Mobile financial Services & opportunities or threat

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Mobile Financial Services & Wallet Wars Opportunities or Threat

Deepak Sachdeva

Sales Director – Russia & MEA

MoreMagic, an Oberthur Technologies company

Agenda

• Mobile Financial Services & Wallet Wars: Opportunities or threat

– Economic viability of financial series for the unbanked

– Benefits of interoperability

– Challenges faced by banks and mobile operators

– Mobile Payment Gateway: A solution to address interoperability challenges

– Banks and mobile operators collaborative models

11/19/2013 © Oberthur Technologies 2013 2

• Started 6 years ago with pioneers MNOs in Africa and Asia

• Leveraging gap between ubiquity of mobile phones and low access to banking services

• Over 200 live initiatives. 30m active users (1) and many projects with 1m+ registered customers (1)

• 520,000 registered Mobile Money outlets in the world: same as Western Union (1)

• Customer value management impact for MNOs: increased ARPU

up to 20% as well as increased stickiness….

1. GSMA, 2013

Mobile Financial Services are here from last 6 years…


...but results vary a lot and lack key elements

To soon to tell Slow growing

Sprinters

• Launched 6-9 months ago

• Limited promotion at start to secure technical stability and distribution set up

• Launched 1-3 years ago

• Penetration below 5%

• No mass market reached

10-15

initiatives

60+

initiatives

130+

initiatives

• National successes with mass market adoption

• P2P, top up and bill payment as killer applications

• Uganda, Kenya, Pakistan, Philippines, Rwanda, Tanzania, Haiti

• Ecosystem challenges

• Technical instability

• No interoperability, no open loop

• Missing key basic banking services: merchant payment, loans, savings, insurance

Service penetration

Maturity


Wallet Wars…few examples

Kenya (05) Uganda (07) Nigeria (19)


Are unbanked population getting benefited from Wallet Wars?

• Do unbanked population have easy access to financial services?

– Can a person easily open a savings/loan account with a wallet scheme provider?

• Does a unbanked person can cash-in or cash-out its wallet from any agent location at min. fee?

– How easy is it for a user to cash-in/cash-out from an agent location?

– Does that agent needs to be from same wallet scheme provider?

• Can he pay for the goods and services he availed to any merchant without any fee?

– How many merchants are allowed to accept payments from other wallet scheme providers?

• Can he transfer money for his friends and family of other scheme providers at a low cost?

– Does current wallet scheme providers allow him to send money to un-registered wallet users?

– What is the cost of money transfer to off-net users?

• Is this unbanked person getting satisfactory services from existing wallet scheme provider?


How Interoperability provides Value to MFS Ecosystem?

• Product innovation beyond domestic remittances and airtime top-ups

In collaboration, banks & MNOs can develop real banking products like micro loans, micro savings,

agri-finance, micro-insurance to address the banking needs of customers.

• Enabling cost-efficient payments to and from the unbanked population

Cash in and cash out is an expensive proposition for everyone. There is a need to create an

ecosystem where Mobile Money can be accepted easily at all locations.

• Expansion of pool of customers

Interoperability enables all wallet service providers to have access to larger market which will

eventually lead to a healthy competitive environment.

• Low cost of operations

Interoperability provides a key benefit of reduction in cost of operation. With interoperability costs

can be shared among various wallet service providers for educating and creating awareness of MFS

among user and agents.


Challenges to implement Interoperability

• How to route transaction between Mobile wallet service providers

– Should agreements be signed with a central party or directly between the participants?

– Will there be a central database of all customer wallets like MNP database?

• Enabling communication across platform

– How to find a common language that all wallet platforms could interpret?

• Managing AML/CFT

– How to manage KYC/AML/CFT of the customers of other mobile wallet scheme providers?

– How to control frauds in new use cases of interoperability?

– Who will be liable for a fraudulent transaction done by a customer?

• Financial Processes

– How to define a fee which provides a win-win proposition for both customer and wallet service provider?

– How to define a common reconciliation and settlement process?

– How the revenue assurance process will be carried out by finance team of mobile wallet scheme providers?


Mobile Payment Gateway: A solution to address interoperability challenges


Wallet Issuers

Consumers

Wallet Acquirers

Merchants

m:Gateway TM

Mobile Payment Gateway

Case Study: A Collaborative Business Model

The first Universal Mobile Money service powered by Oberthur Technologies and MoreMagic Solutions™ in the Czech Republic

Goal: “Eliminate cash” by creating a new payment brand enabling to pay merchants, to top-up airtime and to transfer money to friends

Mopet is a JV created in January 2010 including 4 banks and 3 MNOs

Oberthur selected as supplier in July 2011, service launched in Sept 2012


Business Model

1. Mopet is in charge of acquiring merchants

2. A user can have only 1 MNO and 1 bank (User A has a contract with Vodafone and Ceska)

3. The revenues comes mostly from merchant fees when a user (User A) make a payment

4. Merchant fees is shared between Mopet, the MNO user (Vodafone) and Bank user (Ceska)

User A

User B


http://www.mopetcz.cz/img/web/Mobito.png

Deepak Sachdeva

Sales Director-Russia & MEA

MoreMagic, An Oberthur Technologies Company

M: +971 50 5579179

[email protected]


Mobile financial Services & opportunities or threat

Technology

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