Posts filed under 'mobile payments'
Access to affordable financial services is critical to our life and our work. Yet, this accessibility is far from universal. Mobile banking can change that. Today there are nearly 5 billion people using mobile phones in the world, but only about 1.6 billion bank accounts, and according to World Bank estimates there are over 2.7 billion adults in the world that can benefit from the dramatic changes mobile banking can bring to their lives.
Together with the World Economic Forum (WEF), at part of IdeasLab, Obopay has published a video and an accompanying paper to discuss the opportunity for Universal Mobile Money and how best to address the challenges of making it a reality through an Open Collaborative Model. You can view the video and paper at the links below:
Universal Mobile Money Video:
http://www.weforum.org/content/mobile-financial-services-all
Universal Mobile Money Paper:
http://slidesha.re/o50nSB
July 28th, 2011
Not many days are like the one I had last Tuesday. I had two speaking engagements in the Bay Area in one day. One was to executives of venture firms discussing the shifting landscape in venture (isn’t venture always shifting?), and the second was an evening BayPay Forum event. The BayPay Forum is an organization in the Silicon Valley whose primary goal is to provide a face-to-face professional networking for exchanging views on issues within the payments industry.
I knew as soon as I walked in that it would be a great experience. There were about 170 people and I think I knew at least 50 of them – more than 140 large and small companies were represented, and all levels of management. And there were ten company CEOs present currently working on mobile payment technology—a few working on their second company in this space.
According to the BayPay Forum’s registration survey, nearly half the respondents are now most interest in hear about mobile payments—up from a third in previous polls. The formal and informal dialogue didn’t disappoint.
Mobile payments are taking off all over the world, but there are different types of payments and different approaches to each market that can provide both education and inspiration. The panel did a good job of outlining the landscape, and discussing options ranging from the Starbuck’s mobile gift card to the evolution of digital wallets like the one we are working on. Wallets, by the way, that will enable money transfer, online commerce, bill payments and retail—all from the convenience of your phone.
Although the group was mostly from companies or groups focused on the US market, there was keen interest in emerging markets. The audience interest was twofold – learn from those markets or think about how to participate in those markets.
The theme for the night, “Mobile Payments Beyond NFC” is an important one. Despite all the buzz about NFC, mobile payments go well beyond proximity payments as Tim Attinger of PYMNTS.com notes in his coverage of the event. NFC, while still in the investment stage, will ultimately have a significant effect on mainstream retail. There are also big opportunities in transport – trains, metros, mass transit. But, at the same time, the group recognized that NFC will take time to put in place, and between now and then, there are considerable opportunities in the other areas of mcommerce that will happen more quickly.
My points were simple –
1. Many other markets are ahead of the U.S. Large unmet needs are being addressed in Africa and India which represent very big opportunities, these demand very low cost models, and are scaling quickly. They’re not without significant challenges, but they are fueling the global momentum for mobile payments.
2. There are large opportunities in the US market with the Underbanked. This is a large opportunity–60M-90M people, depending on who is estimating. (I fear with Durbin that this number will only grow in the next few years) Mobile brings lower cost, new levels of convenience, and supports hard working lifestyles (budget conscious; on the go; and family financial support).
3. Technology alone is insufficient to serve the market. It must be coupled with business partnerships – or an “ecosystem” approach. To achieve this each participant must benefit (for example, merchants increasing loyalty; banks efficiently providing better consumer experience,; retailers increasing online commerce).
Since payments are not a solo act, and require an ecosystem; this type of networking is extremely helpful in building a more vibrant and innovative payment industry. Thank you to Daniel Chatelain for his ongoing dedication to BAYPAY – it is a labor of love for Daniel – and he does it well.
April 26th, 2011
I just came back from an amazing week at Davos. Prior to arriving and while I was there, I was a contributing blogger to the Business section of the Huffington Post. The World Economic Forum’s (WEF) annual meeting in Davos is one of the most exclusive events in the world and I am certainly aware of what a privilege it is to be invited. There were five posts that I hope provided some of the unique aspects of the meeting.
It is hard to know exactly the contribution each Davos meeting makes to the world – but I believe it is significant. It takes people out of their day-to-day routine and gets them talking to a diverse group of influencers from all over the world and all walks of life.
In “Three Wishes for Davos; Inclusive Growth, Support Entrepreneurship, Empower Women”. I offered my hopes for the conference in these three specific areas.
When I did arrive at Davos I had the pleasure of meeting and learning about some of the amazing entrepreneurs from the Technology Pioneers. Elisabeth de los Pinos was one of the most remarkable and I talked about what she is trying to accomplish in “The Rock Stars at Davos”.
Financial inclusion, one of my passions, was the subject of a number of sessions. In “Davos Hot Topic — Inclusive Growth Through Mobile Banking” , I covered some of the highlights and lowlights presented during the week.
I heard a number of success stories during the week, but none more inspiring than Brij Kothari and his PlanetRead. Hopefully, you will enjoy it as much as I did in “Davos — Bollywood Brings Literacy to Millions”
When the week was finished, I tried to sort out what I had seen and heard through the eyes of a Technology Pioneer. What I came up with was “A Technology Pioneer’s Top 10 of Davos“.
I encourage you to send me comments or questions on any of these blogs. Hopefully, they help form a small picture and set of insights into one of the most incredible conferences I’ve ever attended.
February 9th, 2011
Kenya – the Silicon Valley of Mobile Banking and Payments
Kenya is at the threshold of fast-paced growth next year, according to the World Bank. This year Kenya repeatedly demonstrated leadership in Mobile Money and this latest announcement from Essar’s YU and Equity Bank reaffirms Kenya’s status as the “Silicon Valley” of mobile banking and payments.
Over 70% of all households in Kenya use mobile money. Each mobile network operator offers a mobile money service. Safaricom and mPesa are the best known, but there are others including YU Cash by Obopay and it is becoming a very competitive market which is pushing providers to bring mobile money services to the next level in order to meet demand and compete for customers. Yesterday, YU and its innovation partner, Equity Bank, upped the ante by announcing new functionality made possible by offering mobile money customers the ability to access their service directly from a full service Equity Bank account. This is a concept that we at Obopay call a “mapped bank account”. It provides the customer with the choice of a full service bank account, complete with mobile money services, with the ability to transact directly from that account, rather than through a separate mobile account. .
How does Mobile Money work in Kenya?
Mobile Money is transforming Kenya. 3 years ago it was a typical cash centric emerging market whereby most consumer transactions were cash based. Then almost overnight things changed when Safaricom offered its customer’s a “mobile wallet” to store money, send money, and pay for things directly from the phone. Other mobile operators have now followed suit and provided similar capability, and it has become a must have service.
Here is how it works – users sign up at a retail location where they previously went to purchase mobile phones or prepaid airtime minutes. Once enrolled, they can load money directly on their phone by giving participating agents/retailer cash over the counter. If they need to withdraw money, they can go to any authorized agent/retailer and get cash out of their mobile phone account. The first thing people in Kenya did was use the service to send money to family members – lots of people work in the cities but have family members in rural areas. Since there are retailers supporting this everywhere – it was the fastest, safest, and most reliable way to send money overnight. It started with money transfer but now people use their mobile money to buy prepaid minutes, pay bills, buy online, and buy at stores, as a way to save money and enhance their personal security by removing the need to carry cash.
Statistics from Central Bank of Kenya indicate that remittance flows in September, 2010, increased by 12.6 per cent to $ 58.6 million, from $ 52 million in August 2010 and were 17.1 percent above the cumulative 12 months average of $ 50 million a month.
What is a mapped bank account?
Before today, most Kenya users of mobile money were limited to using money in the mobile accounts. If they had bank accounts it wasn’t easy to use the money they already had in the bank. Also, if they wanted to “upgrade” and have more services from a bank, which many of them do, that wasn’t easy.
Some providers allowed electronic transfer between bank accounts and mobile accounts – but that could take an extra step, take hours or days, and could involve extra fees. The term we use at Obopay for this type of money movement is a “linked bank account” or a “linked card”. This is very useful since users may want to have my different accounts “linked” so I can move money between them.
At Obopay, we think “linked accounts” are necessary – but insufficient for many users. Users want the option to have full service banking and to transact directly off of their preferred account – and we deliver it via a “mapped bank accounts”.
A mapped account is a traditional bank account “mapped” to my mobile. The account has all the features the bank wants to offer AND allows the user to receive, send, or pay directly from that bank account. In addition to allowing the user to also have direct access to traditional bank accounts from their mobile. It also allows instant money movement between the traditional bank account and the mobile account. So if a user wants to use both – then they have lots of options in how they manage and spend money.
Obopay, the global leader in mobile payments, is an innovator in both mobile and mapped bank accounts. It is especially important in markets like Kenya where people often don’t live near banks. Now, with Mapped Bank accounts they can have all the services they need or want from a bank via a mobile phone.
Mobile accounts have brought limited banking to large underserved communities, mapped bank accounts in combination with mobile accounts will add full service banking to these same large underserved communities.
Obopay could not have accomplished this without great partners like Equity Bank and YU. We are proud to work with them to bring the full power of mobile and banking in an inclusive way.
Links to Press Articles
http://www.capitalfm.co.ke/business/Kenyabusiness/Banks-plan-to-tap-mobile-money-5135.html
http://www.businessdailyafrica.com/Corporate%20News/Equity%20links%20up%20with%20Essar%20for%20diaspora%20cash%20transfer/-/539550/1065390/-/sw7h4t/-/
December 3rd, 2010
Last week I was at the Gates Foundation’s Global Savings Forum. I participated on a panel which included Bill Gates and covered “New Partnerships for Technology-Enabled Financial Inclusion”. The interest from Bill and Melinda Gates was personal – they had witnessed how people living on $2 a day or less around the world need an easy, safe and affordable place to save and build financial security for their future. Bill and Melinda knew that to make global financial inclusion a reality, they would need many organizations working together from both public and private sectors – therefore the Global Savings Forum was established.
Ignacio Mas, Deputy Director of the Financial Services for the Poor at the Gates Foundation, moderated the panel. Panelist included Bill Gates and luminaries from different types of organizations; Ignacio challenged us to speak frankly about partnerships needed to reach and serve the poor. Not a surprise that 3 of the 7 panelists – Michael Joseph (Safaricom CEO), Dr. James Mwangi (CEO Equity Bank), and myself - are directly involved with mobile payments in Kenya. Kenya is the Silicon Valley of Mobile Money – where 14 Million of the 39 Million Kenyans have mobile money and use it in their daily lives.
Bill set the tone by making it clear that “technology should be able to help the poor participate in the greater economy”. Michael Joseph emphasized the importance of the mobile carrier – who has distribution that is key to reach, and customer trust that is key to adoption. Dr. Mwangi believes mobile is changing banking in a big way and the partnerships between banks and mobile carriers bring scale and cost efficiency. Interestingly Equity Bank has partnerships with at least three mobile carriers in Kenya – including Safaricom(mPesa) and YU (YUCash by Obopay).
Equity and Safaricom talked about their partnership around a co-branded savings product in Kenya. “Strategically working with Safaricom was a no brainer. This is one of the best decisions Equity Bank made!”, Dr. Mwangi told the group. Michael Josephs agreed. Yet it was clear that the two of them had to be heavily involved in forging the terms of the agreement over many many coffee meetings.
I advocated for an open collaborative model, and emphasized that scale will come from a rich ecosystem of partners. A question from the audience was – “who should get it started then?” My answer was that there is no right answer except whoever starts it needs to be bold and be a market maker. Then build an ecosystem around what they are doing. Safaricom did that in Kenya.
In general, we find that our partners have been successful because they recognize the importance of being an early movers and taking the market making role. More and more they understand early that it is an ecosystem they are building and move quickly to recruit local partners who share their desire to scale.
We see this happening everywhere we work in the world. We are partnering with mobile handset manufacturers, non-bank financial providers, and retailers. It is a whole new ecosystem unfolding around mobile money. This ecosystem creates greater reach, a fuller range of offerings, and encourages innovation in the mobile money space.
Certainly, there is a tremendous need for these solutions. Globally 5 billion people have phones, but only 1.5 billion have good access to financial services. Those people still depend on cash, a costly alternative where studies have shown that as much as 20% of the cash is lost or stolen. This impacts families, small businesses, surrounding communities, and hampers economic development. It was clear from this meeting that Bill, and especially Melinda, have a real commitment to create technology-enabled savings for those who need it most. And that commitment will certainly accelerate financial inclusion around the world. Bringing together key players from all over the world is certainly a great beginning. It was clear that the Gates will keep a focus on the very bottom of the pyramid – on those with the greatest need. As you know from these posts, it’s a passion of mine and one of the clear goals for Obopay. I was honored to be part of their first Global Savings Forum.
November 23rd, 2010
Obopay’s CEO and Founder, Carol Realini is featured participant at the Global Saving Forum which is taking place today under the sponsorship of the Bill and Melinda Gates Foundation. You can view Carol’s presentation from the event and a white paper that Obopay is publishing in conjunction with the event at the links below:
Global Savings Forum Obopay White paper:
http://slidesha.re/d81QMA
Carol Realini’s Presentation from the Global Savings Forum:
http://slidesha.re/8ZZ68h
November 17th, 2010
This week I have been invited to share my views on how to expand global financial inclusion in a Global Savings Summit www.gatesfoundation.org/financialservicesforthepoor/Pages/global-savings-forum-2010.aspx which is being sponsored by the Gates Foundation. Bill Gates will be participating, listening and probing, to see how his organization can accelerate the efforts to create global financial inclusion. In this blog post I have summarized the points I intend to make at the Summit. In subsequent posts I will tell you how these ideas were received and, later, go into each point in more detail.
As you know, our quest at Obopay is to use the ubiquity of mobile phones to deliver financial services to those who have traditionally been underserved. We do this in partnership with mobile carrier, banks, mobile phone providers, and retailers. Interestingly, our partnership with each of these players has given us a unique insight which is that Collaboration is critical. An open, trusted, scalable and interoperable model is essential to maximize reach and deliver the broadest range of financial service offerings. Also that UDI and disbursements will ensure key cost elements are reduced and drive larger adoption – accelerating the “network effect” for those with the greatest need.
I have always believed that an Open Collaborative Model will achieve the benefit of more financial offerings and more choice when branchless banking scales. It is certainly where I have seen the most success:
- Interoperable multiple mobile banking/payment providers. It is essential to have multiple providers which include both bank and non-bank participants. If they interoperate (allow payments between their respective participants) this will drive greater adoption and usage, much like carrier-based text messaging (SMS) enjoyed when it became interoperable. It is essential that these players recognize the tangible benefits that accrue to the market as a whole, while benefiting each of them individually.
- Broadbased Agent Networks with connections to traditional banking and payment infrastructure. Agent networks need to reach people where they live and work and connect to the traditional banking and payment infrastructure. Financial solutions are not silos. Much like the internet, the value increases with the number of participants and contributors. Agent networks are critical to reach the underserved; traditional connections are key to the participation of the traditionally served community.
- Open Access. It is important to offer choice and encourage innovation in financial services. An open “marketplace” or “appstore” for Mobile Financial Services that gives the users choice. All people deserve access to quality and choice in their financial services. Open approaches will encourage innovation.
- Merchant acceptance interoperability. Building enough places to pay is essential for the growth of mobile financial services. Small and micro business adoption is essential to usefulness. Those businesses benefit more if they are able to serve more of their customers – therefore merchant acceptance of multiple mobile bank solutions will increase value to the SME and value for users.
Such a model empowers life and work by making financial services more accessible and affordable while providing a full range of offerings that are user focused even in the most challenging market scenarios. Users can start with simpler, immediate needs and graduate to savings, micro loans and micro-insurance products.
Once a network is established (critical mass of agents, merchants, consumers, financial offerings), the Open Collaborative Model will encourage highest value, more choice, more innovation and more utility.
There is great interest from the private sector in investment for mobile financial services. Yet these investments, absent an open collaborative approach will achieve only a fraction of their potential. In a world where half the adult population lacks affordable and convenient access to simple banking, we owe it to the underserved to move quickly to this model. What is at stake is inclusive growth and empowerment of the poor.
I look forward to exploring these ideas with you in the days and weeks ahead, and I welcome your comments and thoughts in the comments section below.
November 17th, 2010
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