There are three major business models in which a mobile money deployment can operate: 

  1. MNO-Led: (Most Common) The mobile network operator acts as the acquirer/issuer and hence owns the wallet and the customer. This model places the bulk of the regulatory responsibility on the MNO.
    1. However, mobile operators will usually be required to have a trust bank partner that is a traditional banking institution to hold the trust account.
    2. This is also distinct from mobile banking services whereby a bank simply creates a mobile channel to a traditional bank account; therefore the wallet has to be a separate store of value from a bank account for it to be mobile money.
  2. Bank-Led: (For example in Nigeria and India) Here, the wallet is held by the bank and the mobile operator may only come in as a channel partner to process transactions through USSD, SMS or GPRS. The banks will then access their consumers through a network of agents similar to the mobile network-led model. Bulk of regulatory requirements will be on the bank in this case.
  3. Independent Model: (For example Zoona and MobiKash) – Here, a company that is neither a bank nor an mobile operator, will have its own wallet platform, a trust account at a bank and with the mobile operator as a channel for accessing the wallet, usually USSD. Such companies will often be mobile operator agnostic, with their USSD code being accessible from more than one mobile operator partner.

The success of the mobile operator led model, especially in East African countries, is well demonstrated and it is thought that they succeeded for the following reasons:

  1. The telecom company had already acquired large and loyal consumer bases; it was easiest for them to cross-sell the mobile wallet to their captive audiences. Telecoms companies easily had larger customer bases in these parts of the world where banking penetration was lower and in some cases had up to and over 100 per cent penetration on the population for GSM products.
  2. Mobile operators already had a country wide, ubiquitous, well branded, committed distribution structure in the form of airtime merchants, both at the retail and wholesale level and so it was easier to convert these merchants to also become mobile money agents.
  3. Telecom companies already had refined strengths in communicating and marketing products to large subscriber bases and had successfully introduced data and VAS products in the past, so consumers were used to the idea of adopting innovative and new products from their preferred telecom company.


In Nigeria, as in India and elsewhere, the Central Bank of Nigeria, (CBN) has authorized two models for mobile money operators:

  • Bank-Led model: This means that mobile money wallets are bank branded and owned and the service is to be initiated by a bank or a consortium of banks. Examples are Access Money powered by Airtel (Access Bank); GTMobileMoney (GT Bank); FirstMonie (First Bank), EazyMoney (Zenith Bank); Ecobank Mobile Money (Ecobank); Stanbic IBTC Mobile Money.
  • Non bank-led model: which is similar to the independent model described earlier and  has players such as Paga (most successful so far) and
  • Super-Agency Model: Whereby any so licensed entity can act as a super agent for other mobile money providers. This is a recent innovation and most prominent deployment is GloXchange by Glo the mobile operator which is already a super agent for FirstMonie, Ecobank Mobile Money and Stanbic IBTC Mobile Money.



a) Challenges

Despite having a population of over 170 Million people and a mobile phone penetration rate of over 80 per cent and a banking penetration rate of 20 per cent according to KPMGs 2013 report; Mobile money uptake has been very low.

Early success has been registered such as in the table below. However, of that registered base, subscriber and agent activity levels remain very low.

Mobile Money Operator

Regd. Subscriber Base (2015)

Regd. Agent Base


3.4 Million


Access Money

3.1 Million


Source: Quartz, Access Money

With the bank led deployments, the banks have sometimes had a muddled marketing effort, whereby they have left their clients confused between mobile money and mobile banking. Many in the Nigerian banking sector see more strategic value in pursuing mobile banking and agency banking as they require consumers to open traditional bank accounts. Also, traditionally, the banks have not seen the base of the pyramid as fully addressable market due to high costs of brick and mortar branches vis-à-vis low deposits from this segment, hence the low banking penetration in Nigeria and similar markets.

Also, by creating a bank-led model, margins have to be split between the bank and mobile network operator partners and given the price sensitivity for mobile money services, it often leaves both parties out of the money.

b) Opportunities

With the new super-agent licence the CBN has started issuing, entities, are able to aggregate mobile money wallets and provide network agency services to multiple wallets. This solves the headache of agent fragmentation and agents operating at below the threshold activity level to make the mobile money agency business profitable and worthwhile. GloXchange has already lauched this service in a big way and will remain a player to watch for its future successes.

Independent mobile money operators such as Paga are free from the constraints and goal incongruence of the traditional banks and have used this focus to make broad strides as seen in the data above.

c) Conclusion.

At the end of the day, mobile network operators seem to have shown themselves to be the most capable entities to successfully role out a mobile money service to reach saturation level as they have the financial, logistical, and marketing strengths to do it; not to mention the very strong incentive that comes from creating a lock-in product to increase switching costs for their GSM customers and keep them more loyal. The CBN would do well to allow mobile network operators o directly join the fray and allow open competition with the banks and independent entities and the consumers will be the ones to gain the most from cheaper, more accessible mobile money services. There is a giant market opportunity and need for financial inclusion in Nigeria and we in the mobile money sector are hopeful for such changes.

Mwema Kerich

Mwema Kerich

Mwema Kerich is a Business Development Consultant for Mahindra Comviva. He has several years of work experience in the fields of business development and project management in the telecom sector, starting with telecom infrastructure,...