Infomedia CEO, Michael Tomlins has claimed that regulation and industry maturity remain the key challenges preventing the mobile payments sector from scaling. Telecom Review Asia Pacific managed to secure an exclusive interview with the CEO of the UK-based firm in an effort to understand and explore some of the major trends that are emerging within the mobile payments industry. Tomlin outlined the company’s vision for the MENA and APAC regions and offered some predictions on how the market will evolve.
We’ve recently seen Huawei Pay launch its mobile payment service in Russia. Can you outline to us what are the opportunities for the expansion of mobile payments in both Europe and APAC?
The launch of Huawei Pay means that consumers will be able to set up an account if they have a UnionPay card. Herein lies one of the biggest problems with Huawei Pay, and other platforms such as Samsung Pay and Apple Pay.
Giving consumers the option of paying via their mobile phone doesn’t address the underlying issue of low credit card penetration. Huawei Pay still uses a credit card to power the payment method. All of this offers more convenience to existing and new UnionPay customers. It doesn’t necessarily support low-value micropayments, and that’s why we’ve seen companies like Grab launch their own payments service in the region - credit card payments do not permit them to expand their business.
In your expert opinion, why do you think card payments are failing in the international market?
Credit cards are absolutely not failing. Figures vary but reports suggest there were 736 million Visa cards alone in circulation. It is true however that credit card penetration is still low in many countries across Asia and the Middle East. Even in some parts of Europe, many people don’t have bank accounts or credit cards. This means that in some areas of the international market, card payments are just not fit for purpose. In order to accept credit card payments you need point-of-sale hardware and the supporting technology, which can be expensive to roll out.
Singapore firm Grab has shown intuition and innovation to respond to changing consumer demands in Southeast Asia. Why do you think consumers in SE Asia have been so quick to adopt these new innovative payment methods?
For the reasons mentioned, credit card penetration in Asia and the Middle East remains low and companies such as Paypal have struggled to gain traction. Similarly, Uber has struggled in emerging markets. By contrast, local taxi companies have established a dominant market position because they offer a more flexible approach to payments, taking cash-in-hand and exploring alternative forms of payments such as direct carrier billing (DCB), mobile wallets, cash-on-delivery and prepaid coupons. Ultimately, there’s the challenge of reach, but also the challenge of infrastructure: to undertake credit card transactions you need connectivity.
The payments market in Singapore differs from those of South East Asian countries as there are well-established network operators, good infrastructure, high smartphone penetration, and high data speeds. There’s also a high level of trust in network operators compared to others in the region. Conversely, in Malaysia or Thailand, adoption is driven by a lack of alternative payments options - some of the issues are direct carrier billing (DCB) addresses and improving digital and financial inclusion. Globally, there is a need for alternative payment methods to allow people to consume digital content and make purchases.
Can you tell us more about how Infomedia has performed in the MENA region, and what differentiates the company from its competitors?
Our strategic focus for the Middle East is to ensure we’re offering countries in that region a tailored solution, by offering a range of international products and services that will be popular with local citizens such as McAfee and WWE. We are also brokering agreements with local brands offering to provide products that are widely recognized by consumers in those countries.
We don’t just provide network operators with API connections to bill customers, but rather a comprehensive package including advice on pricing, secure payment functionality, and customer support. Many of our competitors are focused on providing a narrow service across a wider territory. Our aim is to ensure we can provide a full service in each territory we go into.
What are the biggest challenges or obstacles currently facing Infomedia in terms of expansion and growth in the MENA region?
The maturity of the industry is our biggest challenge. Consumers and brands alike are not aware of the benefits because DCB is fairly under marketed as a payment method. The second big challenge is regulation: as the market is currently underdeveloped there is less up-take among service operators. There are also a couple of markets which aren’t sufficiently regulated, and there are issues that need to be rectified before Infomedia can focus on scaling. Lastly, there is an issue of consistency. Ideally, consumers should be able to select DCB as a payment option in the same way they use PayPal. Currently however, there are more than 500 mobile operators around the world and they are all taking different approaches. Infomedia is driving standardization across the operators, which will make scalability easier.
Can you outline to us what your primary objectives and goals are for 2018 in both the MENA and APAC regions?
Firstly, we want to attract and work with the best brands and power payments for the biggest and best-known mobile applications and services. We also want to be sure that we advance DCB as a payment solution to the point that it becomes recognized as a readily-available option. Whether it’s digital content, parking, or ticketing, we are continually exploring new uses for DCB and raising awareness of these within the industry. As part of this, we’re also helping carriers we work with to educate their customers about the service.
Secondly, we are committed to driving the standardization process mentioned previously across all mobile operators. This will make it possible for more brands to access DCB and integrate it within their payments strategy. The process should be quick, easy to implement, and scalable across different markets; DCB should be a ‘plug and play’ technology that instantly provides access to millions of new customers.