This week, the GSMA released their fantastic annual report, State of the Industry Report on Mobile Money 2021.

Everything is up and to the right.

The report, not surprisingly, dedicated the lion's share of time to COVID-related impact and interventions. 23 countries globally reduced or lowered fees, and another 20 increased transaction and balance limits, to provide relief to consumers.

Last year, we published a podcast episode on the future of mobile financial services, and Chris Williamson, the Head of M-Pesa for Vodacom Group, talked about developing more use cases for merchants.

On one hand, mobile money providers are still competing with cash. On the other hand, mobile money providers also desperately need to ween themselves off of fee-based revenue - a need that became even more acute as a result of the policy responses discussed above.

Another thing that stood out to me in this report is the need for interoperability - a theme that emerged in our recent podcast episode with Nomanini's Vahid Monadjem.

There's still a lot of fragmentation.

While third-parties like MFS Africa, through their API hub, make over 200 million mobile wallets interoperable, the GSMA reports that just 5% of P2P transactions take place directly between different mobile money providers.

And back to merchant use cases - cash is fully interoperable and doesn't have any transaction fees. As ever, the work to digitize - and create viable use cases for doing so - continues.

--

Venture Customers

I was introduced to the concept of "venture customers" this week by Matt Clifford, CEO of the talent investor Entrepreneur First.

He writes that a venture customer is "an organisation that stands ready to buy the products of innovation" and that are "buyers willing and able to provide real market “pull” for products that don’t yet exist".

First - what do good venture customers look like?

Matt cites a case study of a NASA procurement program with an explicit need - find a new way to supply the International Space Station with their space shuttle program ending. Crucially, they incentivized partner companies to build something of lasting and standalone value, by having to pay a share of development costs themselves.

Once such partner company? SpaceX.

Second - who are good venture customers in on the continent?

This has me thinking, once again, about risk. I think corporates or governments are, by their very nature, not early adopters. They want proven products or services. I wonder to what extent this behavior is incompatible with that of a good venture customer.

And it raises a question - should we expect more risk-taking behavior from corporates or governments (assuming they ought to be venture customers)?

Or perhaps the better question, as I've asked before - isn't the absence of "risk-taking" behavior actually more risky in the long term?

--

Thanks for reading,

Justin

‍