Mobile Money Asia

Mobile Money Asia

This blog has been established to share thoughts on the development of mobile money globally, but more specifically in Asia. Over the past six years contributors to the blog have been instrumental in mobile money in Cambodia, the Pacific, Bangladesh, Indonesia and other Asian markets. They have worked in payments companies, start-ups and development organisations, thus providing a unique insight to how mobile money is developing in this region. Thoughts and blogs are those of the authors.

Friday, October 24, 2014

Mobile Money in Myanmar: Significant Opportunity Ahead

The self-proclaimed “gold-rush” into Myanmar has generated significant buzz throughout international and investment circles. In what is one of the least developed markets in the world, Myanmar’s obstacles parallel its opportunity for growth, prosperity, and ultimately development for its 51.4 million citizens.
Myanmar is considered one of the last major frontier
economies given its population and untapped potential.
Though the country’s promise continues to unfold, it will need significant improvements in both legal and economic infrastructure before mobile money can be a reality that is utilized by its population.

To give some background, just 1% of the population was thought to be online three years ago. This grew to an impressive 13 million people online in 2013. These astonishing growth rates are expected to continue according to the Myanmar Computer Federation, which expects around half of the population, more than 25 million people, to be surfing the net in the next three years. Although internet connection is a different phenomenon (and, thus, completes a different life cycle) than that of mobile money, it is a decent proxy to understand infrastructure development and access to resources.

In terms of telecommunications, infrastructure and access to mobile phones is growing. Less than 10% of people have mobile phones, but this number (according to Ooredoo) could reach 97% within just 5 years. Myanmar has already seen more telecommunications infrastructure development, increased competition, and dropped prices in the past 4 months than it has seen in its entire history. Qatar’s mobile phone giant Ooredoo, which started services in Myanmar this past August, is now finally confronted with competition of Norway’s Telenor, which launched at the end of September this year. The state-owned Myanmar Posts and Telecommunications (MPT) even entered a joint operations agreement with Japanese telecom firm KDDI and conglomerate Sumitomo to remain competitive against competition.
The price of a SIM card has went from as high as
$2000 five years ago to $1.50 today.

What does all this mean for mobile money? Well to state the obvious, it won’t be happening right away. There is more infrastructure development needed by both the private and public sector, although that’s off to a good start with Ooredoo planning to spend $15 billion over its 15 year license period. Moreover, mobile penetration rates are still way too low. To follow successful parallels in other developing countries, Myanmar’s mobile penetration rate needs to reach a massive majority of the country.

Still, there should be significant interest from the major telecom providers, as well as startups given the presence of major tech companies in Yangon, to provide mobile money services. In fact, this is already starting with some start-ups accepting payment from phone credit.

Legal, political, and geographical challenges remain. These uncertainties will provide major headaches to anyone excited to create and expand a mobile money network. However, the mobile penetration growth rates, increasing competition, decreasing prices, and overall infrastructure development imply that Myanmar has one of the biggest opportunities in the region to successfully leapfrog into the mobile money sphere. If that’s the case, the Myanmar gold rush will be more than just a headline.

Saeid Kian works as Business Development Associate in Vientiane, Lao PDR for a consulting firm named Emerging Markets Consulting (EMC). EMC provides management and strategy consulting for private sector firms and development funds with headquarters in Phnom Penh and offices in Vientiane, Lao PDR and Yangon, Myanmar. This blog post does not represent the opinions of EMC and is solely the opinion of Saeid Kian.

Thursday, October 23, 2014

Is mobile access a human right - but at what price?

How one mobile operator in Jordan is trying to bring mobile access to Asian women domestic workers denied a phone

If the conservatively-minded patriarch of a household in the Middle East will not let his own daughters use a mobile phone, then why would he let the foreign domestic servant use one?

There are tens of thousands of young Asian women living in households across the Middle East doing domestic work. Many suffer labour rights abuses, from having their passports confiscated to non-payment of wages, 20+ hour a day working & lack of time off. One constant, that every domestic worker wants, is access to a mobile phone - but I interviewed a woman who was taken to the desert in a mock execution just because she had hidden a mobile phone against the wishes of her employer.

One day we may see access to a mobile phone and the internet as a human right. Young women generally aspire to be connected to social networks, and to be free to chat and text with their friends and family. For domestic workers, far from home in a land of which they may understand little, being excluded from contacting anyone outside the house in which they work is likely to damage their well-being.

One mobile phone operator in the Middle East is trying to reconcile these two contrasting
Young women in Bangladesh receive
training on electrical goods found
in Middle Eastern households
needs. On the one hand the desire of conservative households that their domestic worker should be kept away from inappropriate social contact, and on the other hand the desire of these same workers to maintain links with home and seek the comfort online of other women from their homeland who use social networks to build a community in their adopted place of work, or to seek help.


Technology has played an important role in the recent upheavals the Middle East has witnessed. Mobile phones are credited with empowering people and of changing the established order. Even the most traditional minds will understand that mobile phones are an irrevocable part of society, and that teen and young adult lifestyles are deeply influenced by online mobile access.

What Zain Jordan has done is to build a product that combines very cheap international calls with a restriction on the number of local calls that can be made. For domestic use mobile subscribers can only call five Zain Jordan numbers. Internet access can be enabled - or disabled - at the time of subscription, by USSD.

Why is this call package significant? We need to look at it from both sides, that of the employer and that of the domestic. From the employer’s perspective it ensures that the domestic worker has a very limited range of local contacts restricted to a whitelist. In conservative households, this is important - they may believe that women under their roofs should not be associating with strangers, and most particularly with strange men. Without passing judgement on these beliefs, it is not inconsistent that the same conservative household may see the benefit of their domestic worker being able to call home, perhaps believing that this is the ‘right thing to do’, or that it may reduce tension in the house, or encourage better work.

African domestic workers call across balconies
to talk to each other in Lebanon, Beirut
The domestic worker’s perspective is very different. For them the 2.5 piaster per minute call charge (just 3.5 US$ cents) is very cheap compared to the normal discounted international tariff of 37 piasters (about 52 cents per minute). But much more significantly is the impact of being able to use a phone at all. If the restrictions placed on their domestic calling are what makes the difference between having access to a mobile phone and none at all, then this is a step-change for the domestic worker. Unpalatable as the restrictions sound, the net effect is possibly an infinite increase in access.

The way Zain Jordan has dealt with internet access is also interesting. During activation of the package, which is done using USSD, the subscriber can opt in or out of internet access. What this business logic enables is that whoever sets up the subscription sets the rules - this means that a Sri Lankan domestic worker who gets the subscription from a Zain salesperson at the Friday market, or a Filipino at church on Sunday, may opt in to internet access, but if the employer decides to get the subscription on behalf of the worker they can decide to turn internet access off.

The questions this tariff raises are intriguing; there’s clearly a trade-off here in order to balance conservative attitudes with the legitimate expectations and needs of overseas domestic worker, but what is an acceptable balance between restriction and permission? One way to look at this is to consider the following question: would the domestic worker who previously was not allowed a phone but under this tariff can now call home for 2.5 piasters a minute exchange this tariff for another one that charged 37 piasters to call home but had no restrictions on domestic calling? In other words, what price human rights?

Malcolm Vernon works on mobile for development in Africa and Asia. In addition to work with the International Labour Organisation that informed this article, Malcolm consults on mobile agriculture and digital financial services at socialmobileventures.com

Wednesday, October 22, 2014

Reverse Innovation, the Developed World Wakes up to Mobile Money

Imagine a scenario where, from a simple mobile handset you could pay all your bills, transfer money to friends whether or not they have a bank account, buy mobile airtime, use an ATM without a card and complete an e-Commerce transaction safely. Imagine that you could do all these transactions simply, safely and quickly, without needing the latest Android or iPhone, and without even needing to have a bank account. This scenario would be near impossible in most developed markets, but it has been a reality in countries like Kenya, Cambodia and Bangladesh for a number of years. And it appears that in countries like the United States, it could become a reality very soon as well.

The SIM Sleeve provides MVNO capability for Equity Bank
Mobile money in developing markets has been a phenomenon. M-Pesa in Kenya attracts many of the headlines, with two thirds of the population now subscribed, however in Bangladesh bKash has seen amazing growth with over 11 million accounts within 30 months from launch. In a relatively small market like Cambodia, WING now has the broadest distribution of any financial services provider, and will process upwards of US$4.5 billion in transaction volume this year. Whilst these services differ in minor ways, they all provide customers with the capability to store and transfer money safely, and to pay bills and other payments conveniently. They have successfully removed friction from the lives of the unbanked through innovation and creation of a financial service that is customer centered in its design. Interestingly, they have also forced banks to change their business models and develop new products and services to avoid losing market share. Equity Bank in Kenya is one of the most prevalent in this regard, with development of a Mobile Virtual Network Operator (MVNO) model to improve the ability to compete with Safaricom’s M-Pesa.

Let’s imagine a scenario now where you are unbanked or under-banked in a developed market like the United States. It is estimated by the Federal Deposit Insurance Company that a whopping 106 million people in the United States are in this category. In a country with such a significant financial services infrastructure, why are people unbanked, and what are the implications for them? Barriers to financial inclusion included services not being offered in languages spoken by the prospective customer, requests for identification that can’t be met and unaffordable fees. When someone is unbanked in the United States, it means they do not have the ability to build a credit score, which limits their ability to buy a home, invest in education or business and forces them to seek loans at predatory rates from payday lenders and other loan sharks. This business has seen huge growth in recent years, with US$40 billion in loans issued in 2010 and revenues of US$7.4 billion. Retail bankers could never imagine margins like that!

Reverse innovation is defined as an innovation that has been firstly adopted in the developing world. This is a counter view for many multinationals that have traditionally focused on innovation for their home markets first, and then have their products ‘trickle down’ to developing markets. In recent times however, the reverse has been occurring, with products specifically designed for developing markets transitioning successfully into developed markets. GE Healthcare produced a US$800 ECG machine for rural India that is now being used in wealthier markets, where the same technology costs US$10,000. This was only possible through effective customer centered design, that focused on the problem but found solutions that greatly lowered cost, including leveraging commercial movie theatre style ticket printers rather then the item normally used. The machine is now sold in 90 countries, both developing and developed. 

T-Mobile partners with Visa for the Mobile Money service
The principles of reverse innovation are being applied to financial services to address the unbanked challenge in markets like the United States. T-Mobile launched its ‘Mobile Money’ service in 2013 with many parallels to similar services in developing markets. The fee-free product allows customers to deposit checks into their Mobile Money account, top up at a nationwide agent network (T-Mobile shops), and withdraw money with a Visa prepaid card through a network of 42,000 ATMs. This service takes out friction for unbanked customers and removes the fees they pay at normal check cashing services in the United States. This year has seen the introduction of ‘Go Bank’, a service offered jointly by retailing giant Walmart and Green Dot, a large prepaid processor with checking products FDIC insured.

The new service by Walmart has bankers on edge, as it has been seen as a back door way for the retailer to enter the banking market. Other commentators are of the view however that Walmart are targeting customers that the banks have pushed away or never engaged with. For a customer with relatively simple financial services needs, Go Bank is compelling. After purchase of a US$2.95 starter kit (another reverse innovation from developing markets), customers are able to cash checks, access an ATM network with a prepaid MasterCard and send money instantly to other Go Bank customers, without the need to ever enter a bank branch. Additional innovations targeted at reducing dependence on payday lending include allowing payroll direct deposit customers to get their paycheck early if employers notify Go Bank of a deposit in advance. Whilst unbanked customers benefit from the Go Bank product, Walmart leverages its massive distribution and is able to reduce interchange fees by incentivizing these customers to maintain brand loyalty.



These new services in the United States are clearly a reverse innovation from the developing world, and time will judge their success or otherwise. The services have been designed with customer needs at the core, and leverage existing infrastructure such as ATM’s, mobile phone shops and supermarkets coupled with mobile devices to provide a compelling service to the customer. Whether banks openly acknowledge concern at these new financial services entrants, the fact remains that these innovations are likely to move up the demographic curve, and as with the example of Equity Bank in Kenya, unless banks innovate quickly, they will lose market share.

- Brad Jones


Brad Jones was Managing Director of WING Cambodia from late 2007 until mid-2010. He then worked at Visa on their emerging markets mobile strategy in Africa, Middle East and Asia before spending a year consulting to IFC and a number of other clients. He now works in a transformation and growth role for a bank in Singapore. Follow Brad on Twitter @bradjoz.

Wednesday, October 1, 2014

Micro and Small Businesses: the missing link for digital financial inclusion?

For most Indonesians, micro and small businesses are a significant part of life; this is especially true for those living below or near the poverty line.  They are more likely to spend their money at a small local shop or business.  If they have a job, it is probably from a small business. And if they ever scrape together enough money to start a business, it will start as a small one.
Despite the huge important of these businesses for people’s lives, most banking products are aimed at personal transactions. This is especially true for mobile money, which has too often relied on the “Send Money Home” template of M-Pesa in Kenya, targeting personal domestic remittances as the key activity that would drive customers to the service.

Credit: Spire Research
TNP2K, in conjunction with Microfinance Opportunities and Spire Research, has recently published research into the behaviours and demand of Micro and Small Enterprises  (MSEs) in Indonesia.  We conducted surveys and focus groups to try to get a picture of the current financial lives of over 400 MSEs and assess the potential demand for Mobile Money and Branchless Banking.
Unsurprisingly, business is done mostly in cash. Suppliers and customers are generally located close by, so transactions are done in cash. There is an opportunity to digitize some of these payments, but businesses are not currently feeling that there is enough pain in dealing with cash for their supplier payments that this will become a compelling transaction.
On a more positive note, businesses are interested in saving their money. About 85 of the respondents have money left over at the end of the day at least half the time, but only a third put this money into the bank. For the others, there is considerable interest in saving the money if it could be made very convenient and fast. Mobile Money or Branchless Banking could fill a significant niche here by giving small businesses the ability to lock away some of their savings at the end of the day.  Traditional banking in developed countries offers a “Night Safe” or a “Night Depository” drop box for small businesses to put their end-of day takings. With some good product design, Digital Financial Services should be able to provide a modern equivalent by allowing MSEs to deposit their money at agents, not only for overnight safekeeping but also longer term savings. 
The full report is available for download from the TNP2K website.


Sunday, September 14, 2014

The Paradox of Calling Mobile Money ‘Mobile’ in Asia

After many years of hard graft, there is an emerging awareness that this mobile money thing might just catch on! The Economist, long a vocal supporter of the growth of mobile money and its transformative power continues to publish positive articles, however there does also appear to be a groundswell of broader interest. Much of this comes from the exciting news of Apple’s foray into mobile payments of course, but there are also a number of targeted articles on developing economies and the ‘buoyant mobile money market’. This is fantastic for all of the pioneers in mobile money of the last decade, as we bear the scars of believing in an idea before the majority. The ‘idea’ was that we could provide efficient and safe financial services to the unbanked, whilst we made a profit and created a sustainable business. Not many people believed in that idea six or seven years ago but the success of companies like Easy Paisa, bKash and WING Cambodia are proving the doubters wrong.

Despite the success of these wonderful companies, there is a ‘dirty little secret’ about mobile money in Asia. Perhaps dirty little secret is a touch too controversial, but the reality is that the success of mobile money in Asia has less to do with mobile, and far more to do with agents. In fact, it would be more appropriate to call the business model ‘agent money’, as the success or failure of this part of the value chain is critical to the operation. A mobile money business must develop an effective distribution network to be successful. Rather than branches, these deposit and withdrawal services are provided by third party agents who may be grocery stores, prepaid airtime resellers or similar. The advantage for the operator is that leveraging agents greatly reduces the fixed costs of distribution however it can be difficult for the provider to control quality and service. Successfully managing this tension between flexibility and quality does take some expertise, and the successful operators have started to master this challenge.  


All three of the companies previously referenced are seen as leaders in mobile money, not just in Asia but globally. All three have slightly different business models, but also one significant similarity, particularly compared to peers in Africa. But first, a quick overview of each business: 
  • Easy Paisa is a joint venture between Norwegian telecom giant Telenor, and the Pakistani micro-finance bank Tameer. Telenor accelerated the joint venture through the acquisition of 51% of Tameer in 2008. Easy Paisa provides mobile money accounts and over the counter services through a network of agents to customers on the Telenor network.
  • bKash is a joint venture formed in 2010 between BRAC Bank, an offshoot of the world’s largest NGO, and an entity formed by Iqbal Quadir, the original founder of Grameenphone. Recently the Gates Foundation and IFC have also become shareholders. The operation connects into four of the six mobile operators for USSD and SMS services in Bangladesh and provides an agent network throughout the country.
  • WING Cambodia is a payment service provider in Cambodia founded in 2008 that is operator agnostic, providing money transfer services, ATM access and e-commerce facilities to merchants. WING also leverages an extensive agent network through every province in Cambodia where customers can do cash in or cash out services, and conduct transactions over the counter.

Whilst all three of these businesses have had very different journeys to success, there is one common thread. Over the counter transactions, or OTC for short, make up the vast majority of transactions. In an OTC transaction the agent effectively conducts the transaction on behalf of the customer. The customer does not need a mobile phone however the agents will use their own phone to conduct the transaction. In the case of Easy Paisa, over 70% of customers were not Telenor subscribers but were leveraging OTC, whilst bKash has had over 50% of their customers leveraging OTC transactions. WING launched over the counter transactions in 2011 only after the original shareholder, an Asian regional bank with a conservative risk outlook, had divested its shareholding. Since then it is claimed that OTC transactions make up 90% of their transaction base and have been a significant contributor to its success. Agents become the critical success factor in the provision of this service, and the OTC model appears to work for both the provider and agent as the margins tend to be better, and the volumes higher, resulting in better income and motivation for the agent.


Over the counter transactions have become a significant accelerator in each of the markets outlined in this blog. In each market the success of the customer proposition has been based on provision of a high quality, liquid and reputable agent network. The agent proposition has been to provide customer footfall, healthy margins for providing the service, and the ability to leverage support where needed. Whilst the mobile channel and user interface is important for the agent, it is far less critical then it would be to the customer as the agent is getting a return for their service. Whilst all operators are keen to migrate customers to mobile wallets over time, the ability to reward their agent network with transaction volume and income from OTC transactions means that the agent network will continue to be far more important then the mobile channel in emerging markets in Asia for the next few years. As a dedicated and passionate advocate for developing markets financial inclusion, I am excited to see the continued success of ‘agent money’ in Asia. 

- Brad Jones

Brad Jones was Managing Director of WING Cambodia from late 2007 until mid-2010. He then worked at Visa on their emerging markets mobile strategy in Africa, Middle East and Asia before spending a year consulting to IFC and a number of other clients. He now works in a transformation and growth role for a bank in Singapore.