The Asia Pacific mobile payment landscape is currently in an exciting phase of development, but remains fragmented. Asian telcos will likely need to wait at least another two to three years to see traction with mobile payments. Here’s why:
User readiness. Let’s face it: Cash and credit/debit cards still dominate the payment landscape, and are a lot more convenient to use. While penetration of feature and smartphones has grown substantially in Asia, not many people actually use their phones for mobile payments. Even in markets like Australia and South Korea, cash and credit cards remain highly popular among consumers. And if demand remains low, merchants will not deign to accept mobile payments — creating a vicious cycle.
Infrastructure development. Telecom infrastructure in many Asian countries remains uneven with spotty coverage, (e.g. India and Indonesia). Without proper network access, mobile payments will not propagate outside of urban areas, if at all. While Globe’s Gcash has seen some level of success, the truth is that mobile payments remain nascent in the Philippines specifically and in Asia more broadly. In addition, there is still limited handset support for mobile payments (e.g. some Android models are not able to work with a service). Australia’s Commonwealth Bank went ahead with its m-payment launch after deciding not to wait for incompatible handsets to catch up.
At a recent Enterprise Mobility event, I spoke with a few Asia-based IT directors about their journey in the age of consumerization of IT, and how they were dealing with Bring-Your-Own Technology (BYOT) at work. Their responses ranged from ‘fear of the unknown’ – as in ‘how do we deal with this trend?’ to ‘paralysis by analysis’ – as in ‘let’s arm ourselves with as much information as possible, and analyze it to death.’
The issue is – their employees are already accessing corporate email on their own mobile devices – which means that these IT managers are scrambling to catch up to managing BYOT in their organizations. In fact, an IT head at a large FMCG organization admitted that he did not know where to start managing BYOT.
Security and compliance were key concerns for these IT folks, and their concerns are valid. Trend Micro predicts, for example, that 91% of targeted attacks begin with spear-phishing, a highly targeted type of phishing aimed at specific individuals or groups within an organization. This was heightened in a recent spear-phishing attack on a South Korea bank. The security provider also predicts that there will be 1 million malicious Android apps in the wild by the end of 2013 – another red flag for organizations coping with the rise of Android devices at their work place.