Last week saw an all-day event at the World Bank on Mobile Innovations for Social and Economic Transformation. The sessions covered the use of mobile phones in everything from governance to education. I attended a morning session on mobile innovations in financial services in which speakers covered issues on payments for ex-combatants in the DRC, Government-to-Person (G2P) payments, and pre-paid value card solutions.
However, the most interesting remark in this session came not from one of the speakers but the invited commentary. Why is it that we see network-centric players dominating this field in some cases (e.g. M-Pesa) or independent firms (e.g., Celpay, the provider of payment solutions for ex-combatants in DRC)? Andi Dervishi, the Global Practice Lead for Investments in Payments at IFC, put it very simply: "The banks are asleep at the wheel."
Why is this the case, when mobile banking should be the natural territory of banks? Andi's explanation is that banks were probably burned in the past trying to extend access to finance to the unbanked when current mobile technologies were not available. The upshot: the World Bank and IFC are now well placed to step into the gap to provide finance for network operators and independent players who want to get into this field.
Update: The Economist contains a special report in the latest edition on mobile phones in emerging markets.