NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, March 3, 2015

(Bloomberg) — As telecommunications carriers in Europe seek a share of the billions of dollars likely to flow to companies that build mobile-payment systems, Claudio Chiche has a few words of advice: Ask Africa for help.

“I pay my electricity, water and cable TV with my mobile phone,” Chiche, chief commercial officer of Mozambique carrier Mcel, said Monday as he browsed handsets at the Mobile World Congress in Barcelona. “Here, I can’t do that.”

Apple Inc. Chief Executive Officer Tim Cook has declared 2015 “The Year of Apple Pay,” and Samsung introduced a similar service for its phones at MWC this week. If those offerings gain traction, carriers such as Vodafone Group Plc, Deutsche Telekom AG and Orange SA could fall far behind in a market set to at least double in the next five years to more than 50 billion euros ($56 billion) in Europe, according to Forrester Research.

Samsung and Apple have spurned wireless carriers, instead teaming up with credit-card companies such as Visa Inc. and MasterCard Inc., whose Chief Executive Officer Ajay Banga is set to speak in Barcelona on Tuesday.

In Africa, by contrast, it’s the carriers — mostly units of the European giants — that are leading the way. At least 40 million Africans use mobile-wallet services from Vodafone’s Vodacom and Safaricom subsidiaries, units of France’s Orange, and Millicom International Cellular SA.