Mobile Payment Services

Mobile Payment Types

• Mobile banking is a service that allows you to manage customer funds using a mobile terminal, which allows you to pay for goods and services, as well as make transfers from your bank account using a mobile phone. The service is implemented either using SMS commands (SMS banking), or using special applications for phones using the Internet for data transfer.
• Mobile payments are contactless (NFC, QR) and remote payments using a payment application installed in the client's mobile device.
  • Payment by phone in a contactless terminal or using a QR code
  • Online payment (via app)

• Mobile operator payment service is an electronic payment service of mobile operators that allows you to pay for goods and services through a mobile phone and/or Internet portal using funds in your personal account and/or bank card.
• SMS banking - many banks provide SMS banking as part of SMS banking, which allows you to receive information about accounts, their change or status. SMS banking is carried out using Pull messages and Push messages.

Mobile Payment Options

Software implementation:

• Host Card Emulation is the only architecture fully defined by the PS/bank

Hardware implementation:

• Built-in security element - complete dependence on the phone vendor
• SIM card - requires an agreement with a mobile operator to implement
• SD card - requires physical delivery to the customer

2024: NSPK unveils iPhone payment technology without Apple Pay

The National Payment Card System (NSPK) in October 2024 introduced a new technology that allows contactless payments using an iPhone without using Apple Pay. The solution, called "Wave," is based on Bluetooth Low Energy technology and works both online and without access to the Internet. Read more here.

2022: Attackers hack accounts of mobile payment service Cash App

According to Motherboard, the accounts of many Cash App users were compromised, and scammers transferred money from hacked accounts to their own. The available balance of hacked Cash App accounts can range from $1,000 to $5,000. The exact amount of damage has not been reported. This became known on August 25, 2022. Read more here.

2017

Mobile Wallet Market Leaders

In 2017, the number of users of mobile services to pay for purchases and money transfers in the world reached 1.6 billion. This is stated in a study by Juniper Research, which also names the leaders of this market:

# PayPal # Alipay # WeChat Pay

What share each of the listed services has is not specified. It is also unknown what are the positions of the Apple Pay,  Samsung Wallet (formerly Samsung Pay )  and Android Pay services, which are most in demand in Russia.

In 2017, the number of users of mobile services to pay for purchases and money transfers reached 1.6 billion

Despite the growing adoption of mobile wallets, Juniper Research reported that in many countries these services are less often used to pay in stores than contactless bank cards. However, mobile service operators are actively catching up thanks to the launch of various online and offline projects. In some countries, such companies (such as operator Orange in France) have greatly expanded their banking offerings to offer customers an extensive portfolio of financial products.

In developed countries, NFC technology is the preferred way to pay for goods and services, which has a high level of protection complemented by biometric authorization. Therefore, NFC-enabled services are widely in demand among both consumers and sellers.

Payments in which a smartphone camera scans a QR code are common in developing countries such as Africa and India, since such technology does not require large costs. The QR system is weakly protected from viruses and phishing attacks, so in other regions it is used less and less, said the author of the report, Windsor Holden from Juniper Research.

According to analysts, in 2019 the number of users of mobile wallets in the world will grow to 2.07 billion, and the turnover in such services will amount to $5.4 trillion. Moreover, 76% of these expenses will fall on the Chinese.^[1]

PayPal: Russia in TOP-20 countries by number of mobile payments 

 On December 20, PayPal presented data on mobile payments that were carried out through the global payment platform in the first three quarters of 2017. The popularity of this method of paying for purchases and transferring money is growing around the world: in the last year alone, the volume of mobile payments through PayPal has grown by 54% and amounted to almost $40 billion (by the third quarter of 2017).

2016: China's mobile payments market outperforms America's by 90 times

In 2016, the Chinese mobile payment market was 90 times ahead of the American one. Such data are cited by The Wall Street Journal, citing analysts.

The research company Forrester calculated that in 2016 the Americans paid for the purchase of goods and services, and also made money transfers using mobile devices in the amount of $112 billion. In China, this figure amounted to $9 trillion, analysts at iResearch estimated. It is expected that by 2020-2021 the gap between the Celestial Empire will become even more significant: $47 trillion against $283 billion.

Comparison of the volume of the Chinese and American mobile payments market

Explaining this trend, IDC analyst Shiv Putcha noted that American companies "are still very focused on the domestic market." In addition, in the PRC, QR codes are much more often used to pay bills and purchases in stores.

China's largest payment systems, Alipay and Tenpay, are increasingly evolving abroad as the local market develops, helping regional start-ups in emerging markets launch mobile payment systems that do not require bank plastic cards.

According to CB Insights estimates for the second quarter of 2017, Chinese investors provided most of the $2.7 billion that Asian IT startups received. Their experience and technology could become even more valuable to China, the WSJ notes.

One of the incentives for the development of the international arena by Chinese payment services is associated with a large number of Chinese tourists. From 2017 to 2027, the Chinese tourism market is projected to grow at an average annual rate of 8%, higher than other countries, according to the World Tourism and Travel Council. For example, the growth of the Indian tourism market for the same period is predicted at 7%, the UAE - 5%, the United States - 3%.

In this regard, Alibaba and Tencent Holdings are striving for the fact that their payment services were available to Chinese citizens in any country.^[2]

2014: Forecast of market growth in Russia by 2018 by 5 times

According to J'son & Partners forecasts, by 2018 the Russian electronic payment market will grow fivefold and reach 122 billion rubles. At the same time, the share of mobile payments in the total volume of electronic payment systems will more than double and reach 2.8%. The growth of the market is facilitated not only by an increase in Internet penetration and the popularity of mobile devices, but also by an increase in the degree of confidence in mobile payments from the population. In addition, the mobile payment market is positively affected by the growing popularity of e-commerce and a significant increase in the share of online purchases in the total turnover of Russia.

2013: UBank - market volume in Russia 35 billion rubles

According to UBank estimates, in 2013 the volume of the Russian mobile payment market amounted to about 35 billion rubles. The main payments fell on Moscow, St. Petersburg and other million-plus cities.

Compared to 2012, turnover growth amounted to 42%, or more than 10 billion rubles. During this period, the number of mobile payment applications has more than tripled. Polls show that about 9% of Russians use mobile devices to carry out financial transactions. This is happening against the background of an increase in the share of non-cash payments in general: the growth rate is about 30% per year. At the same time, the share of mobile payments relative to all non-cash payments remains low - 1.3%. The vast majority of mobile payments are in Moscow (29%) St. Petersburg (6%) and other large cities.

2012

Forecast for the growth of operator payments in 2013 to RUB 13.1 billion

The volume of mobile operator payments in Russia will increase by 40% in 2013 and amount to 13.1 billion rubles, according to a study by J'son & Partners Consulting.

The volume of mobile operator payments, allowing users to pay for various services via a mobile phone using funds in a bank account, according to the report, in 2012 amounted to 9.4 billion rubles in Russia. At the same time, a quarter of the turnover amounted to payments for mobile services. At the end of 2018, according to analysts, the turnover of mobile payments in Russia may exceed 50.6 billion rubles.

The volume of payments made in Russia through mobile banking in 2012, according to the report, amounted to 8 billion rubles. At the same time, the largest share of turnover was remittances - 31%. According to the company's forecast, in 2013 the turnover of payments through the service will increase by 35% and amount to 10.9 billion rubles. The most promising area of ​ ​ mobile banking, analysts say, are applications for mobile phones. According to J'son & Partners Consulting forecasts, by the end of 2018, the turnover of payments through the service in Russia will exceed 35 billion rubles, and the share of remittances will increase to 36.5%

High growth rates in Russia were also shown by sms-banking - services for managing accounts and monitoring their condition. In 2012, the market for payments through the service increased by 46% compared to 2011 and amounted to 6.8 billion rubles, while 83% of the turnover was payments for mobile services. According to J'son & Partners Consulting estimates, in 2013 the turnover of mobile carrier payments will increase by 54.5% and amount to 10.4 billion rubles.

According to the company, in 2013 in Russia 50 million people will use sms-banking, most of them will use it exclusively for informational purposes. By the end of 2018, according to the forecast, the number of sms-banking users will increase to 85 million people, and the share of people paying for goods and services will increase 1.5 times.

Turnover of mobile financial services 24.4 billion rubles

According to J'son & Partners Consulting (February 2013), in 2012, the turnover of the mobile remote financial services market amounted to 24.4 billion rubles, an increase of 43% compared to the same indicator in 2011. By the end of 2017, the market will exceed 100 million rubles, while the average annual growth rate (CAGR) from 2012 to 2017 will be 33%.

Small changes occurred in the turnover structure of mobile remote financial services from 2008 to 2012. Thus, mainly due to a decrease in the share of SMS banking, the share of mobile operator payments increased from 34% to 39%.

In the fall of 2012, J'son & Partners Consulting presented the results of a study of the Russian market for mobile operator payments, mobile and SMS banking.

Thus, according to the J&P report, the purchase of goods using mobile terminals is gaining popularity in Russia. According to a survey conducted by the company in October 2012, about 44% of smartphone users and 60% of tablet users paid for goods or services in the previous month using these devices.

The turnover of services such as mobile payments, as well as the turnover of services such as bank terminals, non-bank terminals, electronic money, refers to the turnover of the electronic payment systems (EPS) market. According to J'son & Partners Consulting estimates, the turnover of the EPS market in Russia in 2012 will amount to 1811 billion rubles, showing an increase of 24% compared to the same indicator in 2011. The turnover of mobile payments that are part of the EPS market in 2012 will exceed 24 billion rubles and will amount to only 1.3% of the estimated turnover of the EPS market.

In 2011, the volume of operator payments amounted to 6.6 billion rubles, while it exceeded the volume of payments through mobile banking in all segments, except for money transfers, payment of fines by GIBBD and e-commerce. The largest share in 27% of the turnover of operator payments in 2011 was payments for mobile services. In 2012, the turnover of mobile operator payments increased by 44% and amounted to 9.5 billion rubles.

As noted, a new stage in the development of the market has come with the advent and spread of smartphones that support functional and convenient applications. According to J'son & Partners Consulting estimates, by the end of 2017, the mobile operator payments market in Russia will exceed 40 billion rubles.

Mobile banking

As noted in the J&P report, the mobile banking market is a fast-growing and promising service around the world, allowing you to take customer service to the next level. In the United States, the number of users using mobile financial services increased by 30% over the year, according to comScore. At the same time, the most promising area at the moment is applications for mobile phones. The growth in the number of users of applications for mobile financial services in the United States for the year amounted to 90%, and this trend will continue. In Europe, bankers are also optimistic about the prospects for mobile banking, and banks are investing in the development of mobile directions and the creation of modern functional applications.

According to J&P experts, Russia will follow global trends in the development of mobile banking, but mobile carrier payments are developing more dynamically in the Russian market and this trend will continue. Thus, the volume of payments made through mobile banking in 2011 amounted to 5.8 billion rubles, while the largest share of the turnover of payments through mobile banking was remittances (30%). In 2012, the turnover of payments through mobile banking increased by 39% and amounted to 8.1 billion rubles.

According to J'son & Partners Consulting forecasts, by the end of 2017, the turnover of payments through mobile banking will amount to 29 billion rubles, and the share of remittances in the structure of payment turnover will increase to 35%.

Among Russian banks are the most functional mobile banking applications at the HandyBank payment system and Gazprombank. "Among the applications reviewed, only these applications allowed bank transfers using free details," J&P said.

According to the results of the study, Alfa-Bank is the leader in the number of supported platforms, whose applications are available for all popular platforms, including the increasingly popular Windows Phone platform.

SMS banking

According to J'son & Partners Consulting, in 2012 in Russia 43.4 million people used SMS banking, while the vast majority of them were customers of exclusively informational SMS banking. Goods and services were paid by a little more than 5% of users, of which 94% paid for mobile services.

In 2011, there were 1.68 million users in Russia who paid for services and services using SMS banking, of which 95% paid for mobile services. Payment for other services using SMS banking, in addition to mobile communications, is not popular with Russian users. Thus, only 2.5% and 2.7% of users paid for broadband access of services and housing and communal services using SMS banking, respectively. By 2017, the number of SMS banking users will increase to 84.5 million people, and the share of people paying for goods and services will increase 1.5 times.

According to J&P, in 2012, the SMS banking market increased by 34% compared to 2011 and amounted to just under 21 billion rubles. Currently, the volume of the SMS-banking information market is more than 2 times higher than the turnover of payments through SMS-banking, the growth rate of payments through SMS-banking is much higher than the growth rate of the information banking market, and by the end of 2016 the volumes of these markets will be equal.

However, in Russia, according to J'son & Partners Consulting, we should expect an increase in the popularity of SMS banking. The main factors that have a positive impact on the penetration of SMS banking services in both quantitative and qualitative indicators are: low smartphone penetration (by the end of 2012 there will be about 27 million smartphones in Russia, of which only 14.5 million have the ability to install mobile banking applications); greater public confidence in banks than in various electronic payment systems; development of remote service systems by the largest Russian banks, including SMS banking.

NFC payments

In the coming years, the development of NFC technologies and mobile commerce will reduce the use of cash, according to J & P. The main efforts of the main participants in the contactless payment market will be aimed at creating an infrastructure for receiving NFC payments. In general, according to the company, there is a trend of convergence of products of the telecommunications and banking industries, which allows cellular operators to create convenient channels for subscribers to access financial services both in communication salons and from the phone. But at the moment, most NFC services cannot be attributed to mobile operator payments, since the technology itself implies settlements, regardless of the operator, the company explained. Despite this, operators are trying to monetize the use of this technology by creating their own services and SIM cards with an NFC module.

Gartner: Worldwide mobile payments will reach $235.5 billion in 2013

According to Gartner, compared to 2012 ($163.1 billion), the volume of mobile payments in the world will grow by 44% to $235.5 billion. However, according to the company's forecast, NFC transactions will occupy a smaller share of all mobile payment transactions than previously predicted.

According to Gartner's Mobile Payment, Worldwide, 2013 Update forecast, the total number of mobile payment users worldwide will reach 245.2 million in 2013, up from 200.8 million in 2012.

At the same time, the volume of transactions that will be performed by users in 2012-2017. using NFC technology, was reduced by Gartner analysts by more than 40%, "due to the insufficient level of adoption of NFC technologies in all markets in 2012, and the fact that several well-known services such as Google Wallet and Isis are still just trying to gain momentum."

According to this forecast, NFC will account for only about 2% of total mobile transactions in 2013 and 5% percent in 2017, although growth is expected to accelerate somewhat from 2016, when the distribution of mobile NFC phones and contactless readers in devices used in retail and banking should increase. "

Gartner also says that Remittances will account for about 71% of total mobile transactions in 2013, while goods will account for another 21% of transactions.

shopping experience is not yet optimized," Gartner said. "People now spend a lot more on online retail channels."

The volume of money transfers in the volume of mobile transactions continues to increase, since users make such transactions much more often (albeit with smaller amounts) due to the greater availability of services and the fact that consumer fees are lower than with traditional banking services. All of these factors make mobile money transfers the most commonly used transaction in many users. Gartner says they will hold nearly 69% of all mobile operations by 2017.

The growth of the volume of mobile transactions for payment of bills is projected at 44% in 2013. Gartner also reports further stable growth in this indicator until 2017. This is also due to the growth in transaction amounts, as more consumers in developed countries pay bills using a mobile phone. The growth is also driven by consumers in developing countries transacting larger amounts than originally forecast. Payment of bills will take about 5% of the total volume of mobile operations projected for 2017.

Speaking about regional markets, Gartner notes that the volume of mobile operations in the Asia-Pacific region will grow by 38% in 2013 and reach an amount of $74 billion. The popularity of mobile operations in developed markets in South Korea and Singapore and emerging markets such as India should lead to a steady increase in mobile payments in the region.

As a result, by 2016, the Asia-Pacific region is projected to overtake Africa and become the largest region in terms of mobile payments, reaching $165 billion. Operations in Africa are projected to reach $160 billion in 2016.

According to Gartner, in North America, the growth of mobile payment transactions is projected at the 53% level in 2013 with an amount of 37 billion compared to $ 24 billion in 2012. NFC implementation has passed almost without significant consequences in the form of transaction growth in this region due to the fact that that many trade and service enterprises have launched mobile applications "in tribute to fashion" without a clear understanding of the winning strategy.

Note that the volume of mobile payments in Western Europe is expected to reach $29 billion in 2013, compared with $19 billion in 2012. The market will grow steadily throughout the forecast period until 2017, but the growth rate may be influenced by the factor of reducing the average number of transactions made by one user in 2012.

IDC: In 2017, the global mobile payments market will exceed $1 trillion

According to an IDC study from 2012, by 2017 the global mobile payment market will exceed $1 trillion. Most of this amount will fall on the segment of the so-called "mobile commerce," which includes both the consumption of digital media through the phone (for example, downloading tunes on iTunes) and purchases in online stores made through a mobile browser. The next largest category will be contactless transactions using NFC (Near Field Communication) technology.

The key area of ​ ​ application of NFC, experts consider contactless payments using mobile phones, which easily turn into electronic wallets by adding a special chip and software.

Finally, the third category of mobile transactions, by a wide margin from the first two, will be personal transfers from one user/client to another (P2P, Person-to-Person). The development of this direction will be hampered by the lack of common standards for making money transfers using mobile phones between different countries.

It should be noted that although $1 trillion is a huge figure, even in 2017 only 2.5% of all payments will pass through phones. The total turnover of this market also includes cash payment, plastic cards, checks and ACH (a system for making electronic settlements on checks and other payment documents in the United States). Nevertheless, the head of the study, Aaron McPherson, notes that the turnover of mobile funds was higher than he expected. Most of all, he was surprised by the results of the development of the NFC direction, which predicts the highest growth rates.

For the NFC story to succeed, a number of conditions must be met.

are a number of uncertainties in the forecast related to whether financial companies, telecom operators and retailers will be able to agree on uniform payment standards. If everyone goes their own way, the forecast will not be fulfilled. If the market develops several leading schemes for each country, the numbers may turn out to be much higher, "IDC said in a press release

According to analysts, mobile payments represent a good opportunity for the development of the business of traditional financial institutions. Most of these services will be associated with "card" products of banks. But they need to act now to avoid missing out on the nascent market. IDC experts recommend targeted marketing, developing bonus programs and, of course, integrating plastic cards into digital wallets.