November 14, 2013
Mobile payment is hot in Poland. According to Mastercard, While Consumer Readiness trails the Index average, as in several continental European economies, mobile device penetration is high. This suggests that Polish consumers probably just need to be educated further about the utility and value that mobile payments can provide. Late last month, a third mobile payment service, named iKasa, was officially launched. The service is by the large retail chain Biedronka, having more than 2200 shops and expecting to grow to over 3000 within two years. From start the service is backed by three banks and the user needs to have an account in one of these. The plan is to add more banks later. First and second mobile payment services in Poland were IKO service by PKO Bank Polski and Orange Cash by Orange Polad & BRE Bank.
With iKasa, the transaction is like a debit card transaction and money are deducted from your bank account. This solves a problem that Biedronka customers had, though only cash was accepted in the shops (Biedronka says that the card interchange fee is to high). With the mobile payment service the company is bypassing cards and interchange fees. iKasa is very easy to use, and a transaction is said to take approx 10 seconds.
Another example of a mobile payment service in Poland is the IKO service from the largest bank in Poland, PKO Bank Polski. The IKO service is one of the largest commercial rollouts of a mobile payment service in the world and includes 65000 POS-terminals, 3500 ATMs and thousands of E-Commerce sites.
What will be the card company’s response to these challengers? I’m sure they will do something..even though lower the fees may not be their first move.
LTP view: Even though the payment card penetration is low in Poland, high mobile phone penetration would lead to greater adoption of mobile payment services if providers launch marketing campaigns to show the benefits of mpayments. Bank, Payment providers and telcos in all three types of mobile payments - P2P, POS and m-commerce have formed many partnerships among themselves. ERA - a bank - and Intelligo (a Polish telco) had initiated a pilot for POS payments in 2010. ING also launched a pilot with Orange called Orange Cash in 2011. The real question we need to ask is: How to take the country beyond Pilots?
- Written by Lars Aase & LTP Team