The Mobile Money for the Unbanked,
Date Posted: Tuesday, May 15, 2012
Last week, we announced that GSMA has secured new funding (9.8m USD, over three years) from The Bill & Melinda Gates Foundation, The MasterCard Foundation and Omidyar Network, for MMU to continue working with the mobile money industry to reach more unbanked customers. We’re really delighted to be partnered with these donors; their support is a clear sign that the donor community recognises the importance of mobile technology to achieve greater financial inclusion, as well as the importance of MMU’s role in helping the industry to achieve its full potential.
The mobile money industry has grown massively since MMU launched in 2009; back then, there were fewer than 20 mobile money deployments in the world, and today, there are more than 100. MMU has played an important role in identifying lessons and best practices, which we’ve shared via case studies, toolkits, handbooks, webinars, Working Groups and field visits. We’ve provided crucial support, both commercial and regulatory, to several mobile money deployments around the world.
Despite these developments, the full potential of mobile money for financial inclusion is yet to be realized, since most mobile money deployments which have launched are not yet operating sustainably and at scale. There are four main barriers that we see facing deployments today:-
Operational hurdles – Several important mobile money best-practices have been identified but have not been consistently replicated throughout the industry. There is still work to be done on market segmentation, customer activation and agent network development before more mobile money deployments reach scale
Regulatory barriers – In a number of markets, regulatory issues are limiting the commercial viability of deployments, such as onerous customer registration / KYC (“know your customer”) licensing requirements, e-money, agent regulation
Inadequate investment – As margin pressures have been increasing on MNOs’ core business, the number of proof-points for mobile money as a profitable business is still too low; therefore, MNOs still perceive mobile money as risky relative to other investment areas, and often fail to allocate sufficient investment towards deployments
Learning gaps – As a young industry, the mobile money sector still has a lot to learn, and there are still areas where best practices have not yet been defined, e.g. new product development, or how to interoperate more effectively among different ecosystem players
With the support of its donors, MMU will help the industry to respond to these challenges. To help overcome operational hurdles, MMU will devote more resources to creating and extracting relevant lessons from mobile money deployments. MMU will use methods of sharing knowledge which have already worked well, while also trialling new ways to embed best practices across the industry. Building on from MMU’s recent publication about MNO-MNO interconnection, we will soon kick off new research to look at the technical and commercial feasibility of linkages between mobile payment platforms and financial institutions, or other potential “bulk users” of mobile payment platforms. MMU is also working on mobile money regulation, helping MNOs to engage with their financial regulators to create more enabling regulatory environments, as well as promoting the role of mobile money for financial inclusion among international standard setters.
With a strong legacy behind us, MMU stands on the cusp of a new phase, with new donor partners, a bigger team and more opportunities to engage more deeply with deployments. Since the start of this year, MMU has recruited two new MMU Managers, Lara Gilman and Phil Levin, as well as our new Regulatory Director, Simone di Castri. As we continue to grow the team, MMU will be able to work with more deployments in more markets, and have an even greater impact towards creating more sustainable, scaled mobile money deployments which serve the unbanked. These are indeed exciting times for MMU and for the industry, and we look forward to working with you, and sharing what we learn over the next three years.