The Celpay Solution Miyanda Mulambo Celpay Zambia Limited.

The Celpay Solution

Miyanda MulamboCelpay Zambia Limited

Celpay Making Finance Work For Africa 2

Celpay ..…

facilitates banking services and payment solutions using cellular network infrastructure

The Principle uses ....

- Mobile phone as basic instrument for payment instructions

- Menu options for users to send payments to others

- Money is taken from deposit accounts. No credit

What is Celpay?


Transaction Flow

GSMNetwork

GSMNetwork

Start:PaymentOrder

Payment Confirmation, Balance Increase

End:PaymentConfirmation, Balance reduction

Payment

Gateway

Payment Processing


Cellular Operators

Banks

Merchants

MFWFA

Account Holders

What does Celpay do?


What does Celpay do?

“3-channel” electronic access to a bank account Mobile phones Internet Point of Sale Devices

Partners with banks and Network Operators

Facilitates electronic financial transactions Real time Mobile Safe Convenient

Value added services/third party applications Individual electronic auto top-up Wholesale airtime distribution Stock ordering Telephone recharge Payment requests/Bill payments Payroll payments Corporate distribution payments facilities


Celpay Features

Real-time with instantaneous account update

Cash equivalent – wireless cash: sender cannot reverse transaction

Detailed records are available for each transaction

Inter-operable across banks and operators

Affordable, easy to use and Simple solution (SMS & Handset based -no additional equipment)

Fully automated financial solution with full audit trail and reporting functionality

Real time 24/7 distribution solution that Facilitates a hierarchical distribution model (if desired) Including financial settlement

Bank level security minimizes losses and fraud


Celpay Corporate Partners

BP Zambia Plc Multichoice Zambia

Zambian Breweries Plc Zambia Bottlers Ltd

Celtel Zambia Ltd

Total Zambia Ltd

Chilanga Cement Plc

SEEDCOINTERNATIONAL

ZAMBIA LTD

Seedco Zambia Ltd


Celpay Partner Banks


Celpay Services to Customers

• Replace scratch-cards with

fully electronic airtime vending

system

• Pay at the till

• Pay bills at home

• Auto airtime purchase

• Bill payments at Celpay Pay Points

• Low cost services

• Payroll

• Instant, remote disbursement of funds

• Fuel allowances

• Mobile recharge

• Take cash out of distribution

• Payment confirmation

• Carry less cash• Buy what you want, when you want • Safe & convenient• Track spending• Affordable banking services

• Easy to distribute allowances• Track usage precisely• Save time and money• Provide employees with banking services

• Save time• Increase safety• Reduce cash management

costs• Improve reconciliation process

• Reduce theft• Never run-out of airtime• Minimise distribution costs• Sales 24/7• Eliminate scratch-card costs

CONSUMERS

EMPLOYERS

CORPORATES

NETWORKS

Services Benefits


Celpay Services to Customers

• POS Devices

• Mobile Banking infrastructure

• Track spending Real time Payment• Reduced cash management and fraud• Greater security• Remote bill presentation and payment

authorization• High quality record management• Distribution management

•Increase in deposits from new accounts•Reduced cash management •Lower cost of servicing new clients (unbanked)

•Able to offer new products to existing clients

•Able to test market for m-commerce with minimal investment risk

MERCHANTS

BANKS

Services Benefits


Celpay Successes

• Primary successes in B2B transactions with customers such as Zambian Breweries Plc, Zambia Bottlers Ltd, Heineken, Coca Cola, Total, BP, Mobile operators

• Celpay has brought previously unbanked informal traders to the forecourt of the bank.

• C2B adoption mainly through Multi-choice and other corporates

• Over 100 POS devices in Zambia and 75 POS devices in DRC accepting payments from mobile phones

• POS used for cash collection (C2B) and payouts ( cash back)

• Direct prepaid Top up from phones

• P2P payments showing some adoption

• Exploring payroll opportunities

• Celpay and its distribution network act as a payment platform to pay out ~$45 mil in cash to 75k demobilized combatants. This a World Bank sponsored project in the DRC

• Product well received by both formal and informal players


Celpay Successes – Transaction Throughput

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2004/2005 2005/2006 2006/2007

Financial Year

US$ '

000


Initiatives to Service the Unbanked

• Investing in a Cash Point network

• Celpay subscribers will be able to have Celpay-enabled bank account and withdraw cash at a cash point

• Partnership with Zampost as the anchor cash point

• Initiative awaiting BOZ approval

• This will form backbone for payroll to those receiving their pay in cash

• IT will afford the ordinary person to have a savings at very low cost

• Also looking at Remittances


Market Opportunity

Appropriate in markets with limited POS & banking infrastructure

- new generation payment instrument

Alternative to making heavy infrastructure investment for ATMs and debit cards

- creates pervasive network

Augments existing accounts to enable wireless transactions


Legal Status

Celpay is an IT service provider for banks

Banks must undertake the opening of accounts

Consumers/merchants have no credit – debit balances only

Funds in the accounts belongs to Celpay subscribers and merchants, not to Celpay

Banks provide the link to the ECH


Economic Impact

Celpay moves cash from general circulation into the banking system

Celpay formalizes previously informal transactions, creating a reliable audit trail

Celpay enables banks to offer very low cost services to a new customer base

Celpay facilitates banks’ cross-selling mainstream banking services

Celpay frees individuals from wasteful travel, standing in line, and money counting to pay bills


Challenges

Lack of Direct Integration with Bank Systems Celpay system sitting outside bank systems has posed a

challenge of Celpay having to do the bank’s job of selling and marketing financial solutions

Account opening process Account opening process is a hindrance to most people

opening bank accounts especially For the banked this entails going over the same process of

account opening to have access to Celpay

Depositing Going to the bank to deposit has always been a deterrent

for most people to take up Celpay Cash Point services should help to address this challenge


Celpay Vision

Banks ….– Setup cash-points network to increase proximity

from cash deposits & withdrawals perspective ;– Brand the product & offer it as value added services

to existing & new customers ;– Take care of cash collection;

Celpay... – Act as an enabler;– Support GSM Operators’ & Partner Banks’ marketing

& sales teams;– Deal with reconciliation & reporting;


Celpay Security

• Authorization: – Allows multiple Account Handlers access without jeopardizing security;– Keeps track of whom has authorized which transaction;

• Data encryption:– Allow highly secure data encryption through 3DES;

• Authentication:– Supports five digits Personal Identification Number (PIN);– Customer must also have in his possession the registered SIM card to

use the PIN;– All money movements are fully logged and can be examined for

suspect behavior;

• Non repudiation capability:– The customer cannot deny having made a payment;


Celpay - Banking for All

The Celpay Solution Miyanda Mulambo Celpay Zambia Limited.

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