Mobile Money: Is it reaching its potential?

Last updated: 20 March 2014

Mobile money has a lot more to offer than meets the eye. It is not just a way to facilitate financial transactions; it’s having a substantial impact on economic development.

For example, Meneske Gencer, founder of mPay Connect, blogger, and author of Mobile Money Movement, found that mobile money is increasing household GDP in emerging markets significantly. Similarly, Citi CEO, Vikram Pandit, believes mobile money has “the potential to improve lives, create jobs and catalyze new enterprises” that will have an effect not just on emerging markets but on the global economy as well. With all the benefits of mobile money, providing service reliability in developing and developed markets is essential to maximize its potential.

Over recent months, several incidents of system failures related to mobile finance have popped up around the world, from Kenya to Britain. Kenya’s mobile money system, M-Pesa, currently controls over half of the country’s mobile money market, yet the strained system is struggling to meet the demands of the millions of mobile money users. Frequent service disruption caused by an overload of transactions has created a number of dissatisfied subscribers.

Numerous Kenyans have taken to Twitter to vent their frustrations about the service outages and how they have been left without access to their funds. A similar situation ensued in the UK when millions of NatWest clients were unable to access their accounts. NatWest cited “technical problems” as the cause of the 3-day system malfunction. No matter whether it’s a developing or developed country, an unbanked or banked population, the sentiments are the same: frustration that something we depend on every day is “out of service.”

The common culprit in these recurring connection problems appears to be a performance issue. Both incidents were provoked by a technical failure caused by a lack of adapted technology to the core system because the demands are exceeding the capacity of the current platforms.
What is the solution to this problem? The underlying mobile money platforms must scale easily to provide the service expected by consumers. Scalability is imperative to a successful deployment of mobile money in both developing and developed countries.

Last month, Gemalto’s Mobile Payment Platform was benchmarked by Oracle as “demonstrating outstanding performance and scalability”. We believe exciting advancements in technology will improve the quality of mobile money worldwide, and create new sources of investment, growth, and revenue. The question to ask is whether or not the efforts will be made to integrate the technology necessary to optimize benefits?