Fortumo, which provides solutions for processing of mobile payments across the web, apps and games has published its Emerging Markets Payment Index that can be used by web, game and app developers for gathering insights on the trends in the uptake of mobile payment services in these regions, where smartphone penetration is high yet where the adoption of conventional payment methods such as credits cards is still low. The payment index aggregates data from various platforms (web, mobile web, feature phones, smartphones) and app stores.
Fortumo said that the Emerging Markets Payment Index focuses on markets with highest smartphone growth rates namely - India, Indonesia, South Africa, Brazil, Pakistan, Nigeria, Egypt and Vietnam. These markets have a significantly lower level of access to traditional online payments compared to mature economies. India and Vietnam for example have a credit card penetration below 2% and in Nigeria 99.3% of all card transactions are conducted on ATMs.
Fortumo’s analysis indicates that the biggest growth in transaction volume from carrier billing in emerging markets is coming from India, Nigeria and Vietnam. At the same time, the Index showed that Brazil, South Africa and Indonesia have the highest spending on digital content per user. Fortumo also noted that the average transaction size is below $1 in most markets which makes credit card based billing unfeasible for virtual & digital goods as fixed transaction fees eat up a majority of the revenue. Most of the markets analyzed have a double-digit quarterly growth rate in transaction volumes which shows the rapid growth of alternative payment methods among unbanked users.
For most developers, emerging markets are considered to have low revenue potential. This is the result of trying to apply the Western revenue model of card-based payments and large transaction sizes to low-income underbanked markets. Our goal with the index is to show developers that emerging markets can provide significant income when the business and pricing strategy is localized.
