Post on 03-Apr-2018
7/29/2019 Mobile Economy :Early Adopters vs laggards
1/12
Global Insights
ADVANCING INSIGHTS ADVANCING COMMERCE MAY 2012
THE MOBILE PAYMENTS READINESS INDEX:
A GLOBAL MARKET ASSESSMENT
EXECUTIVE SUMMARY
MasterCard believes that a score o 60 on the MPRI will indicate that a market has reached the
inection pointthe stage at which mobile devices account or an appreciable share o the
payments mix. The most advanced market in the Index, Singapore, attained a score o 45.6.
To be ready or mobile payments, markets need to achieve a balance o high scores across
the six components that comprise the Index: Environment (economy and scale), Inrastructure
(telecommunications and technology), Regulation, Financial Services, Consumer Readiness, and
Mobile Commerce Clusters (the degree o integration and partnering among banks, telcos, and
the government).
Some global markets lead in certain components, while alling behind in others. A close reading
o the fndings reveals that most markets are still capable o being molded in the interests o
consumers looking or convenience, security, and fnancial inclusion.
THE GLOBAL AVERAGE OF READINESS FOR MOBILE PAYMENTS IS 33.2 ON A SCALEOF ZERO TO 100.33.2
While its early days or the adoption o mobile payments globally, some markets are making
progress toward attaining the right mix o market orces and consumer acceptance. Thats among
the top-level fndings o the MasterCard Mobile Payments Readiness Index (MPRI), a rigorous,
data-driven survey o the global mobile payments landscape. Using public and proprietary data,
as well as original market research, the survey gauges the preparedness and receptivity o 34
countries or mobile payments o three varietiesperson to person (P2P), mobile e-commerce
(m-commerce), and mobile payments at the point o sale (POS).
On a scale o zero to 100, the 34 countries achieved an average mobile readiness score o
33.2. No market reached a score o 50indicating there is still work to be done beore mobile
payments become mainstream. Other top-level fndings include:
No two global markets are identical; each is driven by local conditions of environment,
inrastructure, regulation, and fnancial services.
In the vast majority of markets, more consumers are currently using mobile payments
or m-commerce than or person-to-person or point-o-sale transactions.
Consumers are typically drawn to mobile payments either for access to electronic payments
(mainly in developing economies) or the convenience o mobile phone payments (in the
developed world).
Conditions on the ground, such as a stable telco network, established nancial services, andprogressive regulation, do not ensure consumer readinessthe one essential variablein any
given market.
7/29/2019 Mobile Economy :Early Adopters vs laggards
2/12
ADVANCING INSIGHTS ADVANCING COMMERCE2
INTRODUCTION
The MasterCard Mobile Payments Readiness Index provides a rigorous, data-drivensituation report on the status o the payments business in 34 global markets.
Specifcally, it measures these countries readiness to shit rom plastic to interactive
mobile devices. By investigating three mobile payment typesperson to person,
mobile commerce, and mobile payments at the point o salethe MPRI oers a
comprehensive view o the current state o mobile payments as well as the course
they will likely take in the near uture, both regionally and on a country level.
KEY FINDINGS
No market has progressed to the inection point o 60 on the moile
payments adoption curve. On the MPRIs scale o zero to 100, overall country
scores range rom 22.4 to 45.6, a narrow spectrum. No one country is a standout
with the possible exception o Kenyaand no one country has a monopoly on
success actors. There is opportunity in every market.
Consumer readiness is a critical success actor. The most advanced
inrastructures in the world, with responsive legal systems, mature economies, and
sophisticated technology networks, may be ertile ground, but until consumers
embrace mobile payments, that ground will remain allow. Consumer amiliarity,
willingness, and actual usage are necessary conditions or mobile payments to
take o.
Environment, inrastructure, regulation, and fnancial services are talestakes or readiness. The interplay among these market orces is as important as
the relationship between these orces and consumer readiness.
Partnerships can greatly accelerate progress. Partnerships among the
key players in the mobile payments ecosystemfnancial institutions, telcos,
governments, technology providers, and otherscan speed the commercialization
o mobile payments.
Segmentation is the key to early adoption. The path to success will likely
dier rom country to country, based on consumer segments varying degrees o
receptivity to mobile payments.
M-commerce has achieved the greatest success so ar. Signifcant consumer
experience with e-commerce is part o the reason why m-commerce is the leading
mobile payment type in most o the markets surveyed.
Global Insights
The MPRI oers a
comprehensive view othe current state o moile
payments as well as the course
they will likely take in the near
uture, oth regionally and on a
country level.
7/29/2019 Mobile Economy :Early Adopters vs laggards
3/12
mobilereadiness.mastercard.com 3
The MPRI does not rank order the 34 markets surveyed in terms o valueactual
or potential. Rather, it operates objectively on three levels. On the global level, it
oers an assessment o where the industryis and how ar it has to go in terms omass adoption o the technology. On a market level, it presents a snapshot analysis
o each countrys current situation in terms o conditions on the groundmarket
orces and consumer readinesswhile prescribing activities and initiatives to bridge
these gaps. Finally, on a conceptual level, it isolates thesuccess factors that issuers,
acquirers, merchants, telcos, device manuacturers, networks, and operating system
vendors need to consider in building mobile strategies.
METHODOLOGY
The MPRI is undamentally a data-driven Index. It includes 50 variables comprising
six components. MasterCard weighted each o these components, combining theresults to create a unitary score on a 100-point scale or each o the 34 countries.
MasterCard drew the data that compose the variables rom public sources such as
the World Bank and International Telecommunications Union, and combined them
with proprietary MasterCard data, market research, and analysis.
The Six Components
The components are a mix o quantitative and qualitative data. Five o the
componentsEnvironment, Inrastructure, Regulation, Consumer Readiness, and
Financial Servicesare in large part quantitative. The remaining oneMobile
Commerce Clustersis a more qualitative assessment o readiness.
The Consumer Readiness component is a proprietary MasterCard asset that
dierentiates the Index rom other gauges o mobile payments readiness. Rather
than ocus exclusively on technology and capability, MasterCard surveyed an
average o 1,000 consumers in each o the 34 markets regarding their amiliarity
with, willingness to use, and current usage o each o the three types o
mobile payments.
The Environment component measures economic, technological, and
demographic elements such as a markets per capita income, consumer access to
the Internet, and how well businesses adapt to new technologies.
The Financial Services component measures the level o development o
consumer fnancial services, such as how well consumers are treated by the
industry, the accessibility and aordability o fnancial services, and the penetration
rate o payment cards.
The Inrastructure component measures the breadth and sophistication o the
mobile phone industry by calibrating variables such as mobile phone penetration,
network coverage, and levels o NFC terminalization.
The MPRI is undamentally a
data-driven Index. It includes50 variales comprising six
components. MasterCard
weighted each o these
components, comining the
results to create a unitary
score on a 100-point scale or
each o the 34 countries.
http://insights.mastercard.com/http://mobilereadiness.mastercard.com/the-index/#ConsumerFindinghttp://mobilereadiness.mastercard.com/the-index/#EnvironmentFindinghttp://mobilereadiness.mastercard.com/the-index/#FinancialFindinghttp://mobilereadiness.mastercard.com/the-index/#InfrastructureFindinghttp://mobilereadiness.mastercard.com/the-index/#InfrastructureFindinghttp://mobilereadiness.mastercard.com/the-index/#FinancialFindinghttp://mobilereadiness.mastercard.com/the-index/#EnvironmentFindinghttp://mobilereadiness.mastercard.com/the-index/#ConsumerFindinghttp://insights.mastercard.com/7/29/2019 Mobile Economy :Early Adopters vs laggards
4/12
ADVANCING INSIGHTS ADVANCING COMMERCE4
The Moile Commerce Clusters component analyzes partnerships or joint
ventures among fnancial service companies, telcos, governments, and other
members o the mobile payments ecosystem. As no one entity can develop andpromote mobile payments by itsel, partnerships generally ensure smoother and
more successul product introductions.
The Regulation component assesses the structure and efciency o a markets
legal and governmental bodies in terms o how they interact with business,
particularly the communication and technology businesses.
Global Insights
Kenya Canada Singapore
United States Japan
Consumer Readiness Mobile Commerce Clusters
Survey-based indicators
Familiarity with using a
mobile device to send
money to amily and
riends
Frequency o using a
mobile device to pay
or merchandise ata store
Willingness to use
a mobile device to
browse the Internet to
shop or and purchase
merchandise
Percentage o individuals
using the Internet
Household consumption
expenditure
Impact o inormation
and communication
technology on access to
basic services
Percentage o
population residing in
urban areas
Technology absorption
by businesses
Aordability o
fnancial services
Financial cards in
circulation
Financial card
transactions
Customer satisactionwith companies
Foreign direct
investment and
technology transer
Eectiveness o anti-
monopoly policy
Mobile telephone
subscriptions
Mobile telephone
subscriptions as
a percent o the
population
Annual investment in
telecom services
Revenue rom mobile
services as a percent
o revenue rom all
telecomm services
NFC-enabled merchant
locations as a percent o
the population
Scale o telco-bank
partnerships to
promote mobile
commerce
Scale o involvement
by government
groups
Intellectual property
protection
Government
prioritization o
inormation and
communication
technology
Burden o governmentregulation
Government
procurement o
advanced technology
products
Inormation and
communication
technology use and
government efciency
Efciency o legal
ramework in settling
disputes
Efciency o legal
ramework in
challenging regulations
CONSUMERREADINESS
ENVIRONMENT FINANCIALSERVICES
INFRASTRUCTURE MObILE COMMERCECLUSTERS
REGULATION
THE INTERPLAY AMONG THE SIX COMPONENTS IS CRITICAL
http://mobilereadiness.mastercard.com/the-index/#ClusterFindinghttp://mobilereadiness.mastercard.com/the-index/#RegulationFindinghttp://mobilereadiness.mastercard.com/the-index/#RegulationFindinghttp://mobilereadiness.mastercard.com/the-index/#ClusterFinding7/29/2019 Mobile Economy :Early Adopters vs laggards
5/12
mobilereadiness.mastercard.com 5
Component Interaction
Examining Consumer Readiness scores in the context o the other componentshighlights the extremes o the spectrum across which the markets are arrayed.
Markets such as Singapore have highly advanced inrastructure, fnancial systems,
and regulatory structures, but relatively weak consumer willingness. Conversely, in
markets such as Kenya, the inrastructure, fnancial services, and regulatory systems
score much lower, while consumer willingness is high. Both o these markets are
in the top quintile, but neither has widespread mobile payments adoption across
all three payment types. Markets cannot develop one component and neglect the
others:Allthe ingredients are needed.
While a consumer base that is amiliar with mobile payments and willing to use them
is not the only condition needed or adoption o mobile payments, it is a necessary
one. How technologically capable a market is o developing mobile payments doesntmatter i consumers arent inclined to use the technology.
One o the strategies that the consumer research points to is the need or analyzing
consumers based on what MasterCard calls the amiliarity-willingness gap. For any
o the three types o mobile payments, the most important metric is the dierence
between how amiliar consumers are with the orm o payment and how willing they
are to use it. This method clarifes the approach mobile payments industry players
should take. For example, in a country such as France, where amiliarity is higher
than willingness across all payment types, consumers are not yet sold on the value
of the offering; product enhancement and a sharpening of the value proposition are
needed. On the other hand, in a country such as the Philippines, where willingness
is equal to or higher than amiliarity across all payment types, the situation calls or
marketing and consumer education eorts that allow consumers who arent yet
aware o mobile payments oerings to understand and take advantage o them.
While a consumer ase that is
amiliar with moile payments
and willing to use them is notthe only condition needed or
adoption o moile payments,
it is a necessaryone. How
technologically capale a
market is o developing moile
payments doesnt matter i
consumers arent inclined to use
the technology.
CONSUMER READINESS: ROOM TO GROW
P2P POS m-comm P2P POS m-comm P2P POS m-comm
WILLING USING
16 11 20 19 17 21 8 5 9
FAMILIAR
Index Average on a Scale o Zero to 100.
7/29/2019 Mobile Economy :Early Adopters vs laggards
6/12
ADVANCING INSIGHTS ADVANCING COMMERCE6
7/29/2019 Mobile Economy :Early Adopters vs laggards
7/12
mobilereadiness.mastercard.com 7
7/29/2019 Mobile Economy :Early Adopters vs laggards
8/12
ADVANCING INSIGHTS ADVANCING COMMERCE8
REGIONAL HIGHLIGHTS
Each global region exhibits its own strengths and weaknesses, and individual marketswithin those regions likewise have country-specifc characteristics that determine how
ready they are or mobile payments.
North America
Canada and the United States came close to the top o the global list, largely as
a result o high scores in components related to quantifable market orces such
as Inrastructure and Environment. Nevertheless, Canada slightly edges out the
United States predominantly on the strength o its consumer results and its Mobile
Commerce Clusters score.
The United States also has some vulnerabilities, most notably in its Consumer
Readiness scores. The dilemma conronting the United States is the same one acing
a number o other developed markets such as Australia. Although consumer scores
were by no means negligible, they skewed male and young; and while interest in
mobile payments increases with income, it declines with age. The question is: Are
young males with (relatively) lots o money a broad enough segment to ignite a
change as undamental as a shit in payment orm actor?
CANADA UNiteD stAtes
MOBiLe PHONe sUBsCRiPtiONs PeR CAPitA
Canada
Und sa
Und Kngdom
Grmany
WiLLiNGNess tO MAKe MOBiLe PAYMeNts
Canada and the United States
came close to the top o the
gloal list, largely as a result o
high scores in components related
to quantifale market orces such
as Inrastructure and Environment.Nevertheless, Canada slightly
edges out the United States
predominantly on the strength o
its consumer results and its Moile
Commerce Clusters score.
NORTH AMERICA IS AbOVE AVERAGE IN TERMSOF CONSUMER READINESS
Global Insights
7/29/2019 Mobile Economy :Early Adopters vs laggards
9/12
mobilereadiness.mastercard.com 9
Latin America
In Latin America, the highest consumer scores went to Brazil and Colombia. Thesurprise here is Colombia, by no means the biggest market in the region and one
that has just emerged from a period of considerable political and social turbulence.
Nevertheless, Colombia has a consumer base that is ready and willing, though so ar
not very able, to conduct mobile payments. Colombians as a whole are slightly more
likely to have a mobile device than they are to have a debit card, which suggests that
Colombia could well be ready or a double marketing strategy based on payment
type at both ends o the demographic spectrum.
Colomians as a whole are slightlymore likely to have a moile
device than they are to have a
deit card, which suggests that
Colomia could well e ready
or a doule marketing strategy
ased on payment type at
oth ends o the demographic
spectrum.
Familiar Familiar Willing WillingUsing Using
Country Score Index Average Leading Country Score
BRAZiL COLOMBiA
CONSUMER READINESS IN LATIN AMERICA IS HIGHEST INbRAzIL AND COLOMbIA
Scale : Zero to 100
7/29/2019 Mobile Economy :Early Adopters vs laggards
10/12
ADVANCING INSIGHTS ADVANCING COMMERCE10
Asia Pacifc, the Middle East, and Arica
Asia Pacifc, the Middle East, and Arica (APMEA) represent the most diverseglobal region. The entire world knows about the success o M-Pesa in developing
mobile payments in Kenya. Paradoxically, it was the great disparityin Kenyas
scoresbetween Consumer Readiness and Financial Services, or examplethat
drove the market to its leading position. It was precisely the defciencies in Kenyas
banking, legal, and regulatory systems that created the demand and acilitated the
development o P2P payments.
A very dierent market rom Kenya is China, not simply in scale, but in character. In
Kenya, the development o mobile payments was almost exclusively a bottom-up
phenomenon, ueled by a pressing consumer need or a secure, convenient payment
mechanism that obviated cash. In China, the consumer base is ready or at least
two types o mobile paymentsP2P and m-commerceand the telcos are readyto oblige them. The question o fnancial services role in the ecosystem suggests a
partner strategy.
Global Insights
The entire world knows aout the
success o M-Pesa in developing
moile payments in Kenya.
Paradoxically, it was the great
disparity in Kenyas scores
etween Consumer Readiness and
Financial Services, or example
that drove the market to its
leading position.
component leaders
are located in theMiddle East, Asia,or Africa
APMEA LEADS THE INDEX IN CONSUMER READINESS
7/29/2019 Mobile Economy :Early Adopters vs laggards
11/12
mobilereadiness.mastercard.com 11
Europe
The prosperous and developed countries in the heartland o EuropeGermany,France, and Italydid not rank as highly on the Index as did other integrated
economies, both close by (the United Kingdom) and on the other side o the world
(Australia). This has nothing to do with the economic and political uncertainty currently
roiling the Eurozone. Rather, it is a result o the unique characteristics o each o these
markets payment systems and the unique profles o their consumer populations.
In Germany and Italy, consumer attachment to cash is largely reected not only in
lower-than-average Consumer Readiness scores, but in some o the market orces that
drive this lack o consumer interestor example, the high cost o banking services
in Italy.
Far more positive is the situation in the United Kingdom, where consumers show the
highest levels o amiliarity and willingness to use mobile payments in the region. For all
three payment types, the results skew male, while income levels vary among the three
payment types. Although its still early days in Europe, consumer education to reinorce
the benefts o mobile payments is necessary i they are to thrive in the region.
In Germany and Italy, consumer
attachment to cash is largely
reected not only in lower-than-
average Consumer Readiness
scores, ut in some o the market
orces that drive this lack o
consumer interestor example,
the high cost o anking services
in Italy.
MObILE PAYMENTS READINESS FACTORS IN THE UNITED KINGDOMAND ITALY DIFFER STARKLY
85%
72%
80%
54%
UnitedKingdom
Italy
Mobl phonpnraon
Counry scor indx Avrag
inrnpnraon
Paymn cardpnraon
38%
18%
7/29/2019 Mobile Economy :Early Adopters vs laggards
12/12
ADVANCING INSIGHTS ADVANCING COMMERCE
CONCLUSION
At the global level, some meta-themes emerge rom the MPRI that can help allplayers orientate themselves as the new world o mobile payments takes shape.
Segmentation:While each market operates according to its own dynamic, a two-
pronged segmentation strategy is beginning to take shape: The auent and mass
segments are seeking convenience while the underserved are looking or access to
electronic payments.
Partnerships:Again and again in the Index, the lack o partnerships among players
depressed scores and, more importantly, revealed correlations between the lack o
such partnerships and weak or struggling consumer demand.
Emerging and Developed Markets:The dynamics o mobile payments adoption
vary signifcantly between the developed and the emerging world. In Kenya, it was
the lack o inrastructure, environment, regulatory, and fnancial services that enabled
the success o M-Pesa. At the other end o the spectrum, developed economies such
as Italy and Germany, with everything else going or them, need to build consumer
readiness based on an understanding o the market characteristics driving their
negative consumer scores.
To beneft ully rom the MPRI, users ought to look not so much at the individual
components, but at how they ft together. Especially revealing in this regard are stark
disparities among components, which highlight opportunities to advance the cause
o mobile payments globally.
SOURCES
United Nations (2011)
US Census Bureau (2011)
World Bank World Development Indicators (2010)
International Monetary Fund International Financial Statistics (2010)
International Telecommunications Union (2010)
World Economic Forum Global Information Technology Report (2011)
World Economic Form Global Competitiveness Report (2011)
Euromonitor International (2010)
The World Bank Information and Communications for DevelopmentOnline Database (2011)
CIA World Factbook (2012)
Proprietary Consumer Research for MasterCard Worldwide (2011)
For additional insights, visit http://insights.mastercard.com and www.mastercardadvisors.com
2012 MasterCard. Proprietary and Confdential. All rights reserved.
Insights and recommendations are based on proprietary and third-party research, as well as MasterCards
analysis and opinions, and are presented or your inormation only.
Global Insights
http://www.un.org/esa/population/http://www.census.gov/http://data.worldbank.org/indicatorhttp://www.imf.org/external/data.htmhttp://www.itu.int/ITU-D/ict/index.htmlhttp://www.weforum.org/issues/global-information-technologyhttp://www.weforum.org/issues/global-competitivenesshttp://www.euromonitor.com/http://econ.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,,contentMDK:20487483~isCURL:Y~menuPK:1192714~pagePK:64133150~piPK:64133175~theSitePK:239419,00.htmlhttp://econ.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,,contentMDK:20487483~isCURL:Y~menuPK:1192714~pagePK:64133150~piPK:64133175~theSitePK:239419,00.htmlhttps://www.cia.gov/library/publications/the-world-factbook/index.htmlhttps://www.cia.gov/library/publications/the-world-factbook/index.htmlhttp://econ.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,,contentMDK:20487483~isCURL:Y~menuPK:1192714~pagePK:64133150~piPK:64133175~theSitePK:239419,00.htmlhttp://econ.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,,contentMDK:20487483~isCURL:Y~menuPK:1192714~pagePK:64133150~piPK:64133175~theSitePK:239419,00.htmlhttp://www.euromonitor.com/http://www.weforum.org/issues/global-competitivenesshttp://www.weforum.org/issues/global-information-technologyhttp://www.itu.int/ITU-D/ict/index.htmlhttp://www.imf.org/external/data.htmhttp://data.worldbank.org/indicatorhttp://www.census.gov/http://www.un.org/esa/population/