Financial Inclusion

  • About the book
    • Carol Realini
    • Karl Mehta
    • Book Reviews
  • Audiobook
  • Speaker Info
  • Blog
    • Financial Inclusion
    • FinTech
    • Mobile Banking
    • Entrepreneurship
  • Newsletters
  • Contact
    • Get Involved
Home » Mobile Banking » Mobile Merchant Accounts Must Grow in Emerging Markets

October 21, 2015 By Carol Realini

Mobile Merchant Accounts Must Grow in Emerging Markets

mobile merchant accounts

If only 1 in 10,000 merchants accepted your debit card, would you still carry it, or would you ditch it for cash? The answer probably feels a little obvious: I’d ditch it for cash! That’s because the payments industry represents a “two-sided market”. Someone needs to issue payment instruments to individual consumers and someone needs to acquire businesses through mobile merchant accounts to accept those payments. The value of one side of the market is directly related to the value of the other. 

The above statement holds true across geographies and income brackets, whether we’re talking about Apple Pay in the United States or EVC Plus in Somalia. That being said, how might the average Tanzanian pay for goods and services if only 1 in 10,000 merchants accepted Airtel Money, Vodacom M-Pesa, Tigo Pesa, and Zantel Ezy Pesa (the local mobile money services)? You guessed it… cash!

Why Mobile Merchant Accounts Need to Grow

And that’s exactly the issue: There are hundreds of millions of individual mobile money accounts worldwide, but only a few hundred thousand mobile merchant accounts. As a result, many mobile money services struggle to provide daily relevance to their customers and, in turn, see them immediately withdraw 100% of whatever funds they receive. 

How do we diminish the use of cash? Mobile money providers – and electronic payment providers generally – should begin thinking of merchants, not as a second act to be rolled out years after launch, but as part and parcel of their core offering from day one. Mobile merchant accounts increase the utility of an individual’s mobile money account by giving them more places to use it.

This increases the likelihood that consumers will store value on their accounts. Further, if providers make it easier to pay with mobile money than to withdraw value (e.g. charging a commission to withdraw funds as opposed to paying merchants for free), then people might begin using their accounts multiple times per day. The opportunity to enable electronic payments at the base of the pyramid (BOP) is massive. Merchants stand at the center of that opportunity if provided mobile merchant accounts.

Mobile Money and Merchant Solutions

The development of inclusive financial services is not a solo act. With the success of services like M-Pesa, there is a need for a larger community of actors to realize the broad potential of financial services. Merchants require services that will specifically address their needs, and KopoKopo is helping to make this a reality.

Like an orchestra, where many instruments together make great music, coordinating electronic payments and banking is similar for mobile merchant accounts. Our developed market solutions do that, but the instruments are different, and the number of sections are all from one industry. This orchestra, assembling around the world, has modern instruments and greater contributor diversity.

Looking at the analogy this way, we’ll  serve more peoples’ financial needs.  Complicated? Yes. But accomplishing these goals will happen, as different companies, technologies, and solutions emerge in the marketplace. 

 

This article was written by Ben Lyon, Vice President of Marketing for KopoKopo

Visit KopoKopo:

Twitter

Facebook

LinkedIn

Share this post

  • Click to share on LinkedIn (Opens in new window)
  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to email this to a friend (Opens in new window)

Related

Filed Under: Mobile Banking Tagged With: mobile merchants, mobile money

Search

Informative Newsletter (2X Month)

FREE first chapter of Financial Inclusion at the Bottom of the Pyramid for newsletter subscribers.

Concise news and insights about FinTech, financial services, mobile, and more. Freshly delivered to your inbox. Your email address is never shared.

Recent Posts

  • Fintech Artificial Intelligence Expanding Rapidly in Financial Services
  • Fintech Innovation Infographic Summarizes Growth, Sectors & Directions
  • Global SME Finance Forum: Carol Realini Speaks in China
  • FinTech Growth Up as Bitcoin/Blockchain Funding Rises
  • China SME Growth Linked To Exciting New FinTech Companies
  • Sustainable Development Goal Pioneer Karl Mehta
  • Emerging Market Internet Trends Show India Web Explosion
  • Will India FinTech Startups Create a Cashless Society?
  • Financial Exclusion USA: “Brother, Can You Spare a Bank?”
  • Why is Worldwide Financial Literacy–Rich or Poor–33%?
  • Emerging Country Smartphone Growth Spurting Forward
  • Financial Inclusion Book Shares New Vision – Free Chapter
  • FinTech Industry Booming, Fragmenting Worldwide
  • GCash Mobile Banking Continues Huge Growth in Philippines
  • Millennial Financial Marketing Growing: FinTech Targets Gen-Y

Informative Newsletter (2X p/Month)

FREE first chapter of Financial Inclusion at the Bottom of the Pyramid for newsletter subscribers.

Concise news and insights about FinTech, financial services, mobile, and more. Freshly delivered to your inbox. Your email address is never shared.

Book

As incredible as it may seem in this hyper-connected, technologically advanced era, half the planet's population exist as "Financial nomads"—those who nourish and shelter themselves without using traditional banking services. Read More…

Audiobook

We stand at a time when we have the opportunity to leverage the breathtaking advances that have been made in communications technology during the past twenty years, and use these advances to reconfigure today’s obsolete financial services system. Listen to a Sample...

Follow Us On:

Facebook
LinkedIn
Twitter
You Tube

Search

Discover

  • Entrepreneurship
  • Financial Inclusion
  • FinTech
  • Mobile Banking

Copyright © 2021 · - Authors of Financial Inclusion at the Bottom of the Pyramid - All Rights Reserved

loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.