mobile money services – Integra LLC

Tag Archive for: mobile money services

The Future of Mobile Phone Banking in the Philippines: Global Trends for Rural Bankers to Consider (Part 3 of 3)

RBAP-MABS Chief of Party John V. Owens shares the future of mobile money in the Philippines during the Roundtable Conference on November 9, 2011.

During my presentation, I shared with the audience some of the latest relevant updates and trends that we are seeing from around the world in terms of the uses of mobile money and mobile banking services.

One interesting theme is the use of viral marketing to support the expanded use of mobile money and mobile banking services by focusing on key influencers in particular markets. The second major agent of change is referred to as the “Stickiness Factor” or the specific content of a message that makes it memorable and the third major agent of change is referred to as the “Power of Context.” This last factor points to the fact that human behavior is sensitive to and strongly influenced by the environment and the surrounding circumstances at a particular time and place.

Banks, MFI, and even agents are beginning to see the benefits of offering mobile money-enabled banking services in order to better address real client needs and use it as hooks to attract more banking clients as well as to cross sell additional banking services to their clients interested in a mobile wallet.

Read the complete article.

March 30, 2012/by actualize

Mobile Money for Women: Greater Mobile Adoption or Development of Specific Services?

Photo Credit: The Guardian

GSMA, through its mWomen program, has invested its resources in expanding the knowledge of why there is such a large gender gap in developing countries. As stated in the report entitled “Women & Mobile: A Global Opportunity” (written by Vital Wave Consulting), there is gap between male and female mobile phone ownership in low and middle-income countries which totals 300 million. The report also includes results from surveys about why women did not own mobile phones – cost, need, fear of technology, and cultural issues. In terms of mobile money, there seems to a clear benefit to families if mothers have access to formal financial services. This includes the ability to save and make payments. Research from around the world has shown that mothers are more likely than husbands to spend more on the health and education of their children. But, as shown in the large gender gap, women do not have the same access to mobile money simply because they are lacking the hardware in order to utilize the services. As the work to close the gap continues, it is important to understand how women are using mobile money. This allows for products and services to be designed for women and their needs and desires. Today there are clear examples of mobile money being leveraged by women in developing countries.

As written about last month on this blog, women in Eastern Kenya are utilizing mobile money to make payments into informal savings groups. It also has been used to make payments into a women’s co-operative in Zimbabwe. The convenience of sending payments via mobile money has allowed women to focus on their businesses and/or their families. Traveling long distances to markets not longer limits their ability to make payments on time. These are two examples in which women have decided to fold mobile money into their informal financial services. This is a clear sign that women are seeking more formalized financial services, specifically focused around convenience of mobile payments. Since they have limited access to services that men has access to, like bank accounts, they are using mobile money in innovative ways to make up for the lack of services they have.

So there is a large gap in mobile ownership between men and women. And women do not have access to some of the financial services provided to men. But there are examples of women creating their own services via mobile money. So the question is: if we want to increase women’s access to formal financial services via mobile money, should we focus more on increasing women’s mobile phone ownership or should the focus be on developing mobile banking services specifically for women? This is a difficult question, particularly because the elephant in the room is their husbands. And this elephant is preventing both issues: low mobile ownership and access to formal financial services.

As mentioned in an interview with Mary Ellen Iskenderian, President and CEO of Women’s World Banking, women have requested greater confidentiality. The goal of their request is to keep their husbands out of their finances. Mobile money is a possible way for women to hide money from their husbands, if they control the phone or own a separate one. If it is a shared phone, the ability to hide money from their husband becomes harder. This would be a reason to push harder to increase mobile ownership. But ownership with not immediately mean that women will begin to have financial freedom. Clearly mobile ownership needs to be pushed further but understanding the cultural dynamics in each country and region will be important in the development of future mobile banking products and services for women.

March 8, 2012/by actualize

Mobile Money, Originally posted on the GBI Portal

IFC’s Report on Mobile Money: A Framework to Analyze a Country’s Readiness for Mobile Money

Photo Credit: Bancore Mobile Financial Services

On February, as a part of the ICT Learning Days at the World Bank, Sonja Oestmann, the Director of Consulting and Partner of Intelecon, presented the findings from a report commissioned by the International Finance Corporation (IFC) about mobile money. Entitled “Mobile Money Study 2011,” the reports focused on the mobile money markets in four countries – Nigeria, Thailand, Sri Lanka, and Brazil.

The IFC has committed to further expanding financial inclusion by 2013 and see the potential in mobile money to help reach this goal. But while it has been successful in some countries, it has yet to take off in others. By focusing on vastly different countries in terms of region, socio-economic conditions, and financial infrastructure, the focus of the report was to show the different ways in which mobile money can be used as well as the business models that make them sustainable. It also used Kenya and Japan as examples of countries in which mobile money has succeeded.

Framework

The report included a framework to assess the sustainable viability of mobile money in a country as well as the most appropriate business model to utilize. This includes the partnership strategy, the necessary regulation environment, and the development tracks of mobile money products and services. By creating a structure of the market research that must be conducted, the report is aimed at providing this knowledge to regulators, mobile network operators, commercial banks, microfinance institutions, telecommunications manufacturers, and all others interested in expanding mobile money opportunities.

User Demand

The report also examined where the user demand of mobile money is based on the major money flows within each country. Based on these flows, the report listed the following as potential areas of demand:

Government-to-person (G2P) payments
P2P transfers
Payroll payments from small companies in the informal sector
Public transport payments
Bill payments to major utilities (e.g., electricity and water), postpaid mobile accounts, fixed phone subscribers, pay TV (cable and/or satellite)
Retail payments
Business-to-business (B2B) payments
Credit and microfinance
International remittances
Savings

Survey Findings

Surveys were conducted in order to further understand how and why individuals were using (or not using) mobile money in the four countries. One of the more interesting findings from the survey is the ability of marketing to increase the adoption of mobile money. Individuals using the service became aware of it directly from either the bank or the MNO. But the nonusers heard about the service indirectly from mass media. The conclusion in the report is that increasing adoption could be done more effectively through direct marketing with a personal touch. Another interesting finding is the state of the formal financial services effect on the perceived value of mobile money. In countries where the financial services sector is less extensive, mobile money is seen has a cheaper and faster alternative. But in countries with a strong financial services sector, cost and speed were not as important. Its perceived value was seen as an increased convenience.

Conclusions of Studies

The main conclusion from the report was that the value proposition for mobile money depends on the existing financial service infrastructure. When financial services are unavailable to a larger population, there is a higher demand for fast and cheap money transactions. But as the services improve, partnerships between banks and MNOs increase in significance. At the same time, the demand for mobile banking decreases as other e-payment services become competitors. In countries with an established and advance financial services sector, the demand for new services is based on performing at higher speeds, with greater frequency, and increased convenience.

March 6, 2012/by actualize

Mobile Money, Originally posted on the GBI Portal

Financial services demonstrate the most proven sustainable business models within ICT4D

The following is a guest post we’re pleased to share by Hystra Consulting and Ashoka.

A recent study reveals how Information and Communication Technology (ICT) can viably provide access to education, healthcare, agro-services and financial services to the Base of the Pyramid (BoP). The study reviewed more than 280 initiatives set up by various types of actors (corporations, Citizen Sector Organizations, social entrepreneurs…) in Asia, Latin America and Africa which are using ICTs to provide services to the BoP. Hystra, a French consulting firm and its partner Ashoka evaluated the projects based on their ability to solve a problem, their scalability and their financial sustainability. The report presents 15 of the most ground breaking market-based business models, which have reached a significant level of scale and have improved the living standards of the BoP using ICTs.

Financial sustainability varies across sectors, financial services being the most mature of the four areas studied.

3 of the projects featured as financial services case studies in the report serve profitably more than 5 million customers each via different business models: M-PESA in Kenya with mobile money, Bradesco in Brazil with branchless banking via post offices and small retail shops, and FINO in India with a suite of POS-powered financial services available to over 40 million clients via door-to-door agents.[1]

Why are financial services the most developed area in terms of business model sustainability? One of the reasons cited is the willingness of clients to pay upfront for the service, because it offers them immediate savings compared to previous practices (such as cheaper money transfers). Moreover ICT-based financial services often go well beyond previous offerings, creating new practices for unbanked populations such as savings or insurance schemes that lower their vulnerability to adverse events. For example, some MNOs have developed innovative loyalty-based life insurance covers. These types of products help reduce churn and attract new customers for MNOs while providing a new valuable service to customers.

Establishing trust in the service is a key factor of success for ICT-based financial services, as they deal directly with people’s money. These services require robust and secured platforms, in addition to trusted agents who are able to sell the service, manage liquidity and provide a direct interface between the technology platform and end-users. Leveraging existing trusted networks such as Safaricom’s airtime resellers (in the case of M-PESA) or post office agents (in the case of Bradesco) appears as an effective way to create trust in these services.

The business models studied in the report tap into multiple revenue sources, getting commissions from governments for g2p payments, banks and insurance companies for the opening of new accounts, end-users for the transactions they perform, and MNOs which benefit from customer retention and higher end-users fees. Governments can actually play a large role in promoting such services: using them for their G2P payments, they can be a sufficiently large first client of ICT-based financial services to justify the initial investment in the technology that new companies entering this space need to make – one of the first services offered by FINO was G2P payments and state health insurance, for example. Many actors have tried – with mitigated success – to replicate M-PESA. However, the study points out to a wider range of models which can be just as effective in providing financial services using ICT. The key is to find which business model is suitable in each local context.

The study was sponsored by AFD, Ericsson, France Telecom-Orange, ICCO and TNO and conducted by Hystra and Ashoka. The full report is available for download in the MMU library.

[1] The number of FINO clients stood at “only” 28 million when the case study was done in February 2011, but FINO grows by over a million customers each month!

January 25, 2012/by actualize

Agriculture, Mobile, Originally posted on the GBI Portal

Free money transfers in Kenya

The following is a guest post we’re pleased to share by the GSMA’S Mobile Money for the Unbanked (MMU) programme, which seeks to accelerate the availability of mobile money services to the unbanked and those living on less than US$2 per day.

Outdoor advertising for free mobile money sending service in Kenya

One of my first posts for this blog explored how mobile operators could exploit the network effects that characterize mobile moneyservices by “subsidizing” early adopters—that is, by rewarding those who sign up and use a service early with deep discounts or bonuses to make up for the fact that there aren’t many other people on the network to transact with. It’s a classic pricing strategy in networked markets.

Recently, Airtel in Kenya launched a new promotion offering Airtel Money (formerly known as Zain Zap) customers free money transfers to both registered and unregistered customers. Although slated to run only for a short time, this promotion is a clear illustration of an attempt to subsidize participation in a network that has far fewer users than its competitor M-PESA, the most famous and well-established mobile money service in the world.

Such a move is risky, but not crazy. Ignacio Mas has pointed out that the online payments service PayPal lost $23 for every customer they signed up during their first 9 months of operation because they paid large sign-up bonuses and chose not to charge fees that were large enough to cover their variable costs. PayPal racked up millions of dollars of losses that way, but in the process it built a user base that it was later able to monetize: PayPal went on to a successful IPO and now has over 100 million active users around the globe.

For this tactic to work, a networked business must be willing to sustain losses up until the point that it has built a network large enough—which is to say, valuable enough—that users and potential users are willing to pay to use it.

We’ll see if this gambit pays off in Kenya.

Subsidizing early adopters is just one of the tactics that networked businesses can employ to exploit network effects. Previously, I’ve written about how network effects apply to mobile payments and their implications for target market selection and marketing communications.

September 9, 2011/by actualize

Tag Archive for: mobile money services

Case Studies

Contact Details

Quick Links

About

Expertise

Impact

Join

Sign up for Updates