Mobile Money businesses will not morph into banks: Quist

Lucy Quist, Managing Director of Airtel Ghana and reigning Telecom CEO of the year has called for more collaboration between financial institutions and mobile telecom operators to create prosperity for Ghanaians and everyone within the Mobile Money ecosystem.

Addressing delegates at the 20th National Banking Conference at the Accra International Conference Center on the theme “The Emerging Mobile Money Business in Ghana – the role of telecom companies’, Mrs. Quist indicated that the Mobile Money business has come to stay and financial institutions must embrace and leverage the platform, through strategic partnerships, to ensure more Ghanaians are financially included.

She said “The Mobile Money platform provides a unique opportunity for collaboration between financial institutions and operators in the country to create and perpetuate prosperity for everyone in the ecosystem. For instance, for customers, the platform provides convenience, value added services and innovative lifestyle solutions that meet their needs now and in the future.

For agents operating the service, it is a source of employment and livelihood for themselves and their families and for financial institutions, the platform is a major mobiliser of deposits”.

Employment and financial inclusion

She continued: “The Mobile Money platform provides employment to thousands of Ghanaians. According to the latest report released by the Bank of Ghana, there are currently more than 108,000 registered agents across the country. For many of these agents, this platform is their main source of income and for others, it is a second stream of income. With more collaboration, this platform has the potential to contribute significantly to job creation, livelihood support and empowerment”.

She threw more light on the ability of the platform to promote financial inclusion and prosperity for all.

Lucy Quist said “Mobile Money serves as a conduit for promoting financial inclusion by bringing millions of Ghanaians who are currently excluded into the formal banking system. Once in the banking system, they have access to financial products and services that support their enterprises and livelihoods – creating prosperity for all within the ecosystem.  This is a win-win situation.”

The World Bank pegs the percentage of unbanked Ghanaians at some 70% of the total population. Yet Mobile penetration stands at around 132% across all telecom operators.

“The millions of Ghanaians outside the formal banking system need some form of financial mediation – they need to be financially included and they will naturally find a way to access financial services. With almost every Ghanaian who needs a phone owning one, Mobile Money provides that bridge that connects them to the formal banking system.”

Competitors or partners

In August 2016, PwC released the 2016 Banking Survey on the theme: “How to win in an era of mobile money,” which indicates that banks consider mobile money operators as partners due their ability to mobilise deposit through the use of technology, but at the same time increasingly worried that mobile money operators will metamorphose into banks or develop to the point where they can operate independently of banks.

Touching on the issue, Quist said “Our focus is on providing the network infrastructure and distributive system that serves as a catalysts for innovation, reach and scalability not financial modelling.

When we launched Airtel Money in 2010, it was in collaboration with partner banks. All other operators did same. The mobile money platform, by its architecture and operating model, was not designed to operate outside the financial system. It was built to work effectively with banks and other financial institutions to provide limitless possibilities and drive sustained value for the entire ecosystem.

Mobile Money businesses will not morph into banks. What is likely to happen is more collaboration to offer consummate solutions to customers who stand to benefit the most. A few years ago, you can only send and receive money through the Mobile Money platform, now there are unlimited services – bill payments, transfer of funds between mobile wallets and bank accounts, purchase of T-bills etc. The possibilities will grow in the years ahead.”

The total volume of mobile money transactions grew from 110 million between January to June last year 2015 to 220 million for the same period this year. Registered customers for the service has seen more than 820% growth from 2010 when there were only a little over 2 million customers to the current figure of Circa 16 million with more than half being active customers

“The growth in customer numbers as well as the volume and value of transaction over the period is a clear indication that Mobile Money is here to stay. These figures are expected to double and some will triple over the next couple of years as more people embrace the service and become included,” Mrs.   Quist concluded.

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