Cash Gap | Emerging Markets – Developed.
Many would recognize the amazing success emerging markets have witnessed over the past six years in the deployment and adoption of Mobile Financial Services. We have seen the success of M-PESA in Kenya, followed by the drive of G-Cash in the Philippines. We have seen MTN attack a group wide strategy with absolute conviction, while Pakistan has seen the rise of both Mobile Operator and Bank Led models in a single market. But why has this success never been translated to developed markets? Why have we not seen adoption rates in markets like the US, Europe, and Australia. Because if you look closely at the market, both Uganda and Australia have similar numbers of cash based transactions.
Having personally seen many of these emerging market successes, I feel that the developed world has a great deal to learn from the success of their poorer cousins. But it appears that there is a clear inability to execute on these learnings.
I put a challenge to the world of Financial Services to taken Mobile Money business models of the world and apply it to the US, or the UK, and I think you’ll find that if you analyze the numbers, there is a greater chance of ROI in these markets, where transaction amounts are higher and people are willing to pay for convenience.
But what are these learnings? Here are a few insights that can easily be replicated:
1. Simplified Money services. not complex transactional accounts with a multitude of expensive channels. Just a simple wallet for everyday money needs. Buying milk, the newspaper, a coffee. Small simple transactions.
2. Lighter incentivized eco-systems: Avoid the expense of the current card/POS networks to deploy a lighter POS network that runs across already present mobile devices. And offer incentives in the eco-system that reduce your cost or risk or cash management
3. Replace the cash, not the cards. There have been dozens of attempts to replace the cards we already carry. But we need to look at the cash, why do people carry cash? How do they use it? How can you intermediate these transactions?
Get these three right, and you’ll have a successful Mobile Money deployment anywhere in the world, which includes developed countries. I’ll even help if there is anyone keen.