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There is an inflection point an ignition between month 13 and month 26 after launch. To estimate the length it took mobile money schemes in each of the countries to reach critical mass and ignite, we analyze the evolution, since the moment mobile money schemes start, of variables that indicate usage of these schemes. Such variables could be number of transactions, value of transactions or active users of mobile money schemes. These variables are not always available and when any was available we use total registered mobile money users. This variable is a poor substitute of the previously three mentioned variables, but it is the one we used in most cases since it’s the more widely available of the four.

Figure 2 There is an inflection point an ignition between month 13 and month 26 after launch. To estimate the length it took mobile money schemes in each of the countries to reach critical mass and ignite, we analyze the evolution, since the moment mobile money schemes start, of variables that indicate usage of these schemes. Such variables could be number of transactions, value of transactions or active users of mobile money schemes. These variables are not always available and when any was available we use total registered mobile money users. This variable is a poor substitute of the previously three mentioned variables, but it is the one we used in most cases since it’s the more widely available of the four.

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Figure 1. Ignition and Implosion compare the evolution of mobile money schemes in these countries we identified when mobile money schemes first started, took that as the birth of the mobile money ecosystem, and then compared countries at similar ages for the mobile money ecosystem.
Figure 1. Ignition and Implosion compare the evolution of mobile money schemes in these countries we identified when mobile money schemes first started, took that as the birth of the mobile money ecosystem, and then compared countries at similar ages for the mobile money ecosystem.
Table 1. Mobile Money Scheme Successes and Failures Based on a detailed investigation into the similarities and differences between these countries and icross the categories we reached several key findings. The first finding is the most robust and important. Heavy regulation is usually fatal to igniting mobile money schemes in a country. The key difference between the countries that clearly succeeded and clearly failed is stark All but one of the eight countries that ignited and grew explosively had relatively light regulation on mobile money schemes. Only one of those required the mobile money schemes involve a bank for anything other than just hold funds. Seven of the countries imposed minimal limitations on who could operate a mobile money scheme and all generally had relatively light KYC requirements and minimal restrictions on who could setve as an agent. All but one of the eight countries that have failed to ignite had relatively heavy regulation on mobile money schemes. They required that banks take the lead role in operating the mobile money scheme and conversely prohibited mobile network operators from doing so. They then typically imposed other heavy burdens including stringent KYC requirements and restrictions on who could operate as an agent.
Table 1. Mobile Money Scheme Successes and Failures Based on a detailed investigation into the similarities and differences between these countries and icross the categories we reached several key findings. The first finding is the most robust and important. Heavy regulation is usually fatal to igniting mobile money schemes in a country. The key difference between the countries that clearly succeeded and clearly failed is stark All but one of the eight countries that ignited and grew explosively had relatively light regulation on mobile money schemes. Only one of those required the mobile money schemes involve a bank for anything other than just hold funds. Seven of the countries imposed minimal limitations on who could operate a mobile money scheme and all generally had relatively light KYC requirements and minimal restrictions on who could setve as an agent. All but one of the eight countries that have failed to ignite had relatively heavy regulation on mobile money schemes. They required that banks take the lead role in operating the mobile money scheme and conversely prohibited mobile network operators from doing so. They then typically imposed other heavy burdens including stringent KYC requirements and restrictions on who could operate as an agent.
Table 2. Socioeconomic Data on Countries Selected for Analysis
Table 2. Socioeconomic Data on Countries Selected for Analysis
Table 5. Mobile Money Scheme Successes and Failures To provide a richer understanding of the sources of success and failure we examine each of the groups in more detail. Table 5 (which repeats Table 1 for the convenience of the reader) lists the countries for each of the four categories of success and failure.
Table 5. Mobile Money Scheme Successes and Failures To provide a richer understanding of the sources of success and failure we examine each of the groups in more detail. Table 5 (which repeats Table 1 for the convenience of the reader) lists the countries for each of the four categories of success and failure.
Table 6. African Countries that had ignited in the Study and MNOs All of these countries are desperately poor. Based on the 2013 International Monetary Fund (IMF) ranking of 186 countries, with a higher number reflecting a lower rank, they rank between 173 for Uganda and 149 for Kenya. Not surprisingly they have very poor physical infrastructure. Of particular relevance for mobile money, they have extremely low penetration of banking and poor physical transport in terms of road systems and automobiles. Table 7 lists the ranking of these countries based on IMF data on per capita GDP and World Bank data based on gasoline consumption per capita and where available percent of paved roads and on banks per 100,000 adults. What people do have in these countries are mobile phones. For completeness the table shows the number of mobile phone subscribers per capita. All but one of the countries in which mobile money schemes have ignited and have seen explosive growth are in Africa, and several of those are clustered in a mid-eastern crescent that goes from Somaliland to Zimbabwe. We conjecture that this concentration of the strong successes is the result of the geographic diffusion of the successful methods for starting mobile money schemes that started in Kenya combined with these countries having other features in common. A related factor concerns the experience of the MNOs who have led these efforts. Table 6 lists the African countries we had examined that ignited strongly and identifies the MNO, where applicable, for each system.
Table 6. African Countries that had ignited in the Study and MNOs All of these countries are desperately poor. Based on the 2013 International Monetary Fund (IMF) ranking of 186 countries, with a higher number reflecting a lower rank, they rank between 173 for Uganda and 149 for Kenya. Not surprisingly they have very poor physical infrastructure. Of particular relevance for mobile money, they have extremely low penetration of banking and poor physical transport in terms of road systems and automobiles. Table 7 lists the ranking of these countries based on IMF data on per capita GDP and World Bank data based on gasoline consumption per capita and where available percent of paved roads and on banks per 100,000 adults. What people do have in these countries are mobile phones. For completeness the table shows the number of mobile phone subscribers per capita. All but one of the countries in which mobile money schemes have ignited and have seen explosive growth are in Africa, and several of those are clustered in a mid-eastern crescent that goes from Somaliland to Zimbabwe. We conjecture that this concentration of the strong successes is the result of the geographic diffusion of the successful methods for starting mobile money schemes that started in Kenya combined with these countries having other features in common. A related factor concerns the experience of the MNOs who have led these efforts. Table 6 lists the African countries we had examined that ignited strongly and identifies the MNO, where applicable, for each system.
Table 7. Rankings of Infrastructure Characteristics for Explosive Ignition Countries Not surprisingly, airtime top up is one of the major ways in which people use mobile money. Rather than going to a top-up location people can use the funds in their mobile money account to top up their phones. Beyond that the mobile money schemes in these countries have focused on sending and receiving money and solving the friction of moving money between families located in geographically separate regions of the country with a major use case being transferring money between urban and rural areas. Large amounts of domestic remittances are transferred using the mobile phone. In Kenya, Uganda and Tanzania, 90 percent, 68 percent and 60 percent respectively of domestic remittances are made with mobile phones.*8
Table 7. Rankings of Infrastructure Characteristics for Explosive Ignition Countries Not surprisingly, airtime top up is one of the major ways in which people use mobile money. Rather than going to a top-up location people can use the funds in their mobile money account to top up their phones. Beyond that the mobile money schemes in these countries have focused on sending and receiving money and solving the friction of moving money between families located in geographically separate regions of the country with a major use case being transferring money between urban and rural areas. Large amounts of domestic remittances are transferred using the mobile phone. In Kenya, Uganda and Tanzania, 90 percent, 68 percent and 60 percent respectively of domestic remittances are made with mobile phones.*8
Table 9. Main Mobile Money Schemes and Partnerships in Countries with Explosive Growth These countries are geographically dispersed with only one in Africa. The range of per capita GDP is quite large, from a low of US$1,275 in Pakistan to a high of US$2,791 in Philippines. Airtime
Table 9. Main Mobile Money Schemes and Partnerships in Countries with Explosive Growth These countries are geographically dispersed with only one in Africa. The range of per capita GDP is quite large, from a low of US$1,275 in Pakistan to a high of US$2,791 in Philippines. Airtime
Table 10. Regulatory Model for Each Country that had Weak Ignition 52 Demand Study of Domestic Payments in the Philippines, BANKABLE FRONTIER ASSOCIATES (2010). Available at: http://bankablefrontier.com/wp-content/uploads//documents/BMGF.PDP-FinalReport-dec2010.pdf 53° Quarterly Branchless Banking Newsletter Apr-Jun 2014, STATE BANK OF PAKISTAN, July 2014. Available at: http://www.sbp.org.pk/publications/acd/BranchlessBanking-Apr-Jun-2014.pdf
Table 10. Regulatory Model for Each Country that had Weak Ignition 52 Demand Study of Domestic Payments in the Philippines, BANKABLE FRONTIER ASSOCIATES (2010). Available at: http://bankablefrontier.com/wp-content/uploads//documents/BMGF.PDP-FinalReport-dec2010.pdf 53° Quarterly Branchless Banking Newsletter Apr-Jun 2014, STATE BANK OF PAKISTAN, July 2014. Available at: http://www.sbp.org.pk/publications/acd/BranchlessBanking-Apr-Jun-2014.pdf
Table 11. Main Mobile Money Schemes, Investors and Partnerships in Countries th Weak Ignition result mobile money use in these countries is very low. These countries are in several different parts
Table 11. Main Mobile Money Schemes, Investors and Partnerships in Countries th Weak Ignition result mobile money use in these countries is very low. These countries are in several different parts
Failed to Ignite These countries generally have imposed a variety of regulatory requirements on the mobile money schemes. Table 13 describes the details of the regulatory requirements. By contrast the countries in which mobile money has ignited, and either grown explosively or more slowly, generally have very limited requirements, mainly focused on requiring a 100 percent bank reserve for the electronic money that has been issued. Table 12. Main Mobile Money Schemes, Investors and Partnerships in Countries that
Failed to Ignite These countries generally have imposed a variety of regulatory requirements on the mobile money schemes. Table 13 describes the details of the regulatory requirements. By contrast the countries in which mobile money has ignited, and either grown explosively or more slowly, generally have very limited requirements, mainly focused on requiring a 100 percent bank reserve for the electronic money that has been issued. Table 12. Main Mobile Money Schemes, Investors and Partnerships in Countries that
Table 14. Mobile Money Market Shares
Table 14. Mobile Money Market Shares
Successful mobile money schemes in lesser-developed countries require as we discussed earlier the simultaneous development of a CICO network. Agents are critical for senders to put money into mobile accounts and for receivers to take money out of the mobile accounts. The development of the mobile money schemes and the CICO agent networks go hand in hand because agents require enough volume to serve and senders and receivers need enough agents to participate. The evidence shows, however, that mobile money schemes are able to ignite and grow (explosively or more slowly) with a wide range of agent density. Table 15 lists active agents per 10,000 adults and active mobile subscribers per capita for the countries under analysis where both pieces of information are available. The density of the active agent networks ranges from a low of 1.05 agents per 10,000 adults in South Africa to a high of 48.46 in Kenya. Figure 2 plots the data. It suggests that earlier the simultaneous development of a CICO network. Agents are critical for senders to put
Successful mobile money schemes in lesser-developed countries require as we discussed earlier the simultaneous development of a CICO network. Agents are critical for senders to put money into mobile accounts and for receivers to take money out of the mobile accounts. The development of the mobile money schemes and the CICO agent networks go hand in hand because agents require enough volume to serve and senders and receivers need enough agents to participate. The evidence shows, however, that mobile money schemes are able to ignite and grow (explosively or more slowly) with a wide range of agent density. Table 15 lists active agents per 10,000 adults and active mobile subscribers per capita for the countries under analysis where both pieces of information are available. The density of the active agent networks ranges from a low of 1.05 agents per 10,000 adults in South Africa to a high of 48.46 in Kenya. Figure 2 plots the data. It suggests that earlier the simultaneous development of a CICO network. Agents are critical for senders to put
Table 15. Agents and Active Subscribers
Table 15. Agents and Active Subscribers
There is an inflection point in month 45 after launch.
There is an inflection point in month 45 after launch.
Kenya There is an inflection point in month 11 after launch.
Kenya There is an inflection point in month 11 after launch.
Rwanda There is an inflection point between month 29 and month 35 after launch
Rwanda There is an inflection point between month 29 and month 35 after launch
There is an inflection point in quarter 5, between.13 and 15 months after launch
There is an inflection point in quarter 5, between.13 and 15 months after launch
There is an inflection point during fourth year of operations, between month 36 and month - aince launch
There is an inflection point during fourth year of operations, between month 36 and month - aince launch
Ugand: There is an inflection point in month 10 since launch.
Ugand: There is an inflection point in month 10 since launch.
There is an inflection point 2 months after launch
There is an inflection point 2 months after launch
Ghana Countries that had ignited but weakly so
Ghana Countries that had ignited but weakly so
There is an inflection point between month 36 and month 48 after launch. Is is difficult to assess an inflection point with the data available. It should had been between nonth 0 and month 25 after launch.
There is an inflection point between month 36 and month 48 after launch. Is is difficult to assess an inflection point with the data available. It should had been between nonth 0 and month 25 after launch.
It is difficult to access an inflection point with the data available. Using data of registered sets, inflection point should had been between 0 months and 31 months after launch.
It is difficult to access an inflection point with the data available. Using data of registered sets, inflection point should had been between 0 months and 31 months after launch.
Related topics:
Network EconomicsApplied EconomicsMobile MoneyMobile Payments
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