In 2009, the CBN launched the mobile money regulatory framework and many of us rejoiced at the opportunities mobile money will create. Quoting Peter Ojo, CEO VTN
Mobile money gives users 25 hours in a day. “Mobile money” is cash converted to electronic form, where it becomes more efficient. Nigerians who used their mobile phone to send a payment could save one hour daily (and also avoid potential theft of cash).
As of December 2011, there are over 17 million subscribers using M-Pesa. If each transaction saved the subscriber one hour per day, productivity would jump by 17 million hours, or 1,863 years! And Nigeria has more than double the number of mobile phones compared to Kenya. What further development could be achieved in Nigeria by having over 2,500 years extra to think?
For what everyone thought was going to be a massive change in the way we pay, send and recieve cash, mobile money refused to take off. While I am no financial expert, I opined that these happened as a result of
- the insistence of the CBN not to let the telcos champion the cause (not a bad or good thing)
- the inability of the banks to innovate in a way that meets real needs of consumers
- using Safaricom’s mPesa as a template in an age where online banking was growing fast
- lack of seamless distribution networks
I also did argue then with anyone I could pour my heart to that mobile money already existed in some way in Nigeria and what we needed to do was to explore new models that work seamlessly…
- ability to withdraw from atms without need for a card or bank account .i.e. make the ATM a mobile money agent
- direct connection to bank accounts or airtime accounts or pseudo airtime accounts.
Innovation however is what it is – its new value created that elevates/leapfrogs the experience of the customer far beyond the incumbent. In the midst of mobile money’s uncertainty, an innovation has emerged and its fast transforming the payments landscape.
Firstly, we started buying credits with *737*amount# or *767*~ and we abandoned the street hawker (I am typing this from Atlanta and I did buy airtime few moments ago using same channel and last week as well from another country).
Account transfers is now about to be disrupted. With GTB leading the pack. Soon other banks would follow suit as they are wont to do.
What fuelled the rapid adoption for this?
- little or no on-boarding needed to start – just use the phone number connected to your bank account
- speed and the ability to do it anywhere.
Where do I see this going?
- Merchant payments will also be disrupted. Soon Jumia/Konga will have a merchant code/bank account number and transaction code that will allow us to do *737*merch_code*trans_code#. You may be able to even click on such a link from a mobile site/app such that you don’t have to type it in. You will be able to pay for cabs, movie tickets and goods via a shortcode or a single click.
- Phone security will become a big deal, soon everyone will be talking about the risks, then everyone will stop talking about it again.
- Bank transaction volumes will increase double digits. And all of this will happen outside the internet or branches. Totally mobile.
- This will also kickstart simpler and more 1-minute account opening methods that will simply allow anyone with a mobile phone to open a bank account (akin to online account opening). Such mobile-first accounts will definitely have their limits (fund limits as well as work for only numbers not attached to any account).
Now if this is not mobile money, what is it ?
Do you think this will go in another direction? Please feel free to share your comments below – I can make use of some new different thinking myself.