Operators would do well to avoid attempting to replicate M-Pesa in different markets, despite its success, claimed online financial services company Movenbank on Thursday.
"Different models appeal in different markets," said Scott Bales, chief mobile officer at Movenbank, during a panel session at CommunicAsia in Singapore. "The message is: stop trying to copy M-Pesa."
First launched in 2007 by Kenya-based Safaricom, M-Pesa is a simple mobile money transfer service that enables users to send money to a phone number. It has since been extended to a number of other countries including Tanzania, South Africa, Egypt and Afghanistan. In Kenya alone it boasts 14.7 million users.
However, Bales said service providers will come unstuck if they simply try to apply the M-Pesa model in every market, specifically citing Vietnam as one example of a country in which players will need to do their homework, due to the lack of demand for mobile payments.
Indeed, m-payment adoption in Vietnam is still very low despite many attempts over the years by telcos, banks and online payment providers to stimulate the market.
"In Vietnam they didn't realise that P2P [money transfer] is not a market, and mobile bill payment is not a market," he said.
"Vietnamese people still prefer using cash in making payments," commented Jan Jirovec, business development director at online payment services firm PayU, in a VietnamNet report last June.
Meanwhile Bales, who previously worked at mobile financial services specialist Fundamo, which was acquired by Visa for $110 million last year, claimed service providers are launching m-payment services and trying to drive uptake, which is the wrong way to go about it.
"You need to think about the user's journey first," he said, suggesting would-be m-payment providers start by finding and addressing specific pain points.
This approach, plus the benefit of lower overhead costs, gives start-ups an advantage over banks and operators, he said, citing the success stories of online payment firms Dwolla and PayPal. He also praised Square, which was started in 2009 by Twitter founder Jack Dorsey and offers a credit card reader for iOS devices.
"They're the people who are going to own the m-payment market in 10 years' time, not the banks or the telcos." he predicted.