Advancements in mobile payments technology will allow corporations to reduce their cost of cash sales by up to 20%, according to a new white paper from Mobile Money Consulting. Consumer goods companies operating in emerging markets are set to benefit most, although developments in mobile payments sector will also have a positive impact for corporations in all markets globally. The paper also says that mobile operators, payment providers, platform vendors and governments are well positioned to gain from the sector’s advancement.
Significant Opportunity for Corporate Payments
Mobile technology is revolutionising financial services throughout the world and, as the white paper notes, many of these developments have been consumer-led and focused. However recent technological advancements have opened up a significant opportunity for corporate payments, and for corporate disbursements and collections in particular. With cash amounting to upwards of 75% of corporate receivables in some emerging markets and the cost of cash collection being as much as 20% of the amount collected, the business case for companies in the fast moving consumer goods (FMCG) market is particularly strong, Mobile Money Consulting has found. Even in more developed markets where cash constitutes a smaller yet significant proportion of sales and collection, the paper explains that mobile payment technology can substantially reduce overheads.
Driver for Mobile Payments Industry
Corporate Mobile Payments also present an opportunity to build the wider mobile payments ecosystem from the top down. By passing on some of the savings from mobile technology, corporations can encourage the acceptance and adoption of mobile payments from distributors, merchants and consumers alike, Mobile Money Consulting’s paper illustrates. This incentivisation through the distribution channel also has a positive impact on financial inclusion, particularly in emerging markets as more consumers, merchants and SMEs are encouraged to use their phones for payments and transfers.
“There has never been a more opportune time to make efficient payments in the corporate supply chain system than now,” Sanjiv Purushotham, Senior Business Leader, Business Expansion, MasterCard Middle East Africa
The paper concludes with advice and insights from industry leaders including Citi, MasterCard, Visa, Barclays, Vodafone, Airtel and the IFC.
“ I believe Corporates will begin using mobile payments and related technology to forge more connections with consumers and with each other,” Hannes Van Rensburg, Group Country Manager, Visa Sub Saharan Africa and CEO Fundamo – a Visa Company