What Mobile Operators Should Know About Mobile Payments
Diamond Management & Technology Consultants has announced a new white paper titled "Mobile Payments: Mobile Operator Market Opportunities and Business Models" that suggests that, "while the growing multi-functionality of mobile phones could present an opportunity to substitute the ubiquitous wallet with a digital alternative, wireless operators face real challenges in deciding how they will generate new revenue in a mobile payments ecosystem that could be dominated by financial services firms."
Mobile payments -- or m-payments -- refer to any payment made through a mobile phone, whether in-store or remote. For example, a consumer can use a mobile phone to make purchases at retail stores in place of cash, credit or debit cards, and checks. In the case of remote transactions, consumers use mobile phones to purchase mobile content and applications and complete peer-to-peer (P2P) and international fund transfers.
"The total payments market in the U.S. is estimated to be over $7 trillion, so even if m-payments capture a small share of that, the potential opportunity is enormous. U.S. mobile operators will need to play an active role in developing an m-payments ecosystem that ensures they capture a fair share of revenue from this opportunity," said Hamilton Sekino, a Partner in Diamond's Telecom and High Tech practice.
"These operators will have to work collaboratively with financial institutions and other ecosystem players to build a compelling value proposition around m-payments in order to accelerate consumer behavior shift from traditional payment methods to mobile payments. M-payments' associated fees to mobile operators will help them fill the gap in $40 billion non-voice revenues they need to generate by 2010 to sustain overall ARPU."
To obtain a complete copy of Diamond's white paper, send an email to mobilepayments@diamondconsultants.com.
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