Alternative Finances

Why Global Financial Inclusion Programs Fail

For well over a decade, players across the payments space and all around the world have been trying to crack the code on delivering mobile financial services to the un-and-underbanked consumer. And despite many great ideas and the urgent need to move those without bank accounts into the financial system, there’ve been precious few successes. The world was beginning to wonder whether mPESA was a brilliant stroke rooted in a business model that was impossible to replicate anywhere else in the world.

The mistake, says Michael Liberty, founder of Mozido says, is not thinking hard enough about how the underserved can benefit from mobile services. Liberty says that it isn’t enough to just to enable mobile financial services, those services must have benefits that are obvious and easy to access or else they’ll fail to serve the very people they were intended to help.  Liberty says that’s where he believes Mozido, a cloud-based financial services platform can make a difference.

“We like to think that we can lead the financial inclusion revolution taking place around the world and will bring the financially disenfranchised people of the world into an ecosystem of hope, opportunity and financial fairness.”

And, they’re about $185M closer to that goal, thanks to its recent Series B round, which included MasterCard, Wellington Management Company, H.R.H. Sheikh Nahyan bin Mubarak Al Nahyan & Tiger Management.

Liberty and Mozido’s Chief Business Officer David Luther recently spoke to PYMNTS.com about why they think Mozido and its new partnership with MasterCard is in the best position to make the financial world just a little more fair.

The key, Liberty observes after spending almost 20 years traveling around the world and working with a variety of partners, is thinking like an ecosystem – going beyond a solution that offers only a discrete set of services and creating a platform that makes it easy for those with assets and capabilities and a desire to help the underserved, do so in an effective, efficient and cost effective manner.

“We’ve been very thoughtful about going in with boots on the ground and building ecosystems,” Liberty explained.  “In Jamaica, for instance we went in and started by working with a credit union which ultimately scaled into a national product.”

This Mozido Jamaica product, offered in partnership with the Jamaica Cooperative Credit Union, allows consumers do things like pay bills and make P2P money transfers, while at the same time giving merchants the ability to use a mobile wallet to pay their vendors.

“Building an ecosystem allows us to deliver utility and interoperability. There’s two mobile carriers in the Caribbean that are in Jamaica:  Align and DigiCel. Mozido is integrated to provide services for both of those carriers’ customers, so the consumer has both functionality and interoperability and that’s really the most important thing,” Liberty explained.  “Sure, there are wallets but they don’t enable basic functionality and therefore, no value to the customer.  We believe that everything revolves around the consumer experience, user experience and value proposition for merchants.”

At a price point that reflects the realities of the consumer’s financial situation. Luther pointed out that the un- and under-banked have access to financial services but “Today they may be paying a premium for services.”  Those premiums come in more forms that just financial costs, noted Luther, since accessing them can often be complicated, time consuming and wholly inefficient.

“We’re trying to use mobile channels to provide those same services at less cost and more convenience for customers.”

And not just less cost, Liberty noted, but “disruptively lower pricing,” on services from bill payment to check deposit of cashing.

More likely that path to cheaper financial services travels a road with mobile rewards Mozido’s “sticky” facet, Liberty said. Stickiness that will vary based on the needs and customs of each country and that can work on any type of phone, even the “candy bar” phones that operate on the USSD network. “There are unique attributes to each market, Liberty said. “And we learn by having key people there to deliver what consumers want and what they need.”

“A worldwide network that is compliant,” is Liberty’s and Mozido’s goal.

Mozido’s new partnership with MasterCard is one way that Liberty believes they will move closer to realizing that goal. Moving forward, Mozido will integrate MasterCard payment and security products into Mozido’s global ecosystem of mobile payments, marketing, and commerce services that can be accessed from any type of mobile phone.

“MasterCard has a great focus on the un- and the under-banked. They are a great fit for us in a number of ways. For example, they are doing a lot of prepaid card in these regions and we can marry that with our mobile application and use it as a funding source.” Mozido also says that this also expands its access since Mozido’s compatible mobile products will now work where MasterPass is available.

“Their 30 million merchant network is a tremendous asset for us,” Liberty noted.

If there is a magic bullet to bringing the underserved into the mainstream financial system, it seems that someone would have already found it. But maybe that’s the point – maybe there is no silver bullet/one-size-fits-all solution for this problem. And maybe that’s the secret sauce that Mozido brings to this very important global problem. They aren’t trying to build THE right solution—but rather providing a platform so that those with the assets, the wherewithal and the passion for helping the underserved become part of the mainstream  around the world have the best shot of doing it.

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