In 2009, McKinsey conducted the largest study of its kind and sized the market for mobile money through to 2012. The following statistics are quite striking:
-The # of unbanked people with mobile phones is expected to increase from 1 billion (2009) to 1.7 billion (2012), a CAGR of 19%
- 290 million more previously unbanked people could be using mobile money services by 2012, bringing the global total to 364 million unbanked using the services
- Mobile network operators stand to earn $7.5B in direct and indirect revenues from serving the 364 million clients ($5B in direct and $2.5B 5ndirect revenues)
This has served as an impetus for large players like Western Union to reveal an international mobile strategy. And it's not just Western Union. It's Fidelity, Fiserv, Gemalto, Verifone, Alcatel Lucent, Amdocs, and the list goes on and on.
Which players will win, and what is the criteria for winning? One thing is for sure. Strategies must be market-based. Zambia's mobile needs (e.g. capabilities in money transfers), are far different from Brazil's mobile needs (e.g. capabilities in mobile bill payment). So now the question becomes this:
Is any solution truly scalable?
If the space is so profoundly market-based, can any player develop a solution and walk away with 25% slice of that growing $7.5B pie? Can one player develop deep enough capabilities around the entire value chain to offer a-la-carte mobile services to every market? Or, will we continue to see dozens of market entrants succeed on a small scale?
In my opinion, it's the latter. I believe we'll continue to see both small and large players enter the market, and dependent on their market strategy, partnerships, and technology, all have the possibility of success.
Email opinions to thestroop@gmail.com.
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