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Valuable lessons about mobile money & emerging markets

reloadable prepaid card on zipzap smart mPOSIn eight years, Kenya’s mobile market has galvanised an economic revolution. M-Pesa, is a mobile money system that allows those without a bank account to transfer funds as quickly and easily as sending a text message. Never before has there been this level of financial inclusion in an emerging market, where people can not only transfer money to each other but also buy electricity, airtime, and withdraw cash – all without a traditional bank account.  M-Pesa contributes US$14.6-billion to Kenya’s economy each year, and is so successful that the mobile money system has spread to Tanzania, Lesotho, Mozambique and India.

Keep your eye on Eastern Europe.

Another emerging market that’s fully embraced the mobile money market is Eastern Europe. Huge volumes of remittances (which are cross-border payments, often between family members) are sent to and from Eastern European countries – totalling approximately US$ 6.3 billion.

According to the Financial Times, Bulgaria, the Czech Republic, Hungary, Latvia, Lithuania, Poland and Romania send outbound remittances worth US$6.3-billion, a 350% increase from 2002. Notably, the Czech Republic sends US$2-billion outbound, which is the same amount as their UK counterparts. This presents an opportunity for entrepreneurs to provide efficient and sustainable mobile payment solutions. Already, Vodafone has an e-money license to operate M-Pesa there.


Mobile money is being used for more than just cash.

M-Pesa in Kenya originally started out as a tool to transfer money between people. It’s evolved into M-Shwari which is a service offering investments, insurance, loans and savings, without having a bank or savings account.

The M-Shwari savings account, for instance, allows customers to save towards a goal and for a time period; their money earns interest until the maturity date. These functionalities have seen M-Shwari gained considerable traction in Kenya – in its first four months, there were 2.3-million subscribers, with 900 000 having active accounts. Similar innovations could coincide with the launch of mobile money wallets in Eastern Europe. Vodafone currently has an e-money license to operate M-Pesa, with the possibility of extending the platform into savings, loans and insurance, like M-Shwari.


The majority of individuals in emerging markets have at least one mobile device, but not a traditional bank account.

Like Africans, Eastern Europeans are mobile crazy. Research done in Romania shows that while everyone has at least one mobile device, one third of the population, or seven-million people, don’t have a bank account.


Mobile money innovations will win the day.

The key to developing emerging markets is to make money accessible. Hence, mobile money products must have the capability to store, withdraw, deposit and transfer funds. Products like Reload Mobile Money give people access to instant money transfers, the ability to swipe in-store for purchases withdraw cash from ATMs or tillpoints and make prepaid airtime and electricity purchases. Reload can be bought off the shelf, along with daily essentials like bread and milk.


Mobile money that’s linked with a prepaid debit card offers users even more flexibility.

Mobile money solutions that incorporate both mobile banking as well as Visa cards offer users richer functionality. Besides being able to store, withdraw, deposit and transfer funds via a cellphone, products like Reload work hand-in-hand with a Visa card. Users can withdraw cash at ATMs and don’t pay for in-store card transactions – making this an affordable alternative to traditional bank cards. Users are able to register for online banking, where they can check their balances, view transaction histories, and add beneficiaries.