ICT Mobile Money

7/28/2019 ICT Mobile Money

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1AEBS 2013 - ICT


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ICT session

2AEBS 2013 - ICT


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3

Title

Date

Restricted - Confidential Information GSMA 2013

The mobile money opportunity

ASEAN-EU SUMMIT

Hanoi, 8 March 2013

Simone di Castri - Regulatory DirectorRestricted - Confidential Information GSMA 2013


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GSMA contribution to achieve the scopeof the ASEAN-EU Business Summit

Raise awareness of the mobile money opportunity Facilitate the dialogue between the private sector and different parts of

the government to build enabling environments for mobile money to drive

economic and social development



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Community Power for Mobile

Agenda

Mobile growth and ubiquity

What is mobile money?

State of the mobile moneyindustry

GSMA and the Mobile Moneyfor the Unbanked (MMU)Programme



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Mobile money is a key driver of M4D

People, households, citizens

Work and save money

Live in urban and rural areas

Rely on informaleconomyfinancialnetworks

To pay food,goods, house,

wedding,education

To face emergenciesand shocks

Live in thecash

economy

Mobile can drive development


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Mobile can drive development Mobile connects people, government, and business fast and at low cost. Through their mobile, households can gain

access to services and information that are life-enhancing. They use their mobile to access education, health,

agriculture, and financial services. Mobile is changing the life of people, and improving the way companies and public institutions deliver their services,

bringing economic development in the communities and expanding markets. The power of mobile is transformational, particularly in emerging markets and developing countries where its by far

the most available communication channel and device.

Payment systems are crucial because they enable people to collect payments from customers, buy goods, pay forwater and electricity, and send money to friends, family, and business partners. Therefore mobile money is

They also enable governments to collect taxes, disburse social payments, monitor and manage the economy moreeffectively (cash is expensive and risky).

Enabling digital payments and transfers is the first step to create universal access to financial services and improvethe stability and safety of the financial system.

Mobile money is a key driver of the mobile ecosystem

Payment and transfer services are the building blocks of

efficient economiesand financial systems

The rapid growth and the ubiquity of mobile is

enabling socio-economic growth



The benefits of mobile money can be widely felt

Mobile moneyreaches the poor

and it helps themweather financial

shocks

The share ofpoor households who have M-PESA went from 28% in 2008 to 51%

in 2009. Similarly, the percent ofrural households with an M-PESA account wentfrom 29% to 59%, and the percent ofunbanked using M-PESA went from 25% to50%.

41% of TameerBank / Telenor Pakistans Easypaisas users live on less than $2.50per day.

M-PESA users were able to fully absorb large negative income shocks (such asjob loss, livestock death, harvest or business failure, or poor health) without anyreduction in household income whereas statistically comparable non-users sawconsumption fall on average 7 percent.

Mobile money alsomakes SMEs more

productive

The rate of mobile money usage by business owners is much higher than nationalaverage, and many report significant benefits: increased efficiency from time savedand improved logistics. Most find mobile money much easier than banks: thelocations are more accessible, customer service is better, transactions are faster, andit's much easier to sign up for an account.



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The mobile money opportunityMobile growth and ubiquity

ASEAN-EU SUMMIT

Hanoi, 8 March 2013

Simone di CastriRestricted - Confidential Information GSMA 2013



The rapid growth of mobile is enabling the mobile for developmentrevolution

Mobile in emerging markets and developing countries

1.3

2.3

3.0

24%

39%

47%

0%

10%

20%

30%

40%

50%

0

1

2

3

4

5

2007 2012 2017

Penetration

Billion

Active subscribers Penetration



The rapid growth of mobile is enabling the mobile for developmentrevolution

Mobile in emerging markets and developing countries

Thenumber ofconnectionsdoubled inSouth East Asia in the last fouryears

0.8 0.8 0.8 0.9 0.9 0.9 0.9 0.9 0.9 0.9

1.51.7

1.92.1 2.3

2.52.7 2.8

2.9 3.0

0

1

2

3

4

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Individualsubscribers

(billion)

Developed Developing



Mobile: the closest to ubiquity

Penetration of communication devices in emerging and developing countries

24%27%

30%33%

36%39%

1% 2% 2%3%

5%8%

2% 3%3% 4% 5%

5%

0% 0% 0% 1% 1% 2%0%

10%

20%

30%

40%

50%

2007 2008 2009 2010 2011 2012Individ

ualsasa

percentage

ofthe

globalpopulation

Mobile subscribers Smartphones

PCs TabletsOn an ownership basis, the mobilephone is the most widely

owned communication device in the developing world


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The mobile money opportunityWhat is mobile money?

ASEAN-EU SUMMIT

Hanoi, 8 March 2013

Simone di CastriRestricted - Confidential Information GSMA 2013



Public policy goals

In some countries, the totalvalue of mobile moneytransactions is equivalent toa significant proportion ofthe countrys GDP:

> 60 % in Kenya

> 30% in Tanzania

> 20% in Uganda

Socio-economic growth Mobile money helps to reduce

the vulnerability of thefinancial system and mitigaterisks due to the widespreaduse of cash and informalfinancial services

Financial inclusion

Financial stability

Financial integrity

Consumer protection

OBJECTIVE

Universal access to safe and convenient financialservices

Payments Transfers Storage Savings Credit Insurance Pension

Investment International

remittances



What factors limit access to financial services?

Long distances & low pop density High bank costs relative to return

Low financial education Poor product / channel design

Source: CGAP



Mobile growth and ubiquity vs lack of outreach of banks

Of the 2.5 billion people in the world who still lack access to the financial system,

1.7 billion already have a mobile phone

Mobile money can overcome market and policy failures that lead to financial exclusion



Mobile money

The use of information and communication technologies (ICTs) and non-

bank retail channels to extend the delivery of financial services to clientswho would not be reached profitably with traditional branch-based financial

services.

Examples: e-wallets to make P2P transfers or payments, to receive salary,

or a transfers from the government

Additive

Transformational

Merely adds to range of choices or enhances the convenience for existing

customers

Examples: balance enquiry via mobile phone; internet banking

Customers get money into and outof the service by going to anetwork oftransactional agentsoutside of bank branches

Customers initiate transactions usingan interface that is available on basicmobile handsets


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Originally focusedon meeting

transfers and

payment needs

Ubiquitoustransactional

agents

Simple accountopening

Extensive use ofthe mobile channel

A unique revenuemodel that yields

affordability

MNO-bankpartnership

Six hallmarks of the mobile money business model



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Mobile money was developed for payments

In a survey of customers in eight sub-Saharan African countries,

51% reported sending or receiving a paymentover the previous 30 days, of which 50% sent money informally: in cash with traveling

friends

via money carriers like

bus drivers, or

traveling in person to

make large payments

98% of M-PESAusers 96% of M-PESAusers 98% of M-PESAusers 96% of M-PESAusers

M-PESA is fasterthanmy previous method ofsending money

M-PESA is moreconvenientthan myprevious method

M-PESA is saferthan myprevious method ofsending money

M-PESA is cheaperthanmy previous method ofsending money


Mobile money customers

Non- mobile money customers


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-5,000

10,000

15,000

20,000

25,000

2007 2008 2009 2010

Number of transaction points, Kenya(40,000+ today)

Bank branches ATMs

M-PESA outlets Post offices

$0.78

$0.04

Bank teller

Agent

Fixed costs per transaction

Agents operate on a prepaid model, eliminating credit risk

Agents are convenient for customers, and they transformthe economics of digitalising cash



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In 28 countries there are more mobile money agents thanbank branches (out of 49 surveyed)

504 bank branches - since 1925(? Barclays in TZ) 17.549 mobile money agents - since 2008

TANZANIA

Th bil f h b k d b i d l


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Customers shouldbe able to register

at any agent

KYC requirementsshould be

proportionate torisk

Registrationshould be

instantaneous

Enables mobile moneyservices to easily convertcustomer interest intoregistration

Provides agents with animmediate source ofrevenue

Enable low-risk customersto register and transactwithin certain limits byproviding basic

identification

If customers cannot beginusing mobile moneyimmediately afterregistration, they are far

less likely to do soever

The mobile money for the unbanked business model


For mobile money services to succeed, account openingmust not be a barrier to usage


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Leveraging the mobile channel empowers consumers andreduces costs

Customers can use theirown basic handsetsto initiate transactions


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Mobile operators are uniquely positioned to offer mobilemoney services that are affordable for the unbanked

MNOs assets experience with airtime distribution SIM card and data channel on customer handsets

give users and third parties an interactive interfaceat a very low cost

brand recognition confidence that MNOs have

established among customersin many countries

MNOs skills expertise in mass marketing building managing a broad distribution infrastructure

MNOs incentives use mobile money to cross-sell new services to

customers they already serve to compete for customers on other networks

MNOs unique forms of indirectrevenue from mobile money savings from airtime distribution reduced churn increased share of wallet for voice and SMS

Not surprisingly then, MNOs are often more keen to make investmentsinbuilding and scaling mobile money services than banks and other non-banks.


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Gross profit contribution to date (MTN MobileMoney Uganda, March 2010)

52%

12%

36%

1

Transactionfees

2Airtimedistribution

savings

3

Increasedcustomer

loyalty andspending

Only accrue to MNOs


Mobile operators are uniquely positioned to offer mobilemoney services that are affordable for the unbanked


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Marketing Agent network management Technology Customercare

Product and business development

Custody of customer funds

License acquisition, regulatory engagement, and compliance

Communications

BrandingLiquidity management(superagency)

Access to the handset

Transactional platform

Primary activities

Support

activities

Mobile operator activities Bank activities

Marketing (branding and communications) Agent network management Technology

Customer care

Float holding Superagency Sophisticated product development


Successful services leverage the assets and capabilities ofMNOs and of banks


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Six hallmarks of the mobile money business model

Focused onmeeting payment

needs

Ubiquitoustransactional

agents

Simple accountopening

Extensive use ofthe mobile channel

A unique revenuemodel that yields

affordability

MNO-bankpartnership



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The mobile money opportunityState of the mobile moneyindustry

ASEAN-EU SUMMIT

Hanoi, 8 March 2013Simone di Castri


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Mobile money is expanding at a dizzying rate

150 live services in 73 countries, 40 of which launched in 2012

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Sub-Saharan Africa East Asia and Pacific South Asia

Latin America and the Caribbean Middle East and North Africa Europe and Central Asia

1 2 2 46 7 10

15

36

65

109

150


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Mobile money is expanding at a dizzying rate

82m mobile money subscribers 30m active mobile money users

4 countries with more mobile money accounts than bank accounts

USD $4.6bn moved through mobile money in June 2012

28 countries with more mobile money agent outlets than bank branches

x2: twice as many mobile money users than Facebook users in Sub-Saharan Africa in June 2012


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How do customers use the mobile money?

Average value of P2P transactions is $35


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The pathway to digital financial inclusion

Source: BMGF


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Once mobile money has established itself with customers, arange of additional opportunities presents itself

More sophisticatedfinancial services

Cross-border transfersand remittances



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References: www.gsma.com/mmu


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The mobile money opportunityGSMA and the Mobile Moneyfor the Unbanked (MMU)programme

ASEAN-EU SUMMIT

Hanoi, 8 March 2013Simone di Castri


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The GSMA represents the interests of mobileoperators worldwide. Spanning 219 countries,the GSMA unites nearly 800 of the world s mobileoperators, as well as more than 200 companiesin the broader mobile ecosystem, includinghandset makers, software companies, equipmentproviders, internet companies and media and

entertainment organisations.


GSMA Mobile for Development brings together our

mobile operator members, the wider mobile industryand the development community to drive commercialmobile services for underserved people in emergingmarkets.We identify opportunities for social, economic andenvironmental impact and stimulate the developmentof scalable, life-enhancing mobile services.


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Education

Career development /life skills

Health education Language learning Edutainment Teacher training and

tools

Health

Remote monitoring /diagnosis

Data collection Adherence &

compliance Training & capacity

building Health education &

promotion Health supply chain Healthcare payments &

insurance Medical devices

Agriculture

Helplines for advice /trading assistance

Broadcast info content Automated, localised

content Farmer financial

services Data collection Weather monitoring Supply chain efficiency

Employment

Business advicehelplines

Job posting services Training and skills

development Inventory ordering and

stock management

Financial Services

Money transfer Airtime & prepaid

services Bill payment Bank account

management Microfinance Microsavings Microinsurance Corporate payments mCommerce

Mobile technology is increasingly being leveraged to deliver life-enhancing Value Added Services

0

100

200

300

400

500

600

Money Health Agriculture Learning Entrepreneurship

Live deployments

Asia Latam Africa Oceania Central/Eastern Europe



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SCALE

Successfully advocate forand shape regulatoryenvironments that enable

them to sustainablycontribute to financialinclusion

EXTEND THE DIGITALECOSYSTEM

SHAPE REGULATORYENVIRONMENT

Identify and implement bestpractices around how toscale mobile money

deployments that sustainablyserve poor and unbankedclients

Understand and promotemechanisms for harnessingeconomies of scale across

multiple mobile moneyproviders

Operational assessment of mobilemoney deployment, using global

benchmarks & industry best practiceAction planning with mobile moneyteam & senior management

Implementation support

Capacity building

Local advocacy

Facilitate engagement betweenregulators and providers

Global dialogue with policymakers,regulators, standard setting bodiesand other stakeholders



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MMU publications, toolkits, trainings, events, research papers, etc.



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Data and analyticsDeployment tracker, status of the industry annual report, and benchmarkingfor each deployment

0

10

20

30

40

50

60

Dec-10 Jun-11

Millions

All transactions

+107%CAGR

+93%CAGR

0

2

4

6

8

10

Dec-10 Jun-11

Millions

Payments

0

10

20

30

40

Dec-10 Jun-11

Millions

Registered customer

accounts

+49%CAGR

0

1

2

3

4

5

6

Dec-10 Jun-11

Millions

Active customer accounts

+96%CAGR



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Title

Date


www.gsma.com/mmu

[email protected]


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ICT Mobile Money

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Transcript of ICT Mobile Money