Page 239 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

Figure 9 – Average MNO fee for low value transactions

The pricing variation is particularly striking – some MNOs do not charge P2P fees between registered users. It
is also important to note that MNOs often have a minimum value they will transfer. In Uganda, this amount is
~ $0.14. Under this policy, 23 per cent of the transactions would be ineligible for eMoney.

User experience: The eMoney user experience is not optimal. For remote bill transactions, paying the
correct business and ensuring payment is credited to the correct account is error-prone. For face-to-face P2P
transactions, it is easier for someone to reach into their pocket than log into a phone and type the recipient’s
mobile number. Compelling user experiences are needed for each use case (e.g., ‘bumping’ phones for face-
to-face P2P transactions).
Service availability: eMoney is not universally available to all people at all times. Poor or inconsistent mobile
connectivity encourages eMoney subscribers to rely on cash as the more reliable alternative. Even where
mobile connectivity is solid, the local MNO may not provide an eMoney offering or, if they do, they may not
have an adequate agent network to make eMoney a practical offering.

Role of eMoney in tight value chains

eMoney within value chains, although more efficient, is clearly not a silver bullet for creating digital liquidity.
Besides having limited reach, value chains do not remove the incentive to cash-out to any meaningful degree.

Given these limitations, is there a role for tight value chains in creating digital liquidity? Is eMoney somehow
less important to tight value chains?

Part of a holistic approach to digital liquidity: One needs to look at payment-enabling these tight value chains
as just one part of a holistic approach – an approach that considers the lifecycle of money and introduces
solutions that encourage a digital version(s). A holistic approach gives the BoP ample opportunity to receive,
retain, and pay with eMoney. Tight value chains can encourage eMoney adoption and inject eMoney into the
local BoP economy, a requisite step for digital liquidity. Since participating SHFs generate a disproportionate
amount of revenue and may employ others, their impact should be larger than their seven per cent market
share suggests. But, value chains in themselves are not sufficient vehicles for digital liquidity. It is important
to note that for value chains to fulfill their liquidity role, they should use the national payment system and not
a proprietary solution (e-voucher, etc.).

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