The key enablers or drivers of Mobile Money services, and here are few statistics on that. The vast majority of Mobile Money services are essentially ‘Cash-in at one end’ and ‘Cash-out at another end’. That include the poster child(s), like mPesa, Airtel Money, GCash etc. where more than 70-80% of the transactions are: Cash-in at one end, and Cash-out at another (CASINO).

What we are about to say here and do is how do we keep this cash in the system… how do we actually start transacting with it.  With Cash-in and Cash-out, CASINO operators have conveniently done is replaced one mechanism of banking channel with a slightly more efficient mechanism of mobile channel and moved cash from one place to another, with some anticipated fee for each transfer.

The Grand Trick is how we replace cash as part of the transaction mechanism.  Let me share a market snap shot with trends and staggering numbers, and this would have largely changed ever since we consolidated our research data. We have staggering number of agents in Kenya to handle mPesa, the number of active mobile phones worldwide; and the one staggering statistic that we found was that there are more than 17 million un-banked adults in the United States of America. So when we actually talk about the under-banked or un-banked markets, we are just not referring to the African, or South Asian countries. We are really referring to a wide group of people to whom these services could be driven.

One of the key things here, is the drive  towards NFC mobile phones, as to why the technology is possibly necessary for the ‘Financial Inclusion’ or ‘Transacting at the Point of Sale’. NFC is just the way for two devices to be ‘Connected and Communicate’ using Near Field Communication technology.  I call it a ‘No Fuss Connection’. The connection or pairing between two devices can be done with Blue Tooth, Audio, or a whole number of different mechanisms like QR code, etc. NFC is just a convenience and not mandatory for the enablement of the Retail Point of Sale.

The challenge that is faced by industry, again the RETAIL FRICTION,  is creating major incidences and related issues with Mobile Money transactions and payments that people trying to do while keying on their mobile phones. There are lots of keys on the mobile phones using USSD or SMS type services, etc. They don’t work and the answer to that is why one would not rather use Cash itself. Extrapolating that, why one would not use Cash is probably the reason that there is so much more friction in that process that people are looking for a change. Now, let’s talk about the User Experience, given the type of handset or mobile devices we face in the market…

• We have basic phones in the target market for financial inclusion,
• We don’t have NFC at the point of sale, and
• We can’t introduce a service that requires those things

There are countless number of millions and billions of devices that don’t accept things like NFC and which can’t deal with applications from the banks, etc.  There are new players in the market (aka FinTech), that are bit different form the traditional banking world and moving to new ecosystem. They are Mobile Network Operators, emerging Payment service providers (Apple, Google, PayPal, Alipay, etc.) chasing to get a lion’s share of the Digital Financial Services. There are new regulatory environments that are building up around these changes to actually put in place controls that would enable the services to be used in a wider environment.

There is an expression for MNOs where they already have the geographic and consumer reach:  ‘Think like a Bank, Dance like a Telco’. Their aim being to drive services rapidly like their basic services, yet clearly maintain the control and regulations that surround money today, as much like the banks. The type of services that one needs to build at the Retail Point of Sales, are

• Standard Services for paying Goods and Services, merchants, government, utility, telco, etc
• Doing Cash in & Cash Out, and all other types of transactions that would one would expect at POS

It has got to be friction-less, safe, secure, quick and easy, provide an attractive and compelling spend system  that is beyond just Cash in and Cash out, aka CASINO operations. Once this new user experience and interface (UX/UI) is provided to the User at the Retail Point of Sale, then hopefully mobile money and wallet type initiatives can be driven to larger markets, with money that grows in the system for enabling a robust Financial Inclusion and Empowerment.