Would NFC and mobile banking be better targeted at emerging markets where smartphone penetration is higher than PCs? – Question from Jon Choo

Last updated: 20 March 2014

Continuing our series of responding to mobile questions from influential bloggers, our latest question comes from our good friend, Jon Choo.

Jon has more experience than most in the field of NFC payments, having recently taken part in Gemalto’s Contactless Challenge. For this, Jon (and his opposing number, Mobile Industry Review’s Ewan MacLeod) was tasked with carrying out a number of challenges using only an NFC-enabled Samsung Galaxy S3 for payment.

Jon was the eventual winner of our challenge, proving that NFC payments are on their way towards widespread adoption, so it might seem odd that he should question whether developed nations are the right market for this technology. But, equally, the logic of pushing mobile banking and payments in areas where online banking is not already widely-used is obvious. Certainly, in the areas where they have already been introduced, mobile banking programs in developing nations have been a huge success.

In Uganda, for example, mobile banking is thriving, the main reason for this being that the wireless internet infrastructure is far more advanced than ‘landline’ connectivity. Often called ‘Mobile Money’, mobile banking is used by populations on all types of devices, whether smartphones or low end feature phones. However, data coverage in developing countries is still poor, and the service rather expensive. For mass market reach, such services need to be available on other channels, like SMS, USSD and STK (SIM Toolkit).

While there are more smartphones than PCs there is still quite low smartphone penetration overall. NFC in emerging markets is still quite far off, although the interest in the technology exists.

Jon has seen for himself what mobile payments are capable of and the progress of NFC continues apace. I believe that the mobile revolution can bring with it unprecedented convenience and user experience, so it would be wrong to focus our attentions solely on either developed or emerging nations. This technology has plenty to offer to all markets, and I have no doubt it will prove its worth over the coming years.