Tag Archives: mobile money

Battle of the Mobile Wallets – Who will Win?

A few days ago, Isis announced they inked deals with Visa, MC, and Amex in addition to their previous deal with Discover. This announcement could finally break the impasse in the U.S. market.

So, now we have essentially 4 major plays at stake here…

1. Mobile wallets controlled by the device makers/disrupters: Apple, Google
2. Mobile wallets controlled by the MNOs/ISIS + Sprint
3. Mobile wallets controlled by the retailers / stored value (CorFire + Incomm)
4. Mobile wallets controlled by the banks/networks

I’ll make a few assumptions here… First, I am discounting bar codes as a viable long term alternative to NFC since NFC is a much more secure technology. Second, I don’t believe that micro-SD is a commercially viable alternative for distribution of the Secure Element as the consumer experience doesn’t work. Assuming both of these points, without partnerships with the MNOs or device manufacturers, the banks/networks and the retailers will not be able to control the secure element.

So the next question is: will the device manufacturers or the MNOs be more bank-friendly?

Apple – no one knows much. Whoever is working on the wallet must be locked up in the basement somewhere.
Google – Google has said they don’t care about the transaction revenues anymore (This is not too generous since neither do the payments providers with the Durbin Act.) Everyone knows that the money will be in the ads/offers/promotions, etc. so now the question is… Will Google play ball with the banks in this area? If not, they may be out of luck.
ISIS / Sprint – After much ado and many years of tribulations, the MNOs have finally realized they will not create a new network, but will leverage the existing rails and bank infrastructure. This is a smart move. With the latest announcement regarding Amex, MC, Visa in addition to Discover, their strategy finally sounds like it’s a sound one to pull the right ecosystem together.

So, now the big question now is… who will ultimately control the secure element in the U.S.? …the device manufacturers or the mobile network operators? Given the changing power dynamics in the US market, the answer to this question is not as obvious as it once was.

One thing is for certain, however — without thinking about the perspective of your partner sitting across the table, this ecosystem is not going to come together. Those who learn this quickly, will get the critical mass of players to be successful. Those who take a hard stance in the market will likely be left in the dust.

ISIS Retrenches Efforts in Mobile Payments

On May 4, 2011, news articles indicated that the JV that was started by AT&T (NYSE:T), Verizon (NYSE:VZ), and T-Mobile will be scaling back their efforts around mobile payments with a less aggressive approach to the market. This should not be a surprise given customer behaviors and market dynamics.

ISIS (NASDAQ:ISIS)’s strategy to date has not been well-defined publicly. Many believed that the three MNOs were teaming up to create a new mobile payments rail, but their announcements with Discover and Barclays (NYSE:BCS) suggested that they would be riding the “4th” rail in the US market and teaming with Barclays for issuance. While this approach made sense for trailing Discover to try to gain some market share, the question remained how the least adopted rail by merchants would overcome adoption hurdles it has had in the past and what additional value the MNOs would bring to the table… both for the merchants and the consumers.

Given all this, today’s announcement of the “scale back” to be simply a mobile wallet that holds existing cards of the consumers is not a surprise. However, the question still remains what additional value add ISIS will bring to merchants and consumers. Meanwhile, other very disruptive partnerships are being put into place. It will not be surprising if new announcements are made in the very near future that could create a further setback for the ISIS efforts.

-Menekse Gencer
Former Director of Mobile Payments, PayPal
CEO, mPay Connect – a mobile payments consulting service

The Mobile Money Movement(TM): Catalyst to Jumpstart Emerging Markets

In the spring of 2010, I was asked to speak at Columbia’s Center for Tele-Information on the economic impact that Mobile Money will have in emerging markets. This presentation was the genesis for a whitepaper which I recently published with The Innovations Journal by the MIT Press.
To download the whitepaper
If you are interested in hearing the original presentation that was given at Columbia University, fast forward to 22:30 on this video.

Latest Blog posted by UN Foundation’s mHealth Alliance

For a preview of the upcoming whitepaper to be published by The World Economic Forum, please click here.

Tech@State – Mobile Money Public and Private Partnerships

I recently had the honor to present at The State Department’s Tech@State event for Mobile Money on the intersection of Mobile Money with Food Security. It was great to see the level of interest and momentum that the government has behind this, recognizing the mobile money will be the key to financial inclusion world-wide. I was joined by a number of other mobile money experts. The recap can be found here.
The Food Security/Mobile Money presentation can be accessed on slideshare. Two critical videos to watch to gain a better understanding of the use of mobile money for food security are:
Mobile Money Vouchers by Mobile Transactions
Mobile Micro-Insurance by Syngenta Foundation

At the end of the event, I joined my colleagues to discuss the opportunities and challenges that lie ahead and reiterated that I hope this is just the beginning of a dialog between private-public sectors to help advance this industry. The video can be found here.
Stay tuned on a number of items…
1. Working on the intersections of mobile money and mHealth for the mHealth Alliance (United Nations Foundation) and The World Economic Forum
2. Upcoming event on September 13, 2010 in San Francisco as a Bay Area recap of Tech@State and “Around the World in 80 Minutes” to demonstrate some mobile payments systems from around the globe. Registration for this event will be announced on my LinkedIn Group: Mobile Payments Series – mPay Connect

Is the US missing the mark when it comes to mobile payments?

On April 9, 2010, the New York Times published an article entitled, “The Triumph of the Ordinary Cellphone” where the editor posed the following questions: “What if, globally speaking, the iPad is not the next big thing? What if the next big thing is small, cheap and not American?” In this article, he suggests that the United States may be missing the mark when it comes to mobile payments. A consultant to mobile money initiatives globally, I agree with the assessment and explain why.
I have been focused on the mobile money/banking space since 2005 and ran PayPal Mobile’s Business Development efforts for North America for two years (2007-2008) prior to starting my own consultancy mPay Connect (www.mpayconnect.com.) During my time at PayPal, I learned about Kenya’s mPesa system and visited East Africa where it became quite clear to me that there was an enormous chasm between Silicon Valley/US and the rest of the world/emerging markets when it came to mobile money.

As an employee of PayPal at the time, what I came to realize was that PayPal has all the right infrastructure, number of accounts (80+ million) and knowhow for successful money movement. Taking that infrastructure and using the mobile channel is quite natural. We launched many innovative mobile technologies to leverage the PayPal system. In fact, the most recent PayPal iPhone Bump is getting much recognition for its innovation. Here’s the issue: Banked customers with high PC penetration rates don’t need mobile payments for most of their payments activities. Let’s compare the $1.5 billion volume that PayPal estimates this year to get through the mobile channel with the $300+ million/month that Safaricom’s mPesa was enjoying in Kenya last year where the average GDP is $550 per year. Let’s face it, mobile payments won’t change the lives of people who are fortunate enough to live in a highly sophisticated market with financial services infrastructure where they have bank accounts and 5.4 cards in their wallets already, but it will have a profound impact for the rest of the world.

Mobile payments are valuable when it comes to cash replacement. That’s where the mobile phone becomes extremely important… formalizing the informal economic sector (unbanked) by providing accounts for the first time and enabling financial services to those out of reach of banks.

I recently returned from some work in Bangladesh where this was apparent. With unbanked statistics at 85%+, providing access to money services conveniently through the phone is critical. Anyone who has seen the world economic pyramid understands that Bangladesh is not an anomaly.

In Silicon Valley, we focus on the next cool technology which advances us forward, but when it comes to mobile money in the US (for banked customers), what problem are we really solving? If the Silicon Valley continues to focus on the US market with banked customers for mobile money, it most definitely will lose out on this market as wealthy investors from oil countries invest their money into startups in South Asia, the Middle East, and Africa. In the U.S., it’s great that we are innovators for the high end devices… iPhone, iPad, etc. When it comes to mobile money, however, we need to stop thinking like Silicon Valley “techies” and shoving technology into a market while searching for a need. Rather, let’s begin to understand what mobile money means abroad, focus on markets where there’s a demand, and meet that demand with a technology (even if it’s low-tech!) to solve the users’ needs.


Menekse Gencer founded mPay Connect, a consulting service for clients seeking to launch mobile payments. Prior to mPay Connect, Ms. Gencer led PayPal Mobile’s Business Development efforts in North America. She has an MBA from Wharton, and a BA in Economics from Harvard University, and was previously featured on the cover of Fortune Small Business Magazine. Ms. Gencer is the founder of the Mobile Payments Series(TM) for professionals in the mobile money industry. She has lectured and moderated mobile money panels associated with Harvard Business School, Wharton MBA, and Columbia University. She will participate in the World Economic Forum on Mobile Finance, Economic Development. Ms. Gencer is a speaker at Money Mobile Transfer conferences abroad and a board advisor to several startups in the mobile money industry.

Mobile Money: The Catalyst to Jumpstart Emerging Markets

Recently, I had the opportunity to speak at Columbia Business School’s Institute for Tele-Information (CITI) on the topic “Mobile Money: The Catalyst to Jumpstart Emerging Markets.” In preparation for this topic, I posed the question “How do you think mobile money will impact the economies of emerging markets?” to the LinkedIn Group: Mobile Payments Series – mPay Connect where industry experts and economists were able to weigh in on their thoughts… a special “thank you” to those who contributed to this thinking and an invitation to others to be part of helping to drive this market forward by contributing their thoughts to this group.

As a consultant to businesses around the world, seeking to launch mobile money systems and as a former macro-economics major from Harvard, I wanted to bridge the economic theory with the reality of what is happening at the ground level in the emerging markets I have visited. My conclusion: Mobile Money will be a catalyst to jumpstart these markets because it draws on the forces inherent to mobile money itself, namely:

1. it is a new industry that is bringing investment/innovation into these emerging markets;

2. it is both a foundational infrastructure itself to enable other new industries to receive payments as well as a service that requires additional building blocks to work. These building blocks, in turn, support new industries (such as identity management for marketing or credit);

3. it leverages another infrastructure, namely mobile, which is the most ubiquitous data transmission device in the history of mankind (and penetrates to people far out of reach of banks);

4. it addresses taking cash in the informal financial sector and formalizing it into capital deposits which can spur further economic activity (such as investments); and, finally,

5. it relies on electronic transmission, which eliminates the friction and costs associated with cash (namely cost of physically moving cash from one place to the next and the lost productivity in failing to transact as needed due to this time issue.)

Iqbal Quadir, the founder of GrameenPhone in Bangladesh, states that “connectivity is productivity” whereby a study has shown that in emerging markets mobile connectivity profoundly impacts GDP (a 10% rise in mobile subscribers will raise GDP between .6% and 1.2%.) Mobile money exacerbates this phenomenon because it is the enabler of business. If mobile connectivity is the “how” to link data for commerce and business, mobile money is the “why”… so that we can earn an income. Together, the data transmissions to spur economic activity and the mobile money payments services are already unleashing a new wave of entrepreneurism in these emerging markets in an unprecedented manner with new industries leapfrogging those in developed markets (mobile money leapfrogs traditional banking similar to the way mobile leapfrogged fixed telephony and off-grid clean energy is leapfrogging grid fossil fuels.)

Of course the reality of this situation is still less optimistic than it may appear. Kenya is the mobile money success example that all other countries strive to replicate, but none have done so to that degree yet. Without the infrastructure of roads and postal services, for instance, it’s difficult for the Masai to sell/mail their wares on eBay-like global marketplaces. Similarly, regulatory constraints may limit what can be done in many markets. Successfully launching mobile money systems is no small feat… one which requires a deep level of understanding of what it means to combine and execute mobile, payments, and emerging technology operationally and in a manner that will be adopted by a new customer base. Finally, the fragmented nature of these new mobile money systems, mainly due to mobile network operators who choose to roll out closed systems, will continue to limit the usefulness of the payments systems due to lack of interoperability domestically and internationally.

Similar to the hype I witnessed in Silicon Valley in the late ‘90s during the dot com boom, so too is there a high degree of hype in this industry, this time in a much more global arena. Make no mistake, as was seen in the dot com aftermath in the early 2000’s, there will be many failures and consolidations in mobile money, but the few who do survive will drive the industry forward. It has been said that people overestimate the impact of a new industry/technology in the 5-year time horizon, but underestimate its impact over a decade. Although the short term mobile money (r)evolution will continue to face the challenges listed above, I am optimistic that, with the focus the world is seeing in the mobile money industry, over the next decade we will see the profound impacts this industry, infrastructure, and enabler will have on those markets most in need of the economic ignition.

Menekse Gencer founded mPay Connect, a consulting service for clients seeking to launch mobile payments. Her consulting service advises banks, mobile network operators, and third parties on go-to-market-strategy, product design, and business development. Her market expertise extends from North America to emerging markets such as Bangladesh and sub-Saharan Africa. Prior to founding mPay Connect, Menekse led PayPal Mobile’s Business Development efforts in North America for two years during which time she closed PayPal’s first mobile network operator deal to launch PayPal Send Money on Sprint’s mobile wallet.

Menekse has an MBA from Wharton and a BA in Economics from Harvard University and was previously featured on the cover of Fortune Small Business Magazine for her innovative startup in emerging technology. She is the founder of the Mobile Payments Series(TM) initiative which hosts panel discussions and networking events for professionals in the mobile money industry and has over 345 members in her LinkedIn Group: Mobile Payments Series – mPay Connect. She has lectured on mobile money at events for Harvard Business School, Wharton MBA, and Columbia Business School. She will be a participant at the upcoming World Economic Forum in Africa around the topic of mobile finance and economic development and is a guest speaker at mobile money conferences in Africa, South Asia, and The Middle East. She is a board advisor to several startups in this space.