Converging Payments – what’s next in Mobile Financial Services and Financial Inclusion

Wednesday Feb 22, 2012

Richard Matotek, Co-Founder and Co-CEO of Utiba
By Richard Matotek, Co-Founder and Co-CEO of Utiba.

18 months ago, we created a new business within Utiba called Converging Payments. This week marks a critical milestone as we publicly launch this strategy with the formal announcement of our partnership with MasterCard and participation in their Mobile Money Partnership, for which Utiba is the founding member.

T*his is the first part of our Converging Payments strategy and it calls for the intersection of mobile wallet networks with card based payment networks. Through this joint initiative with MasterCard we are addressing one of the most important barriers to growth of mobile financial services – that is the lack of ‘openness’.

What exactly does that mean? Early mobile financial services have provided consumers with basic mobile wallet and bank account services, however confined to transactions within a limited network or ecosystem, for which they were sometimes referred to as a “closed- loop”. Now mobile wallet holders throughout the emerging markets will be able to link a prepaid, debit or even credit card to their balance held in their mobile wallets. With this card, virtual or physical, they will be able to make purchases in the global acceptance network of MasterCard and on the Internet. Global payment networks are considered “open loop” for their near ubiquitous nature and interoperability.

In addition a new breed of ‘virtual’ merchants will be able to join the open loop ecosystem and accept card based payments – without needing to have a POS terminal.

Now the mobile wallet holder in Ghana, who previously didn’t have access to a bank account, will be able to buy goods in a retail store, on the Internet, or from a virtual merchant and take cash out at an ATM, both locally and abroad. For someone who previously only made cash transactions, this opens a world of possibilities, indeed it allows participation in the global economy. For this reason we consider Converging Payments the next step in Financial Inclusion.

Converging Payments will bring a next generation of more sophisticated mobile financial products and services to consumers in emerging markets; widespread adoption will be fueled by investment by payment industry players such as MasterCard, and the advent and rapid penetration of low cost smartphones.

Under the MasterCard partnership, Utiba will bring three new capabilities to our mobile wallet and banking customers,

  1. ‘Issue’ prepaid companion cards against the mobile money (wallet / bank) account, enabling consumers to make payments from their mobile money account either physically at merchants where MasterCard is accepted, or virtually- for example on e-Commerce sites.
  2. Enable consumers to initiate face-to-face or remote payments using their mobile phone at merchants that do not have traditional POS acceptance device.
  3. Equip their agents / retailers to ‘acquire’ card initiated payments from other issuers.


In this first stage and with the MasterCard announcement we are initially focusing on interconnection between the mobile money platforms and global payments networks. However, we are also working diligently to add capabilities to our product and services offering that will allow ever more sophisticated financial products and services to be brought to the emerging markets, supported by developed world banking and payments infrastructure. This includes banking products such as savings and loan accounts, plus the credit scoring, fraud management, business analytics to support this model. Naturally, stronger authentication and security will be required to wrap around this.

In parallel with these initiatives we continue to work on our strategies to link global e-Commerce, social, and gaming merchants into the converging payments eco-system, and the development of sophisticated ‘tools’ for agent / retailer networks to provide more service rich and deeper distribution. More on this later.

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