NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, July 7, 2014

Global context

South Africa’s perceived ‘failure to launch’ in respect to mobile money needs to be put into a global context. In the latest MasterCard Mobile Payments Readiness Index, only four countries – Singapore, Canada, the US and Kenya – score higher than 40 out of a possible 100. The inflection point, according to the report, sits at 60, highlighting the fact that in most cases mobile payments has been a solution looking for a problem.

This is rapidly changing as each market delves deeper into the specific uses and benefits their population is looking for. As Vodacom’s Herman Singh rightly points out, there were too many people with too many tech propositions — and no one who asked what the customer wanted.

South Africa may not be at the head of the global mobile payments race but there is a swathe of hugely exciting mobile transacting applications and services being launched right now. The success of these applications will rely largely on the service providers’ ability to localise each service to suit the specific needs of the South African population. As Singh goes on to state, “What worked in the rest of the world won’t work here.”

Cut and paste copies of services that were successful elsewhere in the world simply won’t succeed. Roleplayers must therefore be wary of relaunching old tech with just a lick of new paint. If the country’s mobile transacting industry is to thrive, we need to apply new thinking. Mobile money simply can’t be in South Africa what it is in Kenya. Our banking sector is too sophisticated, too established.