THE tipping point is often used to refer to the point at which a product or service becomes patronized by more than a niche in the society. It is that point beyond where mainly the early adopters use a product or service to when even the laggards have been convinced of the presumed value to be enjoyed. Malcolm Gladwell in his 2000 book titled 'The tipping point: How little things can make a big difference' provided convincing arguments on the parts played by sociology and group dynamics in social epidemics that profoundly altered existing cultures.At this time it suffices to say that mobile money (MM), which is money that resides in digital wallets in mobile phones (separate from phone credit) is a good idea that can facilitate financial inclusion and commerce in regions of the world where there are large numbers of unbanked people. Mobile money has been found to be quite safe, especially compared to the alternative of carrying hoards of cash; and easily transferable when people are not in close proximity to one another. Additionally, it is popularly accepted as a method of payment in places such as Kenya, Haiti, Afghanistan or Philippines where it is widely used for money transfers and payments.So what's the deal with Nigeria' We have a large percentage of unbanked people and a demographic map that resembles some of the places where the innovation is popular. Why is it taking a long time for the value of mobile money to be realized here and for the masses to begin using it' After all, we had the benefit of watching mobile money launch in other countries and hopefully have learnt from the mistakes in places where there were some. Consequently we have a Central Bank of Nigeria (CBN) mobile money framework that attempts to make the purveying of mobile money services fairer. Rather than handing over the business to the dominant mobile network operators (MNO), several companies have been licensed to provide mobile money service individually or in collaboration with financial institutions or MNOs. Regulation of the service, while mainly residing with the CBN appears to be influenced by the Nigerian Communication Commission (NCC). It therefore seems that a lot has been done thoughtfully and correctly by the relevant authorities. So what is wrong and where is the tipping point' What are the little things that still need to be done before the taxi driver agrees to be paid by transfer of money from my phone to his phone.As we ponder the challenges that face mobile money use in Nigeria, it is wise to also consider the countries where the service has succeeded and the circumstances that existed prior to the introduction there. Research suggests that in countries like Afghanistan and Haiti (after the earthquake), only rudimentary banking services were available through the small network of financial institutions operating. While in Kenya and the Philippines, which were more stable, the level of electronic banking sophistication was quite low before the introduction of mobile money services. In Nigeria on the other hand, we have a multitude of banking institutions that for several years, have supported mobile banking and money transfer services using phone browsers or applications installed on blackberries, iPhones and Android phones. Users of these mobile applications have been able to buy recharge cards, pay registered merchants and transfer money to third party bank accounts for some time now using their phones.This is important because although mobile money services help financial inclusion by extending banking and payments services to millions of unbanked; the reality is that many of the early adopters who typically help spread the phenomenon are the young and upwardly mobile who are not yet jumping on the MM bandwagon because they have an alternative that still works for them. In further support of this position, it is interesting to note that Kenyan banks only recently started offering mobile banking and money transfer services; arguably as a response to Safaricom's popular M-Pesa MM service, which had significantly cut into their business.There are other factors that help compound the problem; chief amongst these is my belief that the mobile money pie is not big enough for everyone who wants a piece of it. By this I am referring to the fees involved as money moves from person A to person B. It is my opinion that the fees involved may be too high, considering that many of the early users in Nigeria already have bank accounts and quite likely already practice mobile banking for less. In a recent research I conducted, on average I found the fee for transferring sums less than N2000 (Naira) quite prohibitive considering there was a cheaper alternative'mobile banking. This challenge perhaps should encourage the purveyors of mobile money services to take another look at the value chain and how it can be reconfigured to make sense for all players. It obviously does not make sense for me to transfer money to someone who has a bank account using mobile money due to the higher fees, but it does make sense to use it to pay a small retail merchant who does not have a point-of-sale (POS) terminal in their shop or a taxi driver.Another concern perceived through a small experiment conducted was the attitude of six people aged 22-35 years, to whom I transferred N1000 (Naira) each using a mobile money service. They were all university educated, with the youngest in his final year. I assumed they would be excited to try out the service, but alas I was wrong. I sent each person N1000 in mobile money and then asked him or her to inform me of the ease with which they registered and collected the money; I was interested in their early experience. Two of them informed me that they were able to access the funds within 24 hours. After two reminders were sent to the remaining four people, one registered and got the money sent. While the remaining three claimed they had not the time to try to learn how to claim the funds. I was surprised, I had assumed that since these youths were always on their phones that they would all be eager to try out a new innovative service on the device they love and use so much. So if the youths are not expressing interest in high numbers, how do you get the older and less educated to do so'The potential of mobile money in Nigeria remains huge, first given our population then the high and still growing mobile phone penetration rate. To this we also add the availability of high speed Internet (although most of it remains at the coastal landing sites) and the growing number of locally focused online stores that will gain from widespread use of a simple payment method. Unfortunately, the fact is a number of things still need to come together for mobile money use to reach a tipping point. I suspect that the precipice at the tipping point will involve a mix of a re-tweaking of the value chain, reassessment of fees for the service and the agency value of shared services.Franklin Chidi, PhD is a finance & business consultant. Follow on Twitter @FranklinChidi
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