My recently published report, “The Mobile Payment Opportunity In Southeast Asia,” finds that mobile payments are hot in Southeast Asia, with online and mobile-based purchases already exceeding tens of billions of dollars. Venture capital firms are also investing close to $75 million in mobile payments, drawn by a combination of factors including a booming digital content market, increase in online and mobile commerce and favorable government policies.
Well aware of the mobile payment opportunity, banks are scrambling to build their own mobile payment systems. But it’s not just financial institutions that are competing against each other to provide the best mobile payment services to their customers. Surging smartphone penetration in the region has created revenue opportunities for mobile operators, credit card networks and financial technology startups, all of which are also rapidly ramping up their mobile payment capabilities to stay competitive.
The brutal reality is that there is a high risk some of the banks’ mobile payment systems will fail. How then can banks ensure the success of their mobile payment systems?
eBusiness professionals need to keep up with the shifting landscape by understanding the market trends, usage scenarios, and local mobile payment options available to consumers. We recommend that banks incorporate three market dynamics into their mobile payment strategies:
User scenario for mobile payments varies across Southeast Asia. P2P payment growth in emerging markets differs from developed markets. We expect remittances to continue to spur P2P payment growth in emerging markets, and P2P payments will continue to account for a small share of transactions in developed markets.
At the 2nd Annual Telco Cloud Strategies 2013 event in Singapore, I moderated a discussion on how Southeast Asian telcos are gearing up to offer cloud services. Here’s what I observed:
In the cloud era, SE Asian telcos are moving faster than they are used to. A year ago, Philippine telco Globe Telecom set up a new division, IT Enabled Services, to effectively deliver cloud services, supported by more than 100 professional services people on the ground. While revenues are still low, the new division is now freed from being part of the larger parent company’s processes and can move quicker than competitors to offer managed cloud services for specific industries. Indonesia’s Indosat, on the other hand, has brought both the IT and network divisions together to offer a bundled service — cloud with connectivity — in the same period. Others, like Singapore’s SingTel, acquired IT services company, NCS, to tap into the enterprise segment.
Telcos need partners for cloud services. This is essential, as telcos do not typically have all the pieces for an end-to-end solution. For instance, even with a solid IaaS offering, a telco still needs partners to build the value chain in their ecosystem, e.g., SaaS, and grow together. Indosat, for instance, partnered with Dimension Data to offer enterprise cloud services in Indonesia. The partnership combines Indosat’s nationwide connectivity backbone infrastructure and its 10 data center facilities in Indonesia with Dimension Data’s cloud consultancy services.