Observations from 2015 Mobile Money and Digital Payments event in Mexico City

More than making life easier for customers the banks can actually bring into fold and also make life easier for them by enmasse relocation of customers which may not be to the banks liking to keep them in branch.In a bid to reach the unbanked India suceeded in opening 115 million bank account of which 80 million have NIL balance.In a emerging major economy like India where there is a huge potential for mobile payments given the fact in India  could cut the use of cash in an economy where nine out of 10 transactions are still paid in notes and coins .The potential to  kick-start the use of low-cost payment forms like mobile money given  that it is being used by only one in every 300 Indians is indeed enormous.So enormous that an Outsourcing company has applied for licence.

Hi Prasenjit,

Thanks for sharing the situation within India. You are definitely "preaching to the converted" as I see mobile money, or digital cash, as a win-win-win-win opportunity--for banks, merchants, consumers, and governments (central banks).

You can read more at:  http://www.quisk.com/blog/2014/05/09/case-digitized-cash-win-win-win-win-opportunity/

Sorry to rain on the parade but this research paper finds Indian mobile money services to be duds. Unfortunately, my personal experience with one of them does nothing to repeal this notion: Omnichannel Fiasco No. 2: M-PESA. The saving grace is that the aforementioned paper finds mobile money to be flops in many other countries as well.

Hi Ketharaman,

Thanks for your comment and reality check.  Yes, most "mobile money" initiatives--the bulk of which have been driven by Mobile Network Operators--have been "duds" (to use your words).  We believe the time has come for "mobile money version 2.0," which would be bank-led (with MNOs participating), interoperable and more useful (i.e., broader range of  consumer transaction types).

And as the research paper highlights, regulators do play a BIG role in ensuring successful mobile money "ignition."

As regards India the regulator has done a feasibility and reality check before calling for 'payment bank ' license .The commitee set up as a to evaluate has tried to borrow the success stories as well from other parts of the globe.

In India partnership between banks and Community Service Centres (CSC) as well as mobile phone companies is a possibility that is being seriously explored .In fact many CSCs facilitate opening of savings accounts (checking Accounts), distribute government payments and distribute loans as well. Its probably no more a possibility rather on the sidelines of truth as Axis bank has partnered with mobile operators Airtel and Idea to spread to the rural hinterland. Else where in Mexico Diconsa, an operator of 22,000 grocery stores in rural Mexico, began a program to deliver cash payments from government benefit programs to people in its stores .That has succeeded

Here is how Dans' thought gets validated :)

@DanG: Where mobile money has taken off, a common driver has been the existence of a segment of market (e.g. Rural Kenya) that has money but no banks to bank with and a regulator who looked the other way when MNOs served this market or total absence of regulator. None of those conditions exists in India. Re. money, RBI is the only regulator, regardless of whether the transaction happens via branch or web or mobile. Now RBI is also the banking regulator and the central bank, so there's little chance of MNOs serving this market assuming there's one. IMO, the key to ignition of mobile money is existence of multiple regulators and power play between them!

Ketharaman,

I certainly am not an expert with respect to mobile money and regulations specifically within India; agree that wise/prudent regulation is a critical ingredient for successful ignition--in any country.

That said, it is interesting the mobile money empirical research report you highlighted mentions Bangladesh, with their bank-led model (and no KYC tiers, etc.), has achieved mobile money ignition.  Fascinating market space!

Why does Kenya lead the world in mobile money?

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