Rise and potential heady heights of mobile money

Speaking at the AfricaCom conference in Cape Town on Wednesday last week, Goulven Bescond, payment product line manager at eServGlobal, a specialist in mobile money solutions, said 1.7 billion people will have a mobile phone, but no access to banking services by 2012.

He added that by 2012 mobile money is forecast to reach US$5 billion in direct revenue and US$3 billion in indirect revenue annually.

Bescond noted the myriad of actors who take part in ensuring the end solution of mobile money including banks, payments networks, telcos, third party processors.

He said that helping facilitate the partnership between Telcos and banks is the forecast by management and consulting group McKinsey, that mobile devises will reduce the cost to serve bank customers 50-70%.

"Banks," Bescond said, "can also take advantage of telco subscribers."

Regulation a consideration

He added that Safaricom selected 300 partners among 1000 who control the street level retail outlets across the country to roll out its successful M-Pesa mobile money service in Kenya.

"Regulation is also a consideration. That determines what can and cannot be done between a telco and banks," he said.

Bescond highlighted a number of cases where regulations influence registration.

He said that in Kenya, agents can perform online registration on subscriber ID, while in India and Brazil, agents can open low balance accounts, but documents must be seen by a bank.

In Peru, only banks can open accounts, he said.

The more services the better

Yolande Van Wyk, head of business development at First National Bank (FNB), South Africa highlighted the importance for banks to have access to new markets.

Van Wyk said of mobile money: "Customer retention has been marked, it also opens up access to new services. The more services you have in the market, the better the take-up will be."

The business development head said it was difficult to predict how mobile money services would do on a broader spectrum, "especially when you rubber stamp it as a broad service".

She noted that each market was different presenting unique challenges.