Papua New Guinea: The Limits of the Mobile Payments Model
Like several Postal operators around the world, the Post Office in Papua New Guinea (Post PNG) has come to play an important role in providing access to financial services in rural and remote areas in PNG. Through its network of post offices and agencies, Post PNG provides a domestic remittance service, Salim Moni Kwik (“Send Money Quick”), which enables clients to transfer cash from post office to post office. In 2011, Post PNG launched a mobile version of Salim Moni Kwik, “MobileSMK,” allowing customers to conduct person-to-person (P2P) money transfers using the mobile phone. Post PNG also offers office space to Australia New Zealand Bank (ANZ), which has recently opened bank branches in two post offices on the Post PNG network.
Over a short period of time, PNG has seen a rapid uptake of mobile technologies for financial services, and a range of service providers have introduced mobile money services in the last three years. MobileSMK was the second mobile money service to emerge in PNG, and five other mobile money services have been launched since then. Other mobile money operators (MMOs) include commercial banks, microfinance banks, as well as the main mobile network operator (MNO), Digicel.
Post PNG represents an interesting case of the early adoption of mobile technology for the provision of postal financial services. Despite the initial success in rolling-out MobileSMK, Post PNG has faced several obstacles in the operation and management of the service. Significant resource constraints, coupled with intense competition within the mobile money environment in PNG, have led to significant losses for the Post. Specifically, the Mobile SMK appears to be cannibalizing revenues from the existing SMK service, resulting in reduced overall revenues, and significant increase in costs. Although this experience is not unique to Post PNG, it does indicate that for Postal operators in particular, a more cautious approach may be necessary when adopting new technologies for the expansion of financial services. This is crucial for the sustainability of the Post, as well as for the sustainability of postal initiatives aimed at promoting financial inclusion.