New research from Ericsson ConsumerLab shows that urbanization stimulates interest in m-commerce services in emerging Asia, such as sending and receiving money via mobile phones. Family and friends – so-called circles of trust – are vital when it comes to financial matters and will have an impact on how consumers adopt mobile financial services. Security concerns and convenience will encourage the adoption of cashless payments and m-commerce services.

A report from Ericsson (NASDAQ: ERIC) ConsumerLab has explored the possibilities of widespread m-commerce adoption in emerging Asia. The countries included in the study were Bangladesh, Indonesia and Vietnam.

The research reveals that 54 percent of respondents in Indonesia, which is the most advanced of the economies in the study, have used money transfer services (sending and/or receiving money), followed by 45 percent in Vietnam and 34 percent in Bangladesh.

When it comes to interest in and awareness of money transfer services using a mobile device there is great variation across the markets. At one extreme we find Bangladesh, where 97 percent show interest in such services, and 100 percent are aware of them. This is largely due to the popularity of the bKash money transfer service.

In Indonesia, 49 percent are interested in mobile money transfer services, while 35 percent are aware of them. For Vietnam, the corresponding figures are 26 and 19 percent respectively.

Looking at how many people have actually used mobile money transfer services, the result is on a lower level: 4 percent in Bangladesh, and 1 percent in Indonesia and Vietnam respectively.

One key finding of the study is that urbanization, which leads to many people moving to cities to find a job, stimulates the need for quick and reliable money transfers.

Patrik Hedlund, Senior Advisor at Ericsson ConsumerLab, says: "The reason for this is that while some family members move to the city, others stay in the countryside and remain dependent on those who moved, particularly concerning financial matters. In these developing markets, where incomes are typically low, there is a need to quickly send and receive money."

All the studied markets are still, to a large extent, cash economies; that is, they are based on the usage of cash for daily transactions. Ericsson ConsumerLab found that these economies are characterized by circles of trust " groups of family members, friends or neighbors " which save money collectively in funds and lend to each other as the need arises.

However, a cash-based society is associated with a number of concerns when it comes to safety. For example, consumers often receive incorrect change when making a purchase, and also face the risk of counterfeit money.

The lack of convenience is a further drawback, arising from having to wait for the bill collector and be at home at a particular time, or " in the case of money transfer " the need to go to a certain location at specific opening hours.

As a consequence, as much as 78 percent of consumers in Bangladesh and 57 percent in Indonesia are interested in using mobile payments for service bills. The corresponding figure for Vietnam is 37 percent.

In summary, there is high general interest in mobile financial services in emerging Asia, especially in mobile money transfer and bill payment services.

Read the report Mobile Commerce in Emerging Asia

Performance shapes smartphone use

Mobile Commerce in Emerging Asia Infograph

Notes to editors

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