Over the past 3 years the m-payment space has experienced a lot of boom. Several companies have churned out mobile payment solutions. Leading this trend are the mobile telecom service providers. Credits to them, the telcos have spearheaded development in the m-payment space bringing some needed energy and spark for further growth in the industry. There has also been a lot of media pump and pageantry on the prospects of the m-payment industry. Africa has to be applauded for being a key stakeholder and pacesetter in this area of the global economics dynamic.
Yes! It is great that these payment platforms have sprung up. However, beyond this great technology is a huge gap. This is the services gap. I don’t think we have been able to develop the m-service space well enough to complement the existing m-payment platforms. Every player or solution provider is targeting mobile money transfer or the payment of utility bills. In some cases we see players bullying governments or trying too hard to convince governments to use their mobile payment services for statutory payments to civil servants. That is not the real problem. The challenge is when we are not able to build an industry which can evolve organically or being able to envision an industry driven by innovation that can easily draw all potential stakeholders together to accept, adopt and develop it. We have conceived and are pushing the whole m-payment agenda on a one dimensional trajectory without much regard for the services sector that could benefit from it. By service sector, I mean all the things we use money to acquire or experience.
Beyond the advertising campaigns churned out in the media by mobile payments providers, I believe it is about time we got people offering all kinds of services to accept mobile money as a viable alternative payment option. What is the real challenge in for example the market woman truly accepting a mobile money payment as credible and viable payment alternative to cash? Whatever the issues are, I believe it is about time providers started giving attention to such issues. For the payment sector to succeed, there need to be a deliberate attempt by providers in the m-payment space to mimic cash. If we preach cashless society, there is no better way to completely overhaul the cash-entrenched system, than imitating the use of cash and creating models around it to make the new experience very enriching and invigorating enough for adopters to stay.
Bridging the service gap would take some effort, but with much consensus, innovation and more involvement through investment and market activities by the m-payment solution providers, I believe much headway would be made in providing the needed momentum for the services that is a key part of the mobile money ecosystem to evolve and take over cash transactions.
Fundamental among the list of approaches that could be adopted is creating first of all a merchant service framework both on the technology and operational front to foster standardisation and interoperability among transaction sources. We don’t want to create the scenario where merchants would have to struggle for space or do too much just to adopt a channel of receiving payments. The merchant service framework should make it very easy and with little supervision for merchants to integrate or opt in and also opt out. Here I am talking about APIs, web services and switches. Operationally, such a framework should be able to provide a transactional flow for the merchant that makes it easy and convenient for him to adopt without much operational overheads. With regards to operational overheads, I am talking about an operational model that creates a learning curve that would require the services of specialised personnel. Such a model could put merchants off, because they would not like the extra cost or may not be willing to adapt their existing operations that quickly.
To bridge the service gap, there need to be a massive education of service providers on the benefits of adopting m-payment alternatives. The education should be specific to the specific cultures of the target market. We can’t adopt a one-size-fits-all approach for all the markets. What worked in Kenya might not work in Ghana. Merchant education should be predominantly direct which can be achieved through focus-group discussions, seminars and physical meetings. Educational materials should be easily comprehensible and be done with much understanding of the local market. A copy and paste approach would be an abject waste of time and resources.
My last recommendation is that m-payment providers should provide value added business tools for merchants (service providers). These tools should enable merchants to have better insights into their own business operations. These tools could be business improvement tools such as simple reporting and accounting systems that would be integrated to the m-payment solution.
Driving the m-payment industry in this direction would let service providers feel the needed difference between cash and m-payments. Whereas you cannot integrate cash into an operational model automatically, m-payment platforms make integration into existing business systems seamless. A marriage between m-payment and merchant service operations would create the needed synergy to catalyse the needed change in mind set in the adoption of m-payments by merchants. This would go a long way to bridge the huge merchant service gap.