Banking on the phone: bank led or operator driven?


A cursory look at mobile banking systems launched in the last five years provides interesting insights. The products on offer range from bank led initiatives such as Wizzit (South Africa), through 50/50 bank-operator JVs of which MobileMoney (Standard Bank, MTN - South Africa) is a good example to operator centric solutions led by SMART Money (Smart Communications - Philippines) and M-Pesa (Safaricom - Kenya).

Although information around subscriber numbers, revenue per user and transaction volumes is generally unavailable there are rough estimates in the public domain. How do the numbers stack up?

The top performers in terms of subscription are M-Pesa (7 mil), SMART (7 mil) and G-Cash at 1.5 million. All three services are bank agnostic. At the bottom of the table are the bank-led and JV solutions: Wizzit (200k est.) and MobileMoney (150k, 2007 estimate).

Why is there such a staggering difference in subscriber numbers between bank-led solutions and those underpinned by MNOs? One clue is the massive distribution network enjoyed by mobile networks. To match M-Pesa's success for example, a bank-led initiative would need to set up at least 16,000 customer service points - equivalent to the current number of M-Pesa agents.

Unlike the traditional 'pull service' model of banking where the customer seeks out the bank, mobile banking, of necessity, is a 'push service'. Service providers must actively reach out to customers. Pervasive distribution channels maximise success.

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