So where do operators actually drive revenue from in a mobile money project? The business case is built around a few main sources:
1) Commissions on Transactions: Probably the most obvious source of revenue is the commission that is paid by end users on each transaction. Mobile money service providers need to be careful of how they price these fees, since they should still be cheaper than traditional transfer services but high enough to warrant the investment in the service. The key to being profitable in this area is to drive a high volume of transactions
2) Subscription Fees: Another fee that can be paid by end users is a subscription fee for the service. Use with caution! Your objective is to encourage registrations and in particular viral registrations - a subscription fee may hinder this objective
3) Customer Acquisition and Increased Sales: Offering mobile money services presents an opportunity to sell more airtime or to acquire off-net customers. If your service is first to market than the opportunity is even sweeter!
4) Cut Costs: A mobile money service can often reduce the commissions that are paid to airtime dealers since airtime can now be sold directly to the customer through the wallet.
5) Reduce Churn: This is a big reason that many operators choose to offer mobile money. Think of how often you change your bank - probably never, right? Operators are trying to achieve the same thing for mobile customers. If you use your mobile to send and receive money, you are quite likely to stick with your service provider. One operator that launched a mobile money service was able to achieve 7% churn reduction in one year. That's big money for operators!