Opening the electronic wallet

The advent of more widespread 3G service will deliver more payment options to smartphone users

The progress of third-generation (3G) mobile communication technology and the development of smart devices are promoting the portability of traditional digital payments and e-commerce.

For mobile players, achieving a secure, flexible and reliable payment system is gaining importance.

Local mobile operators are devising innovative payment services to capitalise on the growing opportunity stemming from commercial 3G service on the 2100-megahertz spectrum.

The goal is to make users view the mobile phone as an electronic wallet.

The research firm IDC (Thailand) says 3G users in Thailand will account for 20% of an overall 85 million mobile subscribers this year, surging to 42% by 2017. The country has 14 million smartphone users.

True Money Co, a unit of True Corporation, says its mobile money service is expected to grow by at least 15% this year, thanks to the availability of 3G service and a base of nearly 18 million mobile internet users.

Punnamas Vichitkulwongsa, managing director of True Money, says his company is aiming at 37 million "under-banked" households to use its mobile money service.

Mobile payment service fees in Thailand were worth 9.1 billion baht last year _ 5 billion from mobile airtime refills and digital content, 3.5 billion from bill payments and 600 million from online shopping.

Mr Punnamas says True is spending 100 million baht this year on research and development, mainly for mobile transaction applications.

True Money's e-Wallet app lets users top up mobile calling credit and make digital bill payments and financial transactions. Customers must have an e-Wallet account with True or a bank account in partnership with True.

"We let users conveniently scan and pay bills with their mobile phones, with support for over 80 mobile bill payment services," said Mr Punnamas.

True Money anticipates 300,000 downloads of the e-Wallet app this year, with revenue rising by 15% to 1.9 billion baht.

Supreecha Limpikanjanakowit, the managing director of Advanced mPay, the payment unit of Advanced Info Service, says cheaper smartphones and improved high-speed wireless broadband have spurred wider adoption of mobile payments.

Advanced mPay is adding two new flagship services _ mass transit payments and a mobile wallet for shopping _ to increase transaction revenue.

Mobile airtime top-ups now account for 40% of total service revenue, with bill payments and online gaming making up 25% each and 10% coming from mobile shopping.

Advanced mPay will join with MasterCard next month to roll out the mPay debit card service, letting customers make purchases via MasterCard.

Since mPay began seven years ago, it has amassed about 700 merchant partners.

"Partnering with MasterCard will lift the number of outlets in the merchant payment gateway to several thousand in Thailand and 4 million globally," said Mr Supreecha.

He blames the restriction of mobile payments to the local currency for impeding the progress of mobile payment service in Thailand.

Advanced mPay is expanding service with Bangkok Mass Transit System Plc this year, letting customers use near field communication (NFC)-enabled smartphones to pay skytrain fares.

About 10 NFC-enabled smartphone models are available in Thailand, mostly from Samsung.

Analysts predict NFC-enabled phones will constitute 30% of mobile phones worldwide within three years.

Advanced mPay expects the number of active mobile payment users to double to 400,000 this year out of 900,000 total customer accounts.

Transaction value is seen doubling to 60 billion baht.

Jon Eddy Abdullah, the chief executive of Total Access Communication (DTAC), says full commercial 3G is the key enabler in widening access to mobile financial services such as mobile payments, mass-transit ticketing and digital coupons.

DTAC is on the verge of upgrading its technology to provide mobile financial services and payments this year.

Mr Abdullah says the company will leverage the successful practices and expertise of Norway's Telenor, DTAC's major shareholder.

To spur adoption of mobile financial services, DTAC plans to partner with mobile network operators, banks and state agencies.

Bunyati Kirdniyom, a spokesman for Ericsson Thailand, the Swedish maker of telecommunications network equipment, cites a Mason Research report that mobile airtime top-ups will remain as the core mobile payment service.

The research firm expects mobile prepaid users in China, India, Indonesia, Malaysia, Pakistan, Thailand, the Philippines and Vietnam to reach 400 million by 2017 for a combined market value of US$23 billion, up from 100 million users worth $6 billion last year.

Ericsson Thailand wants national telecom regulators to allow mobile operators to provide service interoperability across mobile payment services.

Interoperability is the ability of diverse systems to work together.

Most mobile payment services in Thailand are proprietary and can only handle users of the same mobile service provider, said Mr Bunyati.

Thailand has some catching up to do

Thailand's score on MasterCard's mobile payment readiness index for 2012 was 31.6 points, giving it a ranking of 20 out of 34 countries, according to the survey of the global mobile payments landscape.

Thailand ranked fourth in Southeast Asia, behind Singapore, the Philippines and Malaysia.

Singapore was the top-ranked country in the index.

By making several changes, Thailand could set the stage for greater use of mobile payments in the future, said the survey.

The main obstacle to mobile payment adoption is the low percentage of the population in Thailand covered by mobile networks _ 38% versus an average of 94%.

Expanding mobile coverage is seen as vital for wider adoption of mobile payments.

Household consumption expenditure per person, at about US$2,500, was below the $11,000 average of the 34 countries surveyed in the index.

By advancing these elements of the mobile payments ecosystem, Thailand will be better positioned to increase consumer usage of mobile payments.

About the author

Writer: Suchit Leesa-nguansuk
Position: Senior Reporter