There are several formidable players vying for the mobile money space. I’ll be examining these players every Monday. This week, we’ll start by looking at Fundamo, likely the largest mobile money platform targeting mobile network operators (MNOs).
Update: On June 9, Visa announced that they were buying Fundamo for about $110 million in cash. There has been much coverage of the purchase (here, here, and here) so I will just say that I think it was a very smart purchase by Visa. Fundamo has expertise in working with mobile operators and a back-end that’s robust enough to work with banks – Visa now has a great platform especially for emerging markets.
Overview: Fundamo is a private company based out of South Africa and builds mobile financial service products primarily used by MNOs. Its deployments have focused largely on emerging markets where the MNOs have a strong distribution network and banking services are mostly serving an elite few. Its mobile wallet and financial services infrastructure provides a full-range mobile money product (see below for features). Founded in 2000 by Hannes van Rensburg, Fundamo has grown to be a respected leader in the mobile money space. Van Rensburg has prior experience working in the financial services industry which definitely bolsters Fundamo’s credibility in delivering robust financial solutions.
Key Features: Fundamo’s Mobile Wallet platform enables the full range of mobile money basics, including:
- P2P transfers (local and international)
- Airtime purchases
- Bill payments
- Balance inquiries
- Card and PIN management
Notable Clients/Partnerships: Fundamo boasts working in more than 20 countries on over 50 successful deployments. Their strongest regions of deployment are Africa and Latin America with coverage in India, North America, Middle East and Western Europe as well.
Fundamo’s selection as the mobile platform of choice by MTN is by far the most public and notable deployment. MTN is a large mobile operator also based out of South Africa with over 140 million subscribers in over 21 countries. MTN selected Fundamo’s Mobile Wallet product to serve as the backbone for MTN Mobile Money in a deal worth ~$10 million.
Competitors: As a provider of mobile money services to MNOs, Fundamo’s main competition is Obopay which will be covered in a future Platform Spotlight post. Fundamo also competes with banks and MNOs that attempt to offer their own, in-house mobile financial services platform. Fundamo (and Obopay) provides compelling value for those banks and MNOs that do not want to endeavor to create their own solution from the ground up.
Future: In the short to medium term, we can expect Fundamo to continue to grow and prosper as MNOs around the world continue to look for a turn-key, white-label mobile money solution. With M-Pesa’s growth and success as a beacon of hope, MNOs will continue to look to mobile money as a potential value added service that holds up profitability despite competitive pressure in voice sales. That thirst for an M-Pesa-like financial success will drive MNOs toward mobile money and Fundamo will be one of the leading options they embrace.
In the longer term, as MNOs lose their closed-loop and proprietary grip on mobile wallets, I believe that Fundamo will need to transition into an interoperable mobile payments platform that both MNOs and banks can plug into with merchant aggregation and management as a core competency. Time will tell if Fundamo can make the jump into mobile payments. It will be interesting to see the role they choose to play.
 By payments here, I mean payments at retail merchants for physical goods such as groceries or clothes. I distinguish payments as something distinct and separate from P2P transfers.