Archive for June 21st, 2009
Critical success factors of a money-transfer service in telecom
Following up my intention of writing a brief essay related to money-transfer, and considering that we will be participating in the Mobile Money Summit in Barcelona next week, we wanted to share our view of the critical success factors for ensuring success in any money-transfer or mobile payment service.
In the last several years the mobile money products (mobile banking, mobile payments and money transfers) have received a lot of attention from mobile operators, regulators and trade organizations. Specifically in the case of money transfers, there have been a number of success cases, notably M-pesa by Safaricom in Kenya and Smart Padala by Smart Communications in the Philippines. International experiences suggest that money transfer services thrive in markets where (A) there is low penetration of banking services and (B) there is an important inflow of international remittances.
Different African and Asian markets show different completion levels of these pre-conditions. Just to give some examples, you can find: 1) Algeria, a country where the estimated 2008 inward remittances were $5.4 billion annually and the banking penetration rate is at 31%4, 2) Kenya that demonstrates low rate of penetration of banking services at 10% and 3) the Philippines holding the 3rd position in the world by inward remittances at $14.6 billion in 2008.
