Mobile money success considerations. Peer-to-peer exchange on remittances Barry Cooper & Cat Denoon-Stevens October 2016

Transcription

1 Mobile money success considerations Peer-to-peer exchange on remittances Barry Cooper & Cat Denoon-Stevens October 2016

2 Why talk about mobile money? Source: GSMA, 2015

3 What are the conditions required for mobile money to be successful? Supporting infrastructure - Physical (ie: electricity, roads, agent availability) - Payments o Digital o Cash - Mobile phone penetration Regulation - Coordination between regulators - Enabling regulation Business consideration - Business case (inclu. fit to MNO business) - Access points - Product suite Consumer needs Relationship to consumer Appropriate data

4 What are the conditions required for mobile money to be successful? Supporting infrastructure - Physical (ie: electricity, roads, agent availability) - Payments o Digital o Cash - Mobile phone penetration Regulation - Coordination between regulators - Enabling regulation Business consideration - Business case (inclu. fit to MNO business) - Access points - Product suite Consumer needs Relationship to consumer Appropriate data

5 Digital swimming in a sea of cash Percentage of adults that report payment need and its fulfilment across the six MAP pilot countries: Thailand, Myanmar, Mozambique, Lesotho, Swaziland and Malawi Source: Bester, 2016; FinScope Consumer Surveys

6 Digital swimming in a sea of cash BUT Not just an African or developing country phenomena: o In Mexico, 90% of all consumer payments are still made in cash, accounting for 75% of the value of consumer payments. o In India, 87% of all payments are cash based. o In the UK, 48% of all transactions are carried out in cash. Source: Fletcher School, 2014; Payments UK, 2015 Percentage of adults that report payment need and its fulfilment across the six MAP pilot countries: Thailand, Myanmar, Mozambique, Lesotho, Swaziland and Malawi Source: Bester, 2016; FinScope Consumer Surveys

7 What are the conditions required for mobile money to be successful? Supporting infrastructure - Physical (ie: electricity, roads, agent availability) - Payments o Digital o Cash - Mobile phone penetration Regulation - Coordination between regulators - Enabling regulation Business consideration - Business case (inclu. fit to MNO business) - Access points - Product suite Consumer needs Relationship to consumer Appropriate data

8 MM falls in a regulatory gap that can both hinder or enable the business Source: GSMA, 2016

9 What are the conditions required for mobile money to be successful? Supporting infrastructure - Physical (ie: electricity, roads, agent availability) - Payments o Digital o Cash - Mobile phone penetration Regulation - Coordination between regulators - Enabling regulation Business consideration - Business case (inclu. fit to MNO business) - Access points - Product suite Consumer needs Relationship to consumer Appropriate data

10 Mobile money is a tough business to get right! Profitability of mobile money schemes (as a % of GSM revenue) Source: GSMA, 2015

11 What are the conditions required for mobile money to be successful? Supporting infrastructure - Physical (ie: electricity, roads, agent availability) - Payments o Digital o Cash - Mobile phone penetration Regulation - Coordination between regulators - Enabling regulation Business consideration - Business case (inclu. fit to MNO business) - Access points - Product suite Consumer needs Relationship to consumer Appropriate data Trust Volume based business New consumer profile Non-traditional distribution and FSP

12 Group discussion questions What are the conditions required for mobile money to be successful? What conditions are required for mobile money to successfully channel remittances? Supporting infrastructure Regulatory Business conditions Consumer needs THANK YOU Please contact us at Barry Cooper What are examples Cat of Denoon-Stevens key factors going right or wrong?

13 Further resources GSMA: Almazan, M and Vonthron, N Mobile money for the unbanked: Mobile money profitability: A digital ecosystem to drive healthy margins. GSMA: London. Bester et al Lost in the mail: Why bank account access is not translating into usage. MAP Global Insights Series: Note 4. Bester et al The king is (not) dead: Why digital payments are not replacing cash. MAP Global Insights Series: Note 5. GSMA State of the industry report: Mobile Money. GSMA: London.