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;
In a recent CGAP Focus Note, Ignacio Mas and I wrote about six cases of e-money schemes in developing countries. Going Cashless at the Point of Sale: Hits and Misses in Developed Countries intended to draw lessons from these experiences to inform the work being done with e-money in developing countries. The last post in this series looked at the mobile operator-centric payment scheme Simpay. Now we turn to the second such scheme, Osaifu-Keitai in Japan.
DCM is Japan’s leading mobile communications operator, with 53 million subscribers as of March 2008, representing over half of Japan’s cellular market. It launched a mobile wallet service, Osaifu-Keitai (meaning: wallet-mobile phone) in July 2004.
Osaifu-Keitai is based on a FeliCa card embedded in mobile phones (the same that was used by Octopus in Hong Kong). Osaifu-Keitai is a device-based mobile payments solution, supporting both proximity payments in shops that have a FeliCa chip reader and remote (online) payments. Read the rest of this page »
Mobile phones may have a huge role to play in expanding access to finance. But does the company that operates the mobile network need to actually provide financial services? Or should others offer financial services, with the mobile operator merely providing the underlying wireless connectivity? The fact that mobile phones can be used as transactional devices doesn’t necessarily mean that the mobile operator needs to “own” the financial service.
We’re just two weeks from the Mobile Money Summit…where all will be revealed - the results of the CGAP-GSMA Mobile Money Market Sizing Study. The findings describe in detail how unbanked people use mobile money services, and also provide a framework based on industry best practices to help mobile operators drive initial adoption and progress towards more sophisticated offerings, such as savings and credit. Read the rest of this page »
Users began to make transfers “in bits”, remitting smaller amounts of money more frequently.
A significant change to remittance patterns was noted during the fieldwork, especially during the latter stages. Money was being remitted “in bits”. That is, smaller amounts of money were being sent with greater frequency. A shoe maker in Kibera explained:
“Before M-PESA, I used Posta [post office] and would transfer money at month-end. Now I send the money in bits. I send every week. Sometimes I send twice in a week. It is cheaper for me to send with M-PESA…so I can send more times.” Read the rest of this page »
It seems like every week there’s a new market study that comes out about mobile banking – but few of those (if any) focus exclusively on the opportunity to be found in serving poor, unbanked people in developing countries.
So, with our friends at the GSMA, we thought we’d share a preview of the upcoming results of the CGAP-GSMA Mobile Money Market Sizing Study, which includes:
a projection of the unbanked poor who could be reached globally by 2012;
an in-depth look at unbanked mobile money users in the Philippines today;
and a survey of more than 40 operators, vendors and other industry actors.
The aim is to help mobile operators drive initial adoption and progress towards more sophisticated offerings, such as savings and credit. Some highlights after the jump….
A few months ago, Ignacio Mas and I wrote a CGAP Focus Note entitled Going Cashless at the Point of Sale: Hits and Misses in Developed Countries. Our aim was to analyze the history of electronic money schemes in developed countries, more specifically in Europe and Asia. We thought it would prove a useful exercise as CGAP works towards sustainable branchless banking models in developing countries. As expected, our research revealed several important insights.
In the paper, we discuss three broad approaches, and in each case we look at two providers who met different degrees of acceptance in the marketplace. Already on this blog, I have highlighted the two cases of smartcard-based electronic-cash providers: Mondex in the UK and Octopus in Hong Kong; as well as mobile operators facilitating existing payment instruments: Mobipay in Spain and Moneta in Korea. Now I turn to the final approach, mobile operator-centric payment schemes. The first example of this is Simpay in Europe.
Simpay was launched in February 2003 by a consortium of the four leading European mobile operators: Orange, Vodafone, T-Mobile, and Telefonica Moviles. Its mission was to develop and operate a pan-European payments system for mobile phones, focused on micropayments (less than 10 euros). Despite the company’s tagline—“pay for stuff with your mobile”—the system was also designed to allow purchases from PCs connected to the Internet. Read the rest of this page »
Olga Morawczynski is a doctoral candidate at the University of Edinburgh and has spent more than a year investigating customer adoption and usage in both urban and rural Kenya. Today she begins a series of occasional blog posts based on that work.
During the coming weeks, I will post a series of blogs. These will describe observations made during my fourteen month ethnographic fieldwork. Such fieldwork focused on understanding the adoption, usage and impact of M-PESA in two low-income communities. It began in an informal settlement on the outskirts of Nairobi called Kibera. The money trail was thereafter followed to a small village in Western Kenya called Bukura. This blog will reveal the first observation, which is on usage. Read the rest of this page »
People working on social protection policy and financial inclusion don’t always find a lot of common ground. In fact, some would say they put out competing views of poverty alleviation: direct payments from the government to raise incomes, or increasing poor people’s access to financial services to help weather shocks and increase incomes. Of course, this is an over-simplification, and somewhat artificial. Both want the same end (poverty alleviation) and neither casts itself as the magic bullet. There’s a good 20+ years of thinking on how social protection and financial inclusion are mutually reinforcing, including somewhat famously the idea of Individual Development Accounts (IDAs) as created by Michael Sherraden.
There’s a new surge of interest, this time looking at how the impact of conditional cash transfers (CCTs) can be magnified by providing recipients with basic financial services.
I recently participated in a panel on the topic organized by The New America Foundation’s Jamie Zimmerman, who along with Yves Moury, have authored a paper on the topic. Here’s the video.
My take? If linking the poor to financial services helps them, why stop at CCTs? Let’s look at a wider world of government-to-person (G2P) payments, including other types of social welfare payments as well as wages and pensions. By CGAP’s estimate, more than 155 million of the world’s poor receive a regular payment from their government. But far less than 1/4 land in an account.
Those of us working on the financial inclusion need to line up the evidence to convince social policymakers that bolting on basic bank accounts for recipients will have benefits. And crucially, we need to boost the business case for banks to provide basic banking to poor G2P recipients on a profitable basis. One key will be deploying on more cost-effective delivery channels — such as point of sale terminals at existing merchants in the community rather than expensive bank branches.
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)
