As the mobile money industry grows and evolves, we are seeing new business models emerge. More and more mobile phone users around the world are finding access to financial services through branchless banking. Here at ID, we’re working to stay on pace with the ever changing risks and opportunities.

The proof that the mobile payment industry is growing and evolving is in the numbers. In 2011, 141.1 million users worldwide will transfer a forecasted $86.1 billion, according to Garter, Inc. and the Mobile Payment Magazine. Users are up 38.2% from 2010 and the volume of transfers is up a staggering 75.9%. Additionally, SMS and USSD will continue to be the dominant access technologies in developing countries. Money transfers are also driving mobile commerce, which is where the door opens for emerging business models. With new business models, new risks and complexities present themselves simultaneously.

MobiKash Afrika is a mobile commerce service provider. This week, the company launched their mobile banking platform that will be operable across Kenya’s four GSM networks and across participating banks. This will allow users to pay for services and products with their phones and cash-in/cash-out at any one of the anticipated 3,000 agents. MobiKash will be vying for market share with the dominant M-PESA, which has about 20 million customers. On the other hand, MobiKash has the advantage of offering cheaper transaction fees than M-PESA and is operable across all mobile networks.

Whether it’s mobile network operators offering mobile money transfer services, or banks offer mobile banking technology in partnership with a MNO, the African continent is a breeding ground for mobile money operations. In fact, Visa recently purchased Fundamo, a South Africa mobile financial services infrastructure provider, for $110 million. African countries “are making large strides forward in this space,” fostering new mobile banking models for the banked, unbanked, and under-banked. In a continent with an ever increasing mobile penetration rate (currently at 50%) and an estimated 70% unbanked or under-banked, access to financial services via mobile phone is the ideal solution. The CEO of FNB Africa, Danny Zandamela, said, “Mobile money services offer an inexpensive and convenient method to bridge the gap between the banked and unbanked. The African continent, by pure virtue of being one of the fastest growing mobile phone markets in the world, is the ideal environment for such innovation.”

Pakistan is one of the first countries in the world to introduce regulations specifically designed to encourage branchless banking. The regulations allow for a variety of business models and an extended agent network to deliver financial services on behalf of banks. The State Bank of Pakistan recently amended the regulations to further encourage branchless banking and increase access to financial services for the poor. Biometric fingerprints are no longer required to open an account, only a digital image of the account opener. Additionally, there are no maximum account balances and there have been substantial increases in transaction limits. Finally, a new “Level 0” account allows more people to open an account without physical paperwork. According to Mr. Mansoor Siddiqui, the Director for Banking Policy & Regulations, the changes were necessary to keep pace with the rapidly evolving industry.  


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