M-money services have flourished in some countries, both developed and developing, but not in others. Why? What are the drivers for success and the barriers that block success? How can one recognize whether a new market will blossom if given a strategic push or whether a situation is too challenging?
This study was undertaken to increase our understanding of how m-money systems develop and to address key issues in scaling up m-money adoption. It first reports on a survey of user and nonuser perceptions and the types of demand expressed for m-money. Then it looks at several parameters that could spur or block m-money development, such as national regulatory environments, current access to financial services, and the requirements of potential service providers to run m-money services as viable businesses.
Four countries—Brazil, Nigeria, Sri Lanka, and Thailand—each of which represents a different world region, socioeconomic situation, and financial context, were visited and analyzed in terms of m-money business models, major money flows and demand, user and nonuser perceptions and behavior, regulations, and agent networks. We also studied the two most successful m-money countries—Kenya in the developing world and Japan in the developed world—to compare them with the four countries in our study. The United States was included as a reference point and as an advanced country in terms of electronic payment (e-payment) cards (e.g., debit and credit).
Based on our findings, we propose the best possibilities for investment in m-money in the four countries studied and can identify areas that hold little promise under current conditions. We have also developed a theoretical framework and methodology that is a powerful tool for assessing any country’s m-money development potential. It provides insight into the type of business model most appropriate in a specific country context, the sort of partnerships needed, the type of regulatory environment required to enable m-money development, and—finally—the developmental paths that m-money might take.
