by Byron Gibson
Despite current and projected continued global growth in electronic and mobile commerce, as a region with above average mobile penetration (approximately 128%) as well as world-class fibre and cellular data networks, the Caribbean has failed to capitalize on, and remains woefully low on electronic or mobile commerce activity. In fact, with banked populations over 70% and contrasting credit card penetration rates estimated at under 20%, the region remains largely a cash-based economy, with very little by way of electronic or mobile financial transaction/payment solutions and products available to consumers.
Consider if you will that although still considered a developing region, the islands of the Caribbean, with a few exceptions, boast human development and other key Indices that border on developed nation status. With consumer patterns and lifestyles that mirror cosmopolitan markets, the Caribbean is a flux economy with un-served needs and immense potential for competitively revolutionizing commerce. Its almost unimaginable that most of the over 40 Million consumers of a region known for its music, culture and festivals, are challenged to purchase an airline ticket online, sell or buy Soca or Reggae music online, pay for the online submission of a US VISA application or even download a US $.099 paid app to their US $500.00 mobile phone.
Widely regarded by the World Bank, IADB and other development agencies as a region in need of innovative and disruptive financial solutions designed to spur financial inclusion, even as governments seek to diversify economies by encouraging innovation and entrepreneurship, there exists in the Caribbean a dire need for relevant and responsive solutions that facilitates these calls. There exists a natural opportunity for innovative payment technologies to revolutionize the payment transaction landscape through the introduction of much needed, financially inclusive and region-relevant electronic payment transaction technology capable of delivering secure, Individual and Merchant consumer product solutions. Due to the existing, ubiquitous and stable nature of the regional mobile phone networks, it is my opinion that natural direction is to answer this challenge by optimising and adding value to these networks through the introduction of mobile money.
Beyond the range of directly accruing network usage revenues and end customer benefits, introduction of mobile money has the ability to provide larger scale macro economic impact to a region in dire need of stimulating new and diversified commercial opportunities.
- Creation of new markets: Markets are created when Buyers and Sellers are brought together and commerce is facilitated. In the absence of financially inclusive and accessible payment transaction products, what exists in the Caribbean is akin to bringing Customers to your well-stocked store, inviting them to select items but having no cashier or register to take their money. By bringing consumers and businesses together on a ubiquitous and democratically accessible payment platform, markets are organically expanded to include the entire populations and new opportunities for growth can develop.
- Stimulation of Entrepreneurship: New technologies typically provide capacities that spur new enterprise. Consider how Facebook, e-Bay, Etsy and Amazon have spurred growth in the SME business sector. In the case of mobile money, this will be true for both existing and new businesses able to enhance current products and develop new direct to mobile products and offers. With creation of, and democratic access to, new markets, we anticipate increased entrepreneurial activity from legacy as well as new business players.
- Sparking Innovation: Supported by International donor aid, most countries in The Caribbean have been investing in creating cultures of Innovation with the goal of helping to diversify economies and facilitating wealth creating opportunities in the broader societies. With national level programmes as well as those sponsored by agencies such as The World Bank, the IADB and Caribbean Export Development Agency, one of the key pieces missing from the enabling environment has been a truly democratic payment transaction solution that is available innovators to deliver products and services across all markets. As a result, many start-up businesses are either forced to limit activities to local markets, remain cash based or use extra regional services that are both costly and ill tailored for their business needs.
- Lowering Business Costs: Mobile money business models are typically value and transaction based technology, allowing for lower operating expenditure than traditional financial services players. These lowered operating costs are invariably passed down the value chain to end user consumers allowing for significant reductions in operating expenditure. Additionally, the increased market potential means that well run businesses can conceivably increase volumes and further lower costs by achieving better economies of scale.
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