Mobile payments seen as first choice in ME by 2020

Consumers in the Middle East will to be using their mobile phone as the main source of making payments within five to 10 years, according to an telecom industry consultant. “Ten years from now the mobile phone will be the primary means in which the consumer uses the phone to pay for services,” Anandan Jayaraman, chief product and marketing officer at the telecom consultancy company Connectiva, told Arabian Business on the sidelines of the Mobile World Congress in Barcelona. He pointed to the example of Africa, where mobile phones are already becoming the main source of payment.

He said only 10 percent of Africans have bank accounts, while 30 percent have mobile phones and use them as their main source of banking. While he admitted that the infrastructural development will have to be put in place in the Middle East, he believed that strides were being made quickly to introduce mobile banking and finance. At the MWC, Nokia was demonstrating its Nokia Money application, which can be used to transfer cash payments from one phone to another.

A spokesperson from Nokia said that while demand for the service was growing, users were unlikely to abandon cash altogether.

When the credit card was introduced people still continued to use cash, but he believes that mobile banking will simply become another payment option for consumers. One of the systems used to transfer funds is called NFC (Near Field Communication) and is similar to how a bluetooth wireless connection work.

“This is when you show your mobile phone (at a payment point) and the system senses the phone and charges the bill to the phone and you get the receipt by text,” said Jayaraman, who has worked with Middle East operators such as the Zain Group, Etisalat and Qtel Group. This development is already in the UAE and last year Dubai carried out a test case in the use of NFC system payments.

In May 2009, du teamed up with Dubai First bank and ran a pilot programme where 250 Platinum MasterCard holders were able to download their credit card settings onto their smartphone and were able to make NFC payments at specific points. The pilot test was focused on the Jumeirah Beach Residence, Dubai Internet City, Dubai Media City and Knowledge Village areas.