Earned Digitally, Spent Digitally.

Financial Inclusion starts with growing B2B mobile money use cases.

One of the most exciting roles which I had in my career was being the CEO of Tigo Pesa, the 2nd biggest mobile money operation worldwide. Before assuming this role, I was a long-time B2B veteran who enjoyed seeing how empowering businesses with relevant solutions can directly improve macroeconomic trends.

Throughout my time in Tigo; I got the chance to deal with the entire Mobile Money/Fintech ecosystem. Local and International Regulators, Channel Partners, IMT Partners, IT Suppliers, Banks, Specialized Media, Payment Aggregators, Analysts, Investors, Auditors, and Global Financial Players. One of the key observations which I noticed is how the mobile money ecosystem overlooked the B2B use cases. This observation was more obvious when talking with my peers or regulators in markets that are starting their mobile money journey. 

I can’t deny; working directly with end-users has its charm, and that’s why the majority of Fintech startups focus on B2C use cases. Nevertheless, the more I dived into the Fintech ocean, the more I saw clearly that B2B use cases are the true key to unlocking the financial inclusion pandora’s box. I was personally glad to deliver some groundbreaking partnerships on the B2B side which didn’t only improve my KPIs and made my management happy, but moreover, it transformed the day-to-day routine of thousands of customers. 

I was asked by some regulators and peers worldwide to share my advice on how to reach a cashless society, my advice always started with: Focus on growing B2B mobile money use cases, for the following reasons:  

Earned Digitally, Spent Digitally

Sounds logical right? It’s as simple as it sounds. When people receive their wages digitally, they will more likely spend it digitally. 

The amount of money, effort and time spent by Regulators, Fintech Startups, Mobile Money Operators, and Global Financial Players on trying to capture part of the consumer income is humongous. Those efforts are truly appreciated, yet, why try to capture part of the income when you can get all of it?

In this regard, it’s always good to remember that “value” is – most of the time – more important than volume. The incremental amount of money circulating in the digital ecosystem has an exponential effect on the incremental number of potential users. Nothing, as in literally nothing, can increase the volume in the mobile money ecosystem as B2B use cases.

Financial Services Customer Life Cycle Management suddenly becomes easier

In all emerging markets with low financial inclusion, the key challenge facing analysts, marketers, commercial managers and startups is trying to find the best propositions that fit customer’s needs. The use of mobile money by most of the customers in emerging markets is usually confined to some use cases, and going beyond this use case will be like trying to beat Rafael Nadal in Roland Garros, it can happen, but is near to impossible.

On the other side, all mobile payments done by a business entity, whether it is salary transfers, buying supplies, paying taxes/utilities …. Etc., will create digital payment patterns and hence, empowers those working in the mobile money industry to better understand usage patterns and thus, onboard customers to relevant solutions. Suddenly, financial inclusion gets way easier.  

Greenfield for Startups 

I have been lucky to meet the bright minds behind several Fintech startups worldwide. In their opening speech; they all bragged about the fancy trends which they are seeing in transactions, app downloads, total users …etc. However, their confident opening speeches couldn’t hide their badly bruised P&L. Making most of them in desperate need to find angel investors, or more precisely: guardian angels.

Even though you have been hearing the word “Fintech” in probably all business conversations you have had in the past two to three years, Fintech remains to be a green field, and I truly find it surprising to see startups going down like falling leaves in Nordic autumn. 

One of the key reasons behind this challenge is the fact most startups are stuck in more or less similar B2C use cases, and hence, this fierce competition is narrowing their chances to turn profitable. 

Startups are key for the success of any industry, especially if it’s relatively new. I can’t find a better example other than IoT, the boom of IoT didn’t happen except when startups joined the game actively. Their capability to monetize didn’t only add to their bank accounts, but it empowered the entire IoT industry with several use cases and relevant innovations which made us hit new landmark successes in IoT almost on a daily basis. 

B2B mobile money use cases remain to be significantly overlooked by Fintech startups. We will see exponential growth in financial inclusion in emerging markets, the moment we have more startups focusing on B2B use cases, and needless to mention, the more profits they will earn.

Digitalization starts with Financial Inclusion 

If I earned a dollar each time I heard a regulator in an emerging market saying: “Do you know how big our informal economy is?” I would have easily been on the Forbes list. In all emerging markets, you will find a big part of the economy going under the radar. Millions working in daily or monthly jobs, getting paid in cash, sometimes paying taxes, sometimes not and in most of the cases, the scale of this economic activity remains to be a rough estimate, that’s as accurate as flipping a coin. 

Growing B2B mobile money use cases in an economy will not only improve financial inclusion but will improve all other digitalization KPIs. Defining the active working force in each industry, issuing e-bills, accurate taxation, fiscal monitoring, and budgeting …etc. 

The spell over of B2B mobile money use cases on the overall economy is massive, that’s one step in financial inclusion which can accelerate the whole digitalization journey. 

Maximizing Banks contribution to Financial Inclusion

During my time in mobile money, walking into any meeting with Banks, felt like watching the Classico beside Barcelona fans while wearing a Real Madrid jersey.

Banking veterans see mobile money as “the” competitor. Both entities compete in some use cases, that’s true, but that doesn’t compare to the numerous use cases that present potential collaboration opportunities. Growing mobile money B2B use cases will better integrate banking into the mobile money ecosystem and will accelerate financial inclusion. 

Mobile money operators can reach unbanked users, who might not be as profitable for banks. Increasing mobile money penetration in this segment is the first step towards introducing banking services to them later on.

The cycle for B2B payments won’t be complete without banks. Banks and Mobile Money Operators unless they work hand-in-hand. 

To Summarize … 

Growing B2B Mobile Money transactions is the single catalyst for financial inclusion and digitalization. Working with B2B is certainly not easy, and the road is usually bumpy, nevertheless, it’s the best shortcut you can think about.

My mobile money journey was rather easy, I was lucky to have companions who did believe in this vision, a big applause goes to the Tigo Pesa team, Simon Karikari, and Raul Martinez

2 thoughts on “Earned Digitally, Spent Digitally.

  1. Very interesting and insightful. There should be a series of articles to avail more insights but bit by bit to entice readers. Very well done, not on the article work, but on the achievements in mobile money b2b!

Leave a Reply

Your email address will not be published. Required fields are marked *