Last week at our Mobile Money Global Event, I announced that the GSMA has received an additional $9.4 million USD from the Bill & Melinda Gates Foundation, The MasterCard Foundation and Omidyar Network to support GSMA’s Mobile Money programme until October 2018. This is the third phase of funding that GSMA has received from the philanthropic community since our programme started in 2009.
The programme is supporting the industry to develop the mobile money ecosystem, to enable a broad range of digital transactions and make mobile wallets central to the lives of the financially excluded and underserved, providing them with better solutions to manage their financial resources and face economic shocks.
The mobile money ecosystem opportunity
Year on year, the mobile money industry continues to grow, with more services beginning to reach scale: as of December 2014, 20 services have more than 1 million active accounts and there are 16 markets with more mobile money accounts than bank accounts, indicating that mobile money remains a key enabler of financial inclusion.
Despite this evolution, mobile money usage continues to be dominated by two types of transactions: person-to-person (P2P) transfers and airtime top-ups. Deeper impact on financial inclusion can only be achieved with the development of use cases beyond transfers and airtime top ups—mobile money could create a paradigm shift via the extensive digitisation of cash within a mobile money ecosystem.
A mature, robust ecosystem will bring major benefits to mobile money customers and providers:
- Customers can access a greater range of products with an enhanced experience and increased convenience. With new services being enabled via mobile money, new customer segments will be served (e.g. women, or farmers) with the financial products and services which meet their needs.
- Deployments that succeed in building a mature mobile financial ecosystem can expect profit margins of more than 20%, making mobile money an attractive proposition relative to the core GSM business. Building the ecosystem is key to increasing the long-term sustainability of mobile money.
To achieve this, the Mobile Money programme will work with mobile operators and ecosystem players to increase the utility of mobile money; ensure the sustainability of mobile money services; and thereby extend financial inclusion, economic empowerment and economic growth.
Key programme activities in Phase 3
There are five areas of focus for the programme in Phase 3:
- Accelerate scale of mobile money services via Account-to-Account (A2A) Interoperability: Accelerate the successful scaling of mobile money services through effective implementation of A2A interoperability, and capture best practices and evidence of accelerated growth due to positive network effect.
- Accelerate scale of the mobile financial ecosystem (e.g. G2P, P2G, salary payments, etc.): Accelerate ecosystem use cases to scale through industry collaboration, and increase industry knowledge around how to make new mobile money products and models successful.
- Strengthen foundations to stabilise and enable ecosystem development: Strengthen foundations of mobile money services which stabilise and enable ecosystem development and continue to advance the industry learning agenda.
- Advocate with key stakeholders to remove regulatory barriers: Advocate for the promotion of conditions under which operators can sustainably offer financial services, in a policy environment that promotes fair competition and allows innovation and collaboration.
- Share data and insights: Continue to collect, aggregate and share mobile money data and insights, to help mobile money providers make informed decisions to improve operational efficiency.
Evolution from GSMA Mobile Money for the Unbanked to GSMA Mobile Money
Since 2009, the GSMA Mobile Money for the Unbanked Programme (MMU) has worked with mobile money providers and the wider industry to accelerate the availability of mobile financial services that provide safety, security and convenience to the unbanked. Now, for Phase 3, the GSMA Mobile Money programme will evolve beyond supporting basic foundational issues for mobile money providers, as in Phase 2, to focus on issues critical to the development of a mobile money ecosystem for the underserved.
Philanthropic capital in Phase 3 of the Mobile Money programme ensures that: the needs of the underserved are represented in the mobile financial ecosystem and that the industry has the tools to sustainably reach the financially excluded; that proof points for ecosystem development are accelerated to deepen financial inclusion; that the Mobile Money programme is able to develop knowledge products which create public good for the wider industry; and that a continued dialogue occurs with the community of financial inclusion partners to reduce regulatory barriers.