· Uncertainty when it comes to the regulatory guidelines hampering the growth of m-commerce · Industry characterized by fragmented ecosystem that currently gives mobile money only an intermediary role· Next level of growth to come from improved consumer confidence and uptake of mobile payments and financial products
Uncertainty in regulatory guidelines for mobile money, coupled with limited cooperation among m-commerce providers, is hampering the industry from unlocking its full potential, according to Rajiv Bhatia, Head of EMEA Sales for Ericsson’s M-Commerce division.
Bhatia – who was speaking at the Mobile Money Africa conference held in Johannesburg on Wednesday May 28, 2013 - said the industry needs to get the basics right to build trust amongst end users who are sometimes still wary about the security and reliability of mobile money offerings.
”As Mobile Money uptake grows, there is a need for true enterprise grade platforms which provide strong security, ability to handle high transactions load, flexibility to enable efficient business processes and open APIs to connect towards the eco-system,” said Bhatia.
Bhatia’s calls for closer collaboration and clearer regulations to enhance uptake of M-Commerce are in recognition of the fact that the number of people with bank accounts is significantly smaller than those with mobile phones.
The 2012 World Bank estimates indicate that only 1.5 billion people in the world have a bank account even though more than 1.7 billion people who don’t have a bank account have access to mobile phones. Currently, Africa accounts for 15 of the top 20 countries in the world in terms of mobile money usage even though an estimated 80 per cent of adults in the continent are still unbanked.
“In order for the industry to advance and realize these opportunities it is crucial that M-Commerce providers build trust among end users who are still wary about the security and reliability of mobile money offerings,” noted Bhatia, adding that in some countries, the uncertainty around clear regulatory guidelines for mobile money is hampering the launch and takeoff of scalable solutions that contribute towards the financial inclusion of the unbanked and underserved.
“Experience has shown that the mobile money eco-system grows much faster in countries where regulators and central banks draft out clear and specific guidelines for Mobile Financial Services. This further allows different actors in the eco-system to collaborate more easily and leverage on each other’s’ strengths to not only launch services faster and in a cost efficient manner, but to also contribute towards enabling financial inclusion benefits towards the unbanked and the underserved,” said Bhatia.
Bhatia also noted the fragmentation in the industry, saying that interoperability is key for the mobile money eco-system to grow and thrive.
He added: “The current services are not well connected to each other and the market is fragmented, both technically and in terms of rules and regulations. With most mobile money services, users are limited to transacting with subscribers within the same service, and this limited interoperability hampers the growth and mass adoption of mobile money”
He added that operator agents are crucial in increasing public uptake of mobile money by educating users about the benefits of mobile money. “Agents fill the dual role of ambassador and educator,” Bhatia said. “They guarantee availability of funds, as the option of withdrawing mobile money is so crucial. At the same time they often constitute the main face of the service.
Bhatia said there is currently an opportunity to increase usage of m-money, particularly in the area of payments, salary disbursements and savings. To achieve this, it is important to stimulate consumers’ interest in keeping their money within the system.
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