The Enigma of Mobile Money Systems

In this paper we argue that the success of mobile banking models represents an enigma in terms of their replicability to other countries. These models offer the opportunity to diminish the financial exclusion suffered by the poor by offering access to credit, savings, and transfers, which are key tools capable of transforming the livelihoods of the poor as well as the efficiency of the market. We show that mobile phones need a complete ecosystem that supports its application to a functioning mobile banking service. The aim of this paper is to contribute to existing knowledge of mobile money across the value chain by providing insight into the mechanisms of m-money and the value propositions within the business of m-banking. We develop a taxonomy of the key drivers of the business model to help assess the replicability of these models in other countries. We focus on models developed in Kenya, the Philippines, and Brazil, and explore if some of the conditions present in these models are lacking for a widespread adoption in other. We conclude, however, that there appears to be no set of clearly identifiable variables that serve as a basis for success and that those necessary conditions for the replication of m-banking models identified by the existing literature to other countries around the world do not guarantee results. Moreover, we find that some of these conditions are not present in countries where m-banking models have been successful.