There are two glaring facts the mobile money industry needs to face up to. First, digital accounts have very little value stored in them, and the practice everywhere is to withdraw any e-money received immediately and in full. This makes people not naturally inclined to pay electronically, except for remote payments for which people will take the trouble specifically to cash in. Second, there is surprisingly little systematic use of electronic payments by formal businesses, a space in which cash and especially checks prevail, even in Kenya. The predominant business use is in fact by informal traders, though no product development is aimed at them.

These two gaps work together to limit the electronification of merchant payments. While that’s the case, mobile money will not become part of customers’ everyday life, and many providers will struggle to reach sustainable scale.

The failure in the value proposition in both cases –for savers and for businesses— is that mobile money doesn’t offer manageability tools around the money balances that are kept and the payments that are made or received. As a saver, it does not make me feel in control of my money, because it doesn’t let me separate my money out into various pots and play mental discipline games around them (jam jarring). As a business, mobile money does not make it easy for me to keep accounts, reconcile receipts with invoices, and match against things like inventory and sales leads.

We got to this situation because there is indeed very little manageability (beyond doing the actual transaction) that one can offer on simple mobile phones. But now, subject to some caveats, we can foresee the day in the not too distant future when people at the base of the pyramid, and especially traders and entrepreneurs, will all have smartphones. Moreover, by designing compelling user experiences, financial services could become an important driver to accelerate smartphone penetration in developing countries.

It is time to start thinking about a new generation of more intuitive mobile money services on touchscreen smartphones – a mobile money app. With this app, mobile money providers can offer a full upgrade path to heavier mobile money users who like the convenience of payments on the fly, but want much more interaction, structure and information around their money matters.

At the personal use level, this banking app should let people express much more visually and cogently the heuristic games they play in their own minds every time they face a money decision. In other words, it should be conceived more like a game than an internet banking site.

At the business use level, it’s about helping (formal and informal) businesses manage the information around transactions, not just helping them pay/receive money. To adopt mobile money as a way of doing business, enterprises need to make sure that payments can be tracked, reconciliations can be made, frauds can be avoided, and payments can be linked to other business processes (e.g. such as order, inventory and fleet management).

The manageability of payments on the business side will not be achieved at the handset level alone. The challenge needs to be solved by developers and integrators working on behalf of business clients. For that, they will need a set of flexible application programming interfaces (APIs) which allow them to integrate the payment flows from the mobile money system with the enterprises’ own accounting, resource and workflow management systems.

Taking mobile money to the next level has got to be about solving the savings and business use challenges. To crack that, it is time that we start experimenting with smartphone apps, supported by appropriate network-level APIs. There needs to be much more bundling of software services with payments. Only then can we really think about mobile money being not only more inclusive but also more relevant daily – and hence more impactful.

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