The whole world may be going ga ga over mobile payments, but a survey by consulting firm KPMG may be enough to dampen the enthusiasm a bit.
According to the international KPMG Mobile Payments Outlook survey of 1,000 executives in related fields around the World, most expect mobile payments to take four years to go mainstream.
Despite heavy promotions by banks such Bank of Baroda and State Bank of India and operators like Bharti Airtel, volume of transactions have been below expectations. For example, according to numbers obtained by Medianama.com, only around 7 lakh mobile banking transactions are happening per month, totaling around Rs 60 crore per month (around Rs 880 per transaction.)
Mobile banking includes things like sending money from one account to another or purchasing items using the phone. To do so, banks provide special services like downloadable applications and special PIN numbers for such transactions.
However, the RBI number implies that actual users of mobile banking may be less than half a million in the whole of India (as most users would carry out more than one transaction.) In comparison, SBI alone has more than 4 million users online banking users and more than 110 million account holders.
According to the results of the international survey conducted among executives in the financial services, technology, telecommunications, and retail sector, not even half (46%) believe mobile payments will gain acceptability among general public in next two years.
On the positive side, nearly 83% believe that such transactions will be mainstream in four years or less.
Also on the positive side, KPMG believes that the executives are under-estimating the speed of change. ““We believe that exploding smartphone growth and myriad opportunities will grow mobile payments at a much faster rate than our respondents anticipate,” says Gary Matuszak, KPMG Global Chair of the Technology, Communication and Entertainment practice.
81 percent of the respondents believe convenience and accessibility is the greatest positive aspect in favor of mobile banking, followed by simplicity andease of use at 73 percent, security at 57 percent, and low cost at 43 percent.
On the ‘challenges’ side, respondents viewed security as the main challenge to developing mobile payments strategies. Technology and adoption of the technology is a distant second, followed by privacy. Some consumers worry that loss of a phone may result in the loss of their bank balance also.
Interestingly, survey respondents felt that the most important role would be played by the Banks and not the mobile operators, who are perhaps pushing the service just as hard in markets like India.
“Banks, which scored the highest in level of importance in the value chain, and credit card companies will have the most important roles, according to business leaders globally. They placed telecommunications companies third, ahead of specialist online payment players (e.g. PayPal, Boku, Obopay), online service provider giants (e.g. Google, Facebook, Amazon), retailers and technology companies,” KPMG said.