Dozens of mobile money services have now launched in Africa, Asia and Latin America. As the industry grows, participants are asking one simple question: is mobile money a profitable business? The answer is vital to many people with various responsibilities, from C-level executives to front line practitioners.
This section includes articles, blog posts and other resources that operators may find useful.
1. IS MOBILE MONEY A PROFITABLE BUSINESS?
Is There Really any Money in Mobile Money?
Author: Paul Leishman, GSMA
This article examines 16 months of financials from Uganda’s MTN MobileMoney, a growing service in East Africa. It produces key insights on profitability, including direct and indirect benefits, the cost and more.
The Economics of Branchless Banking
Author: Ignacio Mas, The Bill and Melinda Gates Foundation
Ignaico Mas presents a vision of a banking infrastructure that is commercially viable, safe, trusted, and accessible to all. This report also discusses the incentives driving each participant in the value chain, and highlights the importance of driving volume through the system.
2. OTHER RESOURCES
GSMA Webinar on Mobile Money Pricing and Commissions
Author: Paul Leishman and Camilo Tellez, GSMA
These videos are designed to provide mobile operators with a clear understanding of the process that’s used to develop mobile money prices and commissions. It covers a mix of theory and real world examples, and simulates the development process for an imaginary service. (Available in Spanish).
Commissions
Generic Mobile Money Financial Model
Author: GSMA
This financial model was developed by GSMA in 2010. It helps mobile operators judge the profitability of their p2p transfer and airtime top-up services. It’s free to download and may help practitioners develop their own models.
Author: Peter Lyons, Oscar Gruss & Sons
Recorded at Mobile Money Summit 2010 in Rio, Peter Lyons discusses issues like ROI for operators, and the affect distribution networks can have on a working capital cycle.
CGAP Agent Network Financial Model
Author: CGAP
This toolkit includes a financial model to help project revenues in a branchless banking service and demonstrate how these are shared between members of the supply chain.
Related Blog Posts
- Mobile Money for the Unbanked
GSMA position on the taxation of mobile money transactions in Kenya
Last week the Kenyan government announced a plan to apply a 10% excise duty on the fees charged by MNOs for mobile money transactions. This action would risk jeopardizing the mobile money market because it would mean a significant increase of the cost of the s... - Mobile Money for the Unbanked
What is the business case for banks to get into mobile money? The example of DBBL in Bangladesh
I recently had the opportunity to talk to Mr Abul Kashem Md. Shirin, the Deputy Managing Director of Dutch-Bangla Bank Limited (DBBL), a bank serving over 2.5 million people in Bangladesh. A couple of years ago, DBBL was facing a challenge, as it was unable to... - Mobile Money for the Unbanked
Insights on the Economics of Mobile Money: M-PESA Key Revenue Driver for Safaricom
This is a guest post written by Mireya Almazán and Megan Oxman, from The Bill & Melinda Gates Foundation. M-PESA continues to make headlines, increasing revealing insights on the economics of mobile money. Recently released financial statements from Sa... - Mobile Money for the Unbanked
GSMA Hosts Webinar on Mobile Money Pricing and Commissions - Part 2 TBD
This is the second part of the GSMA webinar on the topic of mobile money pricing and commisions . This interactive session was designed to help mobile money practitioners capture best practices from deployments around the world. In this post, we are sharing th... - Mobile Money for the Unbanked
GSMA Hosts Webinar on Mobile Money Pricing and Commissions - Part 1
On December 14th, the MMU programme at the GSMA hosted a webinar on the topic of mobile money pricing and commissions. This interactive session was designed to help mobile money practitioners capture best practices from deployments around the world. In this fi... - Mobile Money for the Unbanked
What operational metrics should an MNO monitor and manage?
Before a mobile money service can turn a profit, it must first be operationally healthy. This may sound obvious (okay, it definitely sounds obvious), but today many mobile money practitioners are unable to report with clarity whether their service is operation... - Mobile Money for the Unbanked
How can MNOs ensure their tariff and commission models are well designed?
Note: For more information on pricing and commissions, please join Neil Davidson and Paul Leishman for a Webinar on December 14th at 9:00am BST. To register for this webinar, please email mmu@gsm.org For a mobile money service to scale and achieve profitab... - Mobile Money for the Unbanked
How can an MNO manage costs to achieve profitability?
When most people hear the phrase “to turn a profit, we need to manage our costs”, they usually take it to mean “to turn a profit, we need to reduceour costs”. But when it comes to mobile money, practitioners have found that some costs can be done away ... - Mobile Money for the Unbanked
How Significant are Direct Revenues to Profitability?
So far on this blog, we’ve written about the role that indirect benefits play in enabling a mobile network operator (MNO) to turn a profit from a mobile money service – but what about the most obvious source of value, direct revenue from customer fees? Aft... - Mobile Money for the Unbanked
How Significant is ARPU Uplift to Profitability?
In my last post, I wrote about the significance of churn reduction benefits to the profitability case for mobile money; and when people talk about indirect benefits, ‘reduction in churn’ is usually closely followed in the same sentence by ‘uplift in ARPU... - Mobile Money for the Unbanked
How significant are churn reduction benefits to profitability?
If you’ve ever attended a mobile money conference, you’ve likely heard a speaker tout the potential benefit of ‘reduced churn’ that mobile money can unlock for an MNO. But what you probably haven’t heard is whether any service has actually delivered ... - Mobile Money for the Unbanked
How Significant are Airtime Distribution Savings to Profitability?
One of the most important sources of value for mobile network operators (MNOs) who offer mobile money services is the ability to sell airtime using the platform. When a customer buys airtime using mobile money rather than with scratch cards, operators unlock v... - Mobile Money for the Unbanked
How much must an MNO invest in mobile money before turning a profit?
In my last post I began to describe MTN Uganda’s MobileMoney, a service that has turned an exciting corner into cash-flow positive territory. But the CFO of any mobile network operator (MNO) knows that simply getting out of the red on a month-to-month basis ... - Mobile Money for the Unbanked
Is There Really Any Money in Mobile Money?
From Afghanistan to Zambia, mobile network operators (MNOs) in developing countries are launching mobile money services at a rapid pace. Yet while their enthusiasm to enter this business is clear – to date 83 deployments have been launched and another 82 are... - Mobile Money for the Unbanked
Getting the Agent Commission Model Right
By now, most mobile money practitioners recognize that for a service to succeed, the agents that support it need to be making money. In recent months, we’ve written about how mobile network operators have carefully managed their customer/ agent ratios over t... - Mobile Money for the Unbanked
The Hidden Costs of Inactive Users
Around the world, mobile money deployments are racking up large numbers of new customers. But as certain commentators have noted, these numbers are sometimes misleading. In some deployments, a gap is opening up between the number of registered users and the nu...
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