We‘ve been following CGAP for over a year now and I must say this is probably one of our favourite blog postings from them. As with most articles on mobile money the focus is around mobile operator led services – though for once we get an admission into why – the GSM Association (GSMA) which is the industry group representing mobile network operators has been the primary driving force in raising awareness for mobile money globally. This one knock aside, there are still many great insights in this article, two salient ones are:
• Though there are at least 15 mobile money schemes from mobile operators none of them have brought out any new innovation at launch. They have all been clones of M-PESA. Not too difficult to understand why – most mobile operators are primarily concerned with increasing their ARPU not broadening financial access.
• Evidence from existing schemes show that mobile money schemes can indeed lead towards formalized savings, BUT, as the Institute For Money, Technology & Financial Inclusion's (IMTFI) recent research shows, this will be best accomplished if Mobile money schemes pay attention to the social and cultural contexts of the communities they go into. For example in Sri Lanka people set up bank accounts but never use them.
We agree – mobile money is a localized business and understanding the social and cultural contexts is critical to success. Also critical is providing low cost products that can exist in the context and go beyond the basic person-to-person money transfer. This article certainly worth a read...