See here for the full Storify of both days of the Mondato Summit Africa 2014.

Mondato Summit Africa got underway in beautiful sunshine and a gorgeous venue at the Summer Place in Johannesburg.  After welcome remarks by Mondato’s CEO, Judah J. Levine, Mr. Levine gave a presentation on how to ‘Navigate the Uncertainty’ of a period where Mobile Financial Services are on the rise.  He emphasized the dynamic nature of the MFS space across different markets, whether in terms of regulations, competition, technologies or otherwise, and demonstrated how Mondato’s ‘4E’ approach to analysing a given market and its diverse segments was the best means to ensuring an MFS product’s unique value proposition was matched to the appropriate realisable market segment.  More broadly, he noted that three themes of universal interest to all participants stood out from the Summit agenda: how to drive innovation; how to move beyond transfers; and how to overcome barriers to MFS adoption.

Mr. Levine was followed onto the stage by former Safaricom CEO and current Director of Mobile Money and Mobile Payments for Vodafone Group Services Ltd., Mr. Michael Joseph.  Never shy of ruffling a few feathers or voicing his strongly held opinions on the recipe for success for mobile money, Mr. Joseph, among other things, opined that banks have been “screwing their customers” for 300 years, and expressed his belief that financial inclusion was a human right that was being denied to many of the world’s poor by the inherent conservatism of banks and regulators, whose focus was the profitable market segment made up of those who were already “banked”.    Needless to say there were plenty of questions for Mr. Joseph and he willingly gave frank answers.

Unsurprisingly, representatives of Africa’s banks were not willing to take full blame for the failure of mobile money services to reach scale in markets other than Kenya.  Ilze Wagner of Nedbank in particular noted that part of the problem was that in other markets the regulators required a more co-operative approach than the one that had worked in Kenya, but that “MNOs and banks are used to being gorillas in their negotiations”, with the result that when you put them in a room together, things got interesting.  Sitting on the same panel, Michael Joseph countered that the problem was that banks viewed MNOs as competitors, whereas the reality is that the average M-PESA transaction is $7.

After an analysis of why mobile money had failed to take off in Nigeria by Mr. Olugbenga Adams of FirstBank (it had become just a payment option rather than part of the value chain), the potential for retailers of productive partnerships with MNOs was put on display by Mr. André de Wet of PriceCheck, and Pieter Verkade of MTN Group.  Bullish about the future of m-commerce, Mr. de Wet took pains to emphasize that he felt that the rise of m-commerce set the stage for the biggest wave of retail innovation since the advent of the internet created the need for multi-channel retail.  The key was ownership of the search process which, he asserted, meant ownership of the purchase decision as well.  It was an assertion that generated a lot of comment.

Mayur Soni, Go-To-Market Executive for relative new-comer on the South African MNO scene Cell C was keen to emphasize that Cell C’s launch of Red Bull Mobile was evidence that MNOs were able to forge productive partnerships, but that in jointly creating that unique value proposition experience on its own was never a recipe for success.  Indeed, as the next speaker demonstrated, disruptive entrants with little experience and a lack of regard for the regulatory environment can sometimes have the recipe for success.  Uber Johannesburg General Manager Alon Lits’s slick presentation matched his company’s revolutionary combination of real-time data and a payment process so frictionless that it appears entirely absent: the “magic” as Mr. Lits referred to it.

There was a feeling among the panellists who discussed the potential for social media to spur MFS adoption that part of the problem was that too many players in the market felt they had the opportunity to own the channel and as such few were willing to co-operate.  Gavin Marshall of Mxit even went so far as to say that he felt that in this regard competition was stifling the MFS market’s growth potential.  He found support for that position from WeChat’s Brett Loubster.  There was something approaching a consensus that a combination of the lack of interoperability and too many players having half the answer was a real hurdle that needed to be overcome.

Two areas with huge potential for MFS, agriculture and education, were the subject of presentations by Lee H. Babcock and Christopher Pruijsens.  In agriculture aggregation was going to be the key to unlocking the potential of MFS in the agricultural value chain.  When this happened, asserted Mr. Babcock, the effect on agriculture in Africa could be as important as the one a developed banking system had on the development of the industrial revolution.

Wrapping up a day in which there had been a huge number of valuable lessons to be learned was a panel that looked at one of the most critical, but sometimes overlooked, elements of scaling MFS across Africa: how to move beyond payments.  The panel included Nahla Mahmoud of UNDP Sudan, Henry Maloba of Grameen Foundation, Leila Moonda of the South African Insurance Association, and Charlene Chen of Bitcoin-based remittance start-up Bitpesa.  Most of the panellists rallied around Henry Maloba’s idea that the key to expansion beyond P2P payments was to take P2P and use it as a tool to make Bottom of the Pyramid consumers visible to financial institutions and stakeholders.

Had that been the learnings from both days of the Summit, no-one would have had grounds to complain that they hadn’t learned a lot.  But as things stood, we were only half-way through!

©Mondato 2014. Mondato is a boutique management consultancy specializing in strategic, commercial and operational support for the Mobile Financial Services (MFS) industry. With an unparalleled team of dedicated MFS professionals and a global network of industry contacts, Mondato has the depth of experience to provide high-impact, hands-on support for clients across the MFS ecosystem, including service providers, banks, telcos, technology firms, merchants and investors. Our weekly newsletters are the go-to source of news and analysis in the MFS industry.

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