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EDITORIAL Alternative payments and how MNOs can become the new Fintechs

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This week it’s all about payments. Many research studies out this week point to how various ‘new’ ways to pay are now starting to accelerate, driven by consumers now expecting the payments process to be so easy to almost be non-existant.

A study out this week reveals, for example, that DCB is set to grow to $74bn by 2026 thanks in the main to games, but also driven by all manner of other digital services. Not least remote physical goods purchasing, which the report saying that, while growing from a much lower base, it has the potential to be a really big moneyspinner, as cross-border ecommerce takes flight.

Meanwhile, instant payments by bank transfer are also now really taking off. They are projected to hit an staggering $126bn by 2032, says a separate study, once again driven by ecommerce, as well as peer to peer payments and the rise of the rental economy.

There is also a going to be a boom in Cloud payments. Cloud billing solutions save money for businesses since they lower the amount of IT resources and infrastructure required by requiring less integration and expensive hardware, as well as decreasing the risk of vendor lock-in for billing activities. As they replace human procedures, these billing solutions result in cheap capital and operational costs.

But dwarfing them all are QR code payments. These are the real winner in the quest to make payments easy – topping the $3trn mark within the next three years. The global spend using QR code payments will reach over $3trn by 2025; rising from $2.4trn in 2022. This growth of 25% will be driven by the increasing focus on improving the level of financial inclusion in developing regions and providing alternatives to established payment methods in developed regions.

Combining loyalty and payment services via a single QR code is a key strategy for increasing adoption and the latest study predicts that loyalty schemes will encourage repeat use and foster consumer trust in QR codes for payments.

This is all being driven by consumers wanting the most seamless and easy ways to pay – with 58% of UK consumers, for example, expecting online payments to be just one click and 88% of them saying they will go elsewhere if the payment process is difficult.

No wonder then that MNOs are once again being tipped to become the next round of Fintechs – but only if they partner up and innovate.

They are also going to have to get to grips with fraud, which continues to dog carry billing and messaging services, but which has to be overcome to create the right environment for carriers to be the leaders in payments.

There is everything to play for here for MNOs. They have the connectivity and they have, to a large degree, consumer trust. Leveraging this, along with developing ways to integrate CPaaS, marketing and payments could well leave MNOs in the position of being the leading players in a new world of engagement marketing-commerce-payments that remove the friction that consumers so hate.

These projected developments in payments across the coming years are all part of the shift in consumer habits and their perceptions of payments. For younger shoppers payments is now something that they want to happen as in the background as possible. To deliver this, any payment provider or operator must crack security as well as process – and then they can deliver what consumers truly want.

It is also vital for MNOs as they are already now facing massive competition from companies such as WeChat and soon the likes of WhatsApp and other OTT players who are surely going to leverage the advantages they are gaining over operators in messaging to also add in payments?

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