Ericsson, the world’s largest mobile telecom equipment maker, has today launched its own mobile banking system called Ericsson Money Services. This business is designed to make mobile money transactions both easier and more available to those without access to traditional brick-and-mortar banks. Initially, it plans to rival established money transfer services like Western Union and MoneyGram, but over the next few years, it may end up competing with credit cards as well.
Ericsson Money Services: Person-to-Person Money Transfers Worldwide
According to Ericsson, the mobile payments market is expected to reach $27.7 billion (20 billion euros) annually by 2015. Over the next two to three years, person-to-person money transfers will become one of the most-used mobile applications in many countries, the company says, totalling around 600 billion euros by 2015.
Ericsson has been developing its mobile money transfer service for two years in both Asian and European markets, where it was performing proof of concept work and making other preparations. Now its solution fulfills all the necessary regulatory, legal and security requirements needed to get a service like this off the ground, it says.
Like its traditional counterparts, the new mobile money service will offer the ability to send payments across borders, and will support currency conversions. The target customers for the service are not the end users of a such a service themselves, but financial institutions, mobile operators and other service providers who would then deliver the service through a partnership with Ericsson to the end users.
According to Semir Mahjoub, Ericsson’s head of the new mobile banking system, the company’s global presence is its main asset in this case. “We expect to have a reasonable share of the market,” he said.
“A new market is opening up consisting of consumers whose first meeting with banks will take place over a mobile phone and who may never own a plastic credit card,” he explained. “People who may never enter a bricks-and-mortar bank now have the opportunity to ‘walk’ into a virtual bank using their phone.”
Ericsson’s Competition in a Growing Market
Ericsson’s initiative is only one of many new mobile banking programs either in development or now launching. Telefónica SA and MasterCard recently partnered on a mobile payments solution for Latin America; in the U.S., Verizon, T-Mobile and AT&T have teamed up to offer a mobile payments solution in conjunction with Barclay’s and Discover called Isis; Visa is launching a mobile payments solution called In2Pay; Google is also preparing a mobile payments service, reportedly; and MasterCard, PayPal and others have developed mobile money sending apps for smartphones.
In other words, it may end up being a crowded market, but it’s one that’s booming.
