Mobile operators as banks or vice-versa? and: regulators interest in the best efficiency for payments

TL;DR

This paper compares mobile operators and deposit banks in payment processing, showing similar efficiencies and risks, and discusses strategic, operational, and regulatory implications of their evolving roles in financial transactions.

Contribution

It provides a comparative analysis of mobile operators and banks as payment handlers, highlighting similarities in infrastructure, efficiency, and risks, and explores strategic and regulatory implications.

Findings

Mobile operators achieve efficiency and risk control comparable to banks.

Payment infrastructures of both are similar and strategically significant.

Regulatory evolution influences future roles and alliances in payment services.

Abstract

This paper addresses the strategic challenges of deposit banks, and payment clearinghouses, posed by the growing role of mobile operators as collectors and payment agents for flows of cash for themselves and third parties. Through analysis and data analysis from selected operators, it is shown that mobile operators achieve as money flow handlers levels of efficiency, profitability,and risk control comparable with deposit banks. Furthermore, the payment infrastructures deployed by both are found to be quite similar, and are analyzed in relation to financial profitability, strategic challenges and opportunities. This paves the way to either mobile operators taking a bigger role,or for banks to tie up such operators to them even more tightly,or for alliances/mergers to take place,all these options being subject to regulatory evolution which is analyzed as well . The consequences are mapped out in operational and regulatory terms