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Transcript of Mobile Financial Services
eBIZ.mobility
Ecommerce Everywhere © 2010 eBIZ.mobility LTD Proprietary and Confidential
Mobile Financial
Services- How Operators
Earn RevenueJeremy Kagan
Founder and CEO
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
• Primer on Mobile Financial Services
• Examples and Case Studies
– Mobile Money Ecosystems
– International Remittance
– Internet Commerce
– Gambling
– Mobile Banking
• Success Factors and Challenges
• Limiting Risk While Increasing Reward
Agenda
2
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
• P2P Transfers
• Mobile Wallets- Stored value / Prepaid cards
• Payment Ecosystems
• Bill Payment
• Mobile Purchasing NFC and Remote
• Salary Disbursement
• Remittances- cash and airtime
• Mobile Banking (banked, unbanked)
It is not just about Premium SMS anymore!
Mobile Financial Services
3
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
High Volume Revenue Share Opportunity• Over 4 billion handsets worldwide, growing to 5.8 billion by 2013 (growth
residing mostly in the emerging markets)
• Mobile Wallet (Domestic)- $4.8B in direct revenues and $2.9B indirect
revenues for telcos in emerging markets (GSMA)
• 85% of world population is unbanked (Gartner)
• International Money Transfer (remittances)- $420B/yr - $600B including black
market (World Bank)
• Fees 2%-15% depending on sending/receiving country (World Bank)
• Mobile Financial Services will yield $7.9 billion in revenues for MNOs by 2012 (GSMA)
• International Airtime Transfer- 5% of Top-Up revenue, $8B transferred
• Alternative payments 7% of online commerce world growing to 15%
• 457M Mobile Banking Users by 2015 (Payments CM Research – Advanced Payments Report 2009)
Confidential & Proprietary 5
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
Global Advanced Payment Forecasts- Relative Volumes
Source: PaymentsCM Research – Advanced Payments Report 2009
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
Ecosystems are Forming
Why has it taken so long? - Somebody had to take the first step- and it is a BIG one
- Asia- Transportation Authorities mass NFC infrastructure spurred MNOs
- Philippines- prepaid top-ups led to Mobile Payments, remittances, p2p
- Africa- MNO deployments led to Mobile Wallet, remittances, p2p, top-ups
What is different now? Baseline Infrastructure is in Place- Successful deployments give basic learning curve on commercial models
- NFC deployments are starting in Europe
- 90% unbanked rates prevent PayPal from satisfying web payment needs of many
markets
Mobile Money- Now is The Time
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
Mobile Wallet
Cash
Identity Card
Credit Card /
Debit Card
Loyalty Card
Check Book Prepaid Airtime
Voucher
• A virtual wallet for subscriber
• May link to:
• Cash- Stored Value
• Credit cards
• Prepaid cards
• Gift and loyalty cards
• Identity cards
• Bank account
• May be based in:
• Server
• Handset App
• Contactless (NFC) Card
Wallet shown courtesy of Trivnet Ltd.
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
Case Study- Mobile Money Ecosystems In Service
• M-Pesa Kenya (Vodafone)- 70% of users were previously
banked- this is a disruptive offering, 2 Million transactions/day
(May 2009), 10% of Kenya’s GDP flowed thru in 2009
• Zain- Zap Holdings Subsidiary- 16.5M active customers-
introducing new people to financial services
• SMART Money Philippines- 125,000 cash-in agents, can
support airtime sales of $0.06
• G-Cash Philippines- 18,000 cash-out points
• Oi Paggo Brazil- 250K Users, 70K merchants
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
Case Study- International Remittances
10
• Average domestic cash deposit $20
• Average mobile remittance transfer $200
• International money transmittance currently costs $5–$87 for a
remittance amount of USD$500 - World Bank
• Mobile is more convenient and lower cost
• Mobile Remittance Corridors are Already in Commercial Service
where mobile wallet ecosystems exist:
– Kenya
– Philippines (An estimated 10 million Filipino migrant and contract workers
remit $17 billion annually via traditional methods)
– Poland & Eastern Europe
– Mexico
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
London,
March 2010:
Western
Union
Advertising its
IMT service to
M-Pesa
Kenya
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
eBIZ.mobility
Web Commerce Today- Limited by Credit Cards
United States Rest of World
40% of U.S. and 90% of Rest of World Internet Users Do Not Have a
Credit Card (Yankee Group)
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
• Facebook, MySpace, Bebo Applications
– Mafia Wars
– My Empire
– Guitar Hero
– Spare Change
• App Stores
– iTunes
– Ovi
• i-mode Japan
• Micropayments
– Boku
– Zynga
– Ping.ping
Case Study- Web Payment for Digital Content
13
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
• Mobile payment offers a quick and easy-to-use payment solution for
casino players to instantly deposit funds to their balance on-the-move
• Launched mobile payment method Aug 2008 in a regulated market- UK
• Started with licensed online/mobile casino Wild Jack Casino: Web:
http://www.wildjackcasino.com WAP: http://mobile.wildjackcasino.com
• Initial transaction amount set to £10
• Due to success in Nov 2008 increased transaction amount to £15
• In 2009 increased transaction amount to £30
• Expanded service to All Slots Casino (fully licensed) Web:
www.allslotscasino.com WAP: http://m.allslotscasino.com
• 70% of all payment attempts are carried out by players who subscribed
to a different mobile network operator
• Since the mobile payment system was launched, the operators
experienced zero disputes or claims by players
Case Study- Mobile Payment for Online Gambling
14
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
• Convenience application for the developed world
• 2009 survey conducted by Palmer Research*
• 2/3 of offline consumers contact their financial institution once a week
or more through traditional bank channels.
• 1/2 use the bank call centre or interactive voice response (IV)
• Each call centre transaction costing an average of US$3.75
• Each IVR transaction costing an average of US$1.25
• Mobile banking estimated US$0.08 per transaction
• Strong operational incentive for Banks to push the mobile channel.
*http://www.onwindows.com/Articles/Mobile-banking-moving-beyond-the-branch/4951/Default.aspx
Case Study- Mobile Banking
15
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
Goal- Payment Standard Alongside Visa/MC
16
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
• Branding
• SIM Card
• Distribution Network
• VAS Marketing
• Billing Relationships
• Customer care infrastructure
MNOs Have Strong Assets for Mobile Money Services
17
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
Ubiquity
• Wide Merchant Network
• Wide Agent Network
• Consistent User Experience
Regulation
• AML/CFT- Anti-Money Laundering/Combating Funding of Terrorism
• Know Your Customer- KYC
• eMoney rules
Overcoming Challenges and Making Money
• Partner with a MFS Hub Provider and Financial Institution
• Deploy open technology platforms and interfaces
• Partner with Merchant Acquirers
• Follow successful 90/10 rev share models to attract merchants!
Collaboration is Key to Success- “Fuel the Wallet”
18
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
• Wallet provides “Chinese Wall” - No direct relationship between
operator and merchant- operator can monetize consumer’s cash &
payments without direct exposure
• Non-Reputable User Authentication- Operators currently have 2 factor
and even 3 factor user authentication systems available which make
transactions legally non-reputable
• Consumer Trust- Consumers use the trust relationship with their
Operators who maintain their private financial information as their
“online identity keepers”
• Reduces Theft- Cash collection by businesses and consumers in
remote regions are more secure if done electronically
Mobile Money Limits Risk and Liability
19
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
The Right Hub Facilitates Success
Real-Time ClearingImmediate availability of funds
Guarantee Finality of Transaction
Real-time Identity Management
Merchant/Agent Authentication
Transaction Verification
Payment Authorization
Settlement & Reporting
Mobile Operator
Payment Interfaces
Subscriber Interaction
Content / Service Provider
Delivery Platform
Wholesale Clearing
& Settlement
Reporting & BI
B2B Client Support
Administration &
24/7 Operations
Public
Transit
P2P
Payments &
Transfers
Point of Sale
Payment
Top-Up
Remittance
JAVA apps
for i-gaming
Open Web-
Advertising & Age
Restrictions
$
Bank
Food Mart
Cash-Out
WebPayment
eBIZ.mobility
Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential
We provide alternative payment solutions for internet, mobile, and
electronic payments.
Product Suite: Target Markets:
- OneTouch Online Purchasing® Digital Merchants
- OneTouch Cashier™ Online & Mobile Casinos
Underlying Technology (patent pending):
- Federated Payment™ Payment Service Providers
- Applet based payment App Stores
- RMG™ (Roaming Mediation Gateway) MNOs
About eBIZ.mobility
21
Copyright © 2007-2010 by eBIZ.mobility LTD. All rights reserved. eBIZ.mobility and the eBIZ.mobility logo, OneTouch Online Purchasing and the OneTouch Online Purchasing logo, Federated Payment, and RMG are trademarks or registered trademarks of eBIZ.mobility LTD. All other trademarks belong to their respective owners. The information contained herein is subject to change without prior notice.
eBIZ.mobility
Ecommerce Everywhere © 2010 eBIZ.mobility LTD Proprietary and Confidential
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Jeremy Kagan
Founder and CEO
+972 2 999 3881