Your Friday fix for global fintech and payments news
This week we have been discussing the longevity of the superapp in the newly released white paper; ‘The rise of the payments super app – a fad, or the future?’ published by MobiCash, the mobile payments service powered by Compass Plus. In payments news the FDIC has complied information on underbanked American households, Visa has announced the global rollout of the Tap to Phone contactless POS platform, and statistics from GlobalData show the incredible increase India is going to see in mobile value transactions to 2024.
Our weekly round-up brings you a dose of some of the biggest news announcements from the past seven days so you can keep an eye on all that’s shaping our world this week.
- Percentage of unbanked Americans drops to record low in 2019
- Visa Tap to Phone contactless payments programme goes global
- Mobile wallet transactions in India to exceed $1.36 trillion by 2024
The Federal Deposit Insurance Corporation (FDIC) has released survey results which show that only 5.6% of American households were unbanked in 2019. The survey included almost 33,000 respondents over the US in June of 2019 and ‘unbanked’ classes as not having access to a checking or savings account.
“It is encouraging that a record number of households had bank accounts in 2019, though we continue to pursue actions to create a more inclusive banking system.” Said Jelena McWilliams, Chairman of the FDIC. “New products and technologies have the potential to bring even more people into the banking system and the FDIC will encourage this important innovation.”
Interestingly, around 50% of the unbanked respondents did not meet the minimum balance criteria to hold a bank account. Another third of unbanked respondents did not trust in the banking system. A portion of the unbanked respondents instead use prepaid cards, with two thirds also using bank credit and a fifth make use of non-bank credit.
Technology from Visa is now allowing Android handsets to be used to accept NFC payments in more than 15 markets, including countries in Europe, Africa and Latin America. Retailers can now download an app and start accepting payments almost immediately. The aim of this technology is to give millions of small and micro businesses access to the digital economy where they may have previously lost sales.
The technology is built atop the security of an EMV chip transaction, where each transaction contains a dynamic cryptogram than cannot be reused. For those who are unsure of how to make the most of the new feature, Visa are offering help with their Ready for Tap to Phone programme.
"With billions of phones around the world at the ready, the opportunity that comes with lighting them up as payment acceptance devices is enormous. Visa Tap to Phone could be one of the most profound ways to reinvent the physical shopping experience." Said Mary Kay Bowman, Global Head, Buyer and Seller Solutions at Visa.
According to research from GlobalData, mobile transaction value is due to increase 250% in India from 2016 to 2024. The value in 2016 was $5.4 billion and looks to reach up to $1.4 trillion in 2024. COVID-19 is said to have had an impact on the huge uptake of mobile transactions with people avoiding touching POS machines but another contributor is the ‘Digital India’ campaign by the government which has been investing heavily in readying the payments infrastructure for cashless payments.
Ravi Sharma, Lead Banking and Payments Analyst at GlobalData said: “With rising smartphone penetration and proliferation of mobile wallet brands, mobile wallets have now become an integral part and are widely accepted by merchants of all sizes, from big supermarkets to neighbourhood kirana shops”
Sharma continued: “Mobile wallet usage is all set to disrupt the overall consumer payment space in India. While the government’s demonetisation move (making 500 and 1,000 rupees notes illegitimate) in late 2016 had set the precedent, further decline in cash usage could be seen during the current COVID-19 crisis.”