Mobile Money: Catalyst to Jumpstart Emerging Markets

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This presentation was given by mPay Connect at Columbia University for the summit on "Macroeconomics of Mobile Money" by the Columbia Institute for Tele-Information on April 2, 2010. Special thank you to contributors to the discussion on the LinkedIn Group: Mobile Payments Series - mPay Connect.

Published in: Economy & Finance

Mobile Money: Catalyst to Jumpstart Emerging Markets

  1. 1. mPay Connect Consulting Mobile Money: the catalyst to jumpstart emerging markets Special “Thank You” to contributors from LinkedIn Group: Mobile Payments Series – mPay Connect Menekse Gencer Mail: mgencer@mpayconnect.com Skype: meneks80 April 2, 2010 Company: www.mpayconnect.com
  2. 2. agenda 1. background 2. what will be mobile money’s impact GDP? 3. why will it have this impact? 4. recap Columbia University ©mPay Connect, Inc. 4/2/2010 Institute for Tele-Information 2 2 mgencer@mpayconnect.com April 2, 2010
  3. 3. background Columbia University ©mPay Connect, Inc. Institute for Tele-Information 3 3 mgencer@mpayconnect.com April 2, 2010
  4. 4. mobile money = mobile + digital cash Using the mobile phone as a channel to conduct financial services Columbia University ©mPay Connect, Inc. 4/2/2010 Institute for Tele-Information 4 4 mgencer@mpayconnect.com April 2, 2010
  5. 5. from paypal to the masai mobile money for the unbanked + = Columbia University ©mPay Connect, Inc. 4/2/2010 Institute for Tele-Information 5 5 mgencer@mpayconnect.com April 2, 2010
  6. 6. what will be the impact? Columbia University ©mPay Connect, Inc. Institute for Tele-Information 6 6 mgencer@mpayconnect.com April 2, 2010
  7. 7. mobile money will lead to increases in GDP in emerging markets Future GDP Cartogram Columbia University ©mPay Connect, Inc. 4/2/2010 Institute for Tele-Information 7 7 mgencer@mpayconnect.com April 2, 2010
  8. 8. GDP grows when Mobile rises Impact on GDP 1.5% of 10% increase of Mobile Subscribers in Emerging Markets Increase in GDP 1.2% 1.0% 0.6% 0.5% 0% Average India Columbia University Emerging Market ©mPay Connect, Inc. Institute for Tele-Information 8 mgencer@mpayconnect.com April 2, 2010 Source: Vodafone, World Bank
  9. 9. Kenya’s mPesa Example 9 million users, >$300 million/month Columbia University ©mPay Connect, Inc. Institute for Tele-Information 9 mgencer@mpayconnect.com April 2, 2010
  10. 10. why? Columbia University ©mPay Connect, Inc. Institute for Tele-Information 10 10 mgencer@mpayconnect.com April 2, 2010
  11. 11. mobile money stimulates levers of GDP GDP = Consumption + Investment + Government Spending + Net Exports New Infrastructure, More Education More businesses, Greater Investment More net exports & Gov’t Spending New Jobs & Income Increases in Consumption, Savings, Taxes Columbia University ©mPay Connect, Inc. Institute for Tele-Information 11 11 mgencer@mpayconnect.com April 2, 2010
  12. 12. why? mobile money = 4 forces at work Mobile Electronic = = Data Efficiencies Ubiquity Infrastructure Capital = = Foundation Catalyst Columbia University ©mPay Connect, Inc. Institute for Tele-Information 12 12 mgencer@mpayconnect.com April 2, 2010
  13. 13. Mobile first ubiquitous 2-way data transmission device Mobile Subs $5+ Billion Columbia University ©mPay Connect, Inc. Institute for Tele-Information 13 13 mgencer@mpayconnect.com April 2, 2010
  14. 14. Mobile reaches those currently with no access to financial services dependent on cash World Economic Pyramid Banks 500 Mill *>$20k/yr Unbanked, 2 Billion Mobile *$3260 to $20k/yr Opportunity: 1.7 Billion in Today 2012 4 Billion 2012 Source: CGAP *<$3260/yr or <$9/day Source: World Resources Institute (*Individual Annual Income: 2005 USD Purchasing Power Parity) Columbia University ©mPay Connect, Inc. Institute for Tele-Information 14 mgencer@mpayconnect.com April 2, 2010
  15. 15. Electronic remote transmission replaces human transport time for cash eliminate “shoe leather costs” Columbia University ©mPay Connect, Inc. 4/2/2010 Institute for Tele-Information 15 15 mgencer@mpayconnect.com April 2, 2010
  16. 16. Electronic less friction than cash enables ability to transact more often smoothing transaction = money received at time of need Columbia University ©mPay Connect, Inc. 4/2/2010 Institute for Tele-Information 16 16 mgencer@mpayconnect.com April 2, 2010
  17. 17. Nature of Electronic digitization and ability to track= less “leakage” and crime, more tax revenue Columbia University ©mPay Connect, Inc. Institute for Tele-Information 17 17 mgencer@mpayconnect.com April 2, 2010
  18. 18. Infra- structure mobile payments = enabler of new industries mHealth, off-grid energy, trading Mobile Payments Columbia University ©mPay Connect, Inc. 4/2/2010 Institute for Tele-Information 18 18 mgencer@mpayconnect.com April 2, 2010
  19. 19. Infra- structure building blocks = enabler of new services Marketing Mobile Payments Identity Management Columbia University ©mPay Connect, Inc. 4/2/2010 Institute for Tele-Information 19 19 mgencer@mpayconnect.com April 2, 2010
  20. 20. Infra- structure new industry & innovations spur investment = new jobs over 140+ mobile payments initiatives Columbia University ©mPay Connect, Inc. Institute for Tele-Information 20 20 mgencer@mpayconnect.com April 2, 2010
  21. 21. Capital formalizing capital increase in savings, credit informal to formal financial services Columbia University ©mPay Connect, Inc. Institute for Tele-Information 21 21 mgencer@mpayconnect.com April 2, 2010
  22. 22. mobile money = catalyst to GDP growth in emerging markets GDP = Consumption + Investment + Government Spending + Net Exports New Businesses & Net Exports Greater Investment New Jobs & Income & Gov’t Spending Increases in Consumption, Savings, Taxes Columbia University ©mPay Connect, Inc. Institute for Tele-Information 22 22 mgencer@mpayconnect.com April 2, 2010
  23. 23. challenges 1. Lack of other infrastructure 2. Government & regulatory policies 3. Lacking capital markets 4. Fragmented / Lack of interoperability Columbia University ©mPay Connect, Inc. Institute for Tele-Information 23 23 mgencer@mpayconnect.com April 2, 2010
  24. 24. Questions? Menekse Gencer mPay Connect Consulting • Wharton MBA ‘98, Harvard BA Economics ’93 For more information mgencer@mpayconnect.com www.mpayconnect.com www.twitter.com/mpayconnect Columbia University ©mPay Connect, Inc. Institute for Tele-Information 24 mgencer@mpayconnect.com April 2, 2010

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