The Mobile Money Ecosystem in Kenya

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An Emerging Platform: From Money Transfer System to Mobile Money Ecosystem

Presentation at IPA Kenya Seminar "Banking at the Poor", hosted at Strathmore University, Nairobi Kenya

https://www.poverty-action.org/sites/default/files/invitation_banking_the_poor_1.8.2011.pdf

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  • Network Infrastructure: - Past networks - canals, road, railroad, electricity, telecommunications, internet etc. brought new ways of moving people, goods, energy, information - have an effect on the economy - markets are transformed, existing firms restructure and new ones emerge to capture new opportunities - Mobile money is a network infrastructure for storing and moving money between various actors, clients, business, government, financial service providers.Platform: - Mobile money is exhibiting characteristics of a platform - bringing together financial services providers and clients - providing them a core functionality which they can transact - can be incorporate into different financial products - platforms have power to stimulate innovations and change existing business models e.g. internet, financial and commercial exchange Platforms and infrastructure require scale to make a significant impact.
  • - Lots of attempted innovations going on, but still in early stages- Not clear whether the poor are being reached by this or not
  • The Mobile Money Ecosystem in Kenya

    1. 1. An Emerging Platform:From Money Transfer System to Mobile Money Ecosystem<br />Jake Kendall<br />Bill and Melinda Gates Foundation<br />Philip Machoka<br />United States International University<br />Clara Veniard<br />Bill and Melinda Gates Foundation<br />Bill Maurer<br />University of California, Irvine ~ Department of Anthropology<br />
    2. 2. INTRODUCTION<br />Overview of MPESA money transfer<br />13.8m registered users<br />26,000 retail agents<br />290 Pay-bill partners<br />Kshs 47billion P2P transfer in March 2011<br />Kshs. 800billion cumulative value of transaction<br />- Source: Safaricom, March 2011 <br />
    3. 3. Source: Safaricom <br />
    4. 4. Mobile Money as:<br />Network infrastructure<br />Platform<br />
    5. 5. What we set out to do.<br />How market players are harnessing MPESA platform for new services?<br />What are the emerging ecosystem of MPESA enabled services?<br />
    6. 6. How we went about it:<br />conducted a landscaping exercise through Internet research and phone calls <br />Had a mini-conference in Nairobi on January the 14th, 2011 <br />brought together some financial service providers and IT service firms who have begun specializing in MPESA product integration<br />
    7. 7. What we found out<br />a significant integration of mobile money into products and services by pre-existing financial institutions in Kenya - “integrators”<br />a number of technology firms have sprung up to facilitate these integrations between financial service providers back end systems and the new mobile money platform - “”bridge builders”<br />a number of innovative new business which have created financial services operating solely over mobile money - “ innovators”<br />
    8. 8. Integrators :<br /> - most financial service providers in Kenya joining mobile money platforms as a channel for their clients to make deposits and withdrawals from bank accounts.<br /> e.g. <br /> - Equity – MKESHO<br /> - Family Bank<br /> - Merumwalimu SACCO <br />
    9. 9. Innovators:<br /> - new entrepreneurial ventures with purely mobile based business<br /> e.g.<br /> - Jua Kali Association<br /> - UAP insurance company partnered with the Syngenta Foundation<br /> - ChangamukaMicrohealth Ltd.<br />
    10. 10. Bridge-builders<br /><ul><li>Financial service providers and other business integrating with MPESA
    11. 11. (software developers and integrators specializing in MPESA platform integration)
    12. 12. e.g.
    13. 13. - Tangaoletu – SpotCash
    14. 14. - KopoKopo</li></li></ul><li>Institutions integrating to existing products and those launching news ones cite:<br />Increased outreach<br />Lower costs in reaching poor clients<br />
    15. 15. Integrating challenges with mobile money <br />Price of P2P transfer is still high<br />Difficulty in integrating to MPESA API’s<br />Challenges of integrators faces with new clients<br />Build trust<br />Educate<br />Cross sell new products<br />Reinforce rapport <br />
    16. 16. ?????????<br />Have we correctly identified the main barriers ?<br />What is needed to “kick start” the market?<br />If these barriers were to improve, would there be some other barriers to serving the poor that will emerge?<br />Will there be an ecosystem of Mobile Money enabled financial services reaching the poor in large numbers or is it just a dream?<br />Which players will be innovators who will make this happen? Fis? Telcos Startups? Or Everyone at once? <br />
    17. 17. THANK YOU<br />

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