Since the introduction of successful mobile money implementations such as G-Cash in the Philippines and M-Pesa in Kenya, many have been eagerly investigating the reasons that such services fare better in some markets than others.

In my experience, a successful implementation is largely dependent on the existence of certain market factors that create an enabling environment for the rapid penetration of mobile money. Since most of the benefits of a mobile money project are only realized when a critical mass of users transact, I think it's worthwhile to explore these factors in more detail.

1) High Penetration of Mobile: Quite obviously, since mobile money services will be offered through the mobile, it helps to address a market that is already comfortable using mobile technology. Although consumer education programs will likely still be required, you may be surprised at how quickly users will learn to use a new service when they are comfortable with the basics. In most emerging markets, the mobile operator has established a strong and trusted brand and this can easily be leveraged to introduce mobile money transfer or mobile banking.

2) Limited Access to Financial Services: In markets where access to banking, credit or debit services is limited, mobile banking and money transfer services are in high demand. They provide an electronic means for retail payments and offer secure, short-term storage of funds. In this case, mobile banking becomes the prime channel for access to financial services, especially in regions where there is no trusted alternative for money transfer. Delta Partners estimates that the potential for these types of transactions is US$1.3 billion by the year 2012 in the MEA region alone. It's important to note that informal money transfer channels (ex: Hawalas) are often widely used and these should not be easily dismissed as a trusted alternative.

3) Migrant Population: Money transfer services are especially required in markets where the population migrates to urban areas to find gainful employment. Many of these workers leave behind close family and friends that are depending on them to send money home. In this case, mobile money and mobile banking transactions are used on a regular basis to support family in rural areas.

4) Poor Infrastructure / security: One of the most useful applications of mobile money is the ability to safely store funds - especially when traveling. In markets where security is a concern, mobile money is invaluable because it allows users to deposit their funds before they travel and safely withdraw when they have reached their destination. Furthermore, in countries with difficult terrain or lack of transportation, mobile money transfers can save users time and money.

With the presence of the above factors, it's quite likely that a mobile money service will actively be used by customers. Of course, in such a rapidly evolving industry these factors are likely to change just as quickly. If you have any comments or feedback on this topic, please feel free to drop me a line!