> can use the system for the distribution of social aid to a selected circle of persons such as unemployed or displaced individuals. In many cases, this is more effective from a logistical point of view than direct handouts in cash or in-kind (e.g. distribution of food). Especially developing countries are often struck by natural disasters (e.g., extreme weather and pandemics) or violent conflicts. In Bangladesh, for instance, the government has been using mobile money to directly support ~5 million poor households affected by the COVID-19 crisis.
Banks
Although the mobile money system is competing with conventional banks in some areas, it is beneficial for them to join the system. By establishing what is commonly referred to as interoperability, mobile money users can conduct transactions with regular banks and their customers (e.g. by sending money from a mobile money account to the bank account of a family member). For mobile money, interoperability is a crucial evolutionary step: it elevates the system from being merely a parallel channel for payments to being an integral part of a country's financial system.
Banks, on the other hand, benefit from the move by gaining access to a whole new group of customers, especially low-income individuals who lack access to conventional banking. Using the mobile money platform, banks can offer specialized products, such as micro-loans and micro-insurances.
Other telcos
Focusing on interoperability, another critical step is the connection of a mobile money system to that of other operators. Unlike cooperations with other ecosystem partners, which tend to be purely complementary, the benefits of giving a direct competitor access to one's own network seem less apparent at first glance. The major benefit stems from simple network effects. Establishing interoperability between mobile money systems increases value for all customers. They are now able to conduct transactions with a larger number of participants and more people are likely to flock to the platform. In simpler terms: the cake is getting larger. Although there remains a risk that some
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8) Findev Gateway (2020): Bangladesh: Govt Cash Gift for Corona-Affected Family Disbursed Through Rupali Bank SureCash, www.findevgateway.org/news/bangladesh-govt-cash-gift-corona-affected-family-disbursed-through-rupali-bank-surecash
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