Just over a year ago in Cairo, we convened the first Mobile Money Summit with our friends at the GSMA, DFID and IFC. The diversity of the crowd was fantastic – people from all over the world and all sorts of business – from mobile network operators to vendors to financial institutions. It might sound corny, but Hannes Van Rensburg captured the mood quite well: “A general spirit of: ‘Let’s build the industry’ rather than criticise each other prevailed.” (Mobile Payments have arrived)
Today’s the second and final day of this year’s Mobile Money Summit, and the key words here are data and partnerships:
Data - around the market opportunity for mobile money – by the year 2012 CGAP and GSMA estimate there will be 1.7 billion people with a mobile phone but not a bank account and as many as 364 million unbanked people could be reached by agent-networked banking through mobile phones;
Partnerships - a slew of deals announced yesterday illustrate the momentum around mobile banking services, notably: Visa Launches First Commercial Mobile Payment Service in Latin America.
Does this mean momentum around mobile banking for the unbanked has reached a no-turning-back stage? Not quite. As CGAP’s Technology Program Manager Steve Rasmussen noted in his presentation titled “The Hype Cycle and Mobile Banking:”
- Regulation can be a constraint but is not the only obstacle and is not usually the primary challenge;
- More can be done to reach unbanked and poorer customers;
- Customers want more than payments and try to fit services to meet their needs;
- Being a cash-handling agent is not the same thing as selling airtime top-ups. This is harder to do than most anticipate.
Finally, some snapshots from the podium:
- “I get offended when people talk about the potential of mobile banking. Mobile banking is here.” – Miyanda Mulambo, General Manager, Celpay (DRC);
- “The banking industry has a well regulated financial structure. Carriers have a well regulated and effective channel. If we can combine the power of these two units into one where we leverage infrastructure, its the perfect opportunity.” – Chris Gabriel, CEO, Zain Africa;
- “The value of a network comes from all the people you can reach. Penetration of cash and checks remains our primary opportunity.” Tim Attinger, Global Head of Product Innovation and Development, Visa;
- “Bringing services to [the] doorsteps [of the unbanked] allows them to save tiny amounts more frequently, and more easily, when they receive cash. The four key things poor people do with money is a)spend it down, b)save up for a purpose, c)receive and send money, d)park money for security and inaccessbility.” Bob Christen, Director of Financial Services for the Poor, Bill & Melinda Gates Foundation;
- “Access to finance is not like flipping a light switch. It is a ladder, a ladder of services. I’m not sure who is greedier, the MNOs or the banks. They want their slices of cake but…there’s only so much to slice. There’s a point where the crumbs don’t make it worthwhile.” Brian Richardson, WIZZIT;
- Responding to a question from an official at the Central Bank of Kenya about the stability of mobile banking services vis-a-vis the crisis: “Our EBITDA margins are 65 percent, everything is prepaid. That means the value in our system is all backed peso for peso. Those funds are sitting in a commercial bank.” Rizza Maniego-Eala, President, G-Xchange Inc /Globe Telecom.
What’s the verdict for this year’s event? And where are we on that hype cycle? Reuters has weighed in already:Mobile money seen as chance for world’s poorest.
