THURSDAY, March 28, 2024
nationthailand

Mobile payment a matter of survival

Mobile payment a matter of survival

THE BANKING sector must change its business model in an era of digital disruption in which non-banks can perform the same business services, according to Daniel Doderlein, the chief executive officer and founder of Auka, the first mobile payment company in Scandinavia.

Doderlein’s disruptive idea was to make money as easy to send as text messages. But that was in 2006, before smartphones had even been launched in the market. He got to work figuring out a way to bring his idea to life, and in 2010 he had his systems built, and had raised enough investment to start up Auka.
In 2010, Auka could interface with Visa and Mastercard, and make P2P payments and merchant payments. Yet, banks didn’t want to buy the system – so he switched gears and started selling to consumers, Doderlein said.
As he pursued his idea to focus on consumers, the company filed for a licence under the first Payment Services Directive and marketed to consumers in Norway as “mCash”, Doderlein recalls. 
Following that launch, banks started approaching the company, seeking white-label deals and so his company moved back to B2B services. He sold the mCash brand and the customer base he’d built to Sparebank 1 Gruppen.
Today, Auka is a dedicated white-label mobile payments provider, working with banks in Europe and all over the world.
Mobile payment surged in popularity in the Scandinavian countries, with about 65 per cent of money payment transactions in the region using mobile payment. Up to 60 per cent of Norwegian payments are by the Vipps mobile application, up to 55 per cent of Swedes pay by the Swish mobile application, and 75 per cent of Danes use the MobilePay application, Doderlein said.
But Scandinavia is not alone in its shift to mobile payment, with consumers in other regions replacing money with disruptive systems. Alipay can boast 520 million users, with about 100 million active daily, while Google Tez recorded a 67 per cent Indian market share in m-payments in December 2017.
With the initial success of mobile payment, next up is to grow the frequency that people use digital wallets through adding under-served merchants to those accepting the cash alternative. And the next major step is the emergence of digital banks that monetise by tapping into retail and other high volume channels.
The disruption has arrived in Thailand, where people are now learning how to use mobile payment and shopping with a digital wallet. This will soon force the entire global banking sector to change their business model to digital banking, asserts Auko’s founder.
“If you do not change by yourself, others will force you to change and may be push you out of the industry,” Doderlein said.
Most Scandinavian banks have opted to get ahead of the cure and transform to mobile and digital banking, accompanied by changes in people’s financial actions. Thailand will also need to see both banks and their customers make changes to maximise the benefits from the new business model.
“Now, the world of payment has changed, and the banking sector is not in control of the opportunity. If a bank wants to stay in the business, it has to change itself,” Doderlein said. 
 

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