Platform Spotlight: Obopay

There are several formidable players vying for the mobile money space.  I’ll be examining these players every Monday.  We’ve already had a look at Fundamo and Square; this week, we take a look at Obopay, one of the leaders in providing mobile money platforms especially for mobile operators (MNOs).

Overview: Obopay is based in the United States and was founded in 2005 by Carol Realini after she saw people carrying “bags of devalued cash” during a volunteering stint in Africa.  Like Fundamo, Obopay is a mobile money solution platform primarily targeted at MNOs but also appropriate for some banks.  Obopay provides back-end technology as well as customer-facing applications that enable for a full-range mobile money product (see below for features).  Obopay currently operates in 4 countries: India, Kenya, Senegal and the US.

Key Features: Obopay’s Mobile Wallet platform enables the full range of mobile money basics, including:

  • P2P transfers (local and international)
  • P2M merchant payments
  • Airtime purchases
  • Bill payments
  • Balance inquiries
  • Card and PIN management

Notable Clients/Partnerships: Because Obopay’s is a partner-led model, it has significant partnerships in each of its 4 deployment locations.  In India, Obopay has partnered with Nokia and an Indian bank called Yes on a combined solution called Nokia Money.  It’s a pilot initiative for Nokia and is an attempt for the Finnish phone maker to make money from services in addition to its traditional hardware business.  The Nokia Money application is pre-loaded on new phones and can be installed on existing phones through Nokia’s distribution network; it provides a good customer experience for low-end phones given it’s an integrated and native application.

In Kenya, Obopay partnered with an MNO called Yu (which is owned by the Indian conglomerate Essar) to create a product called yuCash[1].  Given the popularity of mobile money in Kenya, this was an important opportunity for Obopay to demonstrate its technology and solution; unfortunately for Obopay, Yu is the smallest MNO in Kenya and is struggling to survive.  In fact, there are reports that Essar is trying to sell Yu.  It’s a tough situation for Obopay and one that will not improve unless Yu unexpectedly gains market share or Obopay can strike deals to interoperate with both other MNOs and additional banks.

In the US, Obopay has many partners.  With STAR, Obopay enables instant P2P fund transfers regardless of the banks involved as long as the accounts are STAR debit accounts.  Additional partners have included MasterCard, Verizon, NYCE and FIS Global.  All of these partnerships make for a compelling story – but it’s unclear if any of the initiatives have gained any traction.  Despite much searching, I haven’t been able to find any evidence of substantial take-up or any usage numbers.

In Senegal, Obopay is working with Societe Generale on a product called Yoban’tel to offer its mobile money solution.

Competitors: Obopay competes with other mobile money technology platforms, chiefly Fundamo which was recently purchased by Visa.  Banks are also natural competition for Obopay to the extent that they recognize the opportunity of mobile-based financial services.  And if the card associations (chiefly Visa and MasterCard) continue to move in the direction of mobile based payments and transfers, they will be prime competition.

Future: In the short to medium term, Obopay must prioritize customer adoption in all of their major partnership deployments.  Prior to being acquired, Fundamo had strong success with MTN – demonstrating that their solution worked in the field and that it could scale.  Obopay needs to find its big wins to demonstrate the same.

In the long term, just like I said with Fundamo, I believe that MNOs will lose their closed-loop and proprietary grip on mobile wallets.  Before that happens, Obopay needs to figure out its role in the mobile payments ecosystem – either selling a customer-facing solution to financial institutions or providing an interoperable back-end system for both smaller banks and major MNOs.  Time will tell if Obopay is able to make the transition and gain serious usage.

[1] yuCash and Equity Bank have created a link enabling transfer of funds as well as withdrawal from yuCash via Equity’s ATMs.


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