How to make mobile money

Gartner explains how to make mobile money in emerging markets

July 15, 2009

Gartner explains how to make mobile money in emerging markets

Mobile money services have huge potential in markets where mobile penetration vastly outpaces the number of people with bank accounts, according to Gartner.

However, service providers, including banks and mobile operators will need to invest substantial efforts in building an “ecosystem” to make the service work within the local regulatory and business environment.

Gartner has identified seven steps to enable providers to make successful mobile money offerings in emerging markets. These offerings include:

Step 1 — Talk to the Regulator
Regulators must be involved from an early stage to gain their support, especially in markets where mobile money offerings have not been established.

Step 2 — Define the Business Model
In general there are four business models:

–  Led by the Bank — Banks in this case take most of the responsibility and treat mobile operations as a “bit pipe” that provides mobile access.

– Bank-Operator Joint Efforts — Banks and mobile operators establish a partnership or joint venture with each party taking a fair share of responsibilities.

– Led by the Operator — Operators in this case assume all responsibility, including float accountability and gain the highest returns of all business models, but it also assumes the highest risks.

– Led by a Third Party — This is usually led by a solution provider that offers the service across operators.