Mobile money services began with a simple proposition: let’s find a way to send and receive money from a mobile device. No brick and mortar banks, no middle-man. For the world’s poorest populations, where unbanked families rely on a precarious cash economy to subsist, this little idea has had a big impact. Since the first wave of mobile money adoption began a decade ago, 31 emerging markets have seen a marked increase in financial inclusion rates. Today, 272 mobile money deployments are live in 90 countries, processing over $1.3 billion each day.
Propelled by this worldwide momentum, mobile money services are becoming more sophisticated. Their customers, too, have maturing expectations. Although cash-in/cash-out (CICO) transactions are still the most common, other types of digital transactions are growing twice as fast and will soon overtake their enduring but basic transactional ancestor.
The writing on the wall is clear: to earn, keep and deepen their relationships with customers, operators must find opportunities to grow their service offering into new and in-demand areas.
What do users expect of mobile technology today?
As technology improves and people all over the world come to depend on the small device in their hands for much more than airtime, expectations soar. People are increasingly trained to use that device to manage all areas of their lives, from social interactions to, yes, financial transactions.
Think of it like modern-day grocery shopping: you wouldn’t want to visit one store for your eggs, another for your dish detergent, and another for vegetables. Neither does a mobile money customer want one service for managing their digital wallet and another for paying bills, or buying insurance, or managing credit. The most forward-thinking operators—and the ones likeliest to still be here in five years’ time—are those who recognize this expectation and are responding with a “payments as a platform” approach. The stats bear out this prediction: operators who offer a credit, savings or insurance product see 20% more customer activity than those who don’t.
The key to increased value: an ecosystem of partners
Bridging the gap between end users and the merchants and services they rely on is central to the success of a platform-based approach. The GSMA calls this technology “plug-and-play access,” which proposed that mobile operators share their APIs in order to to streamline and standardize third-party connections to mobile money services. Open APIs reduce duplicated effort for those third parties, who can stay focused on their core offering rather than diverting attention to the effort of rebuilding under-the-hood infrastructure.
The end user benefits, too. That’s because this plug-and-play approach creates opportunities for data-sharing across the financial ecosystem. Operators can turn that data into a customized experience for end users, helping them unlock the full potential of their mobile financial service in a way that’s meaningful to them.
To have lasting value in customers’ eyes, mobile money operators need to diversify. Customers want to manage their whole financial lifecycle, from paying bills to managing savings, in a one-stop platform, which requires operators to embrace open APIs and develop trusting relationships with third parties.
The journey is a rewarding one, encouraging symbiosis between partners and creating spaces for innovation and advancement. The destination is rewarding in another way. More than 1.7 billion people still lack access to save and reliable financial services. By adding value to their services and thereby building longevity and flexibility into their business operations, mobile service operators increase their potential to reach those unbanked populations and change more lives, more enduringly.