Where to, when mobile money reaches critical mass?

M-money services take-up has taken time, but as it passes the “critical mass” moment, two things begin to happen: firstly, their use spreads out beyond the first wave of users and secondly, more sophisticated service elements get built on top.

Russell Southwood spoke this week to Luke Kyohere and Dan Kleinbaum about the work they’re doing.

Luke Kyohere had a software business that used to do SMS and mobile technology work. He then went to the USA for “grad school” which is where he met Dan Kleinbaum and together they created the Beyonic platform. They wanted to make it easier for companies and NGOs to make bulk payments:

”The pain point was that payments can be made to companies (using m-money systems) but there are few people offering a B2person service. Mostly it’s add-on products by SMS aggregators.”

Their platform allows you to draw down contact information from other software and then make payments which you can manage with rules set up up for payment approval.

Its partnership with Mercy Corps’ Agri-Fin programme came out of a second pain point. Often those paid would go to a mobile money agent and discover that the agent’s cash float was exhausted.

The agent had not anticipated so many payments over a short period of time. A recent HELIX, IFC and Micro Save report shows that 35% of agents lose 5 or more transactions a day due to a lack of float & this is primarily due to unpredictable demand.

They set up their system so that it told agents in advance that there was going to be a spike in demand so that he could top up his cash float. It would also be possible to tell him the volume and range of individual payments.

This is phase one but in phase two they envisage being able to match payments to agents in real time. The agents will see the payment and the first to say they can pay out on it will be the one the payee is directed to. This will make the agents more competitive to get the business.

This bulk payment service is only one part of their services for Mercy Corps’ programme: the farmers they work with need a range of financial services. They are connecting 200 mobile farmers with 10,000 mobile money recipients.

For example, an agro-dealer may want to pay farmers for their produce. If the person making the payment says this is how it’s going to be made from now on, this will drive adoption.

Also a farmers’ group may run a savings group and may want to make payments to its members. There is also an agri-information service that costs US$1 a year and this will now be collected by the m-money service.

The platform is operator agnostic and will initially work across the Airtel and MTN networks. The business model works on the basis that it either takes a percentage fee on the transactions or an agreed flat fee.

Beyonic has started in Uganda but has plans to expand. It’s in the process of connecting to both Safaricom and Airtel Kenya and has had interest from organisations in DRC and Tanzania

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Where to, when mobile money reaches critical mass?