Delivering digital finance typically requires a complex web of partnerships and coordination. A digital finance provider—whether a bank, a mobile network operator (MNO), or another third party—has to coordinate with a payment service provider that brands and sells the service to the public, a bank to hold the float account and safely store funds, a technology service provider, an agent network manager that provides the distribution, and a communication channel.
Successful partnerships have the potential to provide millions of unbanked communities with access to affordable and convenient financial services. Indeed, collaboration in the digital finance industry can reduce friction in mobile payments and accelerate network effects that will help mobile money achieve its social and commercial potential.In practice however, a decade of mobile money experience demonstrates that partnerships initially tend to struggle.
This snapshot explores what partnerships can look like, the potential business case for commercial partnerships in digital finance, and the business mechanics of such relationships.