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Mobile Money 2.0: Interoperable, Bank-led and More Useful


Mobile money has made significant strides over this past decade.  Despite the projected growth in mobile money (especially in emerging markets), we believe the time has come for “Mobile Money version 2.0.”  This post describes today’s mobile money market situation and explains the rationale for this needed evolution.


Mobile Money version 1.0

Mobile Money version 1.0, described as “money on your mobile phone,” was created and driven by Mobile Network Operators (MNOs).  Consumers use mobile money primarily to send money to their family or friends, pay bills and do mobile top-ups for their phone.  In almost all cases, mobile money is not interoperable between different MNOs, meaning that consumers in some countries can have 2-3 or more mobile money accounts.

Given the decreasing use of voice over cellular networks, it is not surprising MNOs have invested in mobile money offerings.  There are now 259 live mobile money projects (and another 102 planned deployments) in the world according to the GSMA tracker.  In particular, the Sub-Saharan Africa mobile money market is projected to grow to a $1.5 billion opportunity by 2019.

Some central banks grant MNOs banking licenses in order to help achieve financial inclusion objectives within their countries.  Since banks have not seemed interested and/or able to draw in the “unbanked,” MNOs have been more successful leveraging their scale/reach… since almost all people—banked and unbanked—now own mobile phones (or at least a SIM card which is used with a single mobile phone that is shared among a family).

In the Boston Consulting Group report entitled, “Africa Blazes a Trail in Mobile Money,” they state:  A bank or MNO that isn’t active in the mobile-financial-service market runs the risk of becoming less and less relevant and of failing to capture the long-term value that would come from business model innovation.”

There is no doubt that mobile money version 1.0 has done significant good.  It has helped make lives easier and save money for millions of people in the world.  That said, we believe it is time for a next generation of mobile money to do even more good.


Mobile Money version 2.0

What is needed is a new mobile money solution which is agnostic to MNO and can be used with any type of mobile phone.  This would ensure the solution could reach the largest segment of the population… and consumers would only need to open a single account—because it would be interoperable, or in other words, usable with people who may have different MNO services.

Bain & Company research shows that consumers still trust banks more than they trust retailers, technology companies or alternative payment providers.  The mobile money held in banks could also earn interest to help consumers build their savings.

In their report, Bain & Company states:  The good news for banks is that even though they're late to the game, no one is better suited to provide payment solutions and digital wallets.”

This next generation of mobile money needs to do more.  Bain & Company goes on to say:  The best mobile payment solutions will go beyond treating phones like payment cards. Customers want mobile payment programs that deliver extra value, such as better loyalty rewards or apps that help them manage their money. Of course, these apps must also be secure, widely accepted and easy to use.”

Mobile Money version 2.0 should be even more useful for consumers.  That is, there should be more possible transaction types, including purchasing items in-store, online, cross-border remittances, Government-to-Person (G2P), getting money out at POS terminals or ATMs, etc. beyond v1.0 use cases.

This next generation of mobile money should also create more value for merchants—for them to widely accept it.  Mobile Money version 2.0 should be integrated with merchant-specific offers (which consumers can decide to opt-in) and loyalty programs (which can help consumers keep coming back).

                                         Mobile Money v1.0          Mobile Money v2.0

      Ecosystem driver               MNOs                                    Banks

      Interoperability                  No                                          Yes

      Use cases                             Limited                                 Extensive


In closing, what is needed is not “money on your mobile phone;” rather money in your bank which a consumer can conveniently and securely access and use with their mobile phone.  In this way, the mobile money is with the entity—a bank—which consumers trust most, and the mobile phone becomes the access device in order to safely and conveniently use your money.  Importantly, there is also new value generated for merchants; that is, all ecosystem members now benefit.

This is our vision of Mobile Money version 2.0.  Let us know what you think.



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