Mobile Money

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Continuing the theme of alternative payment systems, and particularly the recent posts and discussions of the M-Pesa success story in Kenya, here is an interview panel on the topic, provided by TelecomTV’s programme Main Agenda.

The discussion took place during 16-19 Feb at the Mobile World Congress in Barcelona. The panel features Mr. Gavin Krugel, Director Mobile Money, GSMA Association who articulates the major commitment of mobile network operator groups such as Orange, MTN and Vodafone behind financial service offerings. Network operators value the added value of such services alongside their standard offerings of SMS, voice and data.

He illustrates the scale of the opportunity offered to network operators in mobile money with the fact that 1 billion consumers in developing markets who do not have a bank account but do have a mobile phone. As a further illustration, a leading financial institution in India has 10 000 branches, while a leading network operator in India has 1 million distribution points. Through their network brands, innovation and secure technologies, mobile network operators are uniquely positioned to meet the opportunity and respond to the need for entry level financial services.

Mr. Vitalis Olunga, Head of International Services, Safaricom presents the opportunity of extending the M-Pesa mobile money concept of Safaricom, Kenya to include cross-border roaming services. He addresses the issue of regulation which came up in my posts from last week. Mr. Olunga tells how when M-Pesa was started in Kenya there was no regulation and the policy was developing post-factum. He sees a considerable challenge for the regulators in distinguishing between telecommunication and financial services. Additionally, mobile money increases the levels of competition in two highly regulated sectors in developing countries: the telecommunications and the financial sectors.

Mr. Hans Paulsen, CCO, Uganda Telecom shares his views regarding mobile financial services. He presents the opportnity present in Uganda to increase the current number of bank customers from 200 000 to 8 000 000 mobile phone users. The main application area Mr. Paulsen considers is that of remittences between urban and rural areas. With regards to regulation he stresses that success stories such as M-Pesa raise questions for telecom regulators and the banking sector regulators.

Mr. Patrick Kariningufu, Rwandatel emphasises that M-Pesa “was a great idea 4 years ago” and currently Rwandatel are looking for ways to enable people in the diaspora to transfer payments to African countries. Mr. Luckas Scoczkowski, CEO, Redknee presents their portfolio including re-sell airtime, emergency airtime, international remittances, and crossborder money transfers.

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3 thoughts on “Mobile Money”

  1. Could not figure out how to view the panel. Clicking the link opens another page where I could figure out the right video.

    That a side I think the regulators of the two converging sectors – telecoms and financial are going to have to learn together. Hitherto, they have been masters of their domains that were pretty well defined. The coming convergence blurs those boundaries, which could make the regulators increasingly uncomfortable, as they are forced to work ever more closely. Another dimension is their willingness to create an environment which encourages innovation while protecting the interests of the users they serve. This requires working out of the comfort zone of the knowledge that they have accumulated over long periods of time. Abandoning misconceptions and creating an openness that empowers you to learn new things is a difficult thing for all of us to do, but I think that is where our regulators need to operate to give these emerging and experimental ideas an opportunity to thrive.

    Just my thinking!

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