I work for Wave, we build mobile money systems in Senegal, Cote d’Ivoire, and hopefully soon other countries. Here are some thoughts on these interventions based on Wave’s experience:
Interventions 1-2 (creating accounts): I think for most people that don’t use mobile money, in countries where mobile money is available, “not having an account” is not the main blocker. It’s more likely to be something like
They don’t live near enough to an agent
Mobile money charges fees that is too high given the typical amounts the person wants to send
They don’t trust the service
They don’t trust the agent they live near
They can’t read, so it’s hard for them to use the app (they would have to memorize the UI)
Intervention 3 (lower restrictions): In countries that don’t have a way of using mobile money without an ID, that’s an extremely valuable thing to advocate for. Also, at least for Wave, our users constantly ask for higher transaction limits than the central bank allows us to give them. Both of these policies are probably at least somewhat based on FUD spread by established players (banks?) that don’t want mobile money to succeed. However, you’re probably right that mobile money companies already have the best incentive to accomplish this change; it’s also hard to get the ear of a central bank as a random foreigner. But there may be something interesting in this space.
Intervention 4 (accounts for ID-less people): this is interesting, although I believe that at least in WAEMU, it’s already possible to use mobile money without an ID with low transaction limits (you can receive at most ~$400/mo). Still, a lot of people want to send/receive more than that, and helping people with paperwork to get a replacement ID is likely to be very helpful in other ways too :)
Intervention 5 (starting agencies): In Wave’s experience, better access to agents is the #1 driver of mobile money growth (at least until a system is so big it hits geographic saturation here). Most mobile money systems also end up working with third-party providers of agent services because they don’t have the organizational capacity to manage a huge number of agents themselves. There’s probably room for an org that’s a third-party agent network focused on the poorest areas in a given country which would otherwise be last on the mobile money system’s priority list for expansion.
Intervention 6 (more research): We’ve found good research on other mobile money systems to be hard to come by, but incredibly useful, even just basics like “here is how M-Pesa expanded over time” or “here are some statistics on ZAAD” (these help us a lot with our own expansion strategy). Although the type of research we want is probably somewhat different from the type of research that would be most useful to other consumers of mobile money research.
I would also add another:
Intervention 7—build a better mobile money system:
Despite the fact that M-Pesa started in 2008, mobile money in most other countries in sub-Saharan Africa is kind of crap by comparison (much more expensive, worse service, smaller agent network, etc.) because most telecoms have not even been able to copycat M-Pesa effectively. By executing better, you can speed up the adoption of mobile money.
Mobile money systems have network effects, meaning that it is somewhat path-dependent which one “wins the market” in a country. Most current mobile money systems that win are the ones offered by monopoly telecoms, so they end up both charging a lot themselves, and also entrenching the telecom’s monopoly. If you were to, say, start an EA mobile money system that wasn’t telco-affiliated, and preferred to lower prices rather than raise them at scale, you could generate a lot more surplus.
If anyone is excited about that, Wave is hiring for many roles, especially engineers—you can contact me here or at ben@wave.com :)
1) Informed, low cost advocacy to improve Mobile Money services for the poor and extreme poor might be impactful. This is something my organisation can explore in Cameroon.
2)Most people who don’t have an account, in environments where Mobile Money is available, don’t need it or don´t feel they need it. Could it be because they are in fact too poor for it? If this is the case it could be a useful indicator for targeting in cash transfer and humanitarian programs.
3) Lastly, supporting agents to become agents might be the most promising, I got the same feedback from a fellow development worker.
However, I was thinking of a traditional development project, we map out places, find poor people, help them set up Mobile Money booths and give them capital to start, while Brian’s reply seems to be about a profit-making venture acting as a sort of middle men facilitating the process. Which approach is more interesting?
Hey Marc, cool that you’re thinking about this!
I work for Wave, we build mobile money systems in Senegal, Cote d’Ivoire, and hopefully soon other countries. Here are some thoughts on these interventions based on Wave’s experience:
Interventions 1-2 (creating accounts): I think for most people that don’t use mobile money, in countries where mobile money is available, “not having an account” is not the main blocker. It’s more likely to be something like
They don’t live near enough to an agent
Mobile money charges fees that is too high given the typical amounts the person wants to send
They don’t trust the service
They don’t trust the agent they live near
They can’t read, so it’s hard for them to use the app (they would have to memorize the UI)
Intervention 3 (lower restrictions): In countries that don’t have a way of using mobile money without an ID, that’s an extremely valuable thing to advocate for. Also, at least for Wave, our users constantly ask for higher transaction limits than the central bank allows us to give them. Both of these policies are probably at least somewhat based on FUD spread by established players (banks?) that don’t want mobile money to succeed. However, you’re probably right that mobile money companies already have the best incentive to accomplish this change; it’s also hard to get the ear of a central bank as a random foreigner. But there may be something interesting in this space.
Intervention 4 (accounts for ID-less people): this is interesting, although I believe that at least in WAEMU, it’s already possible to use mobile money without an ID with low transaction limits (you can receive at most ~$400/mo). Still, a lot of people want to send/receive more than that, and helping people with paperwork to get a replacement ID is likely to be very helpful in other ways too :)
Intervention 5 (starting agencies): In Wave’s experience, better access to agents is the #1 driver of mobile money growth (at least until a system is so big it hits geographic saturation here). Most mobile money systems also end up working with third-party providers of agent services because they don’t have the organizational capacity to manage a huge number of agents themselves. There’s probably room for an org that’s a third-party agent network focused on the poorest areas in a given country which would otherwise be last on the mobile money system’s priority list for expansion.
Intervention 6 (more research): We’ve found good research on other mobile money systems to be hard to come by, but incredibly useful, even just basics like “here is how M-Pesa expanded over time” or “here are some statistics on ZAAD” (these help us a lot with our own expansion strategy). Although the type of research we want is probably somewhat different from the type of research that would be most useful to other consumers of mobile money research.
I would also add another:
Intervention 7—build a better mobile money system:
Despite the fact that M-Pesa started in 2008, mobile money in most other countries in sub-Saharan Africa is kind of crap by comparison (much more expensive, worse service, smaller agent network, etc.) because most telecoms have not even been able to copycat M-Pesa effectively. By executing better, you can speed up the adoption of mobile money.
Mobile money systems have network effects, meaning that it is somewhat path-dependent which one “wins the market” in a country. Most current mobile money systems that win are the ones offered by monopoly telecoms, so they end up both charging a lot themselves, and also entrenching the telecom’s monopoly. If you were to, say, start an EA mobile money system that wasn’t telco-affiliated, and preferred to lower prices rather than raise them at scale, you could generate a lot more surplus.
If anyone is excited about that, Wave is hiring for many roles, especially engineers—you can contact me here or at ben@wave.com :)
Thank you for this extremely informative response. This was way beyond my expectations!
These are my most important takes:
1) Informed, low cost advocacy to improve Mobile Money services for the poor and extreme poor might be impactful. This is something my organisation can explore in Cameroon.
2)Most people who don’t have an account, in environments where Mobile Money is available, don’t need it or don´t feel they need it. Could it be because they are in fact too poor for it? If this is the case it could be a useful indicator for targeting in cash transfer and humanitarian programs.
3) Lastly, supporting agents to become agents might be the most promising, I got the same feedback from a fellow development worker.
However, I was thinking of a traditional development project, we map out places, find poor people, help them set up Mobile Money booths and give them capital to start, while Brian’s reply seems to be about a profit-making venture acting as a sort of middle men facilitating the process. Which approach is more interesting?