I have mentioned Safaricom in this blog several times as an example of a classic disruptive leader and touted their M-Pesa text-based payment system as a game-changing service targeting the bottom of the pyramid (BOP).  But a recent article in the International Herald Times showcases the challenges this service and others face.  In truth, any project, product, or service that needs to tap into an emerging market banking infrastructure faces significant hurtles.

These include regulatory compliance, the banks’ reluctance to open their back-end systems to other companies’ technologies, and overall complexity of implementing these services.  According to the article, Visa and Mastercard are aware of the opportunity and watching on the sidelines.

This reminds me of the hype of online banking in the late 80’s and early 90’s.  Until the internet was everywhere did it finally take off.  Today you would be hard-pressed to find a bank that doesn’t have online banking.

From a BOP perspective, the increasing adoption of cellphones is another example.  But simple, easy-to-use, relevant applications, and affordable payment services are needed to create the perfect storm of pervasive adoption.  The question is how long will the back-end players (banks and governments) take to make the moves to pave the way.

Microsoft, with all its clout and influence, has been unable to make Flexgo, its prepaid/subscription-based PC service viable outside of a few trials.  The biggest issues Microsoft faces are the payment mechanism and support from the banking sector.

A successful strategy is both to partner wisely and hire the right people who can help influence and win the support of the government and banking sectors.  And have patience … it won’t blossom overnight.