Innovate and Disrupt – With a Slant On Sociology

November 13, 2008

How to Serve the unbanked and underbanked sector using Mobile Networks?

For these unbanked and underbanked audience, I feel the money transfer feature has a higher value/benefit than payment (mobile commerce) model. Because they are not looking to purchase their six pack of beer or clothes or pay for their mobile bill (as they are prepaid – maybe for refills but that is not a major revenue driver) using a mobile handset.

While I don’t discount the potential of mobile commerce aspect, for this particular audience, money transfer becomes the primary drive followed by mobile commerce once MMT has penetrated significantly.

If we focus on money transfer –

Currently most of these are using Money Orders or Western Unions to transfer funds across. Even Paypal doesn’t address their context in the most convenient way – bank authentication and email (which is not as prevalent as mobile).

Then how does one go about build a money transfer functionality for mobile? Well there are many ways of doing it as long as these constraints are taken into account. Here are some of my thoughts …..but have written detailed business concepts around this topic over the past year …..would love to discuss offline if there is interest ….

1. Security and Identity – build security or process in place to make sure that the person receiving the funds is the intended one. How do match someone’s identity when there is NO social security card or government issued ID? This is a critical issue in most of the emerging and developing countries.

2. Eliminate Bank account or Operator dependency – This is very critical. One could start a service and do tie ups with Western Unions and Post offices. Post offices are practically in every village, nook or corner, across the world. If Post offices don’t provide a reliable option, there are many other institutions that might save the day.

3. Make it purely mobile – no dependency on email or PC access – make it completely mobile as the target audience for such a feature might have not access to a PC or have an email account. In developing countries, mobile is lot more pervasive than email/PCs. Or at least make this optional for those who might want to benefit from it.

4. Business Model – how do you make money? There are couple of ways of doing that – You can take the “build the dependency to become a crucial backbone for this use case and make money around this experience” model OR charge your user’s directly. Considering the demographic you are going after, second option might not be the best one ….

I have ran across few companies that are focusing on these aspects but are struggling to build the critical mass and traction ….. at the end of the day this is NOT a technology problem – it is identifying those “change agents” who could make mobile money transfer pervasive in the target demographic ………it is a marketing maven’s challenge to transfer the value and emotion to the target audience.

Thoughts …..

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