The MasterCard Mobile Payments Readiness Index: A Method to Our MadnessNitin Sumangali |
Mobile payments have been at the top of the industry’s mind for some time now, but much of the conversation to date has emanated from the gut, rather than the brain. Operating on instinct and convention, many in the industry have been trying to understand and attack this problem based on what they feel to be true or what they sense consumers want.
The Global Insights team sought the same answers that everyone else did, but was committed to developing a rigorous, reliable framework from which to approach from the problem. Enter the MasterCard Mobile Payments Readiness Index.
The Mobile Payments Readiness Index measures how 34 global markets of different size and sophistication are preparing themselves for mobile payments. The Index looks at three types of mobile payments—transferring money person to person (P2P), paying with a mobile device at the point of sale (POS), and using mobile Internet to make purchases via m-commerce.
The top-line findings of the Index provide a lens through which to examine the future of the industry. First, it is still early days for mobile payments. The top-ranked country in the Index, Singapore, scores 45.6 out of 100. We think a score of 60 out of 100 is the inflection point—where mobile payments are a viable and mainstream payment method; the data show that this is still a ways off.
Another key finding was that m-commerce appears to be the gateway mobile payment. For most of the 34 countries in the Index, m-commerce is the most popular type of the three mobile payments. The likely explanation is that m-commerce’s similarities to e-commerce, an established activity in many markets, makes it the easiest form of mobile payments for consumers to adopt.
To get to these results, the Insights team identified approximately 50 variables from data sources such as the World Economic Forum and the United Nations, as well as proprietary MasterCard consumer research—data points expressive of everything from gross domestic product (GDP) to mobile phone ownership. We then organized these variables into six components that represent the pillars of mobile commerce, which we describe in detail on our website.
The addition of consumer research differentiates the Index. Rather than intuiting, hypothesizing, or making assertions about consumers’ feelings towards mobile payments, MasterCard’s proprietary research is built on empirical evidence.
The lessons of the Mobile Payments Readiness Index are clear: The world is getting ready, but it isn’t ready yet. The partnerships among banks, mobile networks, and governments around the world are a sign that the industry is trying to line up the elements needed to offer new products that improve the ways consumers pay. As consumers learn more about mobile payments and the industry adapts to their needs, mobile payments readiness will increase. Understanding where countries are today in terms of adopting mobile payments is the first step to knowing where they will be in the future.
Topics: Payments Strategy