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What you need to know now about mobile money

A review of 'Mobile Banking,' a free e-book from the Wharton School.

June 20, 2013 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

Mobile money is one of today's most important challenges for the global banking industry. The test comes at a time when banks face a major long-term squeeze on profit margins and significant incursions by nonbank competitors into what has historically been banking territory.

This excerpt, from "Mobile Banking: Financial Services Meet the Electronic Wallet" sums up neatly the chief reason why any financial services-related business ought to be paying close attention to the mobile money business.

The publication mentioned above is a free, video-enhanced ebook† researched and written by Knowledge@Wharton, the online business journal of the Wharton School, and sponsored by Ernst & Young.  

It's also a very useful wrap-up that comes at a time when everyone in the financial services world seems to be scrambling to figure out how all things mobile — money, wallets, apps, and even the devices themselves — might be integrated seamlessly and profitably with existing banking channels and products.

The book is divided into five chapters and includes five video interviews featuring marketing and mobile banking experts from Ernst & Young, Citibank, SAP Mobile Services and the Wharton School.

Chapter 1, "A Revolution with Many Faces, a Battlefield with Many Players," details the explosive growth of mobile digital devices andthe payment services to which they've given rise, especially in emerging markets.It also discusses consumers' mad rush in developed markets to transfer the details of their daily lives to mobile devices. 

Chapter 2, "The Emerging World: Who Serves All the New Customers?," surveys the impact of mobile devices in markets such as India, China and African nations, where telecomms have introduced bank-like systems (e.g., M-Pesa) that allow mobile phone owners to store and transfer funds via mobile device. And it looks at the implications of the fact that many of these services are being provided by non-traditional financial players.

Chapter 3, "The Developed World: The Scramble to Market New Services," shifts to a playing field where huge numbers of banks and nonbanks are rushing to market with what they hope will be the must-have app. The stakes are are bigger than just capturing the customer; players are vying for data-rich "digital exhaust," bits of information generated by consumers' every digital action. The player with the killer app will be king of that mountain of data.

Chapter 4, "Battling for the Mobile Wallet," provides a review of non-bank challengers — Microsoft, Google, PayPal and Square, for starters. In some cases, banks are looking for a win through collaboration, not competition, with these nontraditional providers. 

Chapter 5, "A Continuing Challenge: Regulating Mobile Money and Keeping It Secure," follows regulators' efforts to wrap their heads and arms around a rapidly expanding pool of financial services providers, many of whom are just entering this highly regulated market. In a new world of virtual currencies and myriad non-bank providers of bank-style services, questions of data security and consumer protection loom large and require solutions that are fast, fair and farsighted.

The e-book concludes:

Amid all the uncertainty, one thing is clear: After decades of speculation, the era of mobile money has finally arrived. If not now, then soon, every bank will have to decide how it will participate.

For a useful, concise, and complete picture of what it will take for the financial service sector not just to participate, but to effectively compete and ultimately succeed in a mobile money world, this e-book is 77 pages (or thereabouts, depending on format) of worthwhile reading. 

† "Mobile Banking: Financial Services Meet the Electronic Wallet" is available for free download to an e-reader at Amazon.com. An e-reader is not required for access to the publication, however. It's also available for download via a free Kindle app for viewing on a computer, tablet or smartphone (downside, no videos). Or it can be viewed online (with videos).

Read more about mobile banking.

photo: yusuke kawasaki

About Suzanne Cluckey

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Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally.