ict mobile money
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1AEBS 2013 - ICT
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ICT session
2AEBS 2013 - ICT
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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
Restricted - Confidential Information GSMA 2013
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Restricted - Confidential Information GSMA 2013
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
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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
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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
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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
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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
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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
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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
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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
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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
Restricted - Confidential Information GSMA 2013
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
Restricted - Confidential Information GSMA 2013
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
Restricted - Confidential Information GSMA 2013
Mobile operators are uniquely positioned to offer mobilemoney services that are affordable for the unbanked
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Restricted - Confidential Information GSMA 2012
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
Restricted - Confidential Information GSMA 2013
Successful services leverage the assets and capabilities ofMNOs and of banks
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Restricted - Confidential Information GSMA 2011
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
Restricted - Confidential Information GSMA 2013
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Restricted - Confidential Information GSMA 2011
The mobile money opportunityState of the mobile moneyindustry
ASEAN-EU SUMMIT
Hanoi, 8 March 2013Simone di Castri
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Restricted - Confidential Information GSMA 2013
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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Restricted - Confidential Information GSMA 2013
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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Restricted - Confidential Information GSMA 2011
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.
Restricted - Confidential Information GSMA 2013
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
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www.gsma.com/mmu
sdicastri@gsma.com
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