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    Mobile Banking for the Unbanked
    13 Jun 2011HBS Case

    Mobile Banking for the Unbanked

    by Carmen Nobel
    A billion people in developing countries have no need for a savings account–but they do need a financial service that banks compete to provide. The new HBS case Mobile Banking for the Unbanked, written by professor Kash Rangan, is a lesson in understanding the real need of customers.
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    In many developing countries it's common for a person to have a mobile phone but not a bank account. In fact, more than 1 billion people fit this description, and the number is only likely to increase. To that end, many companies are considering how to give residents access to banking services via their handsets. The GSM Association predicts that by 2012, nearly 300 million of the previously "unbanked" will be using some form of mobile banking.

    “The mistake a lot of us make is to look at the folks at the base of the pyramid and assume that they must need the same types of services we need.”

    The Harvard Business School case study Mobile Banking for the Unbanked explores two very different examples of mobile financial service models: WIZZIT, a third-party startup that teamed with a major bank to provide standard banking services via mobile access to impoverished residents of South Africa; and M-PESA, an initiative launched by the mobile network operator Safaricom (in conjunction with Vodafone) to offer a new type of financial service to the poor residents of Kenya.

    Ultimately, the more successful of the two, M-PESA, realized that the intended customers didn't really want bank accounts at all—they wanted effective ways to send money home to their families.

    The case's key lesson is the importance of meeting the real needs of your target audience, not the needs as you perceive them, says professor V. Kasturi "Kash" Rangan, who authored the case with research associate Katharine Lee and teaches it in his second-year elective course Business at the Base of the Pyramid.

    "The mistake a lot of us make is to look at the folks at the base of the pyramid and assume that they must need the same types of services we need," Rangan says. "Everybody needs food. We need education, and so do the poor. We need banks, so they must need banks. But that's the wrong way of approaching it. The ecosystem in which they live is very different from ours. They're on weekly or even daily wages, and their family circumstances are different. So we've really got to dig in and figure out what their real needs are and their pain points."

    The Problem With Wizzit

    WIZZIT entered the mobile banking market in 2004 because the mobile phone penetration rate in South Africa was almost 100 percent, thanks in large part to the onset of prepaid services that offer low-cost handsets and the opportunity to buy airtime in advance.

    "A subscription model doesn't appeal to the poor at all," Rangan says. "They don't want to pay a fee for something they might not use."

    Moreover, more than half of South Africa's population had no access to a bank account. This was largely because half of the population lived below the poverty line, and banks, understandably, were not eager to serve a moneyless customer base.

    "Banks find it an unprofitable proposition to serve people who make less than three dollars per day," Rangan says.

    Still, WIZZIT's founders thought there was a noble and viable business model in bringing banking to the poor, via a mobile banking platform that could be used on even the most primitive cell phone. They succeeded in finding an engineer to develop the platform, but quickly ran into a major regulatory roadblock. Per the South African government, only licensed banks were allowed to take deposits. The cost of a license was the equivalent of $34 million—a hefty fee for a startup—and the South African Reserve Bank was wary of issuing new permits. Hence, the WIZZIT execs began searching for an established banking partner. Time and again the top-tier banks turned them down, so the company ended up teaming with a second-tier bank, the South African Bank of Athens.

    “Banks find it an unprofitable proposition to serve people who make less than three dollars per day."

    By 2009, WIZZIT was not yet profitable. The banking partnership proved problematic in that it was hard for a second-tier bank to compete with its larger brethren, which by 2008 were forced by government mandate to offer low-cost banking options for the poor. But WIZZIT also suffered because the founders failed to recognize the true needs of their target customers.

    "WIZZIT essentially took a banking service like the one we have here—depositing salaries in the bank that we draw down to make payments—and decided that this is what the poor wanted, too," Rangan says. "Of course the founders were very creative in bringing the costs down dramatically and improving access, so the poor could afford to bank. The problem is that this is not the way that the poor think of money. They hardly have any savings. Their main need is money-transfer."

    The Success of M-PESA

    In many developing countries, including Kenya, most of the population lives in rural areas, but the majority of bank branches and jobs are in the cities. To send money home, a city worker had to seal his wages in an envelope and pay a courier to travel for hours to the village. Alternatively, the worker could travel to the village himself, but that meant paying a hefty percentage of his wages for bus fare, plus a day of lost work.

    Click to watch.

    Safaricom and Vodafone initially built M-PESA, a money-transfer application that resides on a phone's SIM card, as a tool for microfinance organizations to collect loan payments. ("M" stands for "mobile," and "pesa" is the Swahili word for "money.") But soon after launching the service in 2007, they realized their mistake and quickly repositioned the service with the slogan, "Send Money Home."

    "The beauty of M-PESA is that they understood a fundamental theorem of marketing: understand what your customers really want," Rangan says.

    To create a distribution channel, M-PESA franchised thousands of mom-and-pop convenience stores to act as M-PESA agents at their existing places of business, such that customers could transfer money and receive money conveniently.

    In order to use the service, the customer hands his money to the agent, plus a transfer fee (about 40 cents). Through a computerized process secured by multiple passwords and PINs, the agent transfers the payment to the customer's phone. Rather than hiring a courier or hopping on a bus, the customer simply hits "send" to transfer the money to a family member's phone.

    "Then, ka-ching! The family member goes to an agent in her village and cashes the money from her phone," Rangan explains.

    Rangan says his students are generally quick to realize why M-PESA is popular among customers. But they wonder how such an application can also be good for the carriers' bottom line. After all, the company is not allowed to pay interest on savings or to invest the float, per government orders; Kenya, too, has strict banking regulations. And how much revenue can anyone garner from a 40-cent fee that customers pay once a week, if that?

    "Students first take a look at M-PESA and think, 'This is CSR [corporate social responsibility]! Where's the double bottom-line?" Rangan says.

    “Why not harness the power of business to take care of their needs?”

    The answer is in the sheer number of registered M-PESA customers,some nine million as of January 2010. More than $600 billion has been transferred through the service, which has garnered revenues of about $100 million—and would have earned even more were regulations more lenient, Rangan says.

    Perhaps more importantly, the service induces loyalty and additional phone usage. "For Safaricom it's a profitable opportunity not just because of the fee it makes from the mobile transactions, but because it makes existing customers sticky," Rangan says. "The company provides an essential service, it is helping the person send money home. He will stay with Safaricom. Plus, as soon as his wife gets the money, what do you think she's going to do? She's going to call him on the phone, and that will increase mobile usage!"

    Lessons Learned

    Rangan is currently tracking mobile financial services in India, the Philippines, and Indonesia, where several banks are beginning to see the value of such services and, consequently, are entering trial partnerships with mobile operators.

    "It's not going to be the Nokias, Motorolas, or Microsofts that are going to lead the charge," he says. "Not even the mobile network operators. It's going to be the banks because they have the licenses."

    In teaching the case in class, the goal is not to put the spotlight on mobile banking, but rather to consider the opportunity of serving an enormous underserved population.

    "What I want my students to also take away is to realize that there are 4 billion people on this planet who live on less than five dollars per day," Rangan says. "If we depend solely on charities and governments to take care of them, we'll have to wait for centuries before we banish poverty. Why not harness the power of business to take care of their needs?"

    Comments
      • Anonymous
      A semblance of this style of banking is increasingly becoming widespread here in Ghana. The last time I wanted to open an account for my print shop with a big bank here in Ghana I was asked to bring my auditor's letter of consent, business registration certificate etc.- that was my last time at that bank.

      Months after a casually dressed mobile banker walked into my shop and introduced her products - I latched onto the idea - 100% bureaucracy free. At the moment she comes for my "deposit" daily, issues me with a scratch-card that allows texting a voucher number to a mobile short code. Instantly a message alert is received saying "account has been credited" indicating your current balance. It is really a breeze.

      Just last month when I needed money badly to buy a new machine it only took me a phone call and within 2 hours received my withdrawal.

      Should traditional banks fail to innovate they will sooner than later lose so much business in the large informal sector of my country to these mobile banks.
      • Anonymous
      The Central Bank of Nigeria is also in the process of issuing mobile banking licences to banks and 3rd party solution providers.

      Telcos have been given a back seat to Banks. Rightfully so because in the Nigerian market unlike Kenya and other markets a major need of the unbanked is the "safety" of thier funds. Saftey of funds is linked to both both the instability of banks and lack of infrastructure to support on-line realtime transactions settlements and notification . Money transfer is definitely the core banking need but its important that this need is not pushed in isolation of the other buyer value that would support the trial and continued use of the mobile banking.

      The unbanked adult market in Nigeria is about 75million people and most live under $2 a day. While mobile banking will help solve thier money transfer needs, the cost of acquiring the customers even on a mobile phone is very expensive without a mass uptake.

      Do you have any views on how the cost to deliver this service to the unbanked can be reduced or optimized so that the service actually makes money for the bank?
      • Smita Aggarwal
      M-Pesa has indeed been a huge success and there is a need for something similar in India and in many other countries. However, regulatory restrictions do not allow this to be replicated here. Banks do need to innovate to serve the underserved, but so should the regulator.
      • Anonymous
      Banks in Kenya have latched on to the idea and have integrated Mpesa as a value add to their traditional account holders. I can transfer funds via my mobile phone from my bank account to my mobile phone and then send it onward to relatives, vendors etc. Supermarkets and departments stores in upmarket malls now allow payment at the till via Mpesa. I pay my utility bills like water, electricity and even satlellite tv subscriptions through Mpesa. So now Mpesa serves not only the poor, but the entire spectrum of the populace. I can say Mpesa keeps me hooked to my service provider because it is now an essential service I cannot do without. Kudos Safaricom....we will forgive any network issues that arise as long as Mpesa runs seamlessly.
      • Jitendra
      • CEO, Citrus Payment
      The only risk I see in the model is of cash management. Who takes the risk of providing cash or prefunding to the merchant at withdrawl point.

      This model can only work if merchant point maintains balance with telecom operator. In India, Airtel has started on similar lines of M-PESA but the model is still not taking off due to whole cash management challenge.
      • Efrain Rosas D?az
      Companies can earn a lot of money offering services to the poorest. The thing is to convince them explaining the benefits of this new technology but also the associated risks, if any. The more clear enterprises explain their services, the faster this sort of services could generate the expected outcomes.
      Companies must create confidence of this service at a higher level, especially, at government level. The associated costs can be reduced if the private companies help governments to develop the legal framework necessary to rule this new way of transactions. Governments can catch a share of the pie because this technology can help them to trace financial movements necessary to tax.
      Private companies (banks, telecoms and software) have a great opportunity to develop a great business.
      • Krish
      Great article!

      This re-iterates the fact that "Customer is Key". As Dale Carnegie puts it - don't bait the hook with strawberries & cream because you like it.. have a worm if you want to catch a fish. Similarly, understanding the needs of the customers and working with them to provide a solution is the key to success.
      • datt
      • Associate software, radix
      This idea is very worthy which can help million of people.yeah as mention in the article million of people across the globe have mobile phone but not bank account. If a person want to send money to his family it will be very long process but it can help them to get money soon.In money transaction if banks are imposing the service tax then how people can be benefiting from that.Suppose some of them can send only very much low amount then they deduct then how much will reach to other side of a person.This is challenge we have to tackle.Bank and telecom operator have pull out the sponsor for this so that people can easily do transaction.
      • Anonymous
      I know the founders of both M-PESA and WIZZIT. While I couldn't say this case study is wrong -- I 100% agree that product design is critical and is something too often overlooked in branchless banking today. But the case study places the emphasis in the wrong place.

      WIZZIT's product wasn't their main problem. That's proven by the fact that S. African banks were able to sign up more than 4 million people to the entry-level Mzansi account. Most were low-income and un- or underbanked. In fact, WIZZIT's biggest problem may have been it had the idea of banking the poor but not the resources as a start-up to quickly grow before the big banks trained their guns on the opportunity. Classic start-up challenge: great idea, but can you act on it before someone else snakes the opportunity.

      M-PESA proves the point: they had the full support of the CEO of Kenya's largest telco who was willing to spend big to make M-PESA a success. Well over $10 mil in marketing and agent network setup expenses.

      A good idea about what consumers want is hard to turn into success if you don't have the funds to act big and fast. That may not be the only difference between WIZZIT and M-PESA, but its one of the biggest.
      • Anonymous
      Public service announcement: You have to be careful about doing online money transfers there's already what you call the grand parents scam where they will ask for your account details as a sweet old man or woman for the sake of their grandkids.. Visit some some sites that will tell you more about it.
      • soujatya
      • manager, TIL India
      M-PESA seems to be an inevitable model for Indian's endeavor towards financial inclusion.
      • Saifuddin M Naser
      • Managing Director & CEO, Union Capital Limited
      I am happy that this issue has been noticed by the HBS. I here by confirm the finding of the author as I have been directly involved in testing this model in 2005. We tested this money transfer through mobile hand set with the largest mobile phone operator Grameen Phone in Bangladesh. We have first tested this model to expedite the SME business in the rural area. It was a success but due to regulatory control of money transfer by the central bank through a non conventional method took quite some times to approve the process. But yet it is used as just merely a money transfer tool till now. But interestingly it has a vast potential to create virtual banks for the under served and the developing SME business at the root level.

      MENA (Middle East and North America) region of IFC (International Finance Corporation) of World Bank also worked with this model in African region, Afghanistan and Southern India.

      This model can expend the horizon of mobile ATM at remote location in a very cost effective way. This also create new horizon to design various savings plan and insurance products for people who can not afford to maintain a regular bank account.

      From the bank's point of view it will be the most cost effective tool to mobilize the fund from very rural areas to the main stream banking channels. More over we have tested the model of distributing SME loan at the very remote location and subsequently collect the repayment on a regular basis. The concept is development of the rural areas where no other operating model would be feasible.

      For the mobile operator they can increase their subscription to a level where they can offer extremely cost effective solution for this segment of the users. In this process they can also channel their business fund mobilization to a very efficient method from the rural areas to the ultra difficult terrain like in African, south Asia or Afghanistan.

      Interestingly this model can also design to serve the customers of developed countries in a very cost effective way. I have personally tested different model of banking in developed areas with the help of transaction flexibility added to the lifestyle of each customer. This can attract the younger generation to be more associated with the banking network in a controlled manner. Which may change the banking concept and bank can help this segment (the largest segment) to design their own financial planning.
      This sort of financial discipline can create sustainable banking model for future.
      • Brian Richardson
      • Co founder and CEO, Wizzit
      Just read your case study on WIZZIT and MPesa. Some interesting points but I feel I need to respond since perhaps unfairly and unintentionally, WIZZIT could be interpreted as being a failure.
      This is far from the truth and needs to be put into context.
      1. WIZZIT launched with a model to bank the unbanked using mobile technology. Our intention in launching in South Africa was to prove scaleability, replicability and sustainability. In addition, although launching with a transactional bank, the vision was to provide additional added value financial services to an unbanked market that was growing in maturity and confidence.
      2. WIZZIT is profitable today.
      3. WIZZIT through bank partners is live in 5 Countries and is doing incredibly well in most of them and in particular in Zambia, Tanzania and Rwanda.
      4. We have launched both personal loans and business loans on a pilot basis in South Africa
      5. We have launched a micro insurance product being a funeral policy in South Africa
      6. We are busy evaluating the business case for a savings product in South Africa
      7. Our experience is that the market wants more than a remittance product and wants a bank account that makes them an economic citizen and truly empowers them

      Strategically we operate WIZZIT Bank in South Africa to pilot and test various products, services and concepts. Through WIZZIT International, we deploy a proven mobile banking platform to leading banks in various countries specifically in emerging markets. Together with our bank partners we have processed millions of transactions per month; we have signed up millions of customers; we have given employment opportunities to thousands of unemployed people; we have proven scaleability and replicability as well as commercial viability. All on an incredibly small investment.

      As you quite rightly point out, South Africa is a very different market to Kenya. It is a very tough market; it is highly regulated; it is very competitive dominated by four very big and powerful players; it has a highly developed financial services infrastructure; it still has 12 million people unbanked.

      What could prove to be an interesting debate with your students is the question as to why in South Africa, MPesa is less successful than WIZZIT despite an investment that MPesa has made that is at least ten times that which WIZZIT has made. MPesa brought the same model, value proposition and marketing messages together with 6 years of learning and the secondment of the product champion and business driver from Kenya to South Africa but have not achieved anywhere close to the success that they anticipated.
      This I believe would be a much fairer comparison between the two entities and provide a much more objective learning for all. In no ways do I wish to decry the fantastic accomplishment of MPesa in Kenya but I do believe that your case is an entirely fair comparison and puts WIZZIT in a negative light which I do not believe it deserves.

      One final point is that our initial research showed that the unbanked market wants:
      A safe place to keep their money
      Access to their money when they want and need it
      Access to loans when they need it
      Affordable transactional capability
      To be treated with dignity and respect.

      We have no reason to believe that these fundamental market needs have changed. This is not our perception of the needs as the case study tends to infer but what we have found after several years in the market which supports our initial market research as well as subsequent research conducted some 12 months ago by an independent research house.

      We are the first to acknowledge that we have made mistakes and that we are always willing to learn. It has been much tougher than we originally thought it would be but we have survived and come through it all refining our strategy in an attempt to fulfill our vision of banking the unbanked.

      I would greatly appreciate it if you could publish this comment in the comments section of the case study and add this/ or an edited version of it as an addendum to your case.

      I do believe that there are things to be learnt in looking at the two entities and models and hopefully my comments gives greater context to the case.
      • Kapil Kumar Sopory
      • Company Secretary, SMEC(India) Private Limited
      It is a fact that the population to mobile phone percentage is ever on the rise even in India. The user of mobile phone utilises it basically to communicate and it is rarely for mobile banking to start with. The usage of all the available facilities on the mobile is also by very few and the technicalities are not properly understood. More so, the connected risks of using mobiles for banking.
      Banks have strict regulations for opening accounts which a big chunk of people at/below poverty level are unable to follow. This also restricts spread of banking especially in rural areas.
      • Anonymous
      I was struck by the notion of extracting money from the pockets of the "4 billion people on this planet who live on less than five dollars per day" being first and foremost considered a lucrative profit-making opportunity by people who already have vastly more income. I'm scratching my head and wondering if this is capitalism at its finest?

      I'm also wondering about comparing these services to the pricing structure of Dwolla here in the U.S. According to their website, there are no subscription, transaction, or banking fees paid by the cell phone payer--only by the recipient of funds, and that is limited to a maximum of 25 cents per transaction. The payer can choose to pay that fee in the case of "send money home". If a group of innovative software developers in Des Moines can come up with this here in the U.S., it seems reasonable to assume that with vastly larger economies of scale, those costs can be further reduced. Any thoughts?
      • Santhanam Krishnan
      • AGM
      Dear Prof. Rangan

      The M-PESA model is a workable model anywhere, where there is a political will and regulatory support. As to the logistical bottleneck such as Cash management there can be a viable substitutes such as Cash-coupons which can be redeemed against the daily or consumer necessities. This arrangement I believe can take care of affordability of the service to the rural poor.
      • Yadeed
      • yadeed@gmail.com
      The venture is akin to a 21st century Western Union money transfer business model where commissions on transactions bring revenue through the door. Quick easy access to transferred money,no need of bank accounts.

      The real challenge will be replicating this model to get inter bank transfers and cross country transfers. While Vodafone could leverage its global network for messaging, would a global bank or say Western Union with overseas branches be willing to come on board ? My guess is yes, as it provides for good cause marketing for the bank/Western Union.

      This movement or transitioning to a global model is moving from a local/national Social Bricoleur Constructionist led venture to a more profit oriented business model but with the social cause as one of the subordinate goals.

      The Filipino and Keralite expat communities is where a large opportunity lies ahead for such a venture.
      • Ally Eric Makori Onentia
      • QSM, D.Kenya
      Brilliant article and great contributions.

      Let me just add that M-Pesa's success must also be studied through the prism of "first mover advantage" coupled with the near-monopoly status of Safaricom at the time of launching this service. It is a resounding success, and Prof. Rangan is right that the main contribution of this service to Safraricom is customer loyalty so that the more significant avenues of profitability maintain a critical mass of users. It also enhances the Safaricom brand equity.

      My observations are based on the fairly dismal run of identical services by the competitors of Safaricom in Kenya. Practically every Kenyan is aware of the existence of Airtel Money, Yu Cash and Orange Money operated by the competitors of Safaricom, namely, Airtel, Yu and Orange respectively. While M-Pesa customer base is roughly 15 million, the total number of users for the three competitors is hardly 600,000 collectively!

      Due to the comparatively huge financial muscle of Safaricom in Kenya, M-Pesa has been enhanced through partnerships with three banking institutions including Equity Bank, the largest bank in Kenya by customer base and Kenya Commersial Bank, the largest Kenyan Bank by asset base. The third one is I&M Bank. Financial products made possible by such partnerships will continue to block easy access by other market players to mobile banking in Kenya.

      M-Pesa is also used to make some online payments and even in the purchase of goods from some leading outlets in Kenya including Uchumi and Naivas Supermarket chains and one of the leading branded clothes retailer in Kenya, Deacons. Almost all utilities and most service payments can be done through M-Pesa.

      Prof. Rangan could expand the study to answer questions about the failure of the M-Pesa competitors in Kenya inspite of attempting to make the products identical, and in some cases cheaper and enhanced.

      Ally Onentia
      • Nic Harvard
      • Principal, Harvard & Associates
      My mobile provider sent me a cheque a few months ago to refund an overpayment i made. Does this make them (or more importantly, the postal service) a bank?

      Carmen Nobel's article; Professor Rangan's case study; and a number of the posts previously have ignored or missed some very important fundamentals, in my opinion:

      In particular, "The only risk I see in the model is of cash management. Who takes the risk of providing cash or prefunding to the merchant at withdrawl point..."
      --Jitendra

      Money is merely an agreed medium of exchange, and banks are regulated institutions authorised to take and issue deposits thereof, and in some cases create it.

      What "the unbanked" lack is not banks - it is sufficient negotiable, liquid assets in the form of cash money, and a safe place to put it if and when they get some.

      Their incomes are also usaully much larger than dollar or two per period that GDP reports would have us believe - but most of it is in an informal, cashless, or collective/barter economy.

      So when the rural family of an urban worker goes to the local store ("local" in this case possibly meaning the only one within a day's walk) they *DO NOT* usually wish to withdraw cash - they would probably rather withdraw supplies of dry goods, hardware, etc.

      Done right, "mobile telco banks" are able to micro-charge legitimately (via special SMS/MMS charges etc) and make their due profit - and rural, subsistence economies have a chance to jump straight from a barter situation, to a post-1st world "cashless" model - much in the same way that many areas are jumping straight from no-comms to satellite, without having to go through the expensive and now largely redundant fixed-line and base-station investments.

      There will be many types of intangible monetarised product lines which will and should continue to fall under existing financial regulation rules, but in the main, all other aspects can be covered under existing PAYG credit balances and brokerage agreements between other (non-consumer) parties.

      A mobile phone (with or without imaging capability) is actually much *more* secure than a credit or debit card, consisting of something you have (unique IMEI *and* SIM) something you know (PINs, passwords, etc) and something you are (RFID-to-merchant; voice or even facial recog given cameraphones)

      The challenge is not marketing this to the end-customer - numerous succesful uptakes have shown it is in demand in many geographies as diverse as India, Japan, and rural Africa.
      It is mostly in dealing with incumbent institutions, and regulations which are simply inappropriate, and take the stance of "guilty until proven innocent" rather than conceding a loophole.

      Mobile provides banking to the bankless much like NCR does with ATM's. (Except to use an ATM, you need a bank account)
      NCR is not a bank.
      • Adebayo
      Excellent article, it would however be interesting to determine what impact the 2007-2008 civil war in Kenya had on the growth of Mpesa.

      Clearly people could no longer travel to the rural areas on a frequent basis and needed a medium to get funds to their families and friends in rural Kenya....remember Mpesa needed to grow both customers and stores at the same time to have any chance of success, so they needed a something out of the ordinary to achieve 6 million subs barely 2 years after launch.

      The key message I am trying to get out is, sometimes it is not just about our well the product is designed but about the timing and traction your product gets in the market place when it's launched.
      • Jaspreet Singh
      The thoughts are great, but it could have touched deeper on the point, that what are the main components for development of mobile banking model for the unbanked.
      M-pesa case perhaps provide lot of do's and dont's but also is exceptional since safaricom had a unique advantage of market share and thus the agent network and second the way kenyan geography and its migrant population are placed for remittances to work.
      These same trends would not be applicable in other places, nor the remittance would become the entry point.
      But nevertheless, the question remains why at other parts of the world where mobile banking is been undertaken for such a long time, remains in pilot form and is not coming to speed.
      One of the main challenges is that different entities who are doing this carry it with there own perspective, viz, a bank does little care about the agent network, or developing the right product for the target market or would be doing it as a social obligation,
      a telecoms on the other hand would have little sense of financial products and would like to see every unit of product sold in terms of profit or loss, and many others such mis-placed perspectives.
      And in all this, development of a true customer value proposition and before that an agent value proposition is overseen which is about right product mix, right revenue and cost structures, process and customer service, marketing and so on.
      • Anonymous
      Great article! I thought to add a quick note on MPESA. The services provided by a telco but is regulated by the central bank of kenya. How is this achieved? MPESA was required to create a clearing and settlement account in a bank where all transactions must pass, are known and monitored. This account is owned and managed by independent trustees. So the central bank regulates MPESA by regulating this trust account in a bank. That is a key innovation often overlooked in the study of MPESA.
      • Khumalo MN
      • DBA Candidate
      Great article and comments! The market dynamics and mobile banking/payments landscape in Kenya and South Africa are very different, at launch and now for both MPESA and Wizzit SA. Interesting research and analysis would be the comparison of MPESA - South Africa and the plethora of other mobile payments operators in South Africa. Where else has MPESA been successful at the same traction as in Kenya?
      • Anonymous
      I am 19 years boy who really born with a dream about being a good pilot,but when i turn out and look around there is no one who can help me,because both my parents are not working
      • Christian Nedu Osakwe
      • Masters, Student of Informatics, Czech University of Life Sciences,Prague
      I would like to firstly commend the author for a job well done on this article. Methinks, it is just the right article for me based on the fact that I am doing a master's thesis on Mobile Banking in Nigeria.

      I have read the Mobile Banking Revolution in Kenya mostly the success story of M-PESA.

      The only challenge I see with such an inclusive and collaborative mobile banking model in Nigeria is the risk of cash management and identity theft.

      More so, infrastructures and network coverage still pose serious challenges to the synergies that would stem from regulators,industry players and the unbanked.

      The adoption of a holistic approach to Mobile Banking in Nigeria could be a huge success story just like M-Pesa but regulators such as CBN and NCC must be ready to enforce strict guidelines in order to harness the full potentials of anytime, anywhere banking model.
      • spidermanzanojr.
      • freshman at saginaw high school, none
      It is really nice that WIZZIT and M-PESA are trying to help the needy but there are still consequences for what the people do with that support.
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    V. Kasturi Rangan
    V. Kasturi Rangan
    Baker Foundation Professor
    Malcolm P. McNair Professor of Marketing, Emeritus
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