The Key to Igniting and Launching Mobile Payments Platforms

By  |  November 4, 2010
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Approximately 70% of people in developing countries don’t have access to finance, according to Ignacio Mas (Gates Foundation Executive).

Mas then responded with what he called “the feel-good story of the day” – M-PESA from Safaricom.

He highlighted how the mobile money transfer service is extending bank infrastructure for all in Kenya. In just 3.5 years, according to Sept. 2010 data from Safaricom, M-PESA has:

  • Amassed 13 million users = 50% of the adult population in Kenya
  • Done more transactions than Western Union has done globally
  • Registered around 20,000 cash merchants in Kenya, 20 times the number of bank branches

What has sparked M-PESA’s incredible ignition? Mas explained that M-PESA addresses major pain points in the lives of Kenyans, including the need to exchange physical cash for electronic value and the need to send money to those in other parts of the country, often in rural areas. M-PESA allows people to transfer money immediately at a low-transaction cost, according to Mas. In addition, he pointed out the scenario that merchants would prefer to deal with fixing a $40 mobile phone than a $400 traditional POS terminal.

For more on M-PESA’s ignition success story and why the organization is a model for improving payments systems in developing countries, check out Mas’ paper: Mobile Payments go Viral: M-PESA in Kenya. PYMNTS.com also spoke with Mas earlier this year about the report and how M-PESA managed to solve the payments chicken-and-egg riddle. (Listen Here)

During the subsequent Q&A session, potential future challenges for M-PESA were raised by panel moderator Tim Attinger (Managing Director of Market Platform Dynamics and former Global Head of Product Innovation and Development at Visa). Attinger felt that M-PESA will likely need to address issues of operability (facilitating cross-border money transfers) and security (protecting the platform from fraudsters).

Other panel highlights included presentations by Chris Hylen (Intuit GM of Payment Solutions), who examined commercialization innovation within organizations, and a look at prepaid growth by Green Dot President Mark Troughton.

PYMNTS.com Blog Entries from the Innovation Institute

Day 1

  1. David S. Evans: Why the Time Is Right for Innovation (and Cash Is Not Dead) (9 a.m.)
  2. No Need to Give a Eulogy for Venture Capital (10 a.m.)
  3. There’s Two Sides to Every [Payments Platform] Story (11:30 a.m.)
  4. The Key to Igniting and Launching Mobile Payments Platforms (12:30 p.m.)
  5. Fed’s Proposal for Interchange Rates to Be Announced Within a Few Weeks (2:30 p.m.)
  6. What Payments Professionals Can Learn from FarmVille (4 p.m.)
  7. Driving Network Effects with Platforms (4:30 p.m.)
  8. What Is The Next Great Payment App That Has Yet To Be Created? (5 p.m.)

 

Day 2

  1. Can the U.S. Replicate Japan’s Mobile Payments Success? (8:30 a.m.)
  2. POS Opportunities around Social Networking (9:30 a.m.)
  3. POS Innovation in the Cloud (10:30 a.m.)
  4. American Idol: Payments Innovation Style (Noon)
  5. Federal Reserve: Cash Usage Increased in 2009 (1:30 p.m.)
  6. Tips for Catering to Consumers’ Payment Preferences (2:30 p.m.)
  7. How Walmart Views Consumer Payments Behavior (3 p.m.)

 

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