Putting Apple Pay Into Perspective, with Tomi Ahonen

Tomi Ahonen

Tomi Ahonen has been praised as the mobile industry’s number one influencer by no less than Forbes magazine. He’s written 12 books on the subject to date and has spoken at over 250 conferences around the world. His latest blog post is on a subject close to my heart , mobile payment systems.

Just to be clear, I’m not going to be drawing on Mr. Ahonen’s considerable expertise to bash Apple’s first foray into mobile payments—I expect that it will be quite successful here in North America, just as other systems that don’t require Apple products have found success in other parts of the world.

Here are two notable examples:

NFC Payments in Japan

Japan’s largest carrier/operator NTT DoCoMo introduced FeliCa branded Osaifu Keitai (mobile phone wallet) running on NFC literally ten years ago, in 2004. Today there are over 500,000 retail points where you can use FeliCa (or its plastic card based cousin, Suica—similar to Octopus and Oyster NFC payment plastic rechargable cards). Every Seven-Eleven, every McDonald’s, every petrol station, every train ticket machine, etc accepts FeliCa in Japan. The vast majority of handsets sold in Japan have had NFC chips on them, and the active user base has kept growing. The latest numbers I’ve seen are 36 million Osaifu Keitai users on NTT DoCoMo, 5 million more users on rival KDDI network’s Osaifu Keitai Au and yet another 4 million more on the third network, Softbank’s Osaifu Keitai. All use the same FeliCa compatible NFC technology so any retail cash machine has only to be upgraded once and all three network mobile wallets will be supported.

SMS Payments in Africa

M-Pesa was launched in 2007 by Safaricom, the Vodafone affiliate and Kenya’s largest mobile operator/carrier. Today Kenya has 7 mobile payments solutions, all primarily working on SMS and USSD with M-Pesa still the biggest. The nation has 26 million active mobile payment accounts according to the Central Bank of Kenya.

That’s not the big number. The mobile payments revenue volume is the staggering number. Kenya’s GDP is 44 Billion USD in 2013. And how much was the value of payments that was processed through mobile? The Central Bank of Kenya reported that it was 22.4 Billion dollars last year. Kenya’s economy has now passed the halfway point, where 51% of the economic value of the nation’s output transits mobile phone accounts. And many African countries follow in close lock-step. Zimbabwe is already at 43%. 10 other African countries have passed the level of 25% of the population already using mobile payments. And in Africa this will inevitably be SMS and USSD based systems. Salaries paid by mobile, taxes paid by mobile, school fees, mortgages, car payments paid by mobile.

Apple Pay in Canada

And now, for some Canadian perspective, here’s Jeff Martin, Vice-President and CIO of Direct Channels Technology Solutions at TD Group:

(Apple Pay is) at least a year away from coming here… There are a lot of regulatory things they will have to work out.

Rage Face

Further Reading:

Survey of Global Market Today for Mobile Wallets and Mobile Money – In aftermath of Apple Pay launch
TD Bank CIO Predicts Apple Pay Launch in Canada “At Least a Year Away”
A Rant About Mobile Wallets