Next Billion Big Idea Series: Taking Mobile Money Forward

This piece was originally posted on Next Billion as part of their Big Idea series on the growth of mobile money.

The excitement of mobile money has been dampened by an inability of deployments to take hold outside a handful of successful markets. Driving the enthusiasm forward is the opportunity to bridge the gap between one billion people in emerging markets who have mobile phones but no bank account. Last week, McKinsey & Company released a report “Mobile money: Getting to scale in emerging markets” seeking to cut through this excitement and identify critical success factors for implementation.

Through interviews and workshops with 40 mobile money providers, the report stresses three important elements as critical for a successful mobile money enterprise after launch:

(1) Pay close attention to managing the agent network;

(2) Create a compelling product offering;

(3) Maintain a corporate commitment.  

The report also rightfully acknowledges other pre-launch factors like regulation, market structure, technology execution, and partnerships, as being central to a mobile money deployments’ success.

There is also a clear need to answer the important questions before launching a product. After comparing developed mobile money environments with the developing environments of Brazil, Nigeria, Sri Lanka, and Thailand, the IFC has worked to develop a framework to assess a country’s potential for a successful mobile money deployment, including demand and user perception surveys and current regulatory and financial services assessments.

As part of the SPINNAKER project, we have focused our research in Kenya and the Philippines on two of the leading mobile money environments in the world. And in a report being released next month, we examine the regulatory framework and financial management behind the growth of agent networks in Kenya and early examples beyond mobile transfers of integrated mobile money and financial products.

With 130 mobile money deployments underway and 93 in planning according to the GSMA, it’s helpful to evaluate what lesson we have learned so far, and the McKinsey findings and IFC framework help to refocus the excitement of the field. But what is also needed is a re-evaluation of the end goal of mobile money, which is an opportunity to progress mobile money beyond money transfers into mobile banking and deeper financial inclusion for the next billion.