> Posted by Elisabeth Rhyne, Managing Director, CFI
What a marvel it is that a couple living in a remote region of the world, despite limited education and financial means, could use their cell phones to receive money from their children in the capital city! Like many techno-wonders of our world, the mobile financial services people all over the world use operate atop a complex set of distinct technologies zipped together. A host of systems work beneath every successful transaction, each driven by and subject to forces specific to that system, not all of which prioritize mobile money. It’s not a wonder, then, when things sometimes fall apart.
CFI Fellow Leon Perlman has the technical chops to unpack these systems, and this is exactly what he has done in his research for us. He went to 12 countries and tested multiple mobile financial services, the main handset brands available, and their component hardware and software. CFI just released his report, Technology Inequality: Opportunities and Challenges for Mobile Financial Services, and I recommend it to the technology savvy and novice alike.
I suggest using Perlman’s work as a mobile money technology primer. For example, do you understand the difference between Unstructured Supplementary Service Data (USSD), SIM Application Toolkit (STK) and Java-based applets used in mobile financial services? I didn’t. Now I know that each technology has its own merits and shortcomings, and that in the dynamic telecoms market the relevance of each is continually shifting. Leon’s paper explains these interface technologies, along with handset features and mobile signaling technologies—and more important, how they work together, or sometimes don’t. Along the way, readers are introduced to the many companies and government bodies involved: telecoms regulators, banking authorities, competition regulators, MNOs, handset manufacturers, operating system providers, user interface designers and financial institutions. These organizations have a wide range of objectives, interests and constraints, making it challenging to bring all the requirements together into a functional operation and viable business model.
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