Tuesday, December 18, 2012

Mobile Money in Asia: Opportunities for Growth


Mobile money in emerging markets has been one of the more exciting, and one would hope sustainable, innovations in financial services over the last decade.We are seeing impressive growth in many mobile money schemes in Africa and these developments have led to similar levels of focus and increasing investment in financial services for the poor in Asia. The direction in which the industry will develop in Asia will be fascinating.Will organisations look to replicate the success of ventures such as M-Pesa with massive mobile operator-led closed loop systems or will they look at different models that reflect the market variations in Asia? My argument would be that due to differences in bank penetration, regulatory oversight, and mobile operator commercial models, mobile operator-led financial services models will not proliferate in Asia, and in the long run, banks will be far more successful in providing these services. I would also argue that in the long run, Asia will eclipse what we have seen in Africa to date in regards to mobile money.

Please see the remainder of this article published in the journal, e-Finance & Payments Law & Policy at http://www.e-comlaw.com/e-finance-and-payments-law-and-policy/

- Brad Jones

Wednesday, August 29, 2012

Mobile Money in China. The next big thing?


Everything is big in China. It has the world’s biggest population with over 1.2 billion, it has over 160 cities with a population of more then 1 million, there are over 1 billion mobile subscribers, and millions of people have bank accounts. Despite this, the gap between access to bank branches in urban areas versus rural locations is huge, with only 0.34 banking outlets per 10,000 people rurally, compared to the national figure of 1.34. Further, in an interesting post this week in the Economist, the author noted that there had been almost zero impact from traditional mobile money services in China, despite the benefits that would be derived, particularly given the lack of bank branch access in rural markets, and the massive urbanisation that is currently occurring. Is this about to change, and in true China fashion, when it does change, will it awaken the world to the opportunity of mobile money in emerging markets?

In contrast to the article in the Economist, whilst there has not been much happening in China in the context of ‘M-Pesa type’ activity, there has certainly been a lot of activity in regards to mobile payments. Mobile banking has been present in China since 1999, and all of the major banks including China Construction Bank, Agricultural Bank of China and the Bank of China allow customers to access accounts, make funds transfers and other services through a mix of STK, WAP and 3G data. There have been deals between operators such as China Mobile and the domestic scheme China Union Pay to develop the use of mobile for payments, including NFC and remote payments. Consulting firm McKinsey believe that China is currently at an inflection point with mobile payments set to become a $40 billion industry driven largely by digital content and ticketing, and that competition is going to become intense between banks, mobile operators and third party providers. Much of this activity however will centre on the urban centres, and will not address the need to fill the gap between urban and rural access to banking services.

It is this gap where I think some of the most interesting mobile financial services activity in China is about to start. The regulators in China have been watching markets in Africa and elsewhere for some time now, and have recognised the opportunity that mobile money and branchless banking can bring to help drive financial inclusion. In March 2011 the China Banking Regulatory Commission issued a circular that encouraged financial institutions to look at alternative channels such as mobile to improve access to finance in rural locations, in an effort to assist with economic development in those regions. There has been recent discussion that the People’s Bank of China were keen to commence pilots in rural locations specifically in mobile money, and had issued guidelines that will govern where these pilots will occur, and the participants to deliver the services. The services that need to be provided to customers include airtime top-up, remittance and some payments. The guidelines provide strict requirements for KYC and risk management, and also provide recommendations on the type of agents that should be selected, including convenience stores, mobile phone shops and post offices. PBOC make recommendations on how services should be marketed, and provide an overview on how participants in the mobile money pilot should report their findings back to regulators to aid with future regulation of mobile money. The guidelines are extremely interesting in that they appear to have been drafted with a close eye to other mobile money schemes in emerging markets.

As an industry we should watch China with great interest over the next 12 months to see how these pilots develop, and whether a framework for large-scale extension of branch accessibility can be built. With over 30% of the population unbanked, there is a significant opportunity to drive financial inclusion through mobile, perhaps catapulting China to be the leading mobile money market in the world. For a country where scale is everything, this could be a phenomenal achievement in the history of financial inclusion.  

- Brad Jones

Sunday, August 12, 2012

‘’Follow That Taxi!’’...To Learn How To Build a Mobile Money Agent Network in Indonesia

In Indonesia a number of mobile money players have started stretching on the sidelines, waiting for the referee to call a start to play. The referee in this case is the Bank of Indonesia. The starting whistle is the much anticipated changes to the regulations that allow setting up of Cash-Out Agent Networks- while in theory are allowed today but in practice current rules are too restrictive.


The excitement over Indonesia’s mobile money potential is well founded. It has a population of 250m, 60%-70% of which are unbanked or under-banked. They are also adopters of technology; mobile penetration reported to range from 90-110%, they are the second largest users of Facebook globally, and third largest Twitter users.    
As mobile money players start preparing their business models, I want to highlight a success story of another Indonesia business- Blue Bird Taxis and the local lessons they can teach mobile money businesses looking to build an agent network in Indonesia.

Blue Bird Taxis, it has a fleet of 20,000 taxis and drivers, serving more than 8.5 million customers each month. Their metallic blue cars are instantly recognisable. Ask any Indonesian for help with a taxi and they will invariably refer you to Blue Bird, commenting they are trustworthy and reliable. Blue Bird’s reputation is evidenced at Jakarta’s Soekarno-Hatta Airport where queues at the Blue Bird Taxi rank are twenty deep while other taxis wait idle.

An instantly recognisable brand, considered reliable and trusted to point to that they are referred to strangers, what mobile money business would not want the same for their agent network? So what lessons can we learn from Blue Bird Taxis?

# On-boarding and Ongoing Training: Blue Bird recognises that drivers are the face of their business. They put each of their drivers through a basic orientation course to familiarise them with company policies and procedures. There are also regular follow-up briefings at which drivers are encouraged to share ideas and experiences in dealing with unusual situations or difficult customers

This results in well trained and knowledgeable business representatives. As the saying goes, a chain is only as strong as the weakest link. Ensuring a level of quality in the agent network representing your business will create strength in the overall brand.  

# Consistent Customer Experience: Use a Blue Bird taxi and you will notice all the drivers are in uniform, they are polite and friendly, they don’t talk on the phone or play loud music, seatbelts are fitted in the back seat and there are no overpowering scented de-odorises. While this might seem background to the ultimate service of being driven from Point A to Point B, as a daily user of taxis when I use another taxi company it’s the varied customer experience that I notice.

Similarly mobile money customers want consistency in the service experience with agent networks. Another important thing to note is the relative service expectation from the customer. If the mobile money business uses existing retail merchants, the merchant is not selling a customer a can of Coke, they are the interface for the customer to access their money. Customers view this as a more personal interaction and expect it to be treated differently.      

# Supported by Strong Customer Services Team: Blue Bird’s Call Centre has received Customer Satisfaction and Loyalty awards for the past 6 consecutive years. These have been measured on speed of answer, staff knowledge & manner, consistency and customer satisfaction. While the Call Centre is the focal point for direct customer interaction, Blue Bird also use their call centre to support their drivers- when a driver needs help with directions, a difficult customer or an accident, the trained call centre staff are available 24 hours and at short notice to assist the driver.

A Mobile Money Agent can feel alone. They are nervous about making a mistake, especially when faced with an unusual situation or disgruntled customer. A supporting call centre that can be relied upon to resolve issues quickly, increases the confidence of the agent network and the customers they serve.    


Regulatory change in Indonesia will see a number of mobile money businesses quickly establish in attempt to gain market share in a very attractive market. Indonesians are mass adopters of new technology; however they also value a customer service etiquette favouring politeness and fairness. Potential situations that could result in conflict will be avoided. Blue Bird Taxis have focused on their driver business model- typically a weak area for taxi businesses, and made it core to their success. Once the regulations do change, mobile money businesses will need to have a similar focus on their agent network model if they want customers to trust and use their service.     


-Paul Reynolds


Paul specialises in business start-ups with a focus in the past 5 years in mobile payments. He has worked in Indonesia for the past 12 months for a leading global mobile money business. 

Sunday, July 22, 2012

Connecting Developed Market Capital with Developing Markets Innovation

I was genuinely excited to read a number of weeks ago about the launch of the Savannah Fund in Nairobi. This US$10 million incubator and accelerator has been established purely to invest in digital and mobile initiatives in Sub-Saharan Africa. Once they raise the capital, they will use the funds to provide mentoring to start-ups, provide follow on investment to those that graduate from the incubator, and then also invest in more mature businesses in the region. Nairobi has been selected as the location for the fund, which makes a lot of sense given the focus and energy that is being generated from the success of M-Pesa and associated businesses. The efforts by Eric Hersman of iHub fame and his partners to generate interest and investment in East Africa technology projects should be widely acknowledged.

What is interesting has been the attention that has emanated from this announcement on the venture capital, accelerator and incubation industry in emerging markets. Traditionally, entrepreneurs in markets like the United States tend take the path of raising initial seed funding from friends and family, before connecting with incubators or accelerators who may provide early stage funding and advisory support, often coupled with co-working spaces with other start-ups. Whilst the product is being built and launched, entrepreneurs will start the well-worn path to Silicon Valley to pitch for Series A funding. This model has worked effectively in the United States for many years and while investment in venture-backed companies only equates to between 0.1 percent and 0.2 percent of U.S. GDP annually, these companies employ 11 percent of the total U.S. private sector workforce and generate revenue equal to 21 percent of U.S. GDP. That is quite an impact!

Sunday, June 17, 2012

Contactless Payments in Emerging Markets: Can Mobile Leap Frog Developed Markets Once Again?

Much has been made of the disappointing growth in mobile contactless payments and near field communication in developed markets. Issues such as sunk cost in existing point of sale infrastructure, business models between operators and banks, and the maturity of handsets and embedded near field communication (NFC) chipsets have presented challenges that have yet to be completely overcome. Contactless cards themselves have struggled to gain huge traction, primarily due to the lack of acceptance in developed markets, and industry players have been slow to look at using phones as contactless acceptance points. Initiatives such as Isis and Google Wallet in the United States, and bridging solutions for mobile contactless including secure micro SD card have provided some solutions for pilots and trials, but it would be fair to say there has not yet been a significant commercial success in mobile contactless in a developed market (with the exception of Japan, and to a lesser extent Korea). Which makes the announcement of Apple’s Passbook in iOS6 all the more fascinating, but that is a blog for another day.

Tuesday, May 29, 2012

Show Me the e-Money! Using Payroll to Support Your Mobile Money Liquidity Strategy


This is the second blog in a series of posts where the contributors, all involved in the creation of WING Cambodia, share their thoughts on the importance and challenges of e-money and liquidity management

A core component to any mobile wallet business is how easy it is for a customer to fund their account to do transactions. A lot of the focus needs to be given on building the capability in the ‘cash-in & cash-out’ network to enables the unbanked to convert physical cash into electronic-money, however an important channel of electronic funds will come through the integration to existing banking infrastructure.  This makes sense as the majority of the money in the economy resides in bank accounts, and more importantly can be transferred electronically. Integrating to the banking infrastructure will allow the flow of money from the banked (corporations and people) to the unbanked.

Wednesday, May 23, 2012

Show Me The E-Money: Keeping it under control.

This is the first in a series of posts where the contributors, all involved in the creation of WING Cambodia, share their thoughts on the importance and challenges of e-money and liquidity management.

Mobile Money is sexy.  It uses technology in new and exciting ways, it reaches out to millions who were previously excluded, and it gives innovators a chance to build new networks from the ground up. But if you look behind the scenes, there’s a whole lot of boring-but-important stuff going on. Managing and reconciling your accounts isn’t sexy but is absolutely necessary for the success and growth of your business. 


Thursday, May 10, 2012

Better Than A Pig: Why Financial Inclusion Matters


For many of us who work in mobile money, the benefits that come from financial inclusion are clearly understood, and to a large extent provide intrinsic motivation for us to work in this industry. It serves as a timely reminder when we come across people who either don’t understand the benefits of financial inclusion, or perceive that reaching those who are unbanked is too hard, unprofitable or unnecessary.

I had an interesting experience some weeks ago when I met an experienced banker in an emerging market that has a sizeable unbanked population, but has not really seen huge steps in financial inclusion to date. We discussed the size of the market, the substitutes for formal financial services, and the solutions that had been tried to date without much success. The market is significant, with approximately 35-40 million people who have not been banked, and GDP per capita of approximately US$3,300. 70% of the population is rural, with urban migration of about 3% per annum. Many of those migrating are moving to manufacturing jobs in the cities, so domestic remittances are a large component of rural income. Substitutes for formal financial services proliferate, with remittances being sent by bus regularly, and in some cases through the post office. Solutions for the unbanked have primarily been government driven, and have relied on payroll cards for workers. Not surprisingly, the majority of these payments are converted to cash with remittances being sent through the informal market.

Monday, May 7, 2012

A missed opportunity: Mobile money failing to meet the needs of small businesses


During my time with a nascent mobile money venture I was always frustrated at how difficult we found it to work with small businesses. It is not something we suffered from exclusively; I see it when I look at the large number of mobile money operators out there.

Much effort is put into enabling large utility bill payments as a way of attracting customers and driving transaction volume. These efforts, undoubtedly important, are often pursued at the expense of enabling payments for smaller businesses. I argue that both are essential and should be pursued in parallel.

Let me give you an example. Soon after launch, small businesses were clamouring to meet with us and work out how they could use our product to collect payments. We had small billers, restaurants, and delivery companies all keen to meet with us. They seemed to instinctively grasp the opportunities our product presented before individual customers did. In addition, their needs were broadly the same.

One of the businesses that came to us was a gaming company, which ran a Massively Multi player Online Role-Playing Game (MMORPG). Their biggest problem was distribution. Their customers, in order to play, had to visit one of a network of stores that had a computerized voucher system and purchase game time from them. This meant that the company was forced to maintain a network of stores and all the cash management problems that came with it. Their customers were increasingly playing from home and were demanding a means to buy game time, at all hours, from the comfort of their home.

Their request was simple. Could we provide an account and access to a real time report? They would do the rest.

Sunday, April 29, 2012

KYC - Turning Risks into Opportunities

In my last post, I asked why KYC (Know Your Customer) is so hard. In many cases, it’s not because the regulators require it, but because the mobile money has not taken a risk-based approach to designing their KYC processes. If you examine your KYC processes carefully, you will probably find many opportunities for improvement. Here are some suggestions:
  • Too restrictive: Is your list of allowable documents too tight? If you only allow a few ID types, you may be excluding many potential customers. I have found that even in countries with a National ID scheme, huge numbers of people do not have an ID because the cost to obtain or replace one is prohibitive. Some operators get around this need by allowing a more informal ID, such as a letter from a local official certifying the person’s ID.

Sunday, April 8, 2012

KYC for Mobile Money - Why is it so hard?


KYC stands for “Know Your Customer”.  Most people forget that. They think it means “Collect lots of paperwork” or “Comply with annoying regulations” or “Make it hard to sign up for a new account”. Most mobile money operators don’t take any effort to really know their customer and the reasons the customers have for using the service. All most operators care about is one question, “Do I have enough documentation about this customer to keep the regulator happy?”
Of course, a mobile money business can’t operate without a happy regulator, but it’s important to understand the reasons behind KYC. If we understand the risks we’re really trying to deal with, we can also see the opportunities to provide a safe service that maximises financial inclusion.

Thursday, April 5, 2012

Mobile Payments and Android. Are you ready?

"Everything takes longer than you think and then it's suddenly been there all along" That is my pitch on mobile payments in a nutshell and is always followed by the question "Will YOU be ready?" That said some things DO come faster than you think.

The convergence of low cost smartphone and mobile payments has arrived. G-Cash in the Philippines, a mobile payment service targeting the unbanked the last 6-7 years, has launched an Android app. Just a short (4 years) time ago you had to register and transact on the service via '/' delimited SMS messages in a specified format. It was a user experience nightmare that few could get correct without assistance. It was the assumed necessary evil as the masses, we were told, only had access to SMS or USSD.

Sunday, April 1, 2012

Four Core Components to Any Mobile Payments Business

Two weeks ago in this blog, Brad Jones posted a synopsis of The Demise of Nokia Money where he made a very fundamental point, ‘’...the old adage of payments remains the same – scale takes time’’. Payment services are competitive, forcing low margins and creating the need to build a large customer base doing multiple transactions to be profitable. Having worked with Brad and WING Alumni to build & launch WING Mobile Money in Cambodia, and being a keen student of other mobile money implementations, I have identified four core components that in my view need to be addressed to build a successful and scalable mobile payments business.

Wednesday, March 14, 2012

The Demise of Nokia Money

Dramatic news in the mobile money world this week with the announcement that Nokia was withdrawing from its Nokia Money business to focus on core offerings. The change in strategy will not happen immediately however, with a Nokia company spokesman outlining that the service will continue to operate in India whilst it works on an exit strategy with its partners, regulators and other stakeholders.
For those of us in the industry, this hasn’t come as a major surprise, as there have been rumours and discussion about the possibility of this for some time, and visible changes in strategy and senior management from Nokia as they completed the test and learn cycle of their financial services offering. As an industry however, it is interesting to consider what lessons can be learned from this experience. As an observer over the last three years, three major observations on challenges with Nokia Money spring to mind. These are; overblown expectations, strategic alignment and distribution.

Sunday, February 5, 2012

Mobile Money in Myanmar – A Unique Opportunity


I have been fascinated for some time now about the potential for economic development in Myanmar when sanctions are lifted and markets open for the first time in decades. Historically Burma was one of the wealthiest markets in South East Asia, and was renowned for its resources and the high literacy rates amongst its people. Unfortunately 60 years of economic stagnation, isolation and internal conflict has had its effect, and Myanmar today has a GDP per capital amongst the lowest in the world at US$1300, and more then 30% of its population scrape a difficult existence under the poverty line (https://www.cia.gov/library/publications/the-world-factbook/geos/bm.html).

Sunday, January 29, 2012

Speakers at the MMT Asia Pacific conference

Some interesting speakers this week at the APAC Mobile Money Summit in Singapore. Have a look at this link for the list - http://www.mobile-money-gateway.com/event/mobile-money-apac-2012/page/mobile-money-apac-speakers. Many of the speakers have been seen and heard at previous events but I would think that the following would have a good story to tell:

  • Annie Smith from Digicel Pacific - Digicel were innovators in launching their mobile money program in the Pacific over the last few years, and were able to rapidly create a footprint in a number of markets including Samoa, Tonga and Fiji. Annie is a new starter in Digicel and will be looking at how these services can move to scale and create a valuable channel for her company. Her insights to these markets and plans for the future should be of value to all mobile money practitioners. Have a look at their site for more details - http://www.digicelmobilemoney.com
  • Ian Watson from WING Cambodia - WING has recently been sold by ANZ to Refresh Mobile. Ian is currently merging the two companies and has publicly said that he plans to expand the WING business model of providing financial services to unbanked Cambodians. His presentation should provide a fascinating insight into his plans for the future. Read more about WING Cambodia and the acquisition by Refresh Mobile here - http://www.wingmoney.com/en/ and http://www.sea-globe.com/Business/winging-ways-refresh-mobile-wing-cambodia.html
  • Oyungerel Rentsen from Mobifinance - Mongolia is a mobile money market that I certainly don't know a lot about, but this country of 2.75 million people has 20% of its population living under $1.25 a day, and is also the most sparsely populated country in the world (http://en.wikipedia.org/wiki/Mongolia). I imagine there should be some intriguing insights as to how mobile money is developing in this country - Mobifinance is a standalone company that has been set up by the largest mobile operator in Mongolia, Mobicom. If you speak Mongolian, have a look at their website here - http://mobifinance.mn/mdb.

Saturday, January 28, 2012

The WING Cambodia alumni

I was fortunate enough during the period 2007-2010 to lead a simply extraordinary team of people to create WING in Cambodia. In 8 very short months, this team worked huge hours to develop not just a mobile money offering, but an entire business, including property development, regulatory sign-offs, new processes and training and recruitment of dozens of staff. Within another 18 months, the team had helped acquire 150,000 customers and develop access to finance in every province of Cambodia.

With such an extraordinary group of people, it is not surprising to see that many of them are now charting the future of mobile money in Asia and elsewhere. After setting up the operations function, Paul Reynolds is now leading business development for Monitise in South East Asia. Scott Bales moved from the technology team to Fundamo, and is now the Chief Mobile Officer for Movenbank. Regulatory risk and operations expert Michael Joyce is now working with bKash in Bangladesh, and Joep Roest is working with UNCDF handling mobile money development in the South Pacific based out of Port Moresby. David Kleiman has recently worked with the Bank of South Pacific, and Andrew Wilson leads mobile innovation for ANZ in Melbourne. Justin Hadgkiss has recently joined Visa to work on the Fundamo integration in Asia. It is fantastic to see so many of these individuals making such an important contribution to the development of this industry after their ground-breaking work in Cambodia.