Issue 5 October 2008
What started as a social
experiment around financial
inclusion unintentionally became
a commercial goldmine with a
strategic imperative to roll out
to another 12+ countries.
According to Dr. Nick Hughes, Head of International The GSMA Market Acceleration Program is a set
Mobile Payment Solutions for Vodafone Group, this of financial, strategic consulting, and technology
is “an uptake which has surprised us but shows the facilities that is being rolled out globally. The program
need in the marketplace for very simple, secure, leverages the experience and assets of GSMA partners
and low-cost services.” Over $276m had been (Accenture, Fundamo, Western Union, and Gemalto)
moved through the system via person-to-person to make a mobile money platform available for other
(P2P) transfers (transactions between individuals) companies to pilot at a subsidised cost.
at a present rate of 20 transactions per second. In
March 2008 alone, transfers were over $46m and The GSMA realises that international remittances
current monthly transaction volume within Kenya has between the developed and emerging markets can
surpassed Western Union’s total global transaction be a bridge. Worker remittances are recognised as
volume. The implications are that M-PESA is replacing a killer mobile application and there is much activity
normal, daily cash transactions which makes sense in this space as a result, including in the traditional
given that Kenyans do not normally have any other banking arena. For example, in October 2007, they
means of digitising money such as cheques or cards. announced an agreement with Western Union to
facilitate the development of cross-border mobile
To put this in context, there are only 4 million bank money transfer services. This was soon followed by
accounts in Kenya overall. Vodafone accidentally one with MasterCard. In both cases, a mobile interface
became the largest “bank” (technically, deposit holder) to existing infrastructures is being employed; physical
in that nation within 18 months of launch. And at the outlets in the case of Western Union and cards in the
current rate of growth, they will have more accounts case of Mastercard.
than the entire banked population in a similar time
frame. What started as a social experiment around
financial inclusion unintentionally became a commercial
goldmine with a strategic imperative to roll out to
another 12+ countries
2, 3
.
oTher oPeraTors
Vodafone is just the first of the global operators to
go down this route. The Global Systems for Mobile
Association (GSMA) is the operators’ global trade
organisation. It represents more than 750 mobile phone
operators and over 180 manufacturers (equating to
over 86% of the world’s mobile phone connections),
including AT&T, Orange, Vodafone and T-Mobile. It
covers 218 territories and countries across the globe.
10 | Perspectives on the future
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