Countries that are Most Ready to Switch to All Mobile Payments
Filed under News by Joseph Hindy on May 8, 2012 at 4:23 PM
Who'd have thought it?
With the NFC feature becoming more common and, more importantly, more mainstream in smartphones, it is time to have that discussion of whether or not we will all eventually be using smartphones instead of credit cards when making purchases. Given that this discussion was last conducted during the invent of the credit card, what seems like a pipe dream to many really isn’t as far off as many people may think. For those who are unfamiliar, NFC, or Near Field Communications, is radio communication system that allows electronics—namely mobile phones—to communicate with one another by holding them very close together. It’s a little under explained, but that’s what it is nevertheless.
One of the biggest features of NFC is the ability to make payments using your smartphone. To put it simply, there are ways to store your credit card in your phone and then use the radio communication to make payments for goods and services. Now that we’ve reviewed what most people already know, let’s get the good part.
Forbes has worked out what they call the MPRI, which stands for Mobile Payments Readiness Index. This is a measurement of how ready any given country is to use mobile payments exclusively, completely omitting and removing credit cards and cash from the equation. This would be really cool because we’d be one step closer to the payment system introduce in Justin Timberlake’s movie In Time. It would also be kind of nice to not have to carry a wallet with cards that are easily lost or stolen; instead relying on a smartphone which is easier to keep track of and, if the right apps are downloaded, can be traced with GPS if lost or wiped entirely to protect your card number.
The MPRI focuses on several key elements to determine how ready a country is to go completely mobile. They include:
- Consumer Readiness
- Environment
- Financial Services
- Infrastructure
- Mobile Commerce Clusters
- Regulation
After carefully factoring in each countries situations in regards to these six elements, the MPRI score is given. One would assume that the countries in which the most Android devices have been sold would lead the way. Not even close, actually. Here’s the top 10 countries that are the most ready for strictly mobile payments:
- Singapore
- Canada
- United States
- Kenya
- South Korea
- Japan
- United Arab Emirates
- Saudi Arabia
- United Kingdom
Yes, you read that right. Kenya is, surprisingly, in the top five for countries most ready to go all mobile. This is due to their partial integration of a mobile payment service already in place there called M-Pesa, a mobile P2P payment service already in use there. This has made Kenya surprisingly ready to drop all cards and cash and embrace the all mobile payment system.
With the world changing quickly to an all mobile environment with tablets that surf the web like desktops and cell phones that play games on par with all but the most recent generation of consoles, is it absurd to think that we’ll all be using phones instead of credit cards in the near future? While no country is ready for prime time yet, Forbes seems to believe that most developed countries are well on their way. What are your thoughts about going all mobile and do you think it’s something your country can do successfully? Sound off in the comments.
Great article Joseph. I really expected Japan to be higher on the list; Singapore to be on the list, but not that high; and Kenya – never would have guessed.
Right? When I first heard about it, my first instinct was to skip it. Then I saw Kenya and was like “oh no way”. I would’ve thought Japan as well, they’re usually ahead on the technological ball than other countries.