If you’re interested in mobile payments and alternative banking go read this article and the research. My highlights below:
A staggering 80% of all transactions processed worldwide, according to the survey sample, were processed in East Africa. The survey further identified 8 of the fast-growing mobile money services enjoying a similar (if less spectacular) growth path to Mpesa. Six of these eight services are in East Africa, and after Kenya, Tanzania, and Uganda, the mobile money wave is now reaching Rwanda. Third, 68% of all mobile money transactions were airtime top-up transactions.
And on the challenges of the business model:
While operator stored-value accounts may emulate some elements of a bank account, with some ‘bank-like’ functionality, (eg. the ability to pay), an operator stored value account and a bank account are very different beasts, defined by different rules and regulations that govern what they can and can’t do.
As a consequence, the business model for operator led mobile money does not, in my view, necessarily stack up for operators. The reason is that legislative compliance has ensured that all operator mobile money services (including Mpesa) keep an equivalent value of the operator stored value, on deposit in a trust account at a bank or banks. For example, if an operator holds US $10 of account holders money in a operator hosted wallet, it must have US $10 on deposit in a licensed bank’s trust account (similar to an attorneys’ or accountants’ trust account).
This means the operator cannot access (or leverage) those funds either as working capital, nor can it derive any benefit in the form of interest or access to surplus. Very different from a bank whose core business is taking in deposits and lending money out.