The pay-by-phone challenge

Bangkok Post (10 November 2007)

Mobile operators won't put banks out of business but could grab a healthy share of payment marketsUMESH PANDEY

Regional and Thai banks already facing forced or voluntary consolidation to gain market share may soon be up against a new and far fiercer competitor in the payments segment: mobile phone operators.

''The telecommunication service providers could be the biggest threat to the banking industry in the near future and this is visible in some markets already,'' said David Rhodes, the senior partner and managing director for Financial service practices for the Boston Consulting Group based in London.

Mr Rhodes still believes that the death of bank branches, as predicted by some pundits in the past, will not come to pass. However, he says that the payments-generating business of the banking industry could be at risk from the growing trend toward using mobile handsets to pay for purchases at various points of sale. The most likely candidates in the near term are stores such as supermarkets, where trials are already under way in some markets.