Mobile Money in Emerging Markets: The Business Case for Financial Inclusion

Mobile money systems offer a dual promise, as an engine for financial inclusion, and as an emerging markets business opportunity for providers. The scale of this opportunity is clearly understood; however, firms seeking to tap the mobile money opportunity are faced with a landscape of unknowns. How will the mobile money value chain work in practice? What do we know about consumer behavior?

To answer some of these questions, and understand how digital payments providers can capture the opportunities while benefiting those without access to financial services, this research has examined the actual financial and transaction data of a sample of mobile money providers, all on a blinded basis. The benchmarking analysis focused most heavily in East Africa, but also included representative companies from both West Africa and Southeast Asia. The main findings from this research include:

• Scale enables ultimate profitability but requires significant up-front spend.
• Regulation can accelerate or hinder ability to grow—or make scale a prize not worth attaining.
• Opportunities for providers will increase as mobile money business models evolve.
• To seize current and future opportunities, providers will need to partner or acquire new skills.