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Index posts modest increase due to mixed results

April results: per person spending increases 3%

This month's release of the Zong Payment Index (ZPI) shows that the average monthly spend per Zong user showed modest growth of 3% from March to April. This growth is primarily due to mobile operators increasing spending limits. Typically, mobile operators impose two types of spending limits: per transaction and cumulative (e.g., per month). Changes in both types of limits this month have a shown a direct effect on spending per person.

Key Insights:

  1. Austria showed a doubling of mobile payment spend per user (from an index value of 191 in March to 376 in April). This is attributed to the mobile operators in Austria increasing the maximum per transaction value from 3 euros to 10 euros. (Total mobile spend in Austria increased more than 2x, as this change attracted more new users to mobile payments, in addition to doubling the average spend per user).
  2. Besides Austria, several other European countries (Belgium, Switzerland, Finland, Hungary, Norway, Turkey showed >10% increase in average monthly spend per user. Similarly, several countries in North America and Latin America (Canada, Mexico, Chile and Colombia) did the same. This growth in monthly spend per user was driven by the growing adoption of mobile payments, and by the mobile operators' expansion of the spending limits, both per transaction and cumulative. It is encouraging to see these trends both in Europe, where mobile payments have been flourishing for years, and in the Americas, where they are a much more recent addition to the payment landscape.
  3. In contrast to these positive developments, in the US the average monthly spend per user declined -3% from March to April, and is now -16% lower than it was at its peak, in October 2011. This is directly attributable to a major US carrier implementing two new policies: 1) a much lower spending limit (going from $100 to $25 per month), and 2) requiring all mobile users to enter their billing ZIP code for each transaction, in addition to a dynamically generated one-time PIN code. We absolutely agree that the mobile operators should be cautious about user fraud and understand the need to minimize financial risk. But we think that the practices of having low monthly spending limits and billing ZIP verification don't actually serve as effective risk management measures. So we at Zong would like to make this offer to all carriers we work with: We will take on all the risk. We believe in our risk management practices 100%. So our offer is that carriers should remove the protection barriers to mobile spending, optimize the user experience, and Zong will resolve consumers' problems.
Month Mar 2010 Apr 2010 May 2010 Jun 2010 Jul 2010 Aug 2010 Sep 2010 Oct 2010 Nov 2010 Dec 2010 Jan 2011 Feb 2011 Mar 2011 Apr 2011
 AT  91 88 75 95 114 148 155 185 155 206 154 158 191 376
 AU  106 111 102 110 117 127 145 164 159 172 178 174 188 222
 BE  94 84 90 118 119 116 144 172 163 178 167 173 204 225
 CA  94 96 96 102 100 104 109 115 113 137 133 203 276 311
 CH  88 77 111 151 163 172 193 215 212 236 224 227 267 297
 CL  102 120 116 101 66 55 49 53 57 61 56 58 57 66
 CO  104 94 95 101 88 95 98 109 117 115 111 108 98 124
 CZ  111 103 101 127 129 139 155 166 168 218 236 229 308 325
 DE  100 82 91 103 138 155 181 207 193 207 227 218 251 254
 DK  108 102 75 77 96 106 99 99 88 93 104 120 125 126
 ES  112 114 104 119 125 122 106 134 175 165 127 119 154 139
 FI  103 119 105 102 109 112 122 120 119 112 117 114 126 141
 FR  97 94 101 94 101 98 108 117 108 111 106 108 123 128
 GB  104 102 102 106 108 112 129 134 132 131 121 116 126 121
 HU  94 90 77 76 79 85 95 102 100 92 90 126 165 189
 IE  91 93 99 105 112 115 122 142 148 164 157 148 169 173
 MX  77 75 88 95 82 82 92 101 107 122 111 106 106 126
 NL  96 92 93 126 148 142 154 175 171 203 219 234 286 303
 NO  91 80 67 69 84 97 113 115 113 118 127 117 114 130
 PL  87 87 85 82 87 101 105 112 104 105 115 118 118 109
 PT  85 78 74 74 75 62 59 66 66 75 78 83 90 89
 RU  141 82 96 148 198 265 232 236 158 127 135 146 160 159
 SE  92 88 82 99 109 117 133 130 134 159 158 167 176 172
 TR  123 107 113 114 111 113 121 118 107 107 98 94 107 122
 US  103 107 119 133 130 130 146 151 150 148 142 131 131 127
 ZA  103 77 77 83 84 92 96 93 89 101 93 89 97 85
Global 40 99 97 102 110 116 118 128 135 128 132 133 133 149 154

About the Zong Payment Index

The Zong Payment Index (ZPI) tracks the spending patterns of Zong’s global user base and is broken out by its top 40 markets. The ZPI reflects three factors: (1) consumer’s willingness to use their mobile phone to buy digital goods online; (2) the consumer’s ability to use their mobile phone to make purchases as determined by mobile operator policies (e.g., spending limits, price points, etc); and (3) the cost of mobile payments as determined by mobile operators’ fees which sometimes result in consumer surcharging.

The index is anchored by metrics from January 2010 and measures average monthly spend per user in comparison to that baseline. The ZPI will be released monthly, and Zong will provide its analysis of the numbers and trends.