Mobile Money in Uganda: Several Use Cases

Domestic money transfers are the dominant application people make of mobile money services, with the mobile money services mainly used to support immediate family members, a study has found. That isn't all people do, though.

The respondents also used mobile money to buy airtime, pay television bills, school fees or tuition. While some of these services are new, they are perceived to offer important benefits to the users: speed (for 78 percent of the respondents), practicality (69 percent), and an affordable price (68 percent).

However, a few concerns were raised regarding agents’ liquidity (35 percent), the risk of losing a mobile phone and any mobile money associated with the device (31 percent) and long queues at agents’ location (29 percent).

In addition, while transferring domestic money is the most widely used service, the respondents highlighted three other services which they perceive to be more important: 1) airtime purchase or top-up 2) paying for transportation 3) Settling of hospital bills.

Exploring Usage of Mobile Money in Uganda Mobile Money for the Unbanked

"Send Money Home" Worked, "Banking" Did Not

Mobile payment and banking services are not different from other businesses in one important respect: sometimes a company has to refine its product and pitch when its original "go to market" strategy fails to resonate, and consumers say they want something else.

M-PESA launched in Kenya in 2007 and thought its customers would want the ability to transfer money to make loan payments. The company found out that what people wanted most was to "send money home." So M-PESA started emphasizing "Send Money Home" and found success.

Business Line : Features News : It's Africa calling for mobile operators

U.S. Consumer Spending: The Mobile Payments Opporunity

U.S. consumer spending is about $10 trillion to $11 trillion a year.

Food is about 13 percent of that spending. Apparel is about 3.5 percent.

Transportation is about 15.6 percent. Entertainment is about 5.5 percent.

Health care is about 6.4 percent. "Other" purchases are about 10.5 percent.

What that means is that some 48 percent or more of monthly retail spending involves "buying things" other than paying a mortgage or rent (assume for that analysis that zero percent of the health care spending is out of pocket by the consumer).

That means upwards of $4.8 trillion a year is spent by consumers buying things that require some sort of payment. Most of that is spent at retail locations.

And that's why many are intrigued by mobile payments.

$4 Billion in U./S. Mobile Ad Spending in 2015

Total U.S. mobile ad spending will grow from $790 million in 2010 to $4 billion in 2015. During the same period, BIA/Kelsey projects the local portion of that total to increase from $404 million to $2.8 billion. This makes locally targeted mobile ads 51 percent of overall U.S. mobile ad spending, growing to 70 percent by 2015. See http://www.biakelsey.com/Company/Press-Releases/110623-U.S.-Mobile-Local-Ad-Revenues-to-Grow-From-$404-Million-in-2010-to-$2.8-Billion-in-2015.asp.

There's a very good reason why Google is interested in what mobile devices can enable, in terms of advertising and promotion. There is a big, and growing local advertising business that typically has been dominated by phone book ads, direct mail and local media advertising. But mobile devices are widely seen as providing a better channel, in part because they are sensors, able to interact with other devices and servers, and in part because they can be used to deliver highly targeted messages, with instant interaction, in real time, in a way that other existing media simply cannot.

New recession begins next year, Shilling says

“I’m predicting another recession next year,” says Gary Shilling, economist. It won't be a "double dip," a faltering of the current recovery, but a brand new recession. Many Americans won't find the quibbling reassuring. If this is a recovery, who needs it?

Shilling's forecast is based in part on current economic conditions, and partly on history. We’re already two years from the end of the last recession and three years from the business cycle’s previous peak, in December 2007.

Historically, economic expansions last about three years, especially in long down cycles of the kind he thinks we’ve been in since 2000.

So, he’s looking for a brand new cyclical recession beginning in 2012.

New recession begins next year, Shilling says Howard Gold's No-Nonsense Investing - MarketWatch

Lots of Moving Parts in Mobile Payment Ecosystem

The mobile payments ecosystem is quite complex. Even if you look only at the matter of security, people have a fairly good idea that there are "lots of moving parts."

Then there are the various segments, including retail payments, online payments, money transfers, mobile wallet services and integration of payment, wallet and location to create localized and personalized marketing services.

There are all sorts of opportunities for third-party or clearinghouse services as well, such as Neustar's "Intelligent Cloud" service, which exposes mobile customer location, or messaging services to application providers who might want to create "geo-fencing" and other features for personalized mobile marketing.

Offline Payments is the Big PayPal Opportunity

Offline, real-world payments are a much bigger opportunity than online payments, representing more than 90 percent of current transactions. That’s where PayPal is looking to shift.

PayPal’s mobile payments currently come in two varieties. PayPal offers person-to-person mobile payments, in which it doesn’t make money if users tap a PayPal balance or bank account or charges a percentage fee on transfers from a credit or debit account. It also makes money on mobile commerce payments, where it takes a percentage fee for goods purchased online on a mobile phone via PayPal.

$3B in mobile payments for PayPal this year but bigger prize at stake