Regulation is holding back the potential of mobile money services in India according to Hannes Van Rensburg (pictured), the CEO of mobile money platform vendor Fundamo.
In an interview with Mobile World Live he cited India as a market that is key to future growth of the sector but said he is “a bit apprehensive” about its regulatory situation.
Vodafone is to launch its M-Pesa service in India, one of a number of recent initiatives that have brought attention to the country’s mobile money market.
“Their regulations are too prescriptive. They are not designed to make the ecosystem work but designed to exert control. There has got to be some kind of breakthrough there from a regulatory perspective,” said Van Rensburg.
As an example, the CEO and founder of Fundamo, which is owned by Visa, points to how cumbersome it is to open a bank account which requires a level of documentation and form filling which he thinks deters potential consumers.
Van Rensburg estimates global take-up of mobile money services is 100 million subscribers. That figure could reach 500 million in five years if India takes off and receives a little assistance from Indonesia and Nigeria, he said.
Regulation is also an obstacle in Latin America, although this time its absence appears to be the problem. Van Rensburg says some mobile operators charge excessive fees to service providers who want to access their networks to offer financial services. The operators use a tiered-fee structure that means the charges are inflated. “I think that is on the fringe of anti-competitive,” he said. “This is a personal opinion but someone, somewhere, should get those operators to play ball because they have a licence. It’s a big barrier to get things going.”