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Smartphone Availability Could Democratize Payments

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Global sales of smartphone units are expected to surpass feature phones for the first time in 2013. The continued ascension of smartphones could open the door to the possibility of more advanced mobile payments around the world. In addition, the advanced handset  could help emerging markets make greater strides toward financial inclusion.

Euromonitor International projects that 869 million smartphones will be sold in 2013 versus 794 million feature phones. The sale of smartphone units will continue to outpace feature phones in the regions of North America, Western Europe, Australasia and do so for the first time in Latin America and Eastern Europe. In all, the sale of smartphone units will exceed feature phone units in more than 30 countries in 2013, according to the latest data from Euromonitor International: Consumer Electronics.

Sales of Mobile Phone Units by Region

Mobile Phone Sales by Region









Source: Euromonitor International


Smartphones continue to be more popular in developed rather than emerging markets. In developed markets, such as South Korea, Denmark, Norway, the Netherlands and Australia, smartphones are projected to be by far the most popular phone purchase in 2013. Increasingly, PCs and laptops are taking a backseat in these markets as more smartphone owners use the small and more convenient device to surf the internet anywhere and everywhere they go.

Greatest Smartphone Preference by Market 2013

Mobile Phone Sales by Region








Source: Euromonitor International

But moving forward, it will be emerging markets that dominate the smartphone growth charts. The fastest growing markets for the sale of smartphone units over the 2012-2017 period are projected to be in emerging markets like Chile, Vietnam, India, Egypt and Brazil, thus opening the door to more advanced mobile payment functionality in many of these markets.

Fastest-growing Markets for Smartphone Units

Fastest Growing Regions for Smartphones









Source: Euromonitor International

Undoubtedly, smartphones have changed consumer behaviour. In developed markets, mobile devices are enriching the consumer-merchant relationship. Plastic cards traditionally can provide only two pieces of information — credit is either approved or denied. Mobile devices, on the other hand, and smartphones, in particular, have the ability to track loyalty points, send deals to the
consumer’s fingertips and allow the consumer to comparison shop. Many are hopeful that the same device also will enable consumers to one day even leave their wallet at home. Smartphones have the potential to transform the mobile payments concept completely by allowing for a better informed, more connected and seamless payment experience.

For emerging markets, mobile phones have begun to democratize financial services for unbanked individuals, who tend to be more prevalent in emerging markets. Mobile phones, in general, can be a more cost-effective means for reaching the large swath of unbanked consumers in lieu of establishing an expensive network of bricks-and-mortar retail bank branches. Consumers in many of these markets are more likely to possess a mobile phone than own an internet-enabled computer. The possibility of so many of these consumers now having access to smartphones could further open that particular population up to greater functionality on their mobile devices. Potentially, they could access the internet to shop and make purchases, as well as make bill payments online. Smartphones truly have the potential to further extend financial services to those that are the most in need. In fact, the way in which emerging and developed market consumers pay in a few years could converge for the first time since cash was the sole method of payment.

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