The Bankwatch

Tracking the consumer evolution of financial services

Social money and payments is a large market

There is a view that the enormous pent up demand to pay your friends, can be opened up, by facilitating mobile payments over your cell phone.

The bank account in your phone – Jul. 11, 2006

“Mobile payments will be an exploding market,” predicts Kevin Dulsky, senior director at PayPal Mobile. He won’t say how many users have signed up so far, but PayPal itself has an installed base of more than 100 million

The market at stake is a billion dollar market.

“The economy of informal debts is huge,” Oberoi says. “All we’re doing is making this invisible market visible, then monetizing it with payment options.”

The market is indeed huge. An estimated $103 billion of social money – think split dinner checks and cab fares – is traded every year. And BillMonk isn’t the only company poised to take a piece of it.

And a varied group of payment firms, and telcoms are right in there.  No banks!

A growing group of startups and established players like PayPal, MasterCard (Charts), and Cingular are betting that the cell phone is about to become king  of small, on-the-go, cashless transactions. Total worldwide mobile payments will reach $24 billion this year and $55 billion by 2008, according to technology analysts at Celent.

Relevance to Bankwatch:
To the extent this is a market, it doesn’t require banks.  There is an opportunity for banks to capture transactional revenue,, and balances, or float.  The inconvenience of the likes of Interac Money Transfer, or NACHA interperson transfer will not help banks markedly in this space.

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Written by Colin Henderson

July 11, 2006 at 22:12

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