Paypal is testing mobile app payments for McDonald's in 30 restaurants in France. If it works, then there might be a roll-out to over 30,000 McDonald's worldwide. The number 30,000 sounded really small so here is a reality check. How many Starbucks are there in the world? Under 17,000 worldwide ,or just over half the number of McDonald's. And here are the top food chains in the US with Subway leading and approaching 24,000.
The Indian retail universe is a massive 14 million. OK only 4% or about half million are over 500 square feet and the rest are tiny.And there are about 700 million mobile phone users. And all those mobile users are very high on tech adoption. Not because everyone is a tech whiz but because if you can avoid crowded lines, difficult infrastructure and petty corruption you'd rather transact online. And since the Internet and computers have affordability issues it is a direct leap to mobile commerce.
Just how huge the mobile revolution is in India is indicated in the research by Reuben Abraham who found that fishermen would call in to the fish market on shore and decide whether to return the fish to sea if prices on shore were too low. For without refrigeration the poor fishermen had very little negotiating power with the fish traders.
The opportunities for mobile payments in an economy that has 700 million phones and at least half million retailers who have some form of refrigeration and a fairly wide range of grocery products indicate huge possibilities for mobile apps that help transactions. And if you include restaurants, clothing stores and other small businesses that transact B2C…. the possibilities are just enormous.
The economy though is a cash economy, and while you can order by phone against say a newspaper ad, the supplier will send a person with the delivery and collect cash payment. The human system does work based on trust – but with all incoming mobile phone calls free- there is constant coordination that helps keep business relations on track.
Whether the payment industry will be able to leapfrog to mobile payments without the stages of credit card,debit card in markets like India will be interesting to observe. If they succeed even in capturing a fraction of transactions on mobile – the numbers of transactions will far outstrip the numbers that one can imagine in developed markets. Contact StratoServe.