile payment systems because the telco quite frankly won’t take that risk on but if you are selling goods under $15 then you should consider it. Those that sell small denomination goods like songs, mp3, ringtones, e-books, web templates, pictures and the like are likely to benefit in a massive way by allowing customers to pay by mobile phone.
A few benefits include
1. Often there is no fixed transaction cost so small 20c items can now be sold profitably.
2. No sign up is required by the purchaser, they just use their phone and that is it
3. Access 4 billion potential customers
4. Possible for merchants to successfully tap into the lucrative markets of China, Brazil, India, Russia and Indonesia and take advantage of their huge populations and rising mobile phone usage.
Overall I am very excited about this mobile payment space and am a bit of an expert in the field. If you are serious about selling online then you should get yourself involved and see what benefits your website can take out of it all.
