Question

What are some of the advantages and disadvantages of mobile payment systems in a) developed countries and b) developing countries?

What are the key factors that differentiate the different mobile payment systems?

Which factors do consumers care most about?

Which factors do merchants care most about?

Are there forces that are likely to encourage one of the mobile payment systems to emerge as dominant? If so, what do you think will determine which becomes dominant? I

s there anything the mobile payment systems could do to increase the likelihood of them becoming dominant?

How do these different mobile systems increase or decrease the power of a) banks, b) credit cards?

Answer 1

1.

Some of the advantages of the mobile payment system in the developed countries are as follows:

A. Convenience and acceleration of shopping and transaction that further fuels the growth.

B. Reduces the burden upon physical banking system

C. Benefits of network externality is visible

Some of the advantages of the mobile payment system in developing countries are as follows:

A. One more alternative to the payment and transaction, causing increase in consumption spending

B. Faster growth in the economy

C. Prevalence of plastic money, wallet system over the physical banking system

D. It increases financial inclusion

E. Authorities can implement the income tax regulations and make people pay the taxes as applicable

F. Derived demand is created that further helps the economy to grow.

Disadvantages are the same in developed countries as well as in developing countries that are 1. risk of fraud 2. theft of data of the cards, wallets 3. regulating these service providers 4. exploiting consumers with unnecessary charges (it is more in developing countries).

2.

There are different factors that bring differentiation. The first factor is the expanded network and reach of the mobile payment systems that vary with the each mobile payment system. The second factor is the amount of additional charges or fee applied by these mobile payment systems. Few of them will be free, but some of them will be charging up to 1% or 2% fee. The third factor is the documentary requirements and minimum technical requirements of the mobile devices. The fourth factor is the type of license and scope of operation, to be permitted by the authorities such as central bank to these mobile payment systems. It also brings differentiation.

3.

Factors cared most by consumers are as follows:

A. It should be free of cost, safe and accepted at most of the places.

B. It requires minimum technical specification in the mobile devices.

C. It should require minimum documentation to operate it.

D. It should be easy to operate.

4.

Factors cared most by merchant are as follows:

A. Data security during the transactions

B. Robust network with minimum failure

C. Minimum fee for availing services with a vast reach among the consumers

D. Each remittance of funds to their bank accounts.

E. Fraud free, encrypted data flow system where hacking cannot take place.

Pl. repost other unanswered questions for their proper answers!