I had the opportunity to attend a briefing onVisa’ s partnership with the Rwandan government to establish abasic electronic payments infrastructure in the emerging nation.This initiative leverages Visa’s recent acquisition of Fundamo asan enabling platform for mobile financial services, most notablyP2P payments.
As we struggle in the U.S. to figure out the basics of mobilepayments, their technologies, and business models, mobile financialservices mean something much more basic in an emerging nation likeRwanda. There, mobile is the vehicle of choice because it is one ofthe few available vehicles to support financial services. With fewbanks, branches, ATMs, and POS terminals, wireless communicationsprovide the one potentially unifying element.
What interests me is not so much the technology of mobile money andintegrating a custom-built market into the broader Visa paymentsnetwork, although that is indeed the capability that makes it allpossible. Rather, it is the challenge I term the “last 3 feet” ofthe transaction, between the end user and a non-bank agent. Innations where nearly everyone is unbanked (because there are fewbanks), the organization, training, and management of a network oflocal agents is a significant and necessary step to providingfinancial services. Money movement may be electronified, but theend delivery of money in these new markets is often via cash. We inthe developed world may go for long periods without tapping thecash sides of our wallets, thanks to the lowly POS terminal andubiquitous payment cards. But in a market without POS terminals orbank accounts, consumers must first learn to trust their localagents, and believe their promise that money will be delivered atthe end of a mobile transaction. Some day there will be POSterminals and more ATMs, but that is not the starting point.
Visa’s partnership with the Rwandan government is important formany reasons. While there is a justifiably feel-good angle to theinitiative, it is an investment in a long term market that willdeliver new payment customers. Visa’s acquisition of Fundamo, aplatform devoted to enabling mobile payments in emerging markets,and its integration into the Visa payments network, show broadcommitment to the dealing with the infrastructure needs of thosemarkets. But I don’t want to lose sight of Visa’s commitment to thelast 3 feet of the transaction-the non-electronic part. That’s anecessary stage of development, and fraught with organizational andcultural challenges.
As we embark on our own mobile payments journey, it’s worth notingthat some mobile paths are much more fundamental in nature. Visa’swillingness to take on these specific challenges of emergingmarkets is noteworthy.