Perspectives on mobile payments from Silicon Valley to South Asia…

I recently returned to Silicon Valley after some client work I did in South Asia.  In preparation for a recent presentation with the Harvard Business School Club of NYC, I was reflecting on my experiences from this trip and within mobile payments for the past 5 years.

Here are some of thoughts. 

1. Just as mobile leapfrogged fixed line in emerging markets… Just as clean energy will leapfrog the traditional grid fossil fuels in places lacking in infrastructure… So too will mobile payments leapfrog traditional banking in emerging markets. It’s happening and will continue to occur.

It occurs to me that there’s an interesting analogy with mobile payments and the path computers took from mainframe to distributed computing.  As industries and technologies advance, we are going “off grid” in the way we accomplish things.  So, too, is the concept behind mobile payments/branchless banking away from the core banking centers to distributed agents/mobile phones in conducting transactions.

2. We need to stop shoving technology into a market that doesn’t have a need, no matter how cool the technology is. Think customer need FIRST, NOT how do we use this cool technology?

I used to work with a team thinking of new ways consumers may want to use mobile payments.  I now know we were heading in the wrong direction.  If there’s no significant pain point, there’s no adoption potential.
3. How to begin assessing a market? Look where the money flows occur.

Understand segments, needs, and the flow of cash to begin to understand how to address a market.
4. Cash is where it’s at. Cards work perfectly well. Spend time on addressing cash because of the high value proposition associated with digitization of money.

Unless there is a SIGNIFICANT value proposition in mobilizing cards, it’s not worth the focus.  Go where there’s friction… cash is it.
5. Developing markets are heavily cash-dependent and have a LOT of people. Focus there.

Google “World Economic Pyramid” if you’ve never seen it.  The overwhelming majority of these people have no access to bank accounts.

6. Developed world has “developing markets” in its back yard. Target cash-dependent segments and services if you target anything.

The US has 70-100 million unbanked and underbanked people.  A portion of them are migrant workers who display similar characteristics to their families back home.  They may have different reasons why they’re unbanked, however.
7. Mobile payments are real and the only way to know this is to go to the markets and experience mobile payments first hand (or at least work with someone who has).
8. Invest in next gen. What happens once mobile payments systems are in place?

Mobile payments is the infrastructure needed as a base for all other industries.  By digitizing money, what new industries are needed and possible?

9. There’s still a LOT of room for innovation. Just because Safaricom hit a home run doesn’t mean we should assume that model is the best one for other markets.

There are many variables at play in determining the right path, and there are new value  proposition that meet unmet needs that have yet to be uncovered.
10. It’s important to understand timing is everything. Just because something didn’t work 3 years ago, doesn’t mean it won’t work now.

If real estate is about Location, Location, Location… New ventures are about Timing, Timing, Timing!



-Menekse, mPay Connect Consulting


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