1、MEF PAYMENTS YEARBOOK 2024Your complete guide to the current state of m-commerce,DCB,mobile money and M-POS2C NTENTSFOREWORD.3INTRODUCTION.4THE MEF PAYMENTS PROGRAMME.9MOBILE WEB,IN-APP AND MESSAGE-BASED PAYMENTS.13 DIRECT CARRIER BILLING.18 MOBILE MONEY.25 IN-STORE MOBILE PAYMENTS AND M-POS.31CONCL

2、USION AND TAKE AWAYS.40 3MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSAt the start of this century,a few enthusiastic phone owners started to pay for ringtones using reverse billed SMS messages.Premium text was an innovative(if clunky)solution to a pretty frivolous business need.But it was,in fact,the

3、start of a mobile payments revolution.Today,mobile payments are everywhere.People store bank cards in wallets on their phones and use them to buy things in store and online.They use phone credit or dedicated mobile money accounts to trade,save and make purchases.Meanwhile micro-merchants use dedicat

4、ed POS readers to receive mobile payments.It all adds up to an industry that transacts trillions of dollars every year.But this market never stands still.New technology is changing whats possible.The arrival of generative AI could,for example,power bot interactions that enable new levels of personal

5、ised shopping.Then theres regulation.Theres a trade-off to be made between convenience and safety.How can law makers and industry stakeholders reduce friction in mobile payments without letting in fraudsters?This is the context for all of the regulatory changes happening around the world.How can ind

6、ustry insiders stay on top of these developments?The MEF can help.Our Payments workstream comprises virtually every major company active in the sector.Our members are committed to building the best possible future for the industry.Since information is so central to that process,we are delighted to p

7、resent the first MEF Payments yearbook.It contains all the latest data and insight on this influential space.We hope you find it useful.ForewordCLAIRE MASLENADVISOR,MEF41.INTRODUCTION5Mobile payment has changed the world.It has transformed the lives of people in many developing countries and re-fram

8、ed the shopping habits of billions of consumers.Vast sums are transacted via mobile devices every day.But the term mobile payment actually describes many different activities a catch all term for a financial transaction that is facilitated through or on a mobile device.As such it includes:l Using a

9、phone to pay for something on a mobile web site or an appl Sending money to a friend from a mobile walletl Using a phone to pay for something in a shop using a contactless tap or barcode scanl Paying for goods and services using phone credit l Paying for goods and services using a dedicated mobile m

10、oney accountTogether these mobile payment scenarios create a space that moves trillions of dollars,supports the income of millions of global citizens and has a rich history of driving innovation.MEF members are active across all various scenarios described above.They are promoting the market,establi

11、shing best practice,fighting fraud,defining regulation and more.Our membership has a rich heritage in this space.In the early 2000s,a handful of entrepreneurs invented the first ever mobile consumables:ringtones,screensavers,wallpapers etc.They correctly guessed that people wanted these products to

12、enhance and personalise their mobile experiences.The challenge was:how to get paid for them?The answer came in the form of the reverse-billed premium SMS message.Here,the customer received a text that he or she paid for.The content provider received a share of the revenue and the MNO facilitated the

13、 transaction through their billing platforms.Premium SMS was a ground-breaking industry innovation.Yes,it was clunky to use and the margins were pretty terrible(for the content providers at least).But it worked.And it unleashed a genuinely new market for what became mobile value-added services(VAS).

14、In time,premium SMS was superseded by a much smoother user interface that invited 1.INTRODUCTIONMobile payments is a lot of things.Its e-commerce on a smartphone,payment via the phone bill(DCB),mobile POS,airtime payment and more.The space is always evolving reflecting changes to the tech and shifti

15、ng consumer preferences.So what lies ahead for 2024?“Premium SMS was a ground-breaking industry innovation.Yes,it was clunky to use,and the margins were pretty terrible(for the content providers at least).But it worked.And it unleashed a genuinely new market for what became mobile value added servic

16、es(VAS).”MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTS6consumers to click on a button to complete a payment.This became known as direct carrier billing(DCB).As this new sector grew,the various companies in the value chain for VAS content providers,messaging aggregators,localisation firms,handset OEMs,M

17、NOs decided they needed a body to represent them.They became the first members of what was then the Mobile Entertainment Forum.In the quarter decade since the birth of mobile payments,the space has evolved.Its become so pervasive that its hard to define exactly.But definitions must be made.So for th

18、e purposes of this yearbook,we are carving up mobile payment into four areas.Lets briefly review each of them.Mobile web,in-app and message-based payments Today,the dominant platform for e-commerce is mobile.Consumers have switched their buying habits away from the desktop PC.And developers have acc

19、elerated the growth of mobile commerce by adapting the design of shopping and payment pages for smaller screens.According to Statistas Market Insights,mobile now represents 60 percent “E-commerce used to describe web transactions made on a desktop PC.No longer.A growing percentage of e-commerce now

20、take place on mobile devices,phones and tablets.Developers have accelerated the growth of mobile commerce by adapting the design of shopping and payment pages for smaller screens.”MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTS7of all online sales volume making mobile commerce worth$2.2 trillion in 2023.

21、Since 2008,a huge amount of mobile commerce has shifted away from the mobile web to native mobile apps.Millions of consumers now use apps to buy regular goods and services.They also make in-app purchases to buy virtual goods such as gaming avatars,subscriptions and power-ups.According to data.ais St

22、ate of Mobile 2023 report,consumers spent$167 billion directly on premium app purchases and in-app extras in 2022.The next phase could be conversational commerce.This describes the purchasing of goods and services from inside a mobile messaging chat aided by technology such as speech recognition,nat

23、ural language processing and artificial intelligence.Channels such as WhatsApp,Viber and RCS are now enabling payments inside a chat session.This opens the way for enterprises to use rich messaging as a genuine channel for shopping.Direct carrier billing(DCB)DCB is the mechanism that allows a consum

24、er to buy something and pay for it using their mobile phone bill.From the early 2000s,this channel has emerged and grown into a popular choice for people wanting to buy VAS content products such as text alerts and ringtones.Today,DCB is used all over the world in a variety of contexts.Its most popul

25、ar use cases are for buying within app stores and OTT subscriptions(video streaming and social media).But,where regulation permits,it is occasionally used for ticketing and even physical goods.According to Omdia,the DCB market has been relatively flat in recent years.But it still expects the space t

26、o grow from$36 billion in 2022 to$46 billion in 2027 with most of the growth in the physical goods and services space,including insurance products,ticketing,bike sharing,EV charging and more.Mobile MoneyMobile Money describes the creation of a handset-based account,managed by an MNO,into which users

27、 can add or withdraw funds.Typically,the subscriber will top up the account with cash at an authorised agent.With funds loaded on the phone,the user can then send money to a friend or merchant.The confirmation message(and account summary)is usually accessible by USSD message.Mobile money brings inst

28、ant digital payment to millions of people without bank accounts and/or broadband PCs.For this reason,it has performed best in developing countries.Safaricoms M-PESA is unquestionably the most successful mobile money service in the world.But its not the only one.According to The GSMA Mobile Money pro

29、gramme,there are currently 1.6 billion registered mobile money accounts worldwide.In 2022,$1.26 trillion was transacted this way.MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTS“Since 2008,a huge amount of mobile commerce has shifted away from the mobile web to native mobile apps.Millions of consumers now

30、 use apps to buy regular goods and services.They also make in-app purchases to buy virtual goods such as gaming avatars,subscriptions and power-ups.Consumers spent$167 billion directly on premium app purchases and in-app extras in 2022.”8Although mobile money was initially designed to help people pa

31、y bills and friends,it has(in some regions)become an important channel for merchant payments,and also for products such as savings,loans and insurance.In-store mobile payments and M-POSFor many years,startups tried to build services that let people use their phones to buy products in shops usually b

32、y scanning bar codes(or similar)to trigger transactions.Some were successful WeChat in China,Swish in Sweden,Paytm in India,along with single store products such as Starbucks.But many failed.The big breakthrough came when Apple launched Apple Pay in 2014.Apple Pay did something simple.It turned a ph

33、ysical payment card into a virtual payment card.Instead of tapping the plastic card to make a contactless payment,the user simply tapped the phone.It was convenient and easy to understand.Apple Pay was reported to have 535.8 million users in 2022.This revolution in phone payment making was mirrored

34、by a similar transformation in payment taking.Thanks to contactless payments,it became possible for even micro-merchants to take card payments with small mobile readers.This market exploded.Now a new technology looks set to accelerate its growth.This is softPOS.It allows retailers to use a phone rat

35、her than a dedicated reader to receive a card payment.It might seem like a minor change,but it could have profound implications offering better integration with financial management systems,loyalty schemes and more.For all the challenges of definition and the blurring of boundaries around mobile pay

36、ment,the space is booming.Payment stakeholders are making excellent progress in building consumer adoption and adding new functionalities to existing products.MEF members are at the centre of this important activity.This makes MEF the perfect organisation to provide an overview of the market.So,in t

37、his yearbook,we will look closely at the current status of mobile payments,the challenges,the opportunities and all the important changes that occurred over the last year.We will outline:l An overview of all the key MEF Payments programme activity l Key developments in mobile commerce,in-app and in-

38、message paymentsl Key developments in direct carrier billingl Key developments in mobile moneyl Key developments in in-store mobile payments and M-POSl Conclusions and take-aways MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTS“For many years,startups tried to build services that let people use their phon

39、es to buy products in shops usually by scanning bar codes(or similar)to trigger transactions.The big breakthrough came when Apple launched Apple Pay in 2014.Apple Pay did something simple.It turned a physical payment card into a virtual payment card.Instead of tapping the plastic card to make a cont

40、actless payment,the user simply tapped the phone.”92.THE MEF PAYMENTS PROGRAMME10MEF and its members are shaping the future of the mobile payments space.The MEF Payments ecosystem brings together stakeholders to discuss industry challenges,share best practice and tackle fraud in all aspects of the m

41、arket from in-app transactions to direct carrier billing.It draws its membership from across the value chain from MNOs to card schemes to content providers to anti-fraud specialists.Participation in the MEF Payments community brings many benefits including:l Working together to establish new protoco

42、ls and best practicesl Sharing insights and knowledge of different markets and regionsl Shaping commercial models l Corporate profile-raising via events,webinars,blog posts etc The activity of the community centres around its Working Group,which meets online once a month.The group produces deliverab

43、les such as:l Information resources for membersl Educational guides for external stakeholdersl Frequent networking events and webinarsl Brand profile-raising opportunitiesl Best practice and self-policing frameworksLets dive into the six key areas of MEF Payments ecosystem activity.The MEF Payments

44、programme:Data and analysisMEFs Data service tracks 170,000 data points across 218 countries covering almost 700 MNOs.It provides detailed roadmaps for the entire mobile ecosystem with navigation across any country,sub-region,region,or the entire world.Members can find data for SIM connections by re

45、gion,handset type and more,as a well as mobile operator market shares for the active mobile SIM connections.The service also conducts smaller user surveys on specific sectors including payments.An example of this is a study of Perception of change:Payments,which looked at attitudes to DCB.The MEF Pa

46、yments programme:Working Groups DCB Fraud and DCB for GrowthThe MEF Payments programme currently runs two working groups,each dedicated to accelerating the uptake of direct carrier billing(DCB).2.THE MEF PAYMENTS PROGRAMMEMEF and its member play a central role in defining the mobile payments service

47、s of today and tomorrow.Its Payments ecosystem brings together service providers,MNOs,financial services companies and more to define standards,share knowledge and tackle fraud in the space.MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSMEF Payments programme:membersAegisAWGBankaiBizaoBokuBouygues Teleco

48、mBTBTSCFMClipfeedCookies DigitalCreative ClicksDharam DigitalDigital VirgoDimocoDynamic Mobile BillingEmpelloEnabldEvinaWho are the companies shaping the future of mobile payments?They are all members of the MEF ecosystem group listed here11The DCB for Growth Group focuses on business development.Th

49、e DCB Fraud Working Group looks at combating criminality in the space.Each comprises a cohort of DCB,VAS and fraud experts that meet regularly to share use cases,discuss new attacks and develop best practices.The MEF Payments programme:Blog and social channelsAll the activities of the Payments progr

50、amme are reported on the MEF blog:MEF Minute.It reaches around 60,000 unique users.The blog also provides a showcase for programme members to report their own news.Content is also shared on MEF social channels.Payment-related articles to appear recently on the site include:l Need-to-know:10 takeaway

51、s on PIX instant payments in Brazill What Do Context,Semantics,And Mobile Wallets Have In Common?l Messaging and billing are key to the bottom linel Success of the Indian payment platform:UPIl Regulation of cryptocurrencies in BrazilThe MEF Payments programme:Webinars and PodcastsMEF broadcasts live

52、 webinars to a global audience multiple times a month.These online conversations present a deep dive into important industry topics.Members can participate in or even sponsor a webinar in order to increase understanding of the business and raise their own company profile.The Payments programme featu

53、res frequently in MEFs regular podcast(MEF Talks)and webinars.In 2021,for example,MEF Talks ran a series of sessions looking at the potential impact of crypto and blockchain on mobile payment and carrier billing.Webinar sessions have included:l Making DCB a Success:Lessons Learnedl Mobile Subscripti

54、on Bundling in the spotlightl Direct Carrier Billing for Growth To Infinity and Beyond!l MEF Connects Digital Transformation On Demand Mobile Payments in Africa l MEF Connects On Demand:Messaging for Retail&e-Commerce The MEF Payments programme:Publications and researchThe Payments programmes report

55、s offer exclusive MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSMEF Payments programme:members contd.First ScreenGlobe TeleservicesGolden GooseItouchKaleyraLenderwizeMCP InsightMedia Digital GroupMeshAdsmFilterItMobiboxMobile Business EngineMondiaOoredooOrangePerpetuum mediaPM ConnectSam MediaSmadexTele

56、comingTelefonica SpainTelefonicaTelenorTeleSignTELINTELUS12market research,deep dives into payment-related topics,and explanations of programme initiatives.Members can contribute to these reports and download them for free.Recent examples include:l General Mobile Behaviour-MEF Consumer Survey 2023l

57、Which?:Toward a future without fraudl MEF:Consumer Survey Mobile Payments 2023l MCP Insight:Unlock Sustainable Carrier Billing Growth Through DDRCl MEF Anti-Fraud Yearbook 2023l Getting Ready for RCS PaymentsMEF members are also welcome to publish their own reports on site and social channels.The ME

58、F Payments programme:Live and online eventsMEF runs in-person and virtual events throughout the year.They include panel sessions,presentations and interviews.In 2021,MEF hosted its first MEF CONNECTS Digital Transformation virtual event and dedicated an entire day to payments.More than 50 experts di

59、ved into a range of topics from market penetration to developing markets to combating fraud.Session titles included:l Mobile Payments in Africal The Future Battlefield of Payments:Cybersecurity and Data Analyticsl Regulatory FrameworksIn 2023,payments will feature across many MEF live and virtual ev

60、ents,such as l Global Carrier Billing&Mobile Payments Summit This annual event,run by InformaTech,has established itself as the premier conference for the worlds DCB stakeholders.MEF is its endorsing sponsor,and runs a range of conference sessions and networking events.The 2024 edition is scheduled

61、for September.l MEF CONNECTS Mobile Content&Payments(Kuala Lumpa)This event,organised jointly by MEF and content specialist brings together stakeholders from the VAS,advertising and payments industries across South East Asia.Around 80 delegates meet to discuss trust,security,customer excellence,mone

62、tisation,regulation and more.l MEF CONNECTS Mobile Content&Payments(online)This is the headline event for MEFs Mobile Payment ecosystem members.The online conference promises an array of captivating presentations,interactive workshops,and engaging discussions led by industry pioneers and thought lea

63、ders.It starts in June 2024MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSMEF Payments programme:members contd.TGSUpstreamVas2NetsVodafoneWister133.MOBILE WEB,IN-APP AND MESSAGE-BASED PAYMENTS14For millions of people,the mobile web is now all-but-indistinguishable from the regular web.Consumers have stop

64、ped thinking about the difference between phone-based and PC-based shopping.Its all the same.However,the difference does matter.At least to brands and publishers.Web sites have to be configured for mobile real estate,and payment flows must also be calibrated to reduce the risk of cart abandonment wh

65、en trying to check out on a small screen.Its worth the effort to make the UX as good as possible.According to Statistas Market Insights,mobile e-commerce sales reached$2.2 trillion in 2023 and now make up 60 percent of all e-commerce sales around the world.It could be 62 percent by 2027,which will d

66、eliver$3.4 trillion of revenue.The way that consumers pay for their online purchases varies greatly by region.In developed countries most consumers use credit or debit cards.However,its becoming much more common now for people to use dedicated digital wallets to complete their purchases.The term dig

67、ital wallet can be a slippery one.On the surface,it should be easy to define.Like a physical wallet,a mobile wallet should comprise an app into which multiple items can be stored:bank cards,loyalty cards,ID documents,travel tickets etc.Some mobile wallets are like this.Apple Pay and Google Pay fit t

68、he description,as do WeChat and the official apps of major fintechs such as PayPal or even banks like Revolut.According to FIS/WorldPay,these products generated$18 trillion in in-store and online consumer spending in 2023.3.MOBILE WEB,IN-APP AND MESSAGE-BASED PAYMENTSWith the launch of the smartphon

69、e,the world of e-commerce began its shift from the PC to the mobile device.Consumers started to make payments via the small screen on the mobile web and in native apps.Developers responded by tweaking their payments screens accordingly.So whats next?“Mobile e-commerce sales reached$2.2 trillion in 2

70、023 and now make up 60 percent of all e-commerce sales around the world.The total could be 62 percent by 2027,which will deliver$3.4 trillion of revenue.”MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTS15But in other regions a different type of mobile wallet dominates.These products are designed to give c

71、itizens(especially the unbanked)a new and convenient payment option.Users can top up their balances via a bank account but also with cash in a shop or kiosk.Some products GoPay in Indonesia,PicPay in Brazil and many more have achieved stellar penetration and daily usage rates(see In-Store Payments c

72、hapter for a more detailed analysis of this market sector).In-app payments When Apple launched the app store in 2007,it triggered a fundamental switch away from the mobile web.People began depending on apps to do the things they used to do on the mobile internet play games,check the weather,bank etc

73、.And most importantly,shop.As a result,mobile commerce shifted away from the mobile web to native apps.According to data.ais State of Mobile 2023 report,consumers spent$167 billion directly on premium app purchases and in-app extras in 2022.However,apps are not only for digital purchases.Consumers c

74、an buy any kind of product inside them.In 2023,Apple revealed the extent of this habit.It confirmed that the App Store ecosystem facilitated a$1.1 trillion in sales in 2022 with 90 percent of this figure originating from transactions that did not happen on the App Store itself.There are good reasons

75、 for this change in consumer habits.They include:l Convenience With in-app payments,there is no need to switch to a different payment platform and enter new payment information.This ease of use lowers the obstacles to finishing transactions.l SecurityIn-app purchases are developed with strong securi

76、ty features such as card tokenisation and encryption.l Personalisation Apps can offer customised recommendations,discounts or loyalty benefits,and make repeat transactions easier by securely storing user payment information.“Is developing markets its becoming common for people to use dedicated digit

77、al wallets to complete their purchases.These products are designed to give citizens(especially the unbanked)a new and convenient payment option.Users can top up their balances via a bank account but also with cash in a shop or kiosk.Some products GoPay in Indonesia,PicPay in Brazil and many more hav

78、e achieved stellar penetration and daily usage rates.”MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSe-com transactions by payment type 2022(%)2026(%)Digital wallet 49 54Credit card 20 16Debit card 12 10Account-to-account(A2A)9 10Buy now pay later(BNPL)5 6Cash on delivery 2 1PrePay 1 1Others 2 2Source:FI

79、S Global Payments Report16MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSThe impact of account-to-account payments In the 2010s,regulators began to open up the financial ecosystem to enable innovation to flourish.They ordered that the banks develop APIs so that consumers could make direct account-to-acco

80、unt(A2A)transactions,rather than using the traditional card payment rails.A2A payments can provide both parties with much better information(e.g.account balances,transaction details and vendor credentials).And they are especially effective when executed over real-time payment(RTP)rails,which many co

81、untries have now built.So,merchants like A2A as it reduces the cost of payment acceptance versus cards while offering instant settlement of funds.Meanwhile consumers are drawn to A2A payments thanks to simplicity and speed.According to FIS there were 64 live RTP schemes in 2022,and global A2A transa

82、ction value surpassed$525 billion.Why is this relevant for mobile payments?Because A2A is the foundation of a number of ground-breaking mobile wallet services that simplify transactions for millions of people.These include the Netherlands iDEAL,Spains Bizum,Thailands PromptPay and many more.A new ch

83、annel?In-message paymentsThe incredible popularity of rich messaging apps WhatsApp,Viber,RCS etc has led to a revolution in the way that consumers communicate with each other.More recently businesses have embraced these apps for customer care.They are talking to consumers directly inside these apps,

84、and enhancing this engagement with pictures,maps,and AI-assisted questions and answers.Indeed,in 2022,MEFs A2P Markets Global Consumer Survey revealed that 89 percent of global consumers now regularly receive texts from brands and most receive two to 20 a week.Juniper Research forecasts that the tot

85、al number of Application-to-Person(A2P)messages will increase from 2.4 trillion in 2022 to 4.2 trillion in 2027.But enterprises want to go further.They are now weighing up the potential of conversational commerce making it possible for customers to shop inside a chat session.However,there is no comm

86、erce without buying.Payments must be included in the user experience.“Enterprises are now weighing up the potential of conversational commerce,making it possible for customers to shop inside a rich messaging session.Payment must be included in the user experience.It must be direct and friction-free

87、built into the platform so that users can click a pay button and complete a transaction immediately inside the chat session.”17MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSAnd the in-chat payment journey has to be direct and friction-free no clicking on a link to go to a specialist payment page and ent

88、ering their details there.Instead,it must be built into the platform so that users can clock a pay button and complete a transaction immediately inside the chat session.Happily,the messaging giants are making this vision real.l WhatsApp Pay allows users to send money to one another for free or make

89、purchases from small businesses.It has so far launched only in Brazil,India and Singapore,Indonesia and Mexico.l Apple makes it possible to embed Apple Pay payment inside Apple Messages for Business without leaving the conversation.A payment request looks like a normal chat bubble but displays the f

90、amiliar sheet.However,Apple does not allow businesses to start chats,so its value as a commercial tool is limited.l In 2023,Google launched an API to support Google Pay transactions in RCS(the Google-backed rich message channel).l Viber launched Payments on Viber in 2022 as a service that lets users

91、 set up digital wallets tied to their Viber accounts.It launched first in Germany and Greece,with the plan to extend across Europe,then to 180 countries.Rich messaging apps:reachl WhatsApp has 2.78 billion active users worldwide.l Vibers user base exceeds 1.3 billion individualsl Apple Messages for

92、Business can reach every iOS user.There are currently more than two billion active iPhones,iPads,Macs,and other Apple devicesl RCS has 1.2 billion addressable users,and 664 million addressable by businesses.X184.DIRECT CARRIER BILLING19Direct carrier billing(DCB)is what happens when a consumer pays

93、for a product or service using his or her mobile phone bill.The payment method emerged in the early 2000s to enable people to buy the new mobile consumables ringtones,screensavers,wallpapers etc.It made sense to charge these purchases to the phone bill.But how?20 years ago,the mobile internet was na

94、scent,there was no click to buy option.The industry needed a workaround.It came up with reverse billed SMS.Here,the customer requested the ringtone by sending a text,then received a SMS from the seller that she paid for.In time,DCB changed.People bought smartphones with 4G connections.They stopped u

95、sing reverse billed SMS and started paying instead by clicking charge to bill buttons on mobile web sites.In those early years,DCB emerged as an exciting new payment option.Analysts made bold predictions for the market.They saw its potential to become a dominant payment method for digital products a

96、nd even for quasi-physical goods such as parking and ticketing.They were bullish about DCB for two key reasons:l It gave a payment option to the unbanked.In the 2000s,millions of consumers worldwide were going mobile.They were joining the market for digital products.But most did not have bank accoun

97、ts.According to the telco trade body GSMA 1.4bn adults remain unbanked even today.l Its user interface is fast and frictionless.DCB requires the user to enter just their phone number to make a payment.In some scenarios,the fastest DCB transactions can be completed in a single click,whereas a card pa

98、yment can require dozens.This makes carrier billing a powerful converter of customers at checkout.These benefits remain today.However,its fair to conclude that DCB has become a healthy,but not revolutionary,new payments channel.Why only steady progress?Margins havent helped.In the early days,mobile

99、operators charged retailers as much as 50 per cent of the cost of the goods to process a payment.Then there are settlement terms.Typically,it would take 30 to 45 days for a carrier to pay out.DIRECT CARRIER BILLINGPaying from the phone bill also known as direct carrier billing(DCB)has become a well-

100、established channel for small value digital transactions.What are the forces shaping its evolution?And how can DCB evolve and expand into new markets and use cases?MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTS“In the early years of the 21st century,DCB emerged as an exciting new payment option.Analysts

101、 made bold predictions for the market.They saw its potential to become a dominant payment method for digital products and even for quasi-physical goods such as parking and ticketing.”20MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSBoth of these metrics have improved.But so has the competition.Rates of c

102、ard ownership have risen consistently,while the card payment UX has also changed for the better(thanks in part to the emergence of Apple and Google Pay).That said,DCB remains a healthy business with plenty of room for growth.Lets look at the size of the market,and the forces driving its future.DCB:m

103、arket size and forecastsAccording to analyst Omdia,the DCB market will grow from$36bn in 2022 to$46bn in 2027.Another market watcher,Verified,is more optimistic.It says the DCB sector will generate$68.17 billion by 2028,growing at a CAGR of 11.34 percent from 2021 to 2028.Juniper Research and Teleco

104、ming go further still:they say the value of end-user spend on digital goods via carrier billing will exceed$74 billion by 2026;up from$54 billion in 2022.DCB:digital use casesAs stated above,DCB started out as a channel through which to purchase mobile VAS products.Today,it supports a vast range of

105、use cases.A huge moment for the industry came in 2012 when Google made DCB available in its Google Play app store.Apple followed suit in 2015.Both app stores saw DCB as a channel to millions of customers who either did not have a bank card or preferred not to use one.The app store market quickly bec

106、ame the biggest in the DCB space.It still is,although there have been some bumps in the road.In 2022,Verizon and AT&T withdrew DCB from Google Play.No official explanation was given,but observers attributed the withdrawals to bad debt and an escalation of compliance from Google.At around the same ti

107、me as the app stores first supported DCB,another promising market opened up:streaming services.Netflix,Spotify and others began using DCB in bulk.However,their motivation was a little different.This was all about reach and distribution.The streaming giants worked closely with MNOs to bundle their pr

108、oducts with mobile subscriptions.These promotions helped them to sign up millions of previously unreachable customers even if the margins compared poorly with card and account payments.Anil Malhotra,chief marketing officer at Bango,says:“Bundling really works.Amazon have got millions of new Prime su

109、bs in India through this method.We encourage our clients to view DCB as a way to activate customers everywhere.Its like having a single payment API for the world.”Today,its estimated that 71 percent of DCB spending is on games and video,with games at 51 percent.Elsewhere,music content is on the rise

110、,and could generate almost$7 billion by 2026.Lifestyle content consumption(health,relationships,wellness,sport and leisure)and publications(eBooks,newspapers and digital magazines)will also continue to grow.MEF Member comment:Anil Malhotra,chief marketing officer at Bango“DCB bundling really works.A

111、mazon have got millions of new Prime subs in India through this method.We encourage our clients to view DCB as a way to activate customers everywhere.Its like having a single payment API for the world.”21MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTS“In the formative years of DCB,there was optimism that

112、 it could become a viable channel for small-value physical purchases.Regulation to liberalise rules around who could become a payment provider helped.The channel did not grow as hoped,maybe thanks to rising card ownership and the danger of bill-shock.That said,there is a healthy market in regions wh

113、ere regulation supports it.”DCB:physical and quasi-physical use casesIn the formative years of DCB,there was optimism that it could become a viable channel for small-value physical purchases.Regulation to liberalise rules around who could become a payment provider helped.However,the market did not g

114、row as hoped.Observers believe there could be a number of reasons for this such as user interface,rising card ownership and the bill-shock of high monthly phone bills.That said,the market is still healthy in regions where regulation supports it.According the Telecoming,carrier billing for physical g

115、oods was worth$3.6bn in 2022.Thats 14 percent of the total DCB market.It will grow by 30 percent to$13.5bn in 2026.Meanwhile,demand for quasi-physical DCB goods will also grow.Ticketing grossed$1.8bn in 2022 and will more than triple that to$6bn in 2026.And there is certainly scope for DCB to expand

116、 into new areas.Payment providers are currently exploring niches such as eBike rentals,EV charging,and vending machines.How are mobile DCB payments being used(2023)?A one-time for mobile apps 20%Content,streaming and app subscriptions 18%In-store goods/services 15%Online goods/services 13%Parking or

117、 other ticketing service 18%None of these 16%Source:MEF Mobile Payments Report 2023:Consumer SurveyDCB spend by product category 2022 2023 2024 2025 2026$bn$bn$bn$bn$bnGames 30.7 32.2 33.9 35.8 38Video 14.3 15.9 17.6 19.4 21.3Music 4.3 4.9 5.5 6.2 7Lifestyle 3.2 3.6 4.2 4.8 5.5ePublishing 1.9 2.1 2.

118、2 2.4 2.7Total 54.5 58.7 63.4 68.5 74.5Source:Direct Carrier Billing Report 2022Non-digital DCB sales%share by sector 2022 2023 2024 2025 2026%Physical 6.1 7.5 9.2 11.6 14.3Ticketing 2.9 3.8 4.6 5.3 6.1Gambling 0.2 0.2 0.3 0.5 0.7Source:Direct Carrier Billing Report 202222MEF-PAYMENTS YEARBOOK 2024B

119、ACK TO CONTENTSDCB:the fraud risk Every payment is vulnerable to fraud.Regrettably,DCB is no exception.Fraudsters target the channel and its users in two main ways.The first is through social engineering,which they use to trick customers into unwanted purchases.The second is a more technical form of

120、 manipulation.Here,fraudsters use methods such as bots and click farms to receive illegitimate pay-outs from DCB vendors.Lets briefly explain these two fraud types.l Customer-targeted fraudHere,fraudulent merchants trick users into making DCB payments they do not intend to make.They use deception an

121、d social engineering to do it.Methods include misleading calls to action,hiding payment information and receipts,bogus incentives(“You have won a prize!”etc),fake landing pages and fake messages from hacked contacts.Alternatively,the fraudster can trick the customer into installing malware.This coul

122、d be a bogus app,which is programmed to set up a subscription/payment,or a bogus link that infects the users device and sets up a payment automatically.Other hacks include clickjacking,where a payment page is hidden behind legitimate content.l Advertiser/vendor-targeted fraudWith this type of fraud,

123、attackers seek to trick advertisers/vendors into pay-outs for bogus advertising clicks.Methods include click jamming,23MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSwhere fraudsters intercept a legitimate pay out to a publisher for an ad click,and device farms,where a large quantity of handsets that per

124、form repeat actions such as registrations,installs and engagement.Advertisers pay out,but there are no real users.The MEF and its DCB Fraud Group are working hard to combat these attacks.One important component is best practice.The group recommends a policy of due diligence on providers,traffic,(IP

125、address,headers etc)and content.The working group also comprises anti-fraud specialists whose technical solutions can detect anomalies to identify questionable traffic and transactions.These systems combine machine learning algorithms with payment processing workflows to block fraud in real time.Pro

126、viders include:EvinaEmpelloMCP InsightmFilterItUpstreamDCB:the impact of regulationAs payments moved from physical to online and from cash to digital,regulators explored how they could change the law to create more innovation and competition among providers and more options for consumers.The result

127、was landmark legislation such as the European Unions Payment revised Payment Services Directive 2(PSD2).This was a big moment for DCB.The original PSD rules allowed consumers to buy digital goods and mobile VAS products via the phone bill.PSD2 extended that scope to movies,games,streaming TV subscri

128、ptions and more providing transactions were capped at 50(up to a combined total of 300 per month).PSD2 also exempted DCB from the strong customer authentication(SCA)requirement introduced to combat online payment fraud.For telcos that wanted to extend their mobile payment activity,PSD2 supported the

129、 option to act as a payment agent with the ability to pass funds from the customer to a payment service provider.It meant they could enjoy the benefits of being a payment institution,without having to go through the process of obtaining the license themselves.It was this option that made it possible

130、 for MNOs to expand into physical-goods payments requiring no registration,such as vending machines,fast-food deliveries,taxi fares,and e-mobility.In 2023,the EU revealed its proposals for PSD3.The new regulation includes provisions that address some of the inconsistencies in PSD2.Its expected that

131、the new regulation will be approved in 2024 and pass into law in 2026.“The European Unions Payment revised Payment Services Directive 2(PSD2)was a big moment for DCB.The original PSD rules allowed consumers to buy digital goods and mobile VAS products via the phone bill.PSD2 extended that scope to m

132、ovies,games,streaming TV subscriptions and more providing transactions were capped at 50.”24MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSPSD2 and PSD3 are not the only EU regulations that will impact the DCB ecosystem.Another is the EU Digital Markets Act,which entered into law in November,and which wi

133、ll fully apply from March 2024.The DMA was drafted to limit the ability of digital gatekeepers to abuse their monopolistic positions.This includes the way they run app stores.As such,the new law will make it easier for consumers to download apps from alternative stores.If this materialises,how will

134、it impact DCB?Much depends on the ability of new stores to support carrier billing.Its also possible that publishers will be free to support app downloads from their web sites.Again,will they offer DCB for this?Its too early to say.Its possible that,even faced with more options,consumers will stick

135、with the certainty and the network effects offered by the incumbents.That said,there are examples of new stores achieving success.In South Korea,the MNOs launched the ONE Store,as a local alternative to Googles Play and Apples App Store.ONE Store charges developers a 20 percent cut and lets them cho

136、ose their own charging systems.Its been very successful locally but has yet to translate that success into overseas markets.“The EU Digital Markets Act was drafted to limit the ability of digital gatekeepers to abuse their monopolistic positions.This includes the way they run app stores.As such,the

137、new law will make it easier for consumers to download apps from alternative stores.If this materialises,how will it impact DCB?”255.MOBILE MONEY26What is mobile money?Simply,it describes an account,managed by an MNO,into which users can add or withdraw funds.This wallet is separate from the phone bi

138、ll itself.Mobile money has taken off,almost solely,in the developing world.It gives citizens in developing countries access to digital payment without the need for PCs,banks accounts and Wi-Fi.The best way to get a sense of mobile money is to describe how the process works.Customers register for a m

139、obile money service at an authorised agent and then deposit cash in exchange for electronic money.Customers can then send money to their family,friends or businesses throughout the country.All transactions are completed and secured by entering a PIN number,after which both parties receive an SMS con

140、firming the transfer details.The recipient receives the electronic money in real-time.He or she can then redeem it for cash via an agent or leave it in the account.Some services also use USSD messages.USSD is a universal messaging medium,one which mobile operators use to send simple alerts to their

141、customers.For example,to show remaining minutes etc.USSD is a good channel for mobile money because it displays in real-time and doesnt require an internet connection.It works on any handset.Over the last two decades,mobile money has changed the lives of millions.For example,M-PESA says its pioneeri

142、ng Kenyan services has increases the countrys financial inclusion from only 26 percent in 2006 to 84 percent in 2021.According to the GSMA,there are currently 1.6 billion registered mobile money accounts.And adoption is speeding up.It took 17 years to reach the first 800 million customers,but only f

143、ive years to reach the next 800 million.The pandemic added a further boost to adoption.It added 400 million more accounts between 2019 and 2022 30 percent higher than forecasts.In the course of this growth,the use cases for mobile money have also evolved.Initially customers used the services to make

144、 small payments to friends,family or merchants.Now,they take out loans,buy insurance and save.In an effort to accelerate third party integration 5.MOBILE MONEYIn developing countries,MNOs have created entirely new forms of mobile money.These products M-PESA,EcoCash,Orange Money and more give unbanke

145、d customers their first taste of real-time digital payments.As a result,they are transforming societies and unleashing innovation.“Over the last two decades,mobile money has changed the lives of millions.For example,M-PESA says its pioneering Kenyan services has increased the countrys financial incl

146、usion from only 26 percent in 2006 to 84 percent in 2021.According to the GSMA,there are currently 1.6 billion registered mobile money accounts.It took 17 years to reach the first 800 million customers,but only five years to reach the next 800 million.”MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTS27wit

147、h mobile money services,the GSMA launched a Mobile Money API specification.It provides free,open-source tools like code snippets,SDKs and a compliance verification services to help developers build services on top of mobile money.In 2021,GSMA reported that more than half of all mobile money provider

148、s had either adopted the Mobile Money API or intended to do so in the near future.Mobile Money:market data and forecastsl Accounts,agents and transactionsMobile money accounts are growing fast thanks to a combination of a general switch away from cash and from favourable regulatory changes in Sub-Sa

149、haran Africa.As of December 2022,there were 1.6 billion live registered accounts.The number of mobile money agents has also increased significantly.It went up by 41 percent between 2021 and 2022 to 17.4 million(7.2 million active).The bulk of this growth came from Sub-Saharan Africa,where agent outl

150、ets nearly doubled in a year.Collectively,mobile money users made 65 billion yearly transactions(to a value of$1.26 trillion).Lets explore how these numbers break down.l Use casesMobile money began as a way to give unbanked people the chances to make instant digital transactions,which they could the

151、n convert into cash.It has evolved a lot since then.Today,the industry is more integrated with the wider financial ecosystem,which means users can pay in and out using bank cards(rather than cash at an agent location).They can also buy digital products.In fact,digital transactions now account for 61

152、 percent of all activity,and just 45 percent of funds are cashed out.In 2022,bill payments were the fastest growing segment.They rose by 36 percent in value.International remittances were also buoyant up by 28 percent in a year.Elsewhere,bulk disbursements(salary payments for example)grew by 23 perc

153、ent,and merchant payments rose by 17 percent.MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTS“Mobile money accounts are growing fast thanks to a combination of a general switch away from cash and from favourable regulatory changes in Sub-Saharan Africa.”Region Services Accounts Volume Value Sub-Saharan Af

154、rica 154 763m 45bn$832bn South Asia 34 336m 10bn$185bnEast Asia/Pacific 54 361m 8bn$180bnLatam/Caribbean 33 57m 1bn$35bnMiddle East/North Africa 31 59m 357m$21nEurope/Central Asia 9 22m 345m$6bnGlobal 315 401m 65bn$1.26tnSource:GSMA State Of The Industry Report On Mobile Money 2023 28l Mobile money:

155、live servicesMobile money is now a global phenomenon.There are services across all regions.According to GSMA,there are now 315 live deployments across the globe,though most are concentrated in developing regions,where they pay an important role in reducing the friction/crime facilitated by cash and

156、digitising trade.Here is a list of the leading services.MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSPayment type Transaction value in 2022Person-to-person(P2P)transfers$27 billion Bill payments$88 billionMerchant payments$78 billionInternational remittances$21 billion Bulk disbursements$80 billionBank

157、-to-mobile transactions$78 billionMobile-to-bank transactions$98 billionSource:GSMA State Of The Industry Report On Mobile Money 2023 East Asia and PacificCambodia AMK MFI,WingMyanmar Wave MoneyPapua New Guinea Nationwide MicrobankPhilippines PayMayaSub-Saharan AfricaBenin MTNBotswana OrangeBurkina

158、Faso Orange,WizallCameroon MTN,OrangeCentral African Rep.OrangeDem.Rep.of Congo Africell,Orange,M-PESACte dIvoire MTN,Orange,WizallEthiopia Ethio Telecom Telebirr,M-PESAGambia Afrimoney GambiaGhana MTN,M-PESA,ZeepayGuinea MTN,OrangeGuinea-Bissau MTN,OrangeKenya SafaricomLesotho M-PESALiberia OrangeM

159、adagascar Mvola,OrangeMalawi TNM MpambaMali Orange,WizallMozambique M-PESANigeria Fortis,MTN MoMo,NowNowRwanda MTN RwandacellSenegal Orange,WizallSierra Leone Afrimoney,OrangeSouth Africa MTNSouth Sudan mGURUSHSudan MTNSwaziland MTNTanzania Tigo,M-PESAUganda MTNZambia MTN,ZeepayZimbabwe EcocashLatin

160、 America and the CaribbeanBarbados ZeemoneyBelize E-KyashHaiti Digicel,HaitipayMexico TransferParaguay Claro,PersonalMiddle East and North AfricaEgypt Orange,M-PESAIraq ZainJordan OrangeMorocco Al Barid Bank,OrangeQatar OoredooTunisia OrangeSouth Asia Afghanistan mHawala,MTN MoMoBangladesh Grameenph

161、oneMaldives DhiraaguPay,OoredooNepal eSewaPakistan Jazz,TelenorSri Lanka MobitelSource:GSMA State Of The Industry Report On Mobile Money 2023 29MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSThe next phase for mobile money:the M-PESA super app?Safaricoms M-PESA was the first mobile money service to break

162、 into the mainstream and remains the most popular in the world.It launched in Kenya in 2007,and now has 59 million customers and with 800,000 active agents across the Democratic Republic of Congo(DRC),Egypt,Ghana,Kenya,Lesotho,Mozambique and Tanzania.The impact of M-PESA has been profound.In Kenya a

163、bout 70 percent of GDP flows through the service.The average number of monthly transactions per user is around 20.Safaricom has also expanded the features of the service to support micro-loans,insurance and savings.The loans and savings product M-Shwari launched in 2012 and registered one million cu

164、stomers within 41 days and 13 million users within three years.Today it has more than 40 million users.“The impact of M-PESA has been profound.Safaricom has also expanded the features of the service to support micro-loans,insurance and savings.The loans and savings product M-Shwari launched in 2012

165、and registered one million customers within 41 days and 13 million users within three years.Today it has more than 40 million users.”30MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSProducts like M-Shwari showed M-PESA and its customers how the service could be more than just a channel for payments.So,in

166、 2021,Safaricom went a stage further:it launched the M-PESA super app.The objective of the launch was to give M-PESA users easy access to a range of complementary services and an easy way to find them.So,in one sense,the M-PESA app is a little like a banking app.It lets people see their payment hist

167、ory and track their spending.But the“Discover”functionality is the big innovation.It lets people find mini apps that provide access third-party products and services.They include the National Hospital Insurance Fund(public health insurance),BuuPass(public transport),mGas(liquefied petroleum gas for

168、cooking and heating),the Bar app(drinks)and Shell(fuel).In April 2023,Safaricom said the app had 3 million active users,and had processed 489 million transactions,with a total value of$9.22 billion,in the previous 12 months.Mobile money:the impact of regulationThroughout the history of mobile money,

169、regulation has played a key role in determining the success or failure of specific services.Nigeria provides the perfect use case of both stories.As the largest country in Africa by population,Nigeria might have been an early adopter of mobile money.But in fact,the country has struggled to support l

170、ive services.Regulation is the reason why.In 2014,the Central Bank of Nigeria allowed financial institutions to launch mobile money services but only let MNOs provide the infrastructure.There followed a number of partnerships(MTN with Diamond Bank for example)but none of these services prospered.In

171、2018,things changed.The Central Bank of Nigeria passed a law to let MNOs operate as Payment Service Banks.Services quickly followed.9 and Hope launched in 2020 with Smartcash(Airtel),MoMo(MTN)and MoneyMaster(Glo)launching in 2022.By 1Q 2023,MoMo had 3.2 million monthly active wallets.Similar regulat

172、ory changes in other countries had similar impact.In 2020,the National Bank of Ethiopia made legal changes to allow MNOs to acquire money licences,this prompted Ethio Telecom to launch Telebirr in 2021.“Throughout the history of mobile money,regulation has played a key role in determining the succes

173、s or failure of specific services.Nigeria might have been an early adopter of mobile money.But in fact,the country has struggled to support live services.Regulation is the reason why.In 2018,things changed.The Central Bank of Nigeria passed a law to let MNOs operate as Payment Service Banks.”316.IN-

174、STORE MOBILE PAYMENTS AND M-POS326.IN-STORE MOBILE PAYMENTS AND M-POSThe world is going cashless and the mobile handset is playing its part in this evolution.People are already using their phones to make payments in-store by scanning QR codes or tapping NFC tags.Now,vendors are preparing to start us

175、ing the phone to take payments too.MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSIn the first wave of mobile payments,the phone was used as a tool through which to make digital purchases.Consumers bought ringtones via the phone bill,and later began to make card purchases from mobile web sites or native

176、apps.It took longer for the smartphone to penetrate the world of in-store commerce.But the transition was inevitable.Through the 2010s,a succession of breakthrough services enabled consumers to make purchases in physical locations from their mobile devices.They varied significantly.In China,everythi

177、ng apps such as WeChat let consumers scan QR codes to make a payment.A number of services in the west(Paypal,Swish in Sweden,MobilPay in Denmark)also used QR codes but were not linked to multi-purpose apps like the Chinese system.Some retailers notably Starbucks also found success with dedicated pay

178、ment apps that linked to loyalty schemes.Meanwhile,in developing countries,services emerged that linked payments to new forms of mobile currency(see Mobile Money chapter).During the early 2010s it was clear that there was consumer interest in in-store mobile payment systems.Still,although many QR co

179、de based services were launched,most failed.It has proved difficult to reach a critical mass of users and participating merchants.“During the early 2010s it was clear that there was consumer interest in in-store mobile payment systems.Still,although many QR code based services were launched,most fai

180、led.It proved difficult to reach a critical mass of users and participating merchants.”33In 2011,for example,a group of prominent retailers including Target,Walmart,Kmart,and others formed MCX to launch a payment service called CurrentC.It was closed in 2016 without ever properly rolling out.Ultimat

181、ely,the partners found it easier to launch and run their own products,as Walmart did with Walmart Pay.Apple Pay changes the game The big change came when Apple launched Apple Pay in 2014.At the time,there was speculation that Apple would build a radical new system with complex data mining that deliv

182、er customer insights.But it didnt.Instead,Apple merely turned a physical payment card into a virtual payment card.iPhone owners could tap their phone to pay instead of tapping plastic.In an instant,every iPhone user and every merchant could participate.So how is it possible to keep card payments sec

183、ure and reliable when there is no physical card to present and authenticate?The answer lies with tokenization the tech that makes it feasible to virtualise cards inside other products.Tokens dont store any identifiable customer information,so they are worthless if stolen.It was tokenization that ena

184、bled Apple,and also Google and Samsung,to launch contactless payment services.Take-up of Apple Pay was fast.Analysts said Apple Pay accounted for five percent of global card payments in 2020 was reported to have 535.8 million users in 2022.Mobile wallets As stated above,Apple Pay(along with Google P

185、ay and Samsung Pay)have come to dominate the in-store mobile payments space in developed Western economies.That said,a small number of dedicated proprietary services have survived and prospered.Mobile-payment apps create a connection between the app and existing financial accounts whether thats a ba

186、nk account,a debit card or a credit card.When you decide to make a purchase using the mobile app,a complex but swift series of actions takes place behind the scenes to complete the transaction.MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTS“How is it possible to keep card payments secure and reliable whe

187、n there is no physical card to present and authenticate?The answer lies with digital tokens.They dont store any identifiable customer information,so they are worthless if stolen.It was tokenization that enabled Apple,and also Google and Samsung,to launch contactless payment services.”34These steps i

188、nclude:Authentication:could be a fingerprint,a PIN or facial recognition.Communication:typically contactless NFC,QR code or click(for online transactions)Transaction:in the background the financial institution receives a request for paymentApproval:the financial institution checks for sufficient fun

189、ds,possible fraud or any other potential issues.If OK,it sends back an approval.Confirmation:transaction details appear in the mobile app history.Settlement:the amount is moved between accounts in anything from real-time to two or three daysThese services typically support three types of payments:l

190、Merchant-presented QR code:The customer scans the QR code displayed in store,enters a payment amount and confirms the transaction on their smartphone with a password.Merchants can print and display generic versions of these QR codes on tables and receipts for the customer.Alternatively,merchants can

191、 load payment apps on their smartphone to generate these QR codes separately from the POS system.l Customer-presented QR code:Here,the customer generates a code on their smartphone screen,which the cashier scans to complete the payment on the till.In truth the in-store payments space is a little mes

192、sy.Some services are universal,while others embrace a single retailer,or maybe a consortium.To understand how these retail services work,it helps to sort them into three broad types:l Closed-loop appsStarbucks and Walmart Pay are good examples of these.They offer payment functionality,as well as loy

193、alty and promotional rewards.Usually,the payment process bypasses the financial networks,which reduces transaction.Merchants also benefit from usage data insights.l Open-loop appsOpen-loop apps are universal,and often use NFC to interact with POS systems in physical shops.Examples are Apple Pay,Goog

194、le Pay and Samsung Pay.l Peer-to-peer payment appsThese services exist to give consumers an easy way to send and receive payments to friends and small businesses.They are particularly well-established in the US,where Venmo,Cash App and Zelle have millions of loyal users.These apps make the process o

195、f sending money as easy as sending a text message,and usually P2P transfers are free.On the downside,these services are so popular they have become the target of fraudsters.Outside of the US,P2P payment apps have struggled.Many have simply been cannibalised by the improved functionality of regular b

196、anking apps.MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTS“Peer-to-peer payment apps exist to give consumers an easy way to send and receive payments to friends and small businesses.They are particularly well-established in the US,where Venmo,Cash App and Zelle have millions of loyal users.”35These prod

197、ucts have improved their UX for P2P payments,and therefore cannibalised the market for single-purpose apps.Europes payment apps chase interoperabilityIn continental Europe,a small number of QR code-based services have reached critical mass.In the face of rising competition from Apple Pay et al,they

198、are now trying to pool their resources and work more closely together.This effort is being driven by the European Mobile Payment Association(EMPSA),which has 14 members in 15 European markets.They include Bizum(Spain),BLIK(Poland),iDEAL(Netherlands),MobilePay(Denmark and Finland),Plick(Italy),Swish(

199、Sweden)and others.Collectively these companies serve 70 million users,and more than one million merchants.EMPSAs vision is to enable seamless mobile payment across the continent.It has scored some wins.In 2021,MobilePay,Pivo(Poland)and Vipps(Norway)created a single payments app with a combined user

200、base of 11 million consumers and 400,000 merchants.A year later,ANCOMAT(Italy),Twint(Switzerland)and Bluecode(Austria and Germany)signed a similar agreement.The rise of payment super appsIn most mobile markets,apps usually serve a single purpose.But in a small number of regions,there are apps that d

201、o everything.Users can stay in these super apps to access a huge range of features such as:l Digital wallet and payments l Food delivery l Ride sharing l Hotel booking l Insurance l Messaging l Online dating l Gaming l Social media MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTS“In continental Europe,a s

202、mall number of QR code based services have reached critical mass.In the face of rising competition from Apple Pay et al,they are now trying to pool their resources and work more closely together.This effort is being driven by the European Mobile X Payment Association(EMPSA),which has 14 members in 1

203、5 European markets.”36MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSThe most successful examples are in Asia.Products such as Grab,Go-Jek,WeChat and Kakao offer seamless access to a range of services and crucially they underpin them with a seamless payment function.Given the success of the Asian product

204、s,the obvious next question is:can such products flourish in other regions?The truth is,probably not.Western markets are dominated by single-purpose apps WhatsApp for messaging,Tindr for dating,Uber for ride sharing with loyal users.This makes it hard for super apps to break through.That said,many c

205、ompanies are trying.PayPal announced plans to create a super app that will put payments,shopping,savings,investing,budgeting,crypto and identity in one place.Elon Musk has declared his ambition to turn Twitter/X into a super app.And Mark Zuckerberg has similar plans for Facebook and WhatsApp.Other c

206、ompanies are trying to build super-app features on top of payments functionality.Banks such as Revolut have expanded their offerings to include chat and bookings,while Klarna is pursuing a similar strategy to build out its buy-now-pay-later service.Other interesting examples include M-Pesa,Safaricom

207、s mobile money product.In 2021 the Kenyan mobile money service launched its own super app with around 30 mini apps for services like ticketing,insurance and various government functions(see Mobile Money chapter).The worlds leading super appsGrabl 500 cities in 8 Southeast Asian countriesl 187 millio

208、n total users l 36 million monthly transacting usersl Services:movie ticket sales,hotel bookings,food delivery and financial services.Go-Jekl Vietnam,Thailand,Singapore and the Philippinesl 170 million registered usersl 500,000 merchantsl Services include food delivery,parcel delivery,movie ticketin

209、g,grocery delivery and more.Paytml 600 Indian citiesl Shopping,bill payments,insurance,investments,loansl 89 million monthly active usersl 31.4 million merchantsWeChat Payl China,Hong Kongl 1.671 billion active monthly usersl 330 million merchantsl Services:gaming,bill payments,ride-hailing,dating,s

210、hopping,medical appointments and more“Given the success of Asian super app products,the obvious next question is:can such products flourish in other regions?The truth is,probably not.Western markets are dominated by single-purpose apps WhatsApp for messaging,Tindr for dating,Uber for ride sharing wi

211、th loyal users.This makes it hard for super apps to break through.That said,many companies are trying.”37MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSAliPayl Chinal 900 million active monthly users(China)l 80 million merchants(110 countries)l Services:payments to Chinese merchants,mini programs for pay

212、ing utility bills,credit card repayments,topping up phone credit,tax filing,and tracking delivery packagesThe fast-changing Indian mobile wallet spaceFew mobile wallet markets have been a vibrant and entrepreneurial as India.Paytm started it all off.It was launched in 2010 as an online tool for topp

213、ing up prepaid phones.Later,it pivoted.In January 2014,it launched the Paytm Wallet,giving users the option to pay for many other services through the platform,such as Indian Railways and Uber.In 2017,it moved into e-commerce via its Mall app,which now features 150,000 sellers.Unsurprisingly,Paytms

214、success attracted competition from startups such as MobiKwik,FlipKart/PhonePe,Itzcash,PayU/CitrusPay and others.But the biggest shake-up came from the government.In 2016,it launched the Unified Payments Interface.UPI lets people link an alias(mobile number,ID or even fingerprint)to their bank accoun

215、t.They could move money without disclosing bank details.The government even launched its own UPI app,BHIM(Bharat Interface for Money).UPI might have been conceived as a tool to improve financial inclusion,but it unwittingly gave the worlds dominant digital players an opportunity to crack Indias 1.3

216、billion-strong consumer market.Google Pay,WhatsApp Pay,and Amazon Pay all launched UPI-based payment services into the market.Taking payments on a mobile:m-POSWhile consumers got familiar with making phone payments in store,they also became familiar with retailers using mobile devices to receive pay

217、ments via small POS readers linked to mobile apps.This m-POS market exploded in the 2010s,enabling even the smallest micro-merchant to accept“Few mobile wallet markets have been a vibrant and entrepreneurial as India.Paytm started it all off.In January 2014,it launched the Paytm Wallet,giving users

218、the option to pay for many services through the platform,such as Indian Railways and Uber.Unsurprisingly,Paytms success attracted competition from startups such as MobiKwik,FlipKart/PhonePe,Itzcash,PayU/CitrusPay and others.”38MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTScontactless card payments at a

219、time of plummeting cash use.This was a revolution,and there seemed to be no end of sectors that the phone/app combination could disrupt.In 2010,a US company called Squareup proved this again by turning its attention to the card acceptance space.Squareup identified a problem:card acceptance was expen

220、sive and time-consuming for most small retailers.The companys solution was to consolidate all the complexity into an app.Small merchants could easily set up an account through the app,then accept card payments via a small portable reader connected by Bluetooth.This new sector was called mobile POS(m

221、POS),and it took off fast.In other regions startups such as iZettle and SumUp rushed into the space disrupting the merchant engagement models and the business of taking payments.They all followed the same template:low setup costs,no fixed monthly fees,no minimum transaction volume and zero contractu

222、al commitment.According to Grand View Research,the global mobile POS market was worth$36.07 billion in 2022,and will grow at 11 percent CAGR to$85.11 billion by 2030.Whats driving the next phase of growth?Many believe it will be softPOS.This is a new tech that allows retailers to use the phone itsel

223、f to receive a card payment.No payment terminal needed.It might seem like a minor change,but it could have profound implications offering better integration with financial management systems,loyalty schemes and more.softPOS has been discussed for years,but really took off in 2022 when regulatory cha

224、nges allowed Apple to introduce Tap to Pay.This feature lets merchants securely accept contactless payments to an iPhone via a dedicated app.“Whats driving the next phase of growth in mobile POS?Many believe it will be softPOS.This is a new tech that allows retailers to use the phone itself to recei

225、vea card payment.No payment terminal needed.”39MEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSIts easy to see why softPOS could give the m-POS space a major boost.Obviously,it expands the potential reach of card acceptance to many more micro-merchants.But it also has benefits for established enterprises

226、such as:l Lower costs.No need for expensive terminals,reducing upfront capital expenditure.l Better customer experience.SoftPoS is fast and convenient and aligns with consumer expectations.It removes the bottleneck of having a fixed number of checkout areas.l Easier on-boarding of new outlets.Easier

227、 to add new locations and train staff to use soft POS.l Better financial management.Merchants can embed payments more deeply into their financial systems.They might be able to improve loyalty schemes,benefits and discounts.A study from Juniper Research was extremely bullish about the impact of soft

228、POS.It predicts the number of merchants deploying soft POS solutions will hit 34.5 million by 2027,rising from 6 million in 2022.It also forecasts that Apples participation will provide 1.2 billion iOS users with soft POS capabilities.“Its easy to see why softPOS could give the m-POS space a major b

229、oost.Obviously it expands the potential reach of card acceptance to many more micro-merchants.But it also has benefits for established enterprises such as lower costs,better customer experience,easier on-boarding of new outlets and better financial management.”40CONCLUSION AND TAKE AWAYS41Thanks for

230、 reading the first ever yearbook on behalf of the MEF Payments membership.As we have described,this is a massive space that has changed the way that people make purchases and organise their financial lives.Yet there is still so much dynamic change coming to this area.Regulation continues to be a dri

231、ving force.Law makers are introducing new rules around data privacy and transaction security.In the case of carrier billing,they are mandating which goods and services can be purchased.And in developing markets,regulators have the power to determine the future of mobile money schemes.Meanwhile vendo

232、rs are exploring the potential of big data to improve personalisation.This could make a big difference to conversational commerce,in which consumers browse and buy from inside rich messaging apps.So we hope this yearbook proves a useful resource with real relevance for your own organisation.All the

233、insights come courtesy of MEF Payments workstream,which meets every month to discuss industry issues and devise best practice for members.Please visit the workstreams web pages for more information and for details of how you can play your part in the future of this exciting industry sector!Conclusio

234、n and take awaysMEF-PAYMENTS YEARBOOK 2024BACK TO CONTENTSMOBILEECOSYSTEMFORUM.COM 2024 Mobile Ecosystem Forum Ltd.All Rights Reserved.Disclaimer Mobile Ecosystem Forum makes no representation,warranty or undertaking with respect to and does not accept any responsibility for,and hereby disclaims lia

235、bility for the accuracy or completeness or timeliness of the information contained in this report.The document was developed by MEF in collaboration with its members in full compliance with the programmes antitrust compliance policy.The information contained in this document may be subject to change.Please check for latest versions online.