Green & White. Mobile Money in Pakistan and beyond

This week I traveled into Karachi, Pakistan for the annual Mobile Commerce summit. This year the title sponsor was UBL (United Bank Limited), a new entrant to the Mobile Financial Services domain and one egger to follow in the foot steps of fellow domestic competitors MCB Mobile and easyPaisa. 

This annual event is always a delight to attend and easily pulls Mobile Financials Services heavy weight Hannes van Rensburg, CEO of Fundamo. Pakistan has been good for Fundamo, we have seen great success from two very different approaches to the market. But what impresses me most about Pakistan is showing what has been labelled "The Perfect Storm", a timely coming together of a number of market dynamics in a way that no other country in the world has managed, including Kenya. The country has any number of progressive thinking bankers sitting next to a banking regulator keen to enable healthy competition, in market with all the right demographic indicators. It also had a Telco with a crystal clear vision of how Mobile Money would succeed in Pakistan's unbanked population. The result is two highly successful businesses that openly recognize they have each targeted different segments of the market and that long term, their ecosystems must interact to drive mainstream adoption. Today MCB Mobile & Easypaisa are the benchmark in Pakistan which has inspired action from many of Pakistan's other players.

Another first for the industry was the opening panel session, which saw the Deputy Governor of the State Bank sit next to the Director of the PTA (Pakistan Telecom Authority) and then proceed to publicly speak of real cooperation and a vision for creating a positive healthy regulatory market that not only enables those wishing to enter the Mobile Money space, but also foster healthy competition without creating a fragmented market. Something I am positive was music to the ears of the VISA delegates at the summit.

A true highlight was hearing the story from Zahir on Roshan's Mobile Money journey in neighboring Afghanistan. A country completely war torn after 30 years of war. A country with almost non-existent infrastructure, no land lines, only 45 ATMs of which 43 don't work, very few roads and a hugely informal cash based financial ecosystem. Roshan's journey through this not only opens your eyes to the pure simple perspective of the world as an Afghan, but it also reminds you not to take basic things for granted. Such was the case when Roshan realized that 70% of the Afghan Police Force were illiterate, and hence couldn't read the SMS that told them that their salary had been paid. Or that the police force salary would go up to 35% simply by removing the middleman.

Zahir also spoke of industry evangelist Jan Chip Chase, who recently jumped on a motorbike with a camera and a translator to deeply engage the Afghan people in an effort to understand their needs. Coupled with Jan's amazing photographic skill, this turns out to be one of the most captivating market case study you'll ever read. (The Mobile Frontier http://janchipchase.com/content/presentations-and-downloads/the-mobile-frontier/). A research project that I am sure his former employer's, Nokia, security policies would have frowned upon. Speaking of which, Nokia's Mobile Financial Services unit popped up at the summit with an interesting insight into their vision for bringing enriched customers experience and the value of a handset manufacturer to the Mobile Money ecosystems of Pakistan. Does this mean Nokia Money is coming to Pakistan?

All in all the summit was a positive injection of industry excitement and evidence that even the world's most advanced Mobile Financial Services market is still looking for ways to raise the bar and continue to push to be a benchmark for other countries.

Lastly, a huge thanks goes out to Owais Zaidi from Access Group, who took us out on a local food adventure. Where my taste buds and tummy were shown Nihari with brain and marrow, Rubberi on Burns Road and the famous Paan stalls, the clean versions of course. Adventures like these are key for international professionals to get out of the Hotels and fancy restaurants to see exactly how the locals live.

I look forward to next year, and encourage those in the industry to try and make time to visit Pakistan.

On the couch with Rensburg

Yesterday I had the pleasure of spending time with a mentor of mine, Hannes van Rensburg of Fundamo. Hannes and I share a enthusiasm for innovation that sees mobile fused with financial services at a time in which there is limited full scale business's to justify the industry's existence. We will often have discussions that venture into the possibilities and challenges of our chosen field. I thoroughly enjoy these discussions, particularly when the happen at Fundamo HQ in Cape Town. A city that is now close to my heart after developing a personal obsession with their signature wine, the Pinotage.

Relationships like this are rare in the Mobile Financial Services industry, given the relative immaturity of the industry. Thought leaders are usually lightly spread across organizations and usually in competitive situations, such as competing businesses, consultancies or technology vendors. This is a complete contrast to our related industries of either Mobile Telecommunications or Banking, where deep multi-generational maturity provides thought leaders with dozens of options when it comes to industry guidance or visionary discussions. Which leaves us questioning, where pioneers find their inspiration, sound board or mentor in the absence of those with reference experience.

Each thought leader in this space has his personal passion ideas. The ones that manifest over the  years into clear visions that eventually the individual feels compelled to act on. Hannes and I love to bounce the latest state of our ideas off each other, as we close pollinate our knowledge in the ongoing pursuit of our visions.

So I'd like to take a few moments to recognize the individuals that have helped shape who I am today. Their contributions to my development have proven time and time again to be invaluable. Firstly with have Lynn Rock, now in 38th year with ANZ Bank in Australia. This is an inspiring woman that started with the bank back when they had to write manual account journals, but has continued to refresh her mind in the ongoing pursuit of excellence. Lynn has seen technology come and go, but continues to show that you can teach an old dog new tricks.

Joseph Seychell, isn't a always remembered with positivity. But this is a guy that was prepared to challenge the norms of a conservative organization. Joe lead ANZ head first into some crazy thinking such as Monte Carlo risk calculation and consolidated counter party decision making in the highly tense world of financial markets. Joe's imprint on me continues to shine through, as I challenge an industry to adapt, evolve and extend.

Brad Jones, who I actually first meet during my Seychell days, gave me the gift that changed my life. Absolute trust in my abilities. Brad, I and a few others landed in Cambodia to catch a concept known at the time only as SMS Banking. Something that would later become a business close to my heart, WING Money. One of the first Bank Led Mobile Money businesses in the world, and one that would maintain commitment to a socially responsible agenda around financial inclusion. When we landed on the ground we had nothing, and I mean nothing. We had to find offices, buy computers and hire local staff. We were forced to make it up as we went alone, cause there was no precedence for what we were doing. But I loved every moment of it, it stretch the boundaries of my creative mind. Brad trust in me during this time, built an invincible resolve in me to chase the impossible with a belief that anything was possible. It also gives me great pleasure to see Brad continue in the industry.

Only through continuity in the industry will brilliant minds likes these help drive Mobile Financial Services through it's decades of immaturity into a thriving main stream market.

Now time to find a bottle of red

Bridging the success gap... Mobile Money, Emerging Markets to Developed

Many would recognize the amazing success emerging markets have witnessed over the past six years in the deployment and adoption of Mobile Financial Services. We have seen the success of M-PESA in Kenya, followed by the drive of G-Cash in the Philippines. We have seen MTN attack a group wide strategy with absolute conviction, while Pakistan has seen the rise of both Mobile Operator and Bank Led models in a single market. But why has this success never been translated to developed markets? Why have we not seen adoption rates in markets like the US, Europe, and Australia. Because if you look closely at the market, both Uganda and Australis have similar numbers of cash based transactions.

Having personally seen many of these emerging market successes, I feel that the developed world has a great deal to learn from the success of their poorer cousins. But it appears that there is a clear inability to execute on these learnings.

I put a challenge to the world of Financial Services to taken Mobile Money business models of the world and apply it to the US, or the UK, and I think you'll find that if you analyze the numbers, there is a greater chance of ROI in these markets, where transaction amounts are higher and people are willing to pay for convenience. 

But what are these learnings? Here are a few insights that can easily be replicated:

1. Simplified Money services. not complex transactional accounts with a multitude of expensive channels. Just a simple wallet for everyday money needs. Buying milk, the newspaper, a coffee. Small simple transactions.

2. Lighter incentivized eco-systems: Avoid the expense of the current card/POS networks to deploy a lighter POS network that runs across already present mobile devices. And offer incentives in the eco-system that reduce your cost or risk or cash management

3. Replace the cash, not the cards. There have been dozens of attempts to replace the cards we already carry. But we need to look at the cash, why do people carry cash? How do they use it? How can you intermediate these transactions?

Get these three right, and you'll have a successful Mobile Money deployment anywhere in the world, which includes developed countries. I'll even help if there is anyone keen.