In today’s world, a mobile connection is a fundamental necessity. This fact has driven the global telecom industry to expand rapidly for decades. By the end of 2022, more than 5 billion people possessed mobile connections, with 4 billion of them also enjoying internet access. With such a vast user base, it’s no surprise that the financial services sector has set its sights on this market. Telecom financial services have emerged as a promising frontier in the industry.
As the telecom industry has grown, financial services have undergone significant transformations, thanks to the contributions of fintechs, emerging technologies, and other factors that have enhanced efficiency, innovation, and convenience. Notably, cross-border transfers have reaped substantial benefits from these changes, leading to a remarkable increase in their total value to $791 billion in 2022.
In this article, we delve into the synergy between telecom and finance, examining in detail the key potential areas where the telecom industry can benefit from leveraging financial services.
How Financial Services Could Transform The Telecom Industry?
- Collaboration and Partnership: Collaboration between these two sectors reduces entry barriers for underserved populations. Telecom financial services have the potential to expand user bases in both industries, leading to increased revenues and profits
- Digital Makeover: Modern financial services like mobile payments and wallets are delivered digitally. Telcos could utilize the opportunity to improve their UX to keep up with the users’ changing needs and start offer improved services.
- Capitalizing on Existing Data: Telecom companies possess extensive data on their users’ spending habits, needs, and data consumption. Leveraging this information, they can tailor financial services to match their users’ preferences and needs.
- Driving financial inclusion: The telecom industry can play a key role in expanding financial inclusion worldwide. With mobile phone ownership and internet coverage increasing exponentially, telcos could deliver financial services to the unbanked global population.
- Staying Competitive: Offering unique telecom financial services could be a differentiating factor for telcos compared to other market players, and help them stay competitive against their rivals.
How Are Telcos Leveraging New-Age Financial Services?
In the era of telecom financial services, telcos are gaining more traction through unique measures. Here are a few examples of such collaborations:
- Safaricom and M-Pesa: Kenyan mobile network company Safaricom has its own mobile payment service for its users called M-Pesa. The service has garnered tremendous popularity in Kenya and other African countries and is one of the chief contributors to Safaricom’s revenue. Recently, M-Pesa also expanded its operations to Ethiopia.
- Telefónica and Movistar Money: Telefónica, one of the leading telecom companies in Spain, has launched a consumer credit service called Movistar Money in multiple countries. The service enables its users to access instant credit at low fees without excessive documentation.
- NTT Docomo: The Japanese telco NTT Docomo delivers various telecom financial products to its users through d Card and d Payment. While d Card is a credit card that NTT Docomo’s users can obtain, d Payment is a payment service operated by the telco for its users.
Enabling an Age of Telecom Financial Services
The convergence of telecom and finance represents a fundamental partnership with the potential for significant positive impact on a global scale. Beyond financial gains, telecom financial services play a crucial role in fostering financial inclusion, facilitating seamless cross-border transfers for millions, and advancing mobile and internet connectivity.
For telecom companies looking to venture into small-value financial services, a B2B marketplace leader like Prepay Nation stands as the ideal partner. API integration with Prepay Nation enables telco users to become familiar with telecom financial services and effortlessly initiate both domestic and cross-border transfers through our array of prepaid products, including airtime, data, bundles, e-gift cards, and utility payments.
Reach out to us today and introduce the benefits of seamless telecom financial services to your users!