57510 MOBILE MONEY SUMMIT 2010 Unleashing the Power of Convergence to Advance Mobile Money Ecosystems Piya Baptista and Soren Heitmann Written by Piya Baptista and Soren Heitmann Designed by Alison Beanland © 2010 IFC and the Harvard Kennedy School ACKNOWLEDGEMENTS This report draws heavily on the experience of speakers and participants in the third annual GSMA Mobile Money Summit, co-organized by IFC, CGAP, and the UK Department for International Development, held May 24-27, 2010 in Rio de Janeiro, Brazil. In particular the authors would like to thank various speakers and industry experts for generously sharing their time and insights through in-depth interviews during and after the summit. The authors would like to thank Andi Dervishi, Arata Onoguchi, and Ian Larsen for their strategic guidance and input into this report. The authors would also like to thank the Harvard Kennedy School's Beth Jenkins for her careful review, substantive input and editing of various drafts as well as her ongoing dedication to this project. This report would not have been possible without the institutional and financial support of IFC and the Government of Netherlands. All quotes and content for this report are drawn from conference sessions, working groups, speaker interviews and presentations during the Mobile Money Summit 2010. Material from other sources is referenced in the endnotes. RIGHTS AND PERMISSIONS The material in this publication is copyrighted. Quoting, copying, and/or reproducing portions or all of this work is permissible using the following citation: Baptista, Piya and Soren Heitmann. 2010. "Unleashing the Power of Convergence to Advance Mobile Money Ecosystems." Washington, DC: IFC and the Harvard Kennedy School Photographs © GSM Association; Digicel; Zain Zap; MTN; Roshan; YellowPepper, O2 MOBILE MONEY SUMMIT 2010 Unleashing the Power of Convergence to Advance Mobile Money Ecosystems Piya Baptista and Soren Heitmann Defintions and Acronyms Used in this Report Acronyms AML: Anti Money Laundering G2P: Government to Person MFI: Microfinance Institution B2B: Business-to-Business KYC: Know Your Customer m-wallet: Mobile Wallet CFT: Combating Financing of Terrorism MNO: Mobile Network Operator NFC: Near Field Communication e-money: Electronic Money m-money: Mobile Money P2P: Person-to-Person Definitions1 Agent: A person or business that is value is typically stored in a microprocessor regulators, international financial institutions contracted to facilitate transactions for users. chip embedded in a plastic card or and donors, and even civil society The most important of these are cash-in and "smartcard." On the other hand, network organizations. cash-out (i.e. loading value into the mobile based products use specialized software money system, and then converting it back installed on a standard personal computer for Mobile Payment: A movement of value that out again); in many instances, agents register storing the "value." The loading of value is made from a mobile wallet, accrues to a new customers too. Agents usually earn onto the device is akin to the withdrawal of mobile wallet, and/or is initiated using a commissions for performing these services. cash from an ATM, and the product is used mobile phone. Sometimes, the term "mobile They also often provide front-line customer for purchases through a transfer of value to payment" is used to describe only transfers to service--such as teaching new users how to the merchant's electronic device. pay for goods or services, either at the point initiate transactions on their phone. Typically, of sale (retail) or remotely (bill payments). agents will conduct other kinds of business Float: The balance of e-money, physical cash, in addition to mobile money. The kinds of or money in a bank account that an agent Mobile Money Provider:4 Any institution individuals or businesses that can serve as can immediately access to meet customer that plays the lead role in a mobile money agents will sometimes be limited by regulation, demands to purchase (cash in) or sell (cash deployment. In this report, "mobile money but small-scale traders, microfinance out) electronic money. provider" refers to MNOs, banks or third institutions, chain stores, and bank branches parties that provide mobile money services. serve as agents in some markets. Some Know Your Customer (KYC): Rules related industry participants prefer the terms to AML/CFT which require providers to carry Mobile Money Transfer: A movement of "merchant" or "retailer" to describe this out procedures to identify a customer. value that is made from a mobile wallet, person or business to avoid certain legal accrues to a mobile wallet, and/or is initiated connotations of the term "agent" as it Liquidity: The ability of an agent to meet using a mobile phone. is used in other industries. customers' demands to purchase (cash in) or sell (cash out) e-money. The key metric used Mobile Wallet (m-wallet):5 An account that Anti Money Laundering/Combating to measure the liquidity of an agent is the is accessed using a mobile phone. A mobile Financing of Terrorism (AML/CFT): A set sum of their e-money and cash balances (also money provider can offer a wide range of of rules, typically issued by central banks, that known as their float balance). services to facilitate financial transactions via a attempt to prevent and detect the use of mobile wallet. These services could include financial services for money laundering or to Interoperability: The ability of users of remittances, person-to-person money finance terrorism. The global standard-setter different mobile money services to transact transfers, bill payments, proximity payments, for AML/CFT rules is in the Financial Action directly with each other. Given the technical, airtime top up, loan repayments, etc Task Force (FATF). strategic, and regulatory complexities that enabling such transactions would entail, no Unbanked: Customers, usually poor, who do Cash in: The process by which a customer mobile money platforms to date are fully not have bank accounts or transaction accounts credits his account with cash. This is usually interoperable with each other. However, at formal financial institutions. via an agent who takes the cash and credits many mobile money services allow users to the customer's mobile money account. send money to non-users (who receive the Under-banked: Customers who may transfer in the form of cash at an agent). have access to basic transaction accounts Cash out: The process by which a customer offered by formal financial institutions, but still deducts cash from his mobile money account. Mobile Banking: When customers access a have financial needs that are unmet or not This is usually via an agent who gives the bank account via a mobile phone; sometimes, appropriately met. For example, they may not customer cash in exchange for a transfer from they are able to initiate transactions. be able to send money safely or affordably. the customer's mobile money account. Mobile Money (m-money): A service in Electronic Money (e-money):2 Electronic which the mobile phone is used to access money is defined as a stored value or prepaid financial services. product in which a record of the funds or value available to the consumer for Mobile Money Ecosystem:3 Networks of multipurpose use is stored on an electronic organizations and individuals that must be in device in the consumer's possession. place for mobile money services to take root, This definition includes both prepaid cards proliferate and scale up. They are (sometimes called electronic purses) and characterized by interdependence and prepaid software products that use computer coordination among any number of networks (sometimes called digital cash). In actors--such as MNOs, banks, airtime sales the case of card-based products, the prepaid agents, retailers, utility companies, employers, Table of Contents IFC FOREWORD 4 PREFACE: THE OCCASION FOR THIS REPORT 5 SECTION 1: STRATEGY 7 SECTION 2: MARKETING 13 SECTION 3: OPERATIONS 17 SECTION 4: GROWTH 23 LOOKING FORWARD 27 APPENDIX 1: MOBILE MONEY SUMMIT 2010 AGENDA 29 APPENDIX 2: MOBILE MONEY TRACKER 32 APPENDIX 3: ENDNOTES 34 APPENDIX 4: USEFUL REFERENCES 35 APPENDIX 5: LIST OF INTERVIEWEES 36 MOBILE MONEY SUMMIT 2010 3 e 2010 Mobile Money Summit marked an important moment in the evolution of the mobile financial services ecosystem. No longer is mobile money an enticing possibility or an unproven concept. In the two years since the first summit, mobile money has provided millions of people around the world with access to finance, and demand continues to increase. Kent E. Lupberger Over the next two years, the number of people with access to a mobile phone but Senior Manager, Telecom and Information not to traditional financial services is expected to grow from one billion to 1.7 Technology, billion, and Mobile Network Operators (MNOs) are poised to earn $7.8 billion in Global Infrastructure & Natural direct and indirect revenues from more than 350 million clients. Resources Department, International Finance Whether it is for paying salaries, reimbursing suppliers, or sending remittances home Corporation from abroad, mobile money is allowing people to conduct transactions at lower cost and with greater efficiency than physical transactions. With mobile money, users are moving out of cash-based informal systems and are fully participating in the formal economy, making it a key way to improve livelihoods. Clearly, mobile money is proving its potential. But scaling up the industry to meet demand requires a deep understanding of money, individual market nuances, stakeholders, strategies, and roadblocks to success. e Mobile Money Summit 2010 was convened to help the industry better understand how the ecosystem has grown and how each of these factors affects mobile money's role in developing a larger e-money economy: one in which cash wallets are replaced with mobile wallets and other electronic payment instruments. To continue its growth and begin to fulfill the promise of an e-money economy, industry stakeholders must work together to unleash convergence, drive customer acquisition, and refine enabling technology. Mobile money must have a clear appeal to consumers, the public sector, and the private sector. e Mobile Money Summit 2010 identified a number of key lessons for all of the industry's stakeholders. Primary among these was that mobile money's development value rests in its ability to facilitate financial sector inclusion. To do so will require financial institutions and MNOs to work together with regulators on a country-by-country basis. Providers will need to introduce basic mobile money services where they do not already exist and foster the consumer's appetite for more sophisticated services. Effective distribution networks must be developed in order to reach critical mass in the industry. IFC has produced Unleashing the Power of Convergence to Advance Mobile Money Ecosystems to capture these and other key lessons learned during the Mobile Money Summit 2010. e report serves as a valuable resource to anyone who seeks to understand the state of the mobile money industry ­ or to anyone working to grow the industry further, a goal shared by IFC and the entire World Bank Group. 4 MOBILE MONEY SUMMIT 2010 The Occasion for this Report T his report is written on the occasion convincing is needed of the mobile money of the third Mobile Money opportunity. e Rio Summit brought Summit, held May 24-27, 2010 in together 58 speakers and 643 participants "Mobile money Rio de Janeiro, Brazil. e discussions at from 63 countries. Approximately 51% sustainability can be this year's summit reflect the evolution in of attendees were senior management. the mobile money industry since the first As in previous summits, the participants achieved through the summit was held two years ago. As represented every sector of the mobile development of the GSMA Mobile Money Director Gavin money industry--including financial full ecosystem but Krugel stated, "We have evolved from service institutions, mobile network must be done jointly: hype in 2008 to regulatory and other operators (MNOs), development organ- banks, governments, challenges in 2009 to a deeper level of izations, technology vendors, regulators MNOs, merchants, conversation based on real experience in and academics. regulators." 2010." is experience is based on an e Mobile Money Summit 2010 Report George Held, Group Marketing increase in the number of mobile money aims to provide readers with a high level Director, Zain deployments worldwide from 60 in 2008 summary of the key discussion points and to 120 in 2009 to 160 as of August 2010. takeaways from this year's conference. It is Of these 160 deployments, 73 are live and based on the main conference proceedings 87 are expected to go live in 2010 (see on May 25 and 26, interviews with 23 Mobile Money Tracker on pages 32-33). speakers and other experts during and is increase in the number of mobile after the conference, and on pre- and post money deployments, as well as the conference events, namely the Mobile continued diversity of speakers and Money for the Unbanked Working participants at the Mobile Money Group on May 24 and the Leadership Summit, indicate that no further Forum on May 27. e report explores MOBILE MONEY SUMMIT 2010 5 E-money: Setting the Electronic Money Context in this Report Mobile money services are financial individuals to engage the formal an electronic transaction. As retailers services accessed via a mobile phone. financial system through electronic and individuals use and accept e-money, The mobile phone is the newest of many transactions. it will become more common and more vehicles used to access financial services. However, the mobile phone is useful in the marketplace and decrease Credit cards are a well-established what makes mobile money services the need to cash-in or cash-out. mechanism for electronic payments, revolutionary. Mobile money describes this broad and it has been possible to send money Mobile phones provide individuals a collection of financial services that are orders since the telegraph. Current convenient access point to financial accessed by mobile phones, enabling mobile money deployments provide services, permitting the user to initiate individuals to spend, accept, store and person-to-business electronic transactions from anywhere transfer electronic money. Mobile money payments, like and send them anywhere, including services will soon serve the breadth of purchasing air time other mobile phones. More significantly, today's daily financial transactions, top-up, or international the money used through mobile money potentially making mobile phones the person-to-person services is fungible so that someone primary access point for daily economic remittance services, for can loan a friend lunch money, for transactions and electronic money example. These services initiate an example, in a way that credit cards the primary means of settling those electronic transaction that is functionally cannot possibly do. Because the store transactions. similar to the act of swiping a credit of value is maintained and potentially card in a store or sending money with spent or re-sent anywhere, this describes Western Union. All these services enable electronic money (e-money), not simply select themes, practices and challenges to divided into four sections: strategy, unleash the full potential of mobile marketing, operations and growth. Each money for the benefit of consumers section presents one to two questions worldwide--the banked, the unbanked, and insights drawn from the discussions and the under-banked. e report is at the Rio summit. ese include: SECTION KEY QUESTIONS Strategy · How do we unleash the power of convergence? · What is the recipe for launching and sequencing services? Marketing · How do you drive customer acquisition and usage? Operations · How do you develop and implement an optimal agent network strategy? · How does technology enable a successful mobile money deployment? Growth · How can we accelerate the acceptance of mobile money services? Previous Mobile Money Summit Reports new mobile money industry marks a focused on `developing' and `accelerating' critical, powerful point of convergence mobile money ecosystem development. between banks and MNOs. In his is report focuses on `deepening and opening remarks, Krugel asked broadening' mobile money ecosystems. participants to "unleash the power of Cross-sector partnerships among MNOs, convergence." In other words, to think banks and others are leading to the about what we can do together to jointly emergence of deeper, more inter- target new market segments. "It's not you connected networks and new entrants are or us," he says, "it is us together that will broadening these networks. Partnerships create a market for mobile money." By between MNOs and banks in particular joining forces, the telecommunications facilitate the development of the mobile and banking industries have the power to money industry as a whole, in a way that change the way people across the globe these individual industries may not easily transact, and especially to address the accomplish. Cooperatively growing this financial needs of the poor. 6 MOBILE MONEY SUMMIT 2010 1 STRATEGY Strategic Partnerships: The key to unleashing the power of convergence is strategic partnership between banks and MNOs. Together, these partners have the infrastructure capability and institutional know-how to meet regulatory challenges and successfully launch a mobile money service. But clear roles and dedicated leadership are required for a mutually beneficial relationship. Product Sequencing: Each market has its own demands and constraints, implying there's no single recipe for launching a mobile money service, or even a clear answer for what that service should be. A successful service will meet customer needs and demand, but requires a deep knowledge of the market. "MNOs have the customer base and understand mass consumer behavior. Banks want to go down-market and tap this wider opportunity utilizing more cost-effective methods of service delivery. With the aligned objectives of increasing access to financial services at lower cost, MNO-bank partnerships will be an underlying theme for the next five years." RIZZA MANIEGO-EALA, PRESIDENT, G-XCHANGE INC. MOBILE MONEY SUMMIT 2010 7 1 STRATEGY How do we unleash the power of convergence? T Partner for Power "Mobile money has the potential to impact scale. "e role of the financial institution billions of people globally," observes George gives the regulator comfort," explains Held, Held, Group Marketing Director, Zain. making them more likely to come to the is potential lies at the intersection table when approached by an MNO-bank of modern telecommunications and partnership than an MNO alone. traditional banking. is is the power of Partnership with financial institutions can convergence: through union between these also help expand services and reach new industries, mobile money can reach customer segments. In the Philippines, for emerging and developed markets alike with example, Globe Telecom's mobile money tremendous opportunities in the form of platform provided by its wholly-owned new services for greater financial inclusion. subsidiary, G-Xchange Inc., has enabled "What's the best way It is no coincidence that all successful millions of Filipinos living abroad to send to get a mobile money mobile money deployments in the world money home to GCASH customers today involve an MNO and a financial though partnerships with PayPal, BICS, service off the ground? institution. ese strategic partnerships Western Union, Xoom and numerous Making sure you have have emerged as best practice for other large remittance companies. Rizza the right ecosystem unleashing the power of convergence. Maniego-Eala, President of G-Xchange partners behind you." Partnerships combine know-how when Inc., describes such partnerships as huge engaging the regulator and capacity to scale assets for the growth and success of mobile Amit Mattatia, service offerings. Zain's Zap service boasts money. ese partnerships create the President & CEO, Trivnet over 12 million customers6 in Africa and essential components of the foundation the Middle East and partnerships with that will allow more financial services to be CitiBank and Standard Chartered were key offered to mobile subscribers. factors enabling this level of international T Challenges for Partnerships ere are two fundamental components regulator's help and support must be of a successful mobile money sought early on to identify problems and deployment: infrastructure and regu- find solutions, or else it will be impossible latory approval. "If your mobile money to get the mobile money deployment strategy wants to cover a mobile area and off the ground. MNO-bank partnerships your network doesn't, that's a conflict," are a perfect match to address mobile says Koji Ono, Chief Strategy Officer for money needs, but both must be fully Robi. e same type of conflict can arise committed to the project's success. e when trying to launch a service that challenges will push partners into doesn't meet compliance standards. Being unfamiliar territory and the mobile compliant is seldom trivial, in part money service itself will likely represent a because mobile money is so new that divergence from their respective core regulators have yet to fully codify how business models. Dedication from top these services need to work. e management is a key factor for success. 8 MOBILE MONEY SUMMIT 2010 G-Xchange Inc.'s partnerships enable G-Cash customers in the Philippines to receive money from relatives abroad. Roles and responsibilities are also may fear competition and back away. critical success factors. ese need to e required commitment to cooperation be clearly defined, not only to meet and shared benefit increases as services regulatory challenges, but also to ensure expand and partnerships grow. For that the partnership is based on shared MTN Ghana, there are nine partner risk and shared benefit. Coenraad banks. "It was a challenge to get Jonker, Director of Community everyone to understand why they Banking, Standard Bank of South Africa needed to share," says Bruno Akpaka, acknowledges that banks may be wary General Manager, MobileMoney, MTN when approached by an MNO seeking Ghana, "but now everyone understands to enter the financial services space. If their role" -- and this has spelled success the MNO seeks to provide mobile for the partnership, which expects over money as a value-added service to 2 million mobile money customers increase its margin or customer base, the within the first year of deployment. In bank is ready to help the partnership this example, MTN Ghana led the succeed. But if the MNO seeks to go partnership due to its initiative, strong deeply into financial services, the bank brand and customer base among a A Strong Partnership Solves Regulatory Challenges The Méditel-BMCE Bank partnership included requiring that only bank AML concerns, but also to improve the identified a strong opportunity for mobile employees register new users and that service offer. banking services in Morocco, with 31% of cash-in transactions happen only at bank Thanks to strong commitment and the population banked and 76% using branches. Banks needed to have cooperation from both Méditel and BMCE mobile phones as of 2008. A careful study governance control over IT infrastructure, top management, the parties managed to of the market found demand for money imposing requirements on the overcome these regulatory challenges by transfer, bill payment and airtime top-up partnership's business model. Finally, signing an "Intermediary in Banking services. banks were responsible for payments Operations" mandate. This mandate However, initial regulatory requirements accounting, but SIM cards and phones allows Méditel to commercialize mobile posed a significant hurdle: money transfer were inadequate identifiers. money using its own agent network to services needed to be executed in Early on, Méditel and BMCE shared the collect money from customers on behalf dedicated premises that included guards project with the central bank to ensure of BMCE. and security cameras. With Méditel's agent regulation was addressed in the scope of network consisting of small grocers, these the project. Many working sessions prohibitive requirements meant no allowed the partners not only to comfort widespread deployment. Other hurdles the central bank about security, KYC and MOBILE MONEY SUMMIT 2010 9 1 STRATEGY largely unbanked population. Strong MNO, a third party may be best leadership is critical, and this role must equipped to lead, such as in Ecuador also be decided. But who leads is highly where YellowPepper brings a host of dependent on the market and the assets mobile money ecosystem stakeholders each partner brings to the table. While and customer segments together under an MNO might lead in a market like the tri-branded MONY service. Ghana, a bank might lead in a country Regardless of who fills the role, uniting where the ATM network vastly outstrips under strong and dedicated leadership an MNO's agent network. In settings is necessary for stable, beneficial without a clearly dominant bank or partnership. What's the recipe for launching and sequencing services and products? T The Killer Application ere is no recipe for launching or target unbanked populations or those sequencing mobile money services. with low financial literacy, as these However, the ingredients are well segments are less likely to demand known: success is predicated on a formal financial tools or be familiar with thorough understanding of the market their use. Herein lies the challenge and target customer, a positive of identifying the so-called killer regulatory environment, and the right application. But Richard Mwami, Head partnerships. Knowing each country's of MobileMoney for MTN Uganda, needs and regulatory nuances is critical offers three basic principles for guidance: to identifying the right opportunities, think big, start small, and scale fast. e says Hesham Shawki, Chief Innovation right sequencing will present itself once and Partnership Officer for Orascom initial services take off, says Aletha Ling, Telecom Holdings, but the use case is Executive Director and Global Head of what ultimately drives and defines Business Development for Fundamo: success. e problem with the use case "Your customers will surprise you, not is that the customer doesn't always know just on volume, but on demand for more what they need or what they want to do services." when it comes to mobile money services. is can particularly trouble services that 10 MOBILE MONEY SUMMIT 2010 MTN agents interact face-to-face with customers to explain the product and service offering. T Think Big Mobile money services are generally offer numerous different services, but categorized in terms of the transaction there's no correct sequence or starting stakeholders: person-to-person (P2P) is point; the only requirement is that the perhaps the most basic and currently the service meet the customer's needs. Know most common. But many possible the customer, know how they spend applications and permutations exist their money, and how they want to among governments, businesses, spend their money. is can also mean customers and all stakeholders within the knowing how a customer wants to ecosystem, both horizontally and receive or send money. For Zain this vertically. Opportunities for mobile meant approaching Coca-Cola in money exist throughout the customer Tanzania--whose big, red trucks spectrum, from the base of the pyramid advertised a driver carrying cash along on up, says Roberto Rittes, Director for insecure, rural routes--and asking, "Do Oi Paggo, with products ranging from you have a cash collection problem?" traditional remittance services to With drivers receiving payments using microinsurance or government benefits mobile money, Coca-Cola's problem payments. found a solution and Zap stimulated the An expanding deployment will likely broader ecosystem. Knowing how Introducing Mobile Money Services in Diverse Markets In Kenya, Safaricom piloted M-Pesa as a a critical customer mass, Safaricom is necessary for creating a rich mobile service for microfinance borrowers to now addressing the demand for savings commerce experience. Going beyond repay loans, but discovered that users products frequently seen in unbanked "2D" services is the sort of innovation that wanted remittances. M-Pesa refocused markets. Ramsden believes is necessary to really to meet this stronger demand and quickly Developed markets need a different excite customers and stimulate demand in gained over 9 million customers. Safaricom value proposition. O2, for example, developed markets, where people are is now expanding its offering by partnering targeted London to pilot its O2 Wallet, highly banked and already use numerous with Equity Bank to launch M-Kesho, an which combined three industries by placing financial services. Micro-savings accounts interest-bearing micro-savings account held an Oyster NFC transport card and a aren't going to excite customers in London, by Equity Bank and offered to M-Pesa Barclay's credit card into a NFC enabled and mobile wallets currently lack demand clients. M-Kesho will be a powerful draw mobile phone. This created the "3D" in Kenya. The right mobile money service is for customers looking for alternatives to experience that Andy Ramsden, Head of the one that fits the market and is "saving under the mattress." First reaching Payment Products at O2, describes as introduced at the right time. MOBILE MONEY SUMMIT 2010 11 1 STRATEGY Coca-Cola wanted their drivers to everywhere, and Olga Morawczynski, receive money made it an easy entry, says Financial Literacy Project Manager at George Held, Group Marketing the Grameen Foundation's AppLab, Director, Zain, who advises: remember reminds us that the poor are active corporate customers too, not just money managers too, who show end-users, when looking for market particular demand for savings products. opportunities. But opportunities are T Start Small e first service should be one that Officer at Orascom Telecom Holdings, enhances the provider's image or bottom and "once you have gained your line. It does not necessarily need to be consumers' confidence, and they are complex or game-changing. MTN hooked to a simple but useful product, Uganda introduced a straight P2P they will demand more from your money transfer service to bring people technology." Prompted by this demand, onto the platform, says Richard Mwami, the evolution of a company's mobile Head of MTN MobileMoney in financial services roadmap for the Uganda. For now, they're staying small, unbanked could evolve as follows: waiting for a critical mass of subscribers sophisticated payments; money storage and double-digit penetration rates or accumulators; interest-bearing savings REGULATORY TAKEAWAYS · Who's accountable for regulatory compliance: before offering more services. Rapidly products; access to credit; and finally the bank or the MNO? introducing new products can over- insurance. However, a mobile money Different environments whelm customers or risk diluting the strategy targeting a financially have different mandates. In Mexico, banks are service quality as managerial capacity sophisticated customer segment or held accountable; in the may be forced to address competing developed markets may target Philippines, the MNO must demands across multiple new market convenience services and develop in a see that agents follow segments. "Do a few things, but do totally different direction. In Shawki's protocol. The regulator must clearly articulate them exceptionally well, as many opinion, real success will happen at the which party is ultimately customers don't tolerate complexity and crossroads of both segments. Again, responsible in order for lack of focus," says Hesham Shawki, there is no one recipe for product partners to define clear Chief Innovation and Partnership sequencing. roles and responsibilities. T Scale Fast "Achieving critical mass is difficult--but government-to-person (G2P) strategy it's the way to achieve success," says offers access to a large customer base. A Rittes, who recommends establishing critical mass is just the start. "You may partnerships with large merchants first, get customer uptake with a given thereby providing customers with more product; but you may not get the opportunities to use the product at the volume you really need without going earliest stages. Indeed, focusing on beyond basic product offerings," says merchant buy-in is one way to scale a Mark Pickens, Microfinance Specialist mobile money operation quickly for CGAP. Spanning customer segments because if the merchants are convinced, and stakeholders is a crucial next step. consumers will use and adopt e-money. True scale is marked by integrating the Or in the case of Roshan, focusing on a entire mobile money ecosystem. 12 MOBILE MONEY SUMMIT 2010 2 MARKETING Key Message: Know the customer to craft a message that expresses the value-add of a service in a way the customer values. Then drive acquisition and usage with a strong marketing campaign. "Consumers today demand cash because it's what they are used to. We have to help them understand that cash is not always the only option and perhaps not always the best option. It is our role to educate consumers that mobile money is safer, more secure and more convenient." ZAHIR KHOJA, EXECUTIVE DIRECTOR OF MOBILE COMMERCE, ROSHAN MOBILE MONEY SUMMIT 2010 13 2 MARKETING How do you drive customer acquisition and usage? T Know the Consumer: Sending the Right Message Understanding the market is critical where people already do mobile airtime for identifying strategic product transfers, so they are accustomed to opportunities, but to drive uptake and sending something of value via a mobile usage within the market, you must know phone. is provides a lever for the customer. is is a necessity for marketing P2P-type services. Under- successful marketing and strategy, standing the customer goes beyond echoed repeatedly at the Rio Summit. providing the right service; it means As a speaker put it, "You have to know knowing how to successfully your customers. If you do not know communicate with the customer by "The final polish that them, you cannot do business with offering that service in a way that them." resonates with what the customer already converts a diamond Knowing what potential customers in the understands, and ultimately, what he from a rough stone market already do can reveal strong levers wants to accomplish. to a precious gem in for driving adoption of mobile money Use-based marketing messages have the eyes of consumers services. In Kenya and Uganda, for proven successful for many mobile lies in direct and example, Bruno Akpaka, General money services precisely because they Manager of MobileMoney for MTN appeal to what a customer already wants effective marketing, Ghana, explains that sending money back to do. Simple ideas, like MTN Uganda's once fundamental home is already a deep cultural "now you can send money to your elements such as characteristic. Remittance services are parents," offer a ready solution for a organization of the immediately understood, and relatively customer seeking remittance services company, distribution little effort needs to be spent educating without dwelling on the service itself. the customer about something they However, in many circumstances points and a certain already do, already know and already potential customers may be unaware of regulatory framework value. By comparison, in many West what they can do, making lifestyle are in place." African countries, he says, money may be messaging a better approach. Yellow remitted, but without the same cultural Pepper's ad campaign offers customers Rizza Maniego-Eala, President, G-Xchange Inc. expectations: "It's a help, but money "more time for yourself," through services transfer will not be the main driver in that provide greater convenience by these markets. Each market needs to limiting the time spent waiting in line at identify what will be the main driver." the bank or making trips to the utility Knowing these types of cultural norms is company to pay bills. e advantages instrumental in effecting customer uptake of these conveniences are readily and demand for mobile money services. understood. It's a message that resonates For example, Haridas Nair, Area Vice with customers, and for many, "more President of mCommerce at Sybase 365, time for yourself " means more time to Inc., points to Latin American markets, earn money. For Roshan's M-Paisa in 14 MOBILE MONEY SUMMIT 2010 Afghanistan, although the service also make a purchase or another possibly offers time savings benefits--and even time-consuming transaction, you have safety benefits by enabling customers to more time to stay at home. Lifestyle potentially avoid difficult or dangerous benefits resonated strongly with M-Paisa's transit--initial marketing campaigns that customers: by staying home and spending focused explicitly on ideas of convenience time with his family, a father is seen as fell short. "Marketing convenience is being a better father, explains Khoja. difficult in Afghanistan," says Zahir e successful marketing campaign Khoja, Executive Director of Mobile communicates the service in terms of Commerce and Product Marketing for what the customer already values, and is Roshan. "e population has never characterized as providing something the experienced it. ey do not know what it customer already desires. tastes like." But if you're not going out to T Marketing, Marketing, Marketing e right message will grab the and usage is critically driven by customer's ear, but this is only a piece of traditional marketing, and lots of it. the puzzle: whether broadcasting that Branding is one of the first issues to message (above-the-line marketing) or address in developing a strong marketing reaching out to individuals (below-the- campaign: the customer must trust the line marketing), customer acquisition message and the product. e strongest Differentiating Your Product From the Competition A Zain TV advertisement shows a proposition with a message that resonates out to his mother, who is working in the payments evolution from shiny shells to with the customer. That message should garden back home. Clearly cash doesn't plastic cards, stating, "throughout history, also help distinguish the product from the fly: M-Pesa is better. Different services money has changed hands and forms." competition. Although multiple operators and markets will have different value The next change comes in the form of may offer mobile money services, today, propositions, but articulating why mobile Zap, bringing a "revolution in commerce." the real competition is cash. M-Pesa's Send money is better than cash is both a The message articulates that Zap is just Money Home campaign differentiates compelling message and one that another form of money, but better itself from cash with a TV spot showing a promotes the broader adoption of money. A marketing campaign needs to young man in an office sending money e-money. communicate the product's value home: cash bills fly from his cell phone MOBILE MONEY SUMMIT 2010 15 2 MARKETING brand in a partnership should lead in the Uganda 1,000 existing agents bolster its target market, although when multiple overall sales force. partners are strong in the market, a Promoting ongoing service use is as co-branded mobile money service may critical as customer acquisition. provide a better vehicle. And while a YellowPepper encourages customer brand name may help bring a customer buy-in up front by charging a to the table, the technology device or registration fee that preloads an REGULATORY TAKEAWAYS · Customer acquisition may platform itself is the ultimate custodian equivalent amount of airtime. By be accelerated with of the marketing campaign: it is the first putting something at stake, the customer proportional KYC experience a customer has upon is incentivized to try the service at least regulation. Unbanked and registration. For many customers in the to get her money's worth. Loyalty under-banked customers may face financial exclusion mobile money space, a complex user schemes and airtime bonuses also because they lack ID cards interface can immediately undermine promote ongoing usage, as do ancillary or the ability to verify IDs customer uptake and belief in the incentives, like micro-health and burial due to absence of faxes, product. insurance coverage that YellowPepper photocopiers or even electricity. This segment Nontraditional marketing channels customers receive with their initial engages in low-risk can often be very effective ways to reach registration fee. However, incentivizing transactions, often below new mobile money customers, where the players in the ecosystem can have $20. Regulators need to target market is more receptive to significant knock-on effects for consider alternative KYC requirements for these below-the-line marketing. For customers stimulating customer uptake and usage. groups, allowing further who may be illiterate, who lack any For example, if wholesale suppliers offer customer uptake while experience with formal financial tools, or shopkeepers discounts or inventory keeping risks low. who simply live in rural areas difficult to bonuses when making purchases using · For providers, incentivizing reach with broadcast marketing, direct mobile money, these small shops will an agent network as a marketing and sales force is sales engagement is the most successful encourage mobile money uptake among also a KYC issue. It must be channel. MTN Uganda, for example, their customers simply by providing the done properly, to minimize credits its direct sales model with its ability to transact using mobile money perverse incentives: agents soaring growth. Over 2400 trained sales services. is is the ultimate marketing eager to earn a new customer commission may agents travel significant distances into tool: providing customers more disregard KYC requirements, rural areas to promote mobile money opportunities to buy, spend and send presenting a risk far greater and educate communities. By focusing using e-money. "We're introducing a than merely signing up on below-the-line methods, MTN new form of money into society: frivolous accounts. Uganda achieved just short of one electronic money," says Andi Dervishi, million customers in its first year. MTN Practice Lead, Electronic Payments and Ghana employs other below-the-line Marketplaces, IFC, "and every time such tools, such as viral marketing and an endeavor has been attempted, success demonstration effects, by promoting depended on whether sellers or service use and word-of-mouth merchants accept the new money as advertising among employees, their payment. Marketing that will drive families and existing customers. acceptance by one seller can trigger However, one of the strongest adoption by a much larger number of opportunities for personal engagement buyers. Merchants influence consumer is leveraging existing agent networks to behavior and are the `queen bees' of a both sell and aggressively promote transacting community." mobile money services: for MTN 16 MOBILE MONEY SUMMIT 2010 3 OPERATIONS Agent Network Development: Agents are the face of the mobile money service to the customer, playing the vital roles of customer education, sign-up and transaction support. A customer's interaction with an agent creates the trust that is critical to adoption and use. Building a trustworthy, ubiquitous, liquid and profitable agent network is key to a successful deployment. Enabling Technology: The technology platform is what enables mobile money operations to succeed: processing transactions, mediating regulatory requirements and binding partners and customers together. Technology will also help spur NFC-integrated phones and broader e-money ecosystems. "We don't use the term `agents,' but `merchants.' The reason we believe the merchant is very important is the sustainability of the business model. If a person sells orange juice or magazines, and at the same time he is using mobile payments as a means of payment, it makes a sustainable business versus if his job is just to perform cash-in and cash-out." GEORGE HELD, GROUP MARKETING DIRECTOR, ZAIN MOBILE MONEY SUMMIT 2010 17 3 OPERATIONS How do you develop and implement an optimal agent network strategy? T Build a Trustworthy, Ubiquitous Network to Achieve Uptake If customers, especially the poor, are to goods companies. In others, mobile adopt mobile money services, they must money providers need to build trust that their money is safe. Selecting relationships from scratch with trustworthy agents who can educate independent "mom and pop" shops or customers about the value of shifting from select agents within existing mobile phone cash to e-money is key. is process airtime distribution networks. GSMA's begins when agents sign up customers research indicates that successful operators and continues when they facilitate grow agent networks in phases.7 In the transactions. Easy access to agents for first phase, an adequate number of agents these services helps customers to need to be recruited throughout the experience the principal benefit of mobile market to support launch. In the second money: convenience. Types of agents, phase, resources need to be redirected however, vary by country. In some from agent recruitment to customer countries, it is easy to leverage the large acquisition. In the third and final phase, retail footprints of supermarkets, numbers of agents and customers need to pharmacies and fast-moving consumer grow in parallel. "If a person wants to T Agent Liquidity and Profitability are Key to Customer Trust cash out his salary and Mobile money providers should pay electronic money for daily transactions. the agent does not strong attention to how their agents is reality makes it important for agents have the money, the manage liquidity to ensure sufficient to have sufficient cash on hand. reserves of e-money are available for Ultimately, as Serge Elkiner, President of SMS message on his cash-in transactions, such as sending YellowPepper, notes, "enabling customers phone has no value. remittances, and physical cash for to use the system not only to cash-out, but Agent liquidity is cash-out transactions, such as receiving also to make payments and purchases, is a paramount to the remittances. An agent's inability to way to address the liquidity challenge." success of mobile perform these transactions could Agent liquidity and profitability are also negatively impact customer trust. Richard closely related since maintaining fixed money." Mwami, Head of MTN MobileMoney amounts of cash and e-money reserves, or Zahir Khoja, Executive in Uganda, notes, "if your customer walks float requirements, comes at a cost. An Director, Mobile Commerce into the agent, he expects to find agent can face increased operating costs as and Product Marketing, electronic money and cash. If he cannot a result of frequent trips to the nearest Roshan find the money, he won't come back." bank or other lender to withdraw cash; Currently, customers in most mobile high interest rates on working capital money deployments are performing more loans needed to main float; or theft of cash-out than cash-in transactions since physical cash by employees at an agent's there are not many places where they can store. All these factors can eat into an use their mobile phones to pay with agent's profit margin. Recognizing that 18 MOBILE MONEY SUMMIT 2010 M-Paisa agents in Afghanistan leverage Roshan's partnership with Azizi Bank to ease liquidity challenges. agents in rural areas face bigger challenges and other services to ensure a profitable in managing liquidity, some mobile agent model require judicious structuring. money providers are offering higher In general, an agent is likely to stop commissions for cash-out transactions to offering mobile money services if it's compensate these agents for the extra unprofitable. is in turn may lead a time, effort and money needed to customer to lose trust in mobile money's maintain the float. Commissions for reliability. customer registration, cash-in, cash-out T Agent Training and Management Ensure a Positive and Consistent Customer Experience "One must build in the cost of agent an independent company, Top Vision, to training and management to ensure that train its M-Paisa mobile money agents on agents continue to adhere to established KYC/AML requirements to ensure procedures, that the system remains intact, regulatory compliance; branding and and that customers build and maintain marketing to increase the visibility of the trust," says Elkiner. While some providers M-Paisa service and customer foot traffic; use in-house staff for agent training and and liquidity management to ensure agents management, others outsource this have sufficient float to maintain a positive function to third parties. Mobile network and consistent customer experience. operator Roshan, in Afghanistan, has hired Approaches to Managing Agent Liquidity Challenges "There's limited trust in the banking its preferred agents about the amount of branch, so agents don't have to travel far system in Afghanistan today, due to money to be transferred and the locations to convert e-money into cash during high historical losses. We have one chance to where agents will need to have cash on demand periods. In addition, if an M-Paisa prove the value to the customer. We need hand. These preferred agents, in turn, agent runs out cash, M-Paisa customers to build this trust," says Khoja. Roshan contact other agents in their areas may visit the Azizi Bank branch to convert relies on a preferred agent approach on regarding expected cash needs. Roshan has their e-money into cash, which is especially salary disbursement day to ensure that also partnered with Azizi Bank, one of the important on salary disbursement days. In members of the Afghan National Police country's largest banks, which has areas where there are no rural bank and employees of other entities availing of extensive nationwide reach, to ease the branches, Roshan ensures that a strong M-Paisa's salary transfer service are able to liquidity burden. About 70% of M-Paisa emphasis is placed on liquidity cash out. In this approach, Roshan informs agents are within reach of an Azizi Bank management during agent training. MOBILE MONEY SUMMIT 2010 19 3 OPERATIONS · Regulators seeking financial with mechanisms to ensure its own. This approval for a REGULATORY TAKEAWAYS inclusion should resist regulating customer integrity, protection network-based license allows m-money agents in the same way and security. The Philippines G-Xchange Inc. to expand its outlet as traditional banks, since the exemplifies what can be achieved network faster while taking full former are often micro and small by progressive regulation. In early responsibility for the KYC/AML businesses who cannot bear the 2010, the Central Bank of the requirements of its network, high overhead costs that can stem Philippines allowed G-Xchange continuing to fully comply with from compliance with complex Inc., Globe Telecom's m-commerce regulations that will ensure regulations. Progressive regulatory subsidiary, to extend its remittance financial integrity and the frameworks balance the ground license to its accredited agents protection of consumers. realities of branchless banking instead of each agent applying for How does technology enable a successful mobile money operation? T The Technology Glue "Technology is what makes these projects careful consideration, both because it possible," says Aletha Ling, Executive shapes the customer experience and Director, Fundamo. But mobile money because there is relatively little industry providers are not selling technology; in precedent to guide developers. Mobile fact, the platform should remain largely money operations need to consider the transparent to the user. e service applications layer from the outset or risk platform sits behind the scenes, yet acts alienating customers or limiting future as the glue that binds the mobile money service offerings. "Many deployments ecosystem together. Well-established today fall short and do not engage technology already connects the broader application developers to the extent that financial system and underpins global they should," according to David Sharpe, telecommunications, but two additional Head of Products, Digicel Haiti. "Banks layers are needed for mobile money and MNOs need to do this, but the level solutions: first, one to connect finance of thought required for applications that and telecommunications, and second, an sit on top of mobile money hasn't gone applications layer that connects the in." customer. is applications layer bears Although attention must be given to "An MNO as a carrier is an enabler. Google and Apple provide the platform, but put out to the development community for applications software. If Apple didn't have thousands of applications, it wouldn't succeed. The MNO needs to provide applications on top of its platform, too." David Sharpe, Head of Products, Digicel Haiti 20 MOBILE MONEY SUMMIT 2010 Agents play a key role in educating customers about the value of shifting from cash to e-money. the applications layer, the first connective call may fail," said a speaker, "but a layer is perhaps more critical: the financial transaction cannot go down." technical platform that turns money And this means flawlessly handling mobile. Here, both regulatory and potentially millions of transactions an business requirements are major hour, and handling them with absolute considerations for the platform's security. "Security is the backbone technical specifications. Mobile money of mobile money services," says solutions are beholden to the same Jean-Pierre Gressin, Head of Alliances security and reliability mandates as & Partnerships, Oberthur Technologies, traditional financial services. "A phone and lack of security carries enormous Integrating NFC into Phones and into the Market NFC technology started with contactless to integrate the broader e-money ecosystem. cards and is now moving to fully-integrated Pilots such as Tap and Pay help mobile phones that will enable the full demonstrate that electronic wallets range of mobile and financial services that implemented through NFC-integrated comprise the electronic wallet. ViVOtech, phones have the potential to redefine the for example, is working to establish these merchant-customer relationship to be more electronic wallets in the marketplace by convenient, more targeted and more developing mobile payments, loyalty, personalized. Consumers will benefit by merchandising and marketing applications having everything in one place, be able to software for existing and NFC-enabled enjoy an enhanced shopping experience, mobile devices. By also deploying over making quick payments and seeing lower 750,000 contactless and NFC payment risks associated with loss, theft or fraud. terminals across 35 countries, ViVOtech Customers may also take advantage of is providing both the software and personalized in-store offers by tapping their infrastructure necessary to bring mobile NFC phones to smart posters, which similarly payments into the retail world. This will benefits merchants, who can engage in offer consumers numerous payment one-to-one marketing, offer instant, conveniences and give merchants new individualized offers, and better track payment and marketing channels. customer loyalty. With networks and mobile ViVOtech's wallet software technology money services intermediating these drove Citi's Tap and Pay pilot, for example, benefits, operators will see additional and this is helping to push payment systems revenue sources as NFC-integrated phones to include and go beyond m-money services and related services take hold in the market. MOBILE MONEY SUMMIT 2010 21 3 OPERATIONS regulatory and financial risks. But matters further, the regulations reputational risks are even worse, says a surrounding these issues may be different speaker. "Lack of security destroys trust. across deployments. Before launching a Without trust, you do not get money or mobile money service, advises Haridas customers." Because the technology Nair, Area Vice President, mCommerce, platform is what actually executes (or Sybase 365, Inc., it is necessary to engage denies) transactions and tracks who sent the regulator early on to establish a how much money where, the platform requirements plan. e best approach is itself is what ultimately enforces to document the use case as clearly as AML/CFT regulations, gains customer possible, for both developers and trust, and ensures system reliability--and regulators. e risk of not doing so, he it is potentially the reason these says, is delayed regulatory approval, requirements could fail. Complicating impacting launch of the service. T Going beyond m-money: e-money e mobile wallet will be the nucleus of mobile wallets, finding pilot self-adopters the electronic money ecosystem, increased total purchase value by as much replacing the cash wallet with an as 150% in response to the convenience NFC-integrated mobile phone equipped afforded by their mobile wallets. with mobile money services--a E-money ecosystems are still some years transition characterized as moving one's away, awaiting broader infrastructure wallet out of the back pocket and into and mobile payments integration. the phone in your front pocket. Pilot Nevertheless, Edgar Dunn & Company, studies, such as Citi's Tap and Pay, have a payments consultancy, predicts that by created test-bed ecosystems that 2015, 1.4 billion people will transact demonstrate enormous potential for with electronic wallets. · Selecting the right technology vendor is critical. REGULATORY TAKEAWAYS Regulations are subject to change; technology platforms that cannot accommodate regulatory shifts may lead partners scrambling for new solutions or deployments being unexpectedly shut down. The technology vendor and the regulator should be involved at the earliest stages as technology ultimately enforces regulations. Not doing so also risks delays or prohibition from launch. 22 MOBILE MONEY SUMMIT 2010 4 GROWTH Key message: Accelerating the acceptance of mobile money requires providers to create services for multiple customer segments. It also requires strategic partnerships with corporations, governments and other organizations that have large geographic footprints. "Any person should be able to walk out of the house with only a cell phone and be able to buy goods, receive remittances, pay bills, repay loans, and more. This is the future we envision and are building today." SERGE ELKINER, PRESIDENT AND FOUNDER, YELLOWPEPPER MOBILE MONEY SUMMIT 2010 23 4 GROWTH How can we accelerate the acceptance of mobile money services? T More Services Bring More Users A "killer application" that addresses a M-Paisa agents. is especially benefits critical unmet need with a simple value borrowers who live a significant distance proposition--combined with a big from an FMFB-A branch office. Roshan marketing push--can bring in early is seeing month-over-month growth of mobile money adopters. ese early customers using M-Paisa mobile adopters, in turn, encourage others to try microfinance services. In addition to the service. But in due course, new microfinance payments, Roshan offers "If one side of the services are needed to sustain and add P2P money transfers, airtime top-up, bill challenge is how many value to existing customers as well as to payments, and salary transfers via people can get onto a draw in more diverse new customers. e M-Paisa. mobile-based payment business case for each service depends on Although the mobile money industry system, the other side is the mobile money provider's core has seen an increase in service variety, objectives and specific market challenges remain in designing and how many places they conditions. In Afghanistan, mobile implementing transformational mobile can use it. To displace network operator Roshan's vision to money services that go beyond money cash, mobile payments contribute to the social and economic transfers and payments for the unbanked must gain `currency.' development of the country led the and under-banked. But Sriraman The combination creates company to first introduce M-Paisa for Jagannathan, CEO M-Commerce, microfinance institutions. Roshan's Airtel, notes that "people will progress the network effect." partnerships with Hope International from payments to access to credit to Sriraman Jagannathan, CEO and the First Micro Finance Bank savings, but first need to shift from an M-Commerce, Airtel Afghanistan (FMFB-A) are increasing informal to a formal network via a digital the efficiency and security of the loan payment mechanism. e microfinance disbursement and repayment process industry has proven how low-income while reducing costs. In both individuals become bankable; mobile, partnerships, M-Paisa agents are part and digital payments will have much wider parcel of the value proposition of the impact." mobile money service to the end customer. For example, Hope International's loan officers collect loan repayments in cash from borrowers and transfer bulk payments through M-Paisa agents to the branch office. is saves them significant time and eliminates the risk of carrying cash from one end of the city to the other. FMFB-A clients can receive loan disbursements and make loan repayments directly through Unbanked customers in Ecuador can use "Pichincha ­ MONY", an m-wallet tied to a pre-paid account offered by YellowPepper and its partners. T Strategic Partnerships can Pull In More Customers Building strategic partnerships with of customers and to drive greater governments and corporations are two financial inclusion, but require skillful avenues to increase acceptance of mobile relationship-building, careful structuring money among large numbers of and patient implementation. individuals. Government partnerships Corporate partnerships can also help can draw in customers across income achieve a critical mass of customers. A segments, especially the unbanked and corporation's switch from cash to mobile under-banked. Wage transfers, social payments to manage transactions across transfers, and pension payments are its supply and distribution chains can the main G2P opportunities for trigger a cascade of incentives for the m-money services.8 A CGAP-DFID adoption of mobile money services. In study estimates that governments make addition to making the flow of cash regular payments, including social across the supply or distribution chain payments and wage transfers, to at least more efficient and secure, these mobile 170 million poor people worldwide. payment services give potential Partnerships with governments offer customers additional options for where great potential to increase acceptance of and how they can use electronic money. mobile money services among millions In Tanzania, Zain Zap's partnership with An Ecosystem Approach to Mobile Money Services YellowPepper, a mobile financial services money and top-up airtime among other pilot is underway with 11 fast-moving provider, has created a neutral, universal services. In Ecuador, YellowPepper has consumer goods companies whose platform that brings together consumers, partnered with Banco Pichincha and Porta products constitute 85% of the product retailers, utility companies, banks, MNOs to offer "Pichincha ­ MONY," an m-wallet mix of mom-and-pop stores. YellowPepper and others to issue, manage and accept tied to a pre-paid account, to provide is also exploring small lines of credit to mobile payments. YellowPepper has similar services to unbanked customers. enable payment on delivery of goods. over two million active users and its Banco Pichincha's correspondent banking "They can't pay the delivery truck now, operations span Ecuador, Guatemala, agents open and manage these pre-paid but they can in two hours--with a Bolivia, Peru, Colombia, Haiti, the accounts. The company also offers a B2B micro-credit option there's no need for Dominican Republic and Panama. Banked mobile payments service to fast-moving the truck to come a second time," says customers use m-banking services tied to consumer goods companies to transact Serge Elkiner, President and Founder, their bank accounts to access electronic electronically with small businesses in YellowPepper. banking services, pay bills, transfer their distribution chains. In Ecuador, a MOBILE MONEY SUMMIT 2010 25 4 GROWTH Coca-Cola demonstrates this approach. pyramid to transact with each other REGULATORY TAKEAWAYS · Regulatory frameworks Zain Zap's B2B service enables mobile more easily and efficiently. is is should strike a balance between policies and rules payments among several tiers of important because "those who are that create incentives for distributors from the large distributor banked interact with the unbanked and first movers to enter the to sub-distributors called Manual no matter how wealthy they may be, mobile money services Distribution Centers to retailers. Each they interact in the same cash economy," market, and those that enable a minimum level of distributor in the chain can make mobile said a speaker from the banking sector at interoperability to increase payments to Coca-Cola as soon as a the Mobile Money Summit 2010. As the value of such services to truck makes a delivery, addressing the Hans Wijayasuriya, Chairman and the end customer. As mobile cash collection problems and security Director of Dialog Telekom in Sri money markets evolve from emerging to expanding to risks of delayed payments, accounting Lanka, elaborates, "Addressing the Base maturing stages, so will errors and counterfeit currency. of the Pyramid (BOP) in isolation is levels of interoperability. Coca-Cola's use of mobile payments probably a mistake. In the context of Andrew Zerzan, Regulatory with its distributors could ultimately achieving financial or banking inclusion Projects Director, GSMA, advises regulators not to align the incentives for retailers to through mobile money deployments, force a business model. promote mobile payments to end mobilizing the Top of the Pyramid "If customers need customers. And aligning incentives is (TOP) toward interacting with the BOP interoperability, there will important if Zain Zap is to achieve its is integral to the ultimate value and be a business case to satisfy customer demand," says vision for a cash-free ecosystem. Zain's inclusion proposition to the BOP. e Zerzan. Held states that "Zain is looking at TOP and BOP need to be able to 'talk mobile commerce from a different to' each other in terms of the underlying perspective than traditional MNOs. e financial flows. is is what financial key differentiator is that Zain sees this inclusion is about: integrating with the service not as a one-off transaction, such mainstream, as opposed to creating a as `send money to your mother in a niche application or micro-ecosystem for remote village,' but as a payment the BOP."9 instrument." Zain is also building partnerships with other corporations like Chevron, Oilcom, Shell and Nokia in keeping with its belief that the corporate customer is an extremely important part of this cash-free ecosystem. A corporation's adoption of mobile payments not only triggers cascading incentives across its supply or distribution chain, bringing a large number of people onto the mobile payments platform, but also enables people at different levels of the income 26 MOBILE MONEY SUMMIT 2010 Looking Forward O ver five billion mobile phone deployments that are reaching millions connections exist globally. By of customers, such as M-Pesa in Kenya 2012, an estimated 1.7 billion and G-Cash and Smart Money in people in developing countries will have the Philippines. At the same time, mobile phones, but no access to formal perspectives from Zain Zap in Tanzania, financial services. Persistence, innovation MTN in Uganda and other more recent and a level of risk-taking by current deployments will deepen the mobile players and new entrants can bridge money services knowledge base. GSMA this gap. Research estimates mobile Mobile Money Director Gavin Krugel financial services could reach a previously urges the industry to "be patient and give unbanked market of 364 million by new deployments time to scale and 2012.10 Providers should seek to go even mature so we can learn from them." A further, to serve a whole range of knowledge base built on lessons from customers as a truly inclusive mobile multiple deployments will help industry money ecosystem, enabling people from players identify patterns in the drivers for all walks of life to transact with each scale and the common characteristics of other more easily, securely and efficiently. successful business models. Such an ecosystem will lead to new Overall, regulatory disparity remains a economic opportunities and growth challenge for the mobile money industry. across the income pyramid, reaching Permissible models--bank-led, MNO-led individuals, businesses and governments. or third party-led--vary widely by e mobile money industry continues country. Progressive but prudent to draw lessons from mature regulatory frameworks can respond to a MOBILE MONEY SUMMIT 2010 27 dynamic industry while encouraging ese alliances establish a powerful growth and fostering new businesses. convergence of industries that collectively As Airtel's Jagannathan explains, "A enrich mobile money ecosystems. regulator has two equally important Summit participants indicated their abilities. One is to create inclusion in the commitment to build on past achieve- society it seeks to regulate, but the other ments and to forge ahead, using strategic is to provide a secure environment for partnerships to drive the introduction of operations to be deployed, inspected and mobile money services across the maintained. Getting these two abilities customer spectrum and keeping the to grow simultaneously is essential. A customer's needs at the center. As Khalid financial regulator should also have the Fellahi, Senior Vice President of Mobile ability to wear two hats­­one as a Transactions Services, Western Union, banking regulator and the other as a says, "e driver is consumer needs. If payment system regulator. Liberating you have a clear and simple value payments from banking will allow proposition and you allow people to widespread digital railroads to be built conduct their basic transactions, then for banking to run on." you can drive growth and open up new e Mobile Money Summit possibilities to consumers." ese new discussions in Rio indicate that strong possibilities will open doors everywhere, alliances among banks, MNOs, third for all players in the ecosystem. party players, technology vendors, regulators and others are needed to address current and future challenges. 28 MOBILE MONEY SUMMIT 2010 Annex 1 Mobile Money Summit 2010 25.05.2010 09.00-10.30 Keynote 1: Operator Heavyweights 14.00-14.20 Presentation: `Institutional and Regulatory Embrace Mobile Money Framework for Mobile Money; What Makes Moderator: Siki Mgabadeli, Freelance Anchor Latin America Different?' and Producer, SAFM Alvaro Martin Enriquez, Head of Innovation, AFI 09.00-09.20 Presentation: `State of MM and key 14.20-14.40 Presentation: `Successfully Deploying Secure developments since 2009' Mobile Money Services for the Banked and Gavin Krugel, Mobile Money Director of the Unbanked' GSM Association Jean-Pierre Gressin, Head of Alliances & 09.20-10.30 Panel: `Operator Heavyweights Embrace Partnerships, Oberthur Technologies Mobile Money' 4.40-15.00 Presentation: `How Operators and Banks George Held, Group Marketing Director, Partner to Enable Regulatory Approval' Products and Innovation, Zain Nawal Gharmili Sefrioui, Senior Marketing Rizza Maniego-Eala, President, G-Xchange, Inc. Manager, Medi Telecom Richard Mwami, Head of MTN Mobile Money in Panel Discussion Uganda, MTN Alvaro Martin Enriquez, Head of Innovation, AFI Gavin Krugel, Mobile Money Director of the Jean-Pierre Gressin, Head of Alliances & GSM Association, GSMA Partnerships, Oberthur Technologies Hesham Shawki, Chief Innovation and Nawal Gharmili Sefrioui, Senior Marketing Partnership Officer, Orascom Telecom Holdings Manager, Medi Telecom 10.30-11.00 Networking Break 15.30-16.00 Networking Break 11.00-12.30 Unleashing the Power of Mobile Money: 16.00-17.25 New Success Stories: Untapped Areas of One Day in the Life of a Mobile Money Growth and Opportunities for Mobile Money Service Moderator: Siki Mgabadeli, Freelance Anchor Moderator: Siki Mgabadeli, Freelance Anchor and Producer, SAFM and Producer, SAFM 16.00-16.20 Joint Presentation: `Driving Accelerated 11.00-11.45 Panel: `MNO Board Meeting ­ Unleashing Growth though Personal Banking and the Power of Mobile Money: One Day in Enterprise Technology' the Life of a Mobile Money Service' Richard Mwami, Head of MTN Mobile Money in Koji Ono, Chief Strategy Officer, Robi Uganda, MTN David Sharpe, Head of Products, Digicel Haiti Aletha Ling, Executive Director, Global Head of Sasha Natasha Monyamane, Group Executive : Business Development, Fundamo AML, Ethics and Compliance, Vodacom Group 16.20-16.40 Presentation: `Creating a sophisticated Limited product portfolio' Sriraman Jagannathan, mCommerce CEO, Roberto Rittes, Director, Oi Paggo Bharti Airtel Bruno Akpaka, General Manager, Mobile 16.40-16.50 Mini Presentation ­ Panel Introduction Money, MTN Ghana Olga Morawczynski, Consultant/Financial Literacy Project Manager, AppLab (Grameen 11.45-12.30 Panel ­ `Mobile Money Ecosystem Foundation) Meeting-Unleashing the Power of Mobile Money: One Day in the Life of a Mobile 16.50-17.00 Mini Presentation ­ Panel Introduction Money Service' Daryl Collins, Bankable Frontiers and Author, Amit Mattatia, President & CEO, Trivnet Portfolios of the Poor Jojo Malolos, Head of Financial Services, SMART 17.00-17.30 Panel: `Understanding the Unbanked Coenraad Jonker, Director of Community Customer' Banking, Standard Bank of South Africa Olga Morawczynski, Consultant/Financial Carlos Marmolejo, Director General, CNBV Literacy Project Manager, AppLab (Grameen Andi Dervishi, Practise Lead, Electronic Foundation) Payments and Marketplaces, IFC Daryl Collins, Bankable Frontiers and Author, 12.30-14.00 Lunch Portfolios of the Poor Mark Pickens, Microfinance Specialist, CGAP 14.00-15.30 What are we missing? The Key Challenges for a Successful Mobile Money Service 17.30-17.35 Day 1 Wrap up Moderator: Siki Mgabadeli, Freelance Anchor Siki Mgabadeli, Freelance Anchor and Producer, and Producer, SAFM SAF MOBILE MONEY SUMMIT 2010 29 Annex 1 Mobile Money Summit 2010 26.05.2010 09.00-10.30 Keynote 2: The Case for Banks Investing in 11.20-11.40 Presentation: `Cash goes Mobile ­ A New Mobile Money Business Model and Open Ecosystem' Moderator Siki Mgabadeli, Freelance Anchor Olivier Cognet, VP Strategy and Business and Producer, SAFM Development, Nokia 09.00-09.15 Presentation: `A Financial Services 11.40-12.00 Presentation: Addressing the Concerns of Perspective: Criteria for the successful Regulators, Operators, Banks and deployment of mobile money programs in Consumers' emerging and developed markets' Staffan Ljung, Director Analytics and Payment, Jose Maria Ayuso, Region Head of Products for Ericsson LAC, Visa 12.00-12.20 Presentation: `Micro Credit Market Analysis' 09.15-10.30 Panel: 'The Case for Banks Investing in Peter Lyons, Equity Research Analyst, Oscar Mobile Money' Gruss Jose Maria Ayuso, Region Head of Products for 12.20-12.30 Q&A LAC, Visa 12.30-14.00 Lunch Andres Fontao Canovas, Head of Mobile Banking, Bankinter 14.00-15.30 Mobile Money Applications: What's Hot? Jeff Hindle, Product and Business Development, Moderator: Gavin Krugel, Director, Strategic Scotia Bank Development for Mobile Money, GSM Ignatius E. Cobbina, Head, Transaction Banking, Association Fidelity Bank Limited 14.00-14.20 Presentation: `Driving Mobile Money Raul Moreira, Executive Manager, Banco do Uptake through Compelling Applications' Brasil/ABECS Dave Parratt, Authorised Mobile Transactions, 10.30-11.00 Networking Break MTN 11.00-12.30 Strategies for Mobile Contactless Payments 14.20-14.40 Presentation: `Commerce on the Go ­ Moderator: Dr Nav Bains, Senior Projects Enacting the Mobile Experience' Director, Mobile Money, GSMA Jürgen Wassmann, Regional Head, Innovative Platforms, MasterCard Worldwide 11.00-11.20 Presentation: `Strategies for Contactless Payments' 14.40-15.00 Presentation: `Mobile Money: Overcoming Andy Ramsden, Head of Payment Products, 02 Challenges to Achieve Business Success' Mike O'Brien, Senior Vice President of Business 11.20-11.40 Presentation: `Using NFC to Enable Effective Development, Syniverse Near-Store and In-Store Mobile Marketing' Mohammad Khan, President and Founder, 15.00-15.20 Presentation: `Understanding the Mobile VivoTech Consumer: The Future of Payments' Amol Patel, Head of Emerging Markets, PayPal 11.40-12.00 Presentation: `Results and Lessons Learnt Mobile from a Succesful Trial of Contactless Payments' 15.20-15.30 Q&A Satish Menon, Executive Vice President, 14.00-15.30 Emerging Business Models for Mobile Citibank Money (Part 2) 12.00-12.30 Panel Discussion: Moderator: Siki Mgabadeli, Freelance Anchor Andy Ramsden, Head of Payment Products, 02 and Producer, SAFM Mohammad Khan, President and Founder, 14.00-14.20 Presentation: 'Driving mCommerce Across a VivoTech Large Market' Satish Menon, Executive Vice President, Sriraman Jagannathan, mCommerce CEO, Citibank Bharti Airtel 11.00-12.30 Emerging Business Models for Mobile 14.20-14.40 Presentation: `Delivering Commercially Money (Part 1) Viable Financial Services by Combining Moderator: Siki Mgabadeli, Freelance Anchor Distribution Channels, Mobile Technology and Producer, SAFM and Real Time Transacting' 11.00-11.20 Presentation: More Connections through Coenraad Jonker, Director of Community Financial Services Banking, Standard Bank of South Africa Hugo Janeba, Vice President of Marketing and 14.40-15.00 Presentation: `Overview of Entel's Succesful Innovation, Vivo Mobile Money Service' Christopher Collins, Head of Evolution of Services New Products, Entel PCS 30 MOBILE MONEY SUMMIT 2010 Annex 1 Mobile Money Summit 2010 26.05.2010 15.00-15.20 Presentation: `Capitalizing on the Wave of Closing remarks: Mobile Wallets' Siki Mgabadeli, Freelance Anchor and Producer, Anthony Belpaire, General Manager, SAFM Alcatel-Lucent Mobile Wallet Gavin Krugel, Director,Strategic Development 15.20-15.30 Q&A for Mobile Money, GSM Association 15.30-16.00 Networking Break 16.00-17.00 From Money Transfers to Enhanced Mobile Financial Services Moderator: Mike Singh, Chairman of Indus-Americas and CEO of Telkom Caribe 16.00-16.20 Joint Presentation: `The Customer Perspective: International Mobile Money Transfer' Khalid Fellahi, Sr Vice President, Western Union Odilon Almeida Senior Vice President and Managing Director, South America Region, Western Union 16.20-16.40 Joint Presentation: `Orchestrating a Group Wide Mobile Money Rollout' Haridas Nair, Area VP, mCommerce, Sybase 365, Inc. 16.40-17.00 Presentation: `Exploiting Niche Micro Payment Opportunities in a Western European Market' Frederic Schepens, Executive Vice President, Belgacom 16.00-17.00 Financial Agents: Coverage, Liquidity and Profitability Moderator: Siki Mgabadeli, Freelance Anchor and Producer, SAFM 16.00-16.15 Presentation: `Lessons Learnt from Launching the First Mobile Wallet in Ecuador' Serge Elkiner, President, YellowPepper Holding 16.15-16.25 Panel ­ Intro: Xavier Faz, Senior Technical Advisor, CGAP 16.25-17.00 Panel: 'Financial Agents ñ The Special Ingredient for Mobile Money' Lauro Gonzalez, Center for Microfinance Studies at FGV, Coordinator, FGV Xavier Faz, Senior Technical Advisor, CGAP Zahir Khoja, Executive Director of Mobile Commerce and Product Marketing, Roshan Neil Davidson, Business Development Manager, GSMA 17.00-17.05 Networking Break 17.05-17.30 Closing Presentations 17.05-17.20 Closing Presentation 1 Marcelo Erlich, Chairman, GSMA LATAM 17.20-17.30 Closing Presentation 2 Pablo Montesano, Director, New Businesses, TelefÛnica MOBILE MONEY SUMMIT 2010 31 Annex 2 Mobile Money Tracker About the Mobile Money Tracker The GSMA Mobile Money for the Unbanked programme (MMU) was launched in 2009 to accelerate the availability of mobile money services to the unbanked and those living on less than US$2 per day. Supported by a grant from the Bill & Melinda Gates Foundation, MMU has the goal of reaching 20 million people by 2012. The MMU has launched the Mobile Money Tracker in order to 1 track the progress towards reaching this goal ­ and ultimately making mobile money a mainstream business. This live tracker may be accessed at 1 http://www.wirelessintelligence.com/ mobile-money BRAZIL Mobile Money Deployments Oi Paggo Oi (2007) 2 Market Characteristics Mobile Penetration 94.90 % Financial Services 43.00 % Urban Population 80.75 % Adult Literacy Rate 90.51 % GDP PPP $10,466 Domestic Financial Flows 1 Cash Payments $525,592 million Direct Credits $1,668,874 million 1 International Remittances Inbound % of GDP 0.32 % Inbound Total $5,089 million 1 Top Inbound Countries Japan United States of America Spain Outbound Total $1,191 million Top Outbound Countries Lebanon Portugal Spain 32 MOBILE MONEY SUMMIT 2010 73 LIVE DEPLOYMENTS 87 PLANNED DEPLOYMENT This map presents the number of planned and live deployments tracked on the Mobile Money Tracker as of August 25, 2010. The numbers in circles are the number of mobile money deployments in the country. 1 1 2 1 4 1 3 4 1 1 1 1 1 1 2 2 1 1 2 3 2 3 3 3 KENYA 1 Mobile Money Deployments 2 1 yucash yu (Essar Telecom) 1 Zap Zain (Bharti Airtel) (2009) 3 M-PESA Safaricom (2007) Market Characteristics Mobile Penetration 56.39 % Financial Services 10.00 % Urban Population 45.00 % 2 1 Adult Literacy Rate 85.10 % GDP PPP $1,712 PHILIPPINES Domestic Financial Flows Mobile Money Deployments 1 GCash Globe Cash Payments $10,990 million Direct Credits $80 million SMART Money Smart (PLDT) International Remittances Market Characteristics Inbound % of GDP 4.90 % Mobile Penetration 86.51 % Inbound Total $1,692 million Financial Services 26.00 % 6 Urban Population 63.00 % Top Inbound Countries Adult Literacy Rate 93.40 % United Kingdom GDP PPP $3,515 Tanzania United States of America Domestic Financial Flows Cash Payments $78,580 million Outbound Total $157 million Direct Credits $380,190 million International Remittances Inbound % of GDP 11.20 % Inbound Total $18,643 million Top Inbound Countries United Arab Emirates United States of America Saudi Arabia Outbound Total $3,559 million Top Outbound Countries China United Kingdom United States of America MOBILE MONEY SUMMIT 2010 33 Annex 3 Endnotes 1. Unless otherwise noted, all definitions are from GSMA Mobile Money for the Unbanked (MMU). 2010. "Mobile Money Definitions." Online at www.mmublog.org (accessed August 25, 2010). 2. Bank for International Settlements (Committee on Payments and Settlements). 2004. "Survey of developments in electronic money and internet and mobile payments." CPSS Publication No 62. 3. Jenkins, Beth. 2008. "Developing Mobile Money Ecosystems." Washington, DC: IFC and the Harvard Kennedy School. 4. As defined by the authors for use in the Mobile Money Summit 2010 Report. 5. As defined by the authors for use in the Mobile Money Summit 2010 Report. 6. Zain. 2010. "Zain's Zap Mobile Commerce service takes GSMA top prize." Press Release dated February 16, 2010. Online at http://careers.zain.com/careers/zaingroup/News.aspx?PageID=6033 (accessed on August 25, 2010). 7. Davidson, Neil and Paul Leishman. 2010. "Building, Incentivising and Managing a Network of Mobile Money Agents: A Handbook for Mobile Network Operators." GSMA Mobile Money for the Unbanked Annual Report. Online at mmublog.org (accessed on July 1, 2010). 8. Pickens, Mark, David Porteous and Sarah Rotman. 2009. "Banking the Poor via G2P Payments." Focus Note 58. Washington, D.C.: CGAP. Online at http://www.cgap.org/gm/document-1.9.41174/FN58.pdf (accessed on July 1, 2010) 9. Wijayasuriya, Dr. Hans, Director and Chief Executive Officer, Dialog Telekom PLC. 2008. Personal communication (interview), May 14. 10.CGAP/GSMA. 2009. "CGAP/GSMA Mobile Money Market Sizing Study" [as presented in GSMA. 2009. "Mobile Money for the Unbanked: Annual Report 2009." Pages 24, 26.] 34 MOBILE MONEY SUMMIT 2010 Annex 4 Useful references Chatain, Pierre et, al,. 2010. "Protecting Mobile Money from Websites: Financial Crimes: Global Policy Challenges and Solutions." : World Bank for International Settlements, Committee on Payment and Bank, Forthcoming. Settlement Systems: www.bis.org/cpss Dolan, Jonathan. 2009. "Accelerating the Development of Mobile CGAP Technology Blog: http://technology.cgap.org Money Ecosystems." Washington, D.C.: IFC and the Harvard Kennedy School. GSMA Mobile Money for the Unbanked Blog: http://mmublog.org Eijkman, Frederik., Jake Kendall, and Ignacio Mas. 2009. Payment System Development Group: "Bridges to Cash: The Retail End of M-PESA." http://www.worldbank.org/paymentsystems GSMA Association (GSMA). 2010. "Methodology for Assessing Money Laundering and Terrorist Financing Risks." GSMA. 2010. "Mobile Money for the Unbanked Annual Report." GSMA.2010. "Mobile Money Definitions." Heyer, Amrik and Ignacio Mas. 2009. "Seeking Fertile Grounds for Mobile Money." Lydian Payments Journal, July 2010. Jenkins, Beth. 2008. "Developing Mobile Money Ecosystems." Washington, DC: IFC and the Harvard Kennedy School. Kumar, Kabir, Claudia McKay, and Sarah Rotman. 2010. "Microfinance and Mobile Banking: The Story So Far." Focus Note 62. Washington, D.C.: CGAP. Leishman, Paul. 2010. "A Closer Look at Zap in East Africa." GSMA. Leishman, Paul and Neil Davidson. 2010. "Building, Incentivising and Managing a Network of Mobile Money Agents." GSMA. Leishman, Paul. 2010. "True Money and M-Pesa: Two unique paths to scale." GSMA. Mas, Ignacio and Daniel Radcliffe. 2010. "Mobile Payments Go Viral: The Story of M-PESA." Lydian Payments Journal, July 2010. Mas, Ignacio and Amolo Ng'weno. 2010. "Three Keys to M-PESA's Success: Branding, Channel Management, and Pricing." Journal of Payments Strategy and Systems, Forthcoming. Pickens, Mark, David Porteous, and Sarah Rotman. 2009. "Banking the Poor via G2P Payments." Focus Note 58. Washington, D.C.: CGAP. Pickens, Mark, David Porteous, and Sarah Rotman. 2009. "Scenarios for Branchless Banking in 2020." Focus Note 57. Washington, D.C.: CGAP. Pickens, Mark. 2009. "Window on the Unbanked: Mobile Money in the Philippines." Brief. Washington, D.C.:CGAP. Tarazi, Michael, and Paul Breloff. 2010. "Nonbank E-Money Issuers: Regulatory Approaches to Protecting Customer Funds." Focus Note 63.Washington, D.C.: CGAP, July. MOBILE MONEY SUMMIT 2010 35 Annex 5 List of Interviewees Aletha Ling, Chief Operating Officer and Executive Director, Fundamo Amit Mattatia, President & CEO, Trivnet Andrew Zerzan, Regulatory Projects Director, GSMA Bruno Akpaka, General Manager, MobileMoney, MTN Ghana Clara Veniard, Financial Services Associate Program Officer, Bill and Melinda Gates Foundation David Sharpe, Head of Products and Pricing, Digicel Haiti Gavin Krugel, Mobile Money Director, GSMA George Held, Group Marketing Director, Zain Zap Haridas Nair, Area Vice President, mCommerce Products, Sybase 365 Khalid Fellahi, Senior Vice President, Mobile Transaction Services, Western Union Koji Ono, Chief Strategy Officer, Robi Michael O'Brien, Senior Vice President, Business Development, Syniverse Technologies Mohammad Khan, President and Founder, ViVOtech, Inc. Pierre-Laurent Chatain, Lead Financial Sector Specialist, World Bank Group Odilon Almeida, Senior Vice President & Managing Director, South America Region, Western Union Richard Mwami, Head of Public Access and Mobile Money, MTN Uganda Rizza Maniego-Eala, President, G-Xchange, Inc. Santiago Vásquez, Central Bank of Ecuador Serge Elkiner, President and Founder,YellowPepper Sriraman Jagannathan, M Commerce ­ CEO, Bharti Airtel Limited Wagner Fierro, Director of National Banking Services, Central Bank of Ecuador Wameek Noor, Consultant, Finance and Private Sector Development, World Bank Group Zahir Khoja, Head of Mobile Commerce ­ M-Paisa, Roshan 36 MOBILE MONEY SUMMIT 2010 THE CSR INITIATIVE, HARVARD KENNEDY SCHOOL Under the direction of John Ruggie (Faculty Chair) and Jane Nelson (Director), the CSR Initiative at Harvard's Kennedy School is a multi-disciplinary and multi-stakeholder program that seeks to study and enhance the public contributions of private enterprise. It explores the intersection of corporate responsibility, corporate governance, and public policy, with a focus on the role of business in addressing global development issues. The Initiative undertakes research, education, and outreach activities that aim to bridge theory and practice, build leadership skills, and support constructive dialogue and collaboration among different sectors. It was founded in 2004 with the support of Walter H. Shorenstein, Chevron Corporation, The Coca-Cola Company, and General Motors and is now also supported by Abbott Laboratories, ExxonMobil Corporation, InterContinental Hotels Group, Microsoft Corporation, Nestlé, and SAP. www.hks.harvard.edu/m-rcbg/CSRI INTERNATIONAL FINANCE CORPORATION IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC's vision is that people should have the opportunity to escape poverty and improve their lives. IFC invests in innovative local mobile operators and financial services institutions, while leveraging its international corporate relationships to develop, scale and replicate successful models throughout the developing world, with a focus on frontier markets. IFC also provides advisory services to enterprises that play vital roles in the development of sustainable mobile money ecosystems, including its investment clients and relevant SMEs, such as cash-in/cash-out agents and merchants. In FY10, IFC committed $12.6 billion and mobilized an additional $5.3 billion through syndications and structured finance for 528 investments in 103 developing countries. In the same year, advisory service expenditures totaled $268 million of which 61 percent went to IDA countries. www.ifc.org The GSMA represents the interests of The Technology Program at CGAP works to DFID, the Department for International the worldwide mobile communications expand financial services for the poor using Development, is the part of the UK industry. Spanning 219 countries, the mobile phones and other technologies and Government that manages Britain's aid GSMA unites nearly 800 of the world's is co-funded by the Bill & Melinda Gates to poor countries and works to get rid mobile operators, as well as more than Foundation, CGAP, and the UK Department of extreme poverty. We work towards 200 companies in the broader mobile for International Development (DFID). achieving the Millennium Development ecosystem, including handset makers, CGAP is an independent policy and Goals ­ a set of targets agreed by the software companies, equipment providers, research center dedicated to advancing United Nations to halve global poverty Internet companies, and media and financial access for the world's poor. by 2015. DFID works in partnership with entertainment organisations. The GSMA It is supported by over 30 development governments, civil society, the private is focused on innovating, incubating agencies and private foundations who sector and others. It also works with multi and creating new opportunities for its share a common mission to alleviate lateral institutions, including the World membership, all with the end goal of poverty. Housed at the World Bank, CGAP Bank, United Nations agencies and the driving the growth of the mobile provides market intelligence, promotes European Commission. DFID works in over communications industry. For more standards, develops innovative solutions 150 countries worldwide. It's headquarters information, please visit Mobile World Live, and offers advisory services to governments, are in London and East Kilbride.. the new online portal for the mobile microfinance providers, donors, and www.dfid.gov.uk communications industry, at investors. Learn more at www.cgap.org www.mobileworldlive.com or the GSMA corporate website at www.gsmworld.com. Corporate Social Responsibility Initiative International Finance Corporation Harvard Kennedy School 2121 Pennsylvania Avenue NW 79 John F. Kennedy Street Washington, DC 20433 Cambridge, MA 02138 USA USA www.ifc.org www.hks.harvard.edu/m-rcbg/CSRI