What's happening to Banks:
- Bank foot traffic is on the decline. In fact, from 1992 to 2012, branch transactions decreased by nearly 50%. The all-in-cost to acquire new accounts through online is 15% to 45% lower than the branch or call centers
- According to a report from RBR the number of ATMs is set to grow from 2.6 Mn 2012 to 3.7 Mn ATMs by 2018 globally (Amidst all the mobile payments razzmatazz).
- American Express reported that more than 50% of card acquisition comes through online channels. In 2013, Chase reported that 53% of credit card accounts were acquired online. 71% of Bank of America’s new U.S. consumers’ credit card accounts came from branch and online channels in 2013. Citibank reported an increase of 472% after implementing online instant account opening, and only needed to hire an additional 38% of new employees to handle the growth
The Unusual Suspects
- According to a report, issuance of payment licenses to third-party payment firms by People’s Bank of China soared to 250 in July 2013 since the first batch was issued back in May 2011. Primary businesses in third-party payment market include offline acquiring, internet payment and mobile payment with these three having scale at 98.27% of the total market size as per the report.
- Airlines are all set to boost investments in mobile payments. According to WorldPay, the percentage of airlines accepting mobile payments rose from 10 percent in 2012 to 25 percent in 2013. WorldPay's latest report revealed that 71 percent of the 68 global airlines surveyed say the future of airline payments lies in mobile, with 50 percent seeing mobile payments as a way to keep up with competitors and 45 percent seeing them as a way to increase revenues.
- Apple has over 600+ Mn user’s card details stored on its Appstore and iTunes. Since its founding, users on iTunes store have downloaded over 25 Bn songs and 40 Bn apps. According to IFPI (International Federation of the Phonographic Industry), in 2012 revenue recorded through the iTunes store was $16.5 Bn. Now Apple is planning a big foray into Mobile Payments as soon as this year including Beacons, iWatch and iPhone based systems
The Dilemma on certain Technologies continues:
- Tap and go payments enabled through mobile devices with Near Field Communication (NFC) technology are gaining some momentum back with nearly 50% of all smartphones launched by 2015, to be NFC enabled. This would mean that 1 Bn NFC based handsets will be sold worldwide by 2016 which will support $50 Bn worth of transactions; approximately 15 Bn NFC tickets will be delivered to mobile devices worldwide by 2014, according to a report by AT Kearney. However many believe NFC is having a rather slow uptake. HCE has provided fresh impetus
- According to Biometrics Research Group, there will be more than 700 Mn users of biometrics technology who will spend over $750 Bn in annual transactions. It’s only now after Apple brought its fingerprint tech in iPhones that biometrics got attention again.
- According to the World Bank statistics, more than $120 Bn was remitted from the U.S. in 2012, and these money transfers are growing at a CAGR of 8%.
- The World Bank estimates show that the international remittance market has grown 11% from 234 Bn 2004 to 534 Bn 2012 & is expected to grow to $685 Bn by 2015.
- According to World Bank, 3% of the world’s population that is 215 Mn people reside outside their country of birth. Immigrants in US alone will end up transferring money worth $515 Bn to their respective countries by 2015.
- Between the years 2001 and 2012, the Indian migrant population increased by nearly 2.4% to reach 22 Mn in 2012. However, the inward remittance in India during the same period increased even more, by 15.5% to reach US$ 70 Bn.
Commerce & Payments stats:
- According to PayPal, $307 Bn will be spent on cross border shopping by consumers in 2018. The figure stood at $105 Bn in 2013. There is definitive trend towards increase in the mobile channel in the above.
- EBay, one of world’s largest online marketplaces, processed $27 Bn in mobile payments in 2013. The company has been aggressive in increasing its mobile footprint through acquisitions. It recently shelved out $800 Mn for a pioneering mobile payments firm BrainTree.
- According to estimates by McKinsey, Internet retail sales in China are expected to reach $395 Bn in 2015 three times the total in 2011. Alipay accounted for 48.3% business of the online payment market, while Tenpay occupied another 20.1%, according to iResearch Global Inc.’s statistics for the first quarter of 2013.
- Germany has a thriving and highly developed online payments market. According to a report from German trade agency, Germany Trade & Invest, the E-commerce market in Germany is estimated to grow from $36.8 Bn in 2012 to $44.7 Bn in 2017 at a CAGR of 21.4%.
- 8 cents for every U.S. dollar is spent at Walmart. There is tremendous scope for mobile payment innovation clubbed with customer analytics and targeted marketing.
- The overall lottery sales in China has grown at a CAGR of 33% from 1987 (year of launch) to 2012 according to agtech.com. According to the Ministry of Finance, China’s lottery sales reached $32.36 Bn in August, 2013. This figure was up 17.6% or $4.8 Bn for the same period last year. Global payment players like Danal and local players are going to enable payments to be made on the private online lottery via mobile payment solution.
Semicon and Prepaid players gain:
- NXP Semiconductors posted revenue of $4.36 Bn in 2012. On 23rd September 2013, the company announced that it has shipped over two Bn SmartMX™ secure microcontroller chips to the growing chip-enabled payment and government identity card markets. This is one of the biggest gainers in the New Payments world.
- According to a research from Mercator Advisory Group, since 2009, the money loaded on to prepaid cards has doubled from $57 Bn to over $113 Bn.