More than a billion people in emerging and developing markets have cell phones but no bank accounts. Many low-income people store and transfer money using informal networks, but these have high transaction costs and are prone to theft. Mobile money is beginning to fill this gap by offering financial services over mobile phones, from simple person-to-person transfers to more complex banking services. To date, there have been more than 100 mobile-money deployments in emerging markets; at least 84 of them originated in the past three years.
But only a handful of these deployments have reached a sustainable scale. We sought to find out what drives on-the-ground success and to develop a preliminary set of prioritized, actionable recommendations. We interviewed and conducted workshops with more than 40 leading mobile-money providers (primarily mobile-network operators and banks) and industry experts, which we supplemented with a survey of about a dozen providers. Among the experts we consulted was Michael Joseph, the former CEO of Safaricom in Kenya and “father” of the M-Pesa money-transfer service, which has inspired many recent deployments around the world.
This article discusses what our research revealed to be the three most critical success factors to implement after a provider has launched its deployment and starts to face execution problems:
- Pay close attention to managing the agent network;
- Create a compelling product offering; and
- Maintain corporate commitment.
The article also includes an interview with Michael Joseph about some of M-Pesa’s early moves and a few of the barriers on its road to success.