World Retail Voice Blog Post
Can retailers capitalise on mobile money in developing economies?
Were you aware that 2.5 billion people in developing countries don’t have access to card-based, online or mobile banking services, yet half have a mobile handset that would allow them to connect to a mobile money service?
Since the launch of M-Pesa by Kenya’s Safaricom in 2007, several operators in Sub-Sahara Africa have rolled out mobile money services for millions of people who don’t have affordable bank accounts. This has allowed the financially excluded to use mobile money to purchase food and household goods from local retail stores, if shop owners have a mobile wallet. It has also allowed FMCG companies to replace cash collections from retail chains with the safety, cost effective and efficient mobile money transactions.
Yet despite the introduction of M-Pesa, it has been suggested that mobile money hasn’t fulfilled its anticipated potential outside of Kenya. A very simplistic analogy that I recently enjoyed described mobile money in Africa as an unpolished symphony orchestra. Despite governments having an interest in using mobile money to facilitate the cross-border flow of remittances and reduce cash transfers, the various industry and government participants are showing up at different times and places with their own music and tempo.
The benefits of the service are surely an enhanced customer service, real-time financial data and the potential of reaching out to the new African consumer? I ask whether an ‘unpolished sympathy orchestra’ the only reason why not all retail chains have mobile wallets? Do retailers need to make significant investments to offer the mobile money service?