The mobile phone is the first ubiquitous communication device in human history, paving the way for the most revolutionary event in the history of finance. As a consequence, mobile payments are an unprecedented opportunity to address four billion people in emerging markets.
On August 10, 2011, 300 passionate payments innovators from 27 countries ranging from Albania to Uzbekistan, with strong representation from Brazil, Canada, Germany, India, Kenya, Nigeria, South Africa, UK and 30 US cities, came together to cause breakthrough results. The session provided a once-in-a-lifetime opportunity to interact face-to-face, using Cisco’s amazing TelePresence technology. Since emerging markets are leapfrogging developed markets in mobile payments, the conversation centered on what markets can learn from each other, what payments innovations from Kenya or India can be used in Canada or US, engaging stories on the use of mobile payments, and overcoming business model inertia.
Betty Mwangi-Thuo and her colleagues at M-Pesa described their sophisticated leverage of Know Your Customer (KYC) data, used to segment customers, understand behaviors and develop marketing campaigns. One resulting success is “Kenya for Kenyans,” a hunger fund that raised 2.8 million US dollars in one and a half weeks.
Figure 1: Betty Mwangi-Thuo and her colleagues at M-Pesa in Nairobi, Kenya
“MPesa ended thuggery in Kenya,” Lowell Campbell, Standard Bank of South Africa
Gaurav Zutshi of Obopay shared a touching story of mobile payments improving people’s lives: a fix-it businessman in Nairobi saves two hours for each supply pick-up and payment using YuCash. Obopay also uses KYC data to segment for pricing sensitivity and promotions. A surprising success was issuing companion plastics with mobile money accounts – their customers really liked the “snobbish” appeal of plastic!
Lowell Campbell in South Africa sees the need for the agent environment – the human interface – in cash-saturated markets, the key being building trust, as M-Pesa developed.
ICICI bankers in Mumbai described their USSD-based pilot servicing consumers and small businesses. They found ways to support customer servicing, account maintenance and regulatory compliance, stressing the importance of training their agent network.
Turning to developed markets, Richard Wendell in New York talked about some of American Express’ recent innovations including mobile wallet and Facebook service “Link, Like, Love,” which provides automatic coupons on the back-end.
The overarching commonality between emerging and development markets is simplified “lite” accounts serving the underbanked.
One Million Acts of Payments Innovation began January, 2011 as a partnership between Capgemini, Cisco, PaymentsMarket and Access Group. It has launched projects such “Without a budget, how can you formulate a strategy to accrue one million new users across the nation?” – a team made up of six university students and a payments start-up.
Deborah Baxley is a Principal with Capgemini Financial Services Consulting. She is a recognized expert in the payments industry with 20 years consulting experience in 14 countries. She possesses in-depth experience in mobile payments and credit cards. She is an officer on the Smart Card Alliance Payments Council, co-founder of One Million Acts of Payments Innovation, advisory Board Member at Brighter Planet, socially responsible company helping manage and mitigate carbon emissions using cutting-edge analytics linked to payment cards, and Certified Smart Card Industry Professional. She is a frequent keynote speaker and prolific author on topics of mobile and advanced payments innovation.
Deborah can be reached at Deborah.Baxley@capgemini.com.