I’ve been in the mobile money space now for nine years. It’s been a highly entertaining ride, and I’ve learned loads about different models in the space. From managing a mobile wallet for a large telecom in Tanzania to rolling out the first mobile credit products in Rwanda and Ghana, I’ve been able to identify several key aspects of what can make or break a mobile money implementation.
- Population Density -> Large densely populated urban centers help create large volume and value domestic remittance corridors.
- Economic Development -> Fewer banks mean a larger opportunity for mobile money transactions to take over financial use cases.
- Access to Finance -> Similar to above, but with additional nuance. People seem to understand products on phones better than in banks. An illiterate person can memorize the sequence and characters to send money to a family member, but can’t fill out a bank form.
- Other money transfer alternatives -> If there are good alternatives, the ecosystem will develop slower.
- Market Share of the Telecoms -> Network effects are real here. The larger market share you have, the more people in your network, the better the experience for users.
- Cash in & Cash out points -> a robust, largely available network of cash in and out points is required. If people can’t put money into the system, or take it out, it’s not going to grow.
- Marketing -> This is changing now, as people understand mobile money better. But at the beginning, marketing was incredibly important. It was an untrusted network and technology, we had to be smart about earning the customer’s trust.
- Fee Structures -> Make it free to put money into the system. Charge for everything else. This worked well.
- Technology -> Mpesa used an STK, but we didn’t have that option. USSD worked fine.
Some of these are more important than others, but in large part, all of them were essential to the success of the mobile money networks I worked on. What is now becoming increasingly interesting to me now is how these nine aspects are changing as the internet and smartphones come to Africa. New models are arriving, particularly from the East, which could upend the traditional models of mobile money in Africa.