Build your own

It is quite amazing that many operators have opted to build their own mobile banking solutions. Quite a few examples exists of which the mPesa initiative that Vodafone have rolled out in Kenya and have announced initiatives in Russia and Afganistan is probably the most famous. In a survey conducted by Edgar and Dunn recently, it was found that 48% of mobile operators are considering building their own wallet solution (rather than buying it). The question needs to be asked why this is the case.

It is an accepted fact that no reputable company would even think of attempting the development of their own general ledger system. This is just unthinkable. It would never be sensible to do this as it would be too expensive and too risky from a general auditability perspective. Yet Mobile Operators (with very little skills as banks), are contemplating building their own banking systems (because wallet solutions are for all considerations the same as bankings systems).

In thinking about this phenomena, I can think of three reasons why they would consider doing this. It could be that mobile operators think that they can build competitive advantages into the mobile wallet solution. This may be the case, but this will only be the case in the short term, when successful solutions will be copied by competitors. Another reason could be because of internal politics and based on the aspirations of staff members of the mobile operator.

Another reason could be that mobile operators are under the perception that no reputable mobile wallet vendor exists that are able to provide scalable, industry robust solutions. If this is the case, the wallet solution industry have a lot of work to do.