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

Day 2’s proceedings got underway with presentations from the six finalists in the Mondato Awards, three in each of the two categories of African MFS Innovation of the Year, and African MFS Social Impact of the year.  Appme had the unenviable task of facing the judges first, followed by Spottm and then Sterio.me, all in the Social Impact category.  Each of the presenters brought their personality to the fore during their 5-minute pitch to the judges and audience, and the diversity of ideas for MFS use cases in Africa were put on display by the presenters and their products: app development, localized social networks, and out of the classroom reinforcement of in-class learning via mobile.  The judge’s barely contained enthusiasm for one of the three products meant that when the award winners were announced in the afternoon, no-one present was surprised that Spottm was the winner in this category, with the judges telling them that they believed they had barely begun to scratch the surface of their product’s potential.

In the African MFS Innovation of the Year category, all three products were equally well-presented, and each offered a distinct and interesting value proposition: PriceCheck seemed poised to take possession of product search and, by CEO André de Wet’s reckoning, consequently the purchase decision in South Africa, Nigeria and several other African markets.  TYME (Take Your Money Everywhere)’s branchless banking offering in Namibia, complete with remote Know Your Customer/Anti-Money Laundering facilities certainly grabbed the attention of the banking representatives, while mHits’ service offering Namibians emergency top-ups of prepaid electricity using airtime was of interest to the MNOs.  Unlike the first category on display, it was far from clear who the eventual winner would be, and opinion among attendees was fairly evenly split three ways.

The lawyers present were all ears during the presentations of Raadhika Sihin, formerly of the South African Reserve Bank and Alliance for Financial Inclusion, and Genna Robb of the University of Johannesburg, into the regulatory and competition aspects of mobile money in certain African markets.  When questioned as to whether MFS and branchless banking in South Africa was over-regulated, Ms. Sihin replied that “If you play in the sand box, you must follow the same rules” as the banks.  She noted, however, that she had the impression that the SARB was perhaps  open to relaxing some of the more stringent KYC/AML measures it had in place, partly as a result of indications from the international community that it would face no opposition to it doing so.  Genna Robb’s competition economist perspective echoed many of the stakeholder comments that had been heard during Day 1 with regard to interoperability and double marginalization.

Before launch there was free money being given out by the ladies from Bitpesa, a Kenya-based start-up that seeks to use the Bitcoin cryptocurrency as a remittance rail for Kenyans abroad.  CEO Elizabeth Rossiello, COO/CTO Charlene Chen, and the Head of Trading & Risk Management at BitPesa, Amy Ludlum, were all giving out small amounts of the world’s favorite digital currency as part of their demonstration of how Bitcoin and BitPesa work.  There’s nothing like free money to grab the attention of a hungry audience.

In some respects we returned to MFS in Africa’s beginnings with the next panel, which was a discussion on remittances, which still dominate so much of the MFS space in Africa to this day.  Whether and how MTOs could adapt to the challenges posed by offerings such as Bitcoin or M-PESA was a topic of huge debate, although all participants were agreed that digital currencies and mobile wallets between them were exerting huge downward pressures on the margins of the big MTOs, Western Union and MoneyGram.  Jonathan Johannesen, a WU Master Agent in the Democratic Republic of Congo, asserted that WU’s fees had dropped to 9% from 12% in light of the competition, and predicted that they would drop further.  Matt Shakhovskoy of Dalberg and CGAP speculated that a tempting option for an organisation such as Western Union with revenues of $1.4 bn would be to buy up the new digital opposition to maintain its margins.  Amy Ludlum of BitPesa noted that with $4 bn in annual costs, Western Union appeared to have plenty of fat that could be cut without harming margins in any event.  It was a discussion that could have run and run.

Money, though not of the free kind was on everyone’s minds as the penultimate panel consisting of Bill Cosby of Kagiso Tiso Holdings and Marc Elias of the Seed Institute shared their insights from an investor’s perspective. This was followed by an interesting discussion between Matt Shokhovskoy, Mondato’s Media Editor Chris Connolly, and Aster Thomas of AFK Insider, during the course of which Mr. Connolly commented that sometimes innovators in the MFS space forget that cash is the enemy when they trumpet their products as being secure and convenient. Cash is both of these things, said Mr. Connolly. “If we were in the chocolate business instead of the MFS business, we wouldn’t walk triumphantly onto a stage at an industry event and announce that our product isn’t poisonous.” Security and convenience are basic requirements, but because they can be difficult to deliver from a technical perspective, it is understandable that those who work on the tech side get excited when they feel they have delivered on them.

As anticipated by many in the room, Spottm received the Mondato Award for African MFS Social Impact of the Year. The hard to call African MFS Innovation of the Year Award went to mHits, which proved to be the company’s second award in as many days.

And then it was all over! Many attendees immediately felt prompted to ask whether Mondato would be holding another Africa Summit in 2015. The answer is a resounding yes, though whether it will be again in South Africa or in another African country has yet to be determined.

Either way, we hope to see you there.

©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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