In mobile money, we spend a lot of time talking about innovative ways to deliver financial services to the unbanked poor in spite of their income, geographic and trust barriers to banking. The story is familiar to most of us by now: someone in a remote or underdeveloped area can’t get to a bank branch or ATM, but does have multiple airtime dealers and other retailers within a few minutes from their home. A mobile operator comes along and uses these locations to deliver financial services – anything from money transfer to micro insurance. This story is well known for good cause: it captures the innovation taking place in the private sector that’s making a social and economic impact by reaching banking’s ‘last mile’.

But there’s another side to the mobile money story. Even in developing markets like Kenya or the Philippines, there are a lot of people who are already banked that choose to use mobile money. These people don’t necessarily live below the poverty line, but they often play an important role in the mobile money ecosystem as early adopters or key sources of funds for the unbanked. An important qualifier at this stage: no two mobile money models are the same. However, observations from the Philippines reveals an interesting school of thought: perhaps the unbanked cannot be looked at in isolation. Rather, (in some cases) perhaps they need to be considered in the context of a complete ecosystem which includes a person that is banked.

In this post I’ll describe three ways that leading mobile money operators in Kenya and the Philippines directly address the needs of the banked – and subsequently deliver benefits to the unbanked. Each of these examples relate to the challenge of getting cash in and out of a mobile money account seamlessly and are targeted at a) the banked, or b) users who are likely to be a source of funds for an unbanked recipient of funds.

Example 1: SMART Money introduces auto-reloader to enable quick cash-in process
SMART Money has deployed a number of ‘auto-reloader’ machines at SMART Wireless Centres in high traffic locations to enable customers to quickly load cash into their account without interacting with an agent. Though costly to deploy, these machines enable SMART to cater to customers that would otherwise not be willing to spend time cashing in and who are accustomed to automation. Customers don’t need to be banked to use the machine – they just need their personalized SMART Money card. However, by virtue of the fact that these machines are generally in high traffic urban areas (the majority of SMART Wireless Centres are in malls), they are presumably used often by people who would be considered a ‘source of funds’.

From a regulatory perspective, SMART is able to offer this solution to customers because the Banko Central Ng Pilipinas recognizes that people with personalized SMART Money cards have completed their proof of identification and passed KYC before the card is issued. Thus, KYC does not need to be conducted by a human every time a person loads their account through ‘auto-reloader’ machines. For security, the machines do also require users to key-in their security m-Pin (like a regular ATM) before transactions are completed.

The video below demonstrates how the auto-reloader machine works:

Example 2: G-Cash and SMART Money enable the ‘banked’ to cash-in via their mobile banking account
SMART Money and G-Cash (among others) enable banked customers to transfer money from their bank account to their mobile money account entirely via a mobile handset. This eliminates the need for banked users of mobile money to visit an agent each time they need to load e-money onto their account – they can instead do so in seconds from any location that they choose.

Developing a seamless process for the banked to load e-money into their accounts will be particularly critical in markets where domestic transfers flow from the banked to the unbanked. Philippines is one such market and both SMART and Globe have created strategies accordingly: SMART enables customers of multiple partner banks (i.e. BDO, Metrobank, China Bank, PNB, etc.) and the two largest ATM consortia to do mobile banking, while Globe enables customers of Bank of Philippine Islands, a large bank that shares a parent company with Globe, to do so. This strategy underscores the importance of choosing effective banking partners when deploying mobile money.

Aside from the fact that the banked can play a key role in a mobile money ecosystem, it’s also important to consider their needs since they’re often early adopters. Indeed, 70% of the early adopters of M-PESA in Kenya are currently banked. Zain’s market entry approach seems to have been designed with this finding in mind: from launch, they have promoted Zap’s feature of enabling customers to link their mobile money account to a bank account.

Example 3: M-PESA, SMART Money, and G-Cash create partnerships to deliver access to ATM networks
In some mobile money models, ATMs play a key role. Though rural ATM penetration will typically be low (and that’s where human cash in/out solutions come in), a banking partner can sometimes offer urban customers access to a reasonably large network. Through their respective partnerships with Banco d’Oro and BPI, SMART and Globe offer their customers access to thousands of ATMs (what the ATM can be used for varies). Similarly, in 2007 Safaricom responded to strong customer demand for ATMs by creating a partnership with Pesa Point, a Kenyan ATM provider. Desire to use ATMs was the second highest customer demand in an FSD Kenya survey of M-PESA users, with one in four respondents requesting access. Today, M-PESA users have access to a growing network of ATMs that offer a (presumably) more reliable option for encashment – all with a mobile phone (and no card).

These are just three examples of mobile money deployments catering to the banked and subsequently delivering benefits to the unbanked. Tell us what you think: can we address the unbanked without also considering the banked? Share your thoughts below.