Critical mass of mobile banking penetration

I started my career as a Nuclear Scientist, working on nuclear reactor projects. The key about a nuclear reactor is to ensure that the neutrons produced by fission of an Unranium atom is enough to sustain the reaction in adjacent atoms. One refers to a situation where sufficient neutrons are produced to sustain other reactions as critical mass.

The deployment of mobile banking is also subject to critical mass. If the penetration is not quick enough to reach critical mass, then the deployments become de-funk and ultimately fail. I have often wondered what critical mass for mobile banking is. Is it a percentage of the population? Is it regionally bound? What are the factors that make something work and how can we manipulate it? Based on my observations, I would say that the following factors influence critical mass for mobile banking:

• The speed to get to critical mass influences critical mass. If the growth is spectacular and fast in number of subscribers, critical mass is less. If take-up is slow, it is possible to get to critical mass, but the absolute number will be more.
• The need also dictates critical mass. If the need is big (for instance in countries with very little payment infrastructure) critical mass will be reached quicker.
• Penetration must be sufficient to ensure that the network effect takes root. Even if the penetration is high and it does not satisfy the need of others to also participate in payment, then critical mass has not yet been reached. That is why factors like the design of the product, regional or socia-economic clustering and competition all play a roll in what critical mass means.

In deploying mobile payment solutions, it is important to have a good idea what will constitute critical mass.