We have not worked on mobile money in Myanmar. But now that mobile penetration is quite high, time is ripe for mobile financial services. Here is a description of the challenges: The biggest challenge for anyone in this business is the distribution network. Myanmar is such a big country. We’re now in about 70% of townships around the country – to get around and actually see where our outlets are, it’s a lot of travel.
Nandan Nilekani of Infosys and Aadhaar fame has been brought in to help the government of India accelerate the transition to e financial services in the aftermath of demonetization. 350 million with no phones and 350 million with feature phones is just the first problem. What happens when there is no signal, like in Chennai after the recent storm? The committee has a mega challenge ahead. The committee is expected to meet again this week to look at how to approach those with limited access to technology.
For bill payments over electronic means to work, it is necessary for the payee to have an electronic system. Some parachute advisers identified mobile payments as a low hanging fruit in the early days, even before the telecom reforms had started. But it took years to pluck this fruit because work had to be done on the pre-conditions. Not only was it necessary to get phones into the hands of the consumers, it was necessary to modernize the billing systems of the payee organizations. ConnectNPay, a joint venture between Myanmar’s MCC Group and Singapore’s Leo Tech, has since May provided an e-link between service providers, such as utility companies, and payment partners, such as banks.
The story of M Pesa in the form of a book. Launched as a simple money transfer service, M-PESA has evolved to a full payment service which now includes payment services and the Lipa na M-PESA service which is targeted at SMEs. Since launch last year, Lipa na M-PESA has so far recruited 36, 749 merchants. “M-PESA has put Kenya and Africa at the forefront of ICT innovation and is a reference for many other countries that plan to implement a mobile money payment platform.M-PESA is indeed one of the ways that we have been able to fulfil our aspiration to Transform Lives,” said Safaricom’s GM of Financial Services, Betty Mwangi-Thuo.
The Economist has a piece on mobiles and banking in Myanmar. This is the world’s leading popular publication on economics, but in this case, it appears the hype has overtaken logic. What is banking? It is the business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to earn a profit. Mobile can play a role in this, but does the Economist really believe that phone companies will actually do well as deposit-taking and credit-extending entities?
I know. Kenya is not in Asia. And M Pesa is in Kenya. But I read this nice blog post and figured that readers of LIRNEasia might appreciate learning a bit more about M Pesa. Few initiatives in microfinance, or for that matter in development, have been as successful as M-PESA: 3 and a half years after launch, over 70% of households in Kenya and more importantly over 50% of the poor, unbanked and rural populations use the service.
I saw this lament and my first thought was, she does not live in Kenya, but in backward New York. A truly mobile wallet — one that would let you easily pay for restaurant meals, subway rides or beers at a bar with a quick wave of your cellphone — has long been described as imminent. But it remains elusive. Some innovations have begun to bridge the gap, but most have been a disappointment or have not yet worked well enough for mainstream adoption. In 2012, Square, which makes a credit card reader that can be plugged into an iPhone or iPad, worked on a credit-cardless system that let people pay for goods without ever pulling out their wallets or phones.
Hard truth about why the successful mobile payments model pioneered in Kenya has failed to spread. However Kenya’s success has yet to be replicated much elsewhere. More than half of all the world’s mobile-money transactions are handled by Safaricom. Mobile money is popular in one or two chaotic countries, such as Sudan and Somalia, but barely used in most places where it could do immense good, including India and China. Not all countries need mobile money, of course.
According to this overview, m-money is the future. The survey, released earlier this month by the Pew Research Center’s Internet and American Life Project along with Elon University’s Imagining the Internet Center, asked just over 1,000 technologists and social scientists to opine on the future of the wallet in 2020. Nearly two-thirds agreed that “cash and credit cards will have mostly disappeared” and been replaced with “smart” devices able to carry out a transaction. But a third of the survey respondents countered that consumers would fear for the security of financial transactions over a mobile device and worry about surrendering so much data about their purchasing habits. Sometimes, those with fewer options are the ones to embrace change the fastest.