The GSMA 2012 Mobile Money Adoption Survey showed that there are over 40 countries with more than 2 live mobile money deployments. When meeting with different operators in the same market, we tend to hear a similar set of challenges. This should come as no surprise since they occupy the same operating environment. These challenges often include customer awareness, regulation, fraud mitigation and building trust for the concept of mobile money. Set-backs in these areas for one operator tend to reflect negatively on all players. Rumours of money not being safe in the mobile phone are likely to hurt all deployments for example.
Competition is important and is driving the growth of mobile money, but there are several non-competitive areas which could benefit from being addressed in coordination. Regulation, for example, will be applied in the same way for all players in the market and a debate regarding its future is good to be had as an industry rather than individual players approaching the regulator separately. In the same way, a fraudster will care little for brand relationships but will try to defraud all players at hand, regardless of which company that is offering the service. If these are common concerns, there should be an opportunity to collaborate on these issues. Sadly, we too rarely see industry collaboration or coordination in mobile money.
Coordinating efforts to overcome certain non-competitive issues that affect the full industry can not only reduce costs for each player individually, but could also increase the impact of the efforts made.
In other industries, this approach has proven successful and the card payments industry is a great example of that. They identify areas that aren’t competitive and collaborate to solve issues as an industry in these areas. This have enabled the card payments industry to agree on which protocols to use; develop new improved security elements such as EMV, and standards in procedures and physical artefacts such as length of PIN and the size of the plastic card. This way the industry can address complex issues like fraud, and ensure that manufactures and 3rd party companies can develop, for example, a POS device for a full industry rather than for a single payments scheme.
There is an opportunity to create something similar for mobile money, starting on a country level to address issues that this still young industry is facing. The areas for coordination might look different from market to market, depending on maturity of the deployments and the particular issues in that market. But nonetheless, a foundation for the industry can be built where trust and the establishment of mobile money as an industry rather than separate deployments with nothing in common. We recently assisted in such industry convenings and the identified areas where it was easy to find common ground and start building trust were:
Fraud prevention
- Blacklisting agents and customers that are committing fraud in the system, and sharing the blacklist within the industry
- Consumer protection
- Sharing best practices on how to improve processes for fraud prevention
Customer awareness and education
- Education and awareness around PIN use
- Identification requirements for registration
- Address customer awareness issues, such as direct deposits
Industry quality standards for agents
- Training and educating agents on AML/KYC if they are performing the services of multiple deployments (in markets like Tanzania or Uganda).
- Putting in place minimum requirements for mobile money agents across the board
Adopt industry standards and conventions (later stage)
- Converging to using similar menu and user interface or process for doing cash-out, cash-ins and payments
Starting with these less commercially sensitive areas for collaboration can form a foundation for more challenging forms of coordination at a later state, such as interoperability efforts to enable the ability to send money across deployment or sharing elements of the distribution.
Addressing industry issues as an industry can be done in 40 markets already today, and provide much needed strength in efforts to overcome challenges in growing mobile money. Please contact us if you see opportunities for us to assist in arranging this forum in your market.