mCommerce Has a Future We’re Just Not Seeing It Yet!

The eCommerce hype has forwarded its hype towards mCommerce, and we’re still waiting and watching for the pieces to come together. With more than 90 million Sim cards in circulation, you would think that mobile commerce is a no-brainer! But before you cloud your thinking with an array of arguments, here are some points discussed at a recent mCommerce event in Karachi, which might make you a convert after all!

Pakistan’s mobile phone penetration is one of the highest in the World. Considering back in 2003, the penetration was at a meager 3%, today, close to 80% of the population has access to communication via mobile phone. The middle class population is the potential user which includes people engaged in small businesses, the working class, students and professionals. On the other hand, most of this ‘connected population’ also makes up the unbanked population. While Microfinance may grow, Pakistan remains largely a cash-based society; 54 billion rupees worth of transactions took place according to the IMF and most of this cash is invisible to the main stream economy.

Perhaps the argument which can actually put a stick in the spool of progress of mobile commerce in Pakistan is the question of ownership. Who owns the customer? Is it the telecom company who makes the transaction and mobility possible? Or is it the bank that actually is the storage place for the physical money? If you look at the history of banking, after 63 years of serving Pakistan, there are only a meager 26 million accounts. Since the time of regulation, there have been an estimated 90 million sim cards out there. In assessing who gets ownership, there is no question about which of the two has experienced more promising growth.

Traditionally, the cost of a single transaction is high. When every financial institution wants to cut back on costs, branchless banking and investments in alternate delivery channels really have to start being looked at.•