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.