Scaling Mobile Money

This paper addresses the need for mobile retail payment systems to scale up and reach a critical mass of customers, and discusses the elements necessary for doing so.

Mobile money, a form of branchless banking, can help improve financial access by leveraging existing infrastructure, converting fixed costs to variable costs, operating on a usage-based revenue model and harnessing customers need for convenient, secure and reliable remote payments. Mobile money systems struggle to achieve scale incrementally because they need to garner high number of clients to attract other clients, simultaneously attract customers and stores and build trust.

The article presents the case of M-PESA, Kenya, to illustrate the necessary conditions for success, and highlight measures for avoiding the sub-scale trap. It identifies key prerequisites for a mobile money system to move from zero to critical mass. They include:

• Identifying and targeting customers pain points to drive early adoption and usage;
• Creating buzz and building trust through aggressive marketing campaigns;
• Greasing the merchant channel through adequate compensation and incentives;
• Ensuring a consistent customer experience.