Shaun Campbell
Shaun Campbell | Business Development Director, sub-Saharan Africa | Sybase 365
Share with Africans, your experiences so far in the African Market?
The African market is leading the world in mobile commerce solutions for the unbanked, semi-banked, rural and low income groups. The rural and low income groups are specifically the people that benefit most as such solution reduce the cost and time to travel to a payment point (whether a bank, MFI, insurance agent, electricity office, family/friends). The opportunity lost in Africa through travel for commercial reasons is huge and significantly holds back the economies at all levels. For example in some countries Teachers must travel to collect their wages each month – up to 1 day is lost in this process which equates to unnecessary cost, lost contribution to the school & family. The same issues arise where ATMs are used to cash-out wages as ATMs are not readily available in rural areas (if at all) and long queues form on pay days.
This latent demand for easier access to financial services has led to a high growth in mobile money / commerce schemes in the region, whether deployed by banks, telcos or independent schemes. These schemes also provide work for 10,000’s of people working as agents in all areas of the country’s geography, hence spreading the potential for further wealth generation beyond the towns and cities.
Africa is leading the way, alongside S.E Asia.
Mobile Financial Inclusion seems to a major attraction to the Financial sector and Telcos but we are seeing more of Telcos, digging in.
Telcos fundamentally benefit from attracting subscribers to their networks and reduced churn. They also have easy access to the subscriber via the existing SIM cards and agent networks, plus large budgets.
This works best for the first-mover Telco, or the Telco with the better and most ubiquitous scheme. Once all Telcos in a market have an offering the advantage is less powerful and churn recommences and the initiative becomes harder to differentiate. Given that Telcos are in business to sell minutes of voice & data this offering will always be a secondary offering to their core business.
In some countries (Central African states being a good example) Telcos are not permitted to run mobile money services. In this regard, Telcos must partner with banks or independent schemes to have a stake in such a business, and not use their in-house scheme.
Telcos and banks will continuously develop mobile money schemes, but these schemes will always be marginal to their core business and will always be ‘islands’, i.e. exclusive to the clients of each individual institution. We are yet to see truly open schemes operated by banks and Telcos. At present there are no bank- or Telco-led open systems in Africa. This is where the independent schemes come in.
Is Regulations catching up with Innovations across Africa.
In some countries there is good progress. Mobile commerce is being embraced by the central banks as a critical means with which to remove cash from the parallel markets, increase the economy’s moneyflow and boost GDP.
I feel that Nigeria has set a good benchmark by allowing limited or zero KYC tied to low value mobile wallets, scratch cards as a tool for cash-in, realistic expectations regarding transaction handling and security. East Africa, especially Kenya is also proving robust with mandating USSD over SMS and also adopting a realistic stance on KYC. I often use these two countries as references and role models for other countries in the region.
The central banks are now focusing on guiding the standards on the real issues of mobile commerce, such as agent float management, consumer protection, security risks and trustee account management. This is a sign of a market entering the next phase, moving on from early-life innovation to an established business model.
Mobile Money Regulation: Telecommunications or Financial Regulator.
In my mind it is very clear.
Telecomms regulation is concerned with managing the distribution and usage of frequency and associated telecoms issues. The mobile commerce market is not the direct concern of the telecoms regulators, but they do indeed play a role in enabling fair and unhindered access to SMS/USSD technologies by no-Telco players, setting suitable access pricing and consistency in Telco network access.
The owner of mobile commerce regulation is, in all cases that I have seen, the Central Bank who’s national payments team & supervisory team typically research and set the standards, and manage the compliance of ongoing services.
Whether the Central Banks need a dedicated mobile commerce team is a much debated topic, and I believe that this will come as mobile commerce becomes more and more universal.
What Technology do you think is appropriate for Africa where millions of Subscribers use Low cost Hand set?
This is a complex topic as there are several technologies available in the toolbox but few are actually realistically deployable today.
The most suitable is the SIM Toolkit but this is owned by the Telco, hence it is not an open platform, and Telcos wish to use it for their own mobile commerce applications, thus denying other schemes from leveraging the benefits of STK (ease of use, security, low integration overheads). Java is complex to deploy and not accepted on 50% – 60% of handsets in Africa so it is not a first choice platform. USSD is the most widely used mobile commerce platform as it sits between a ‘flawed’ SMS and the broad benefits of the Java/STK solutions. So, for non-Telcos, USSD is the best of a mixed and compromised bunch of tools.
Your Technology specifically, How does it solve the Low Cost Handset challenge for Mobile Money?
Sybase deploys across all available technologies but for the low cost handset, USSD is the preferred technology, second only to STK (which is only really available to the SIM-owning Telco).
USSD is accepted on all GSM handsets, easy to use, session based (not store & forward like SMS), cost effective and easy to deploy. The downside is that the Telcos in the specific country need to have deployed USSD commercially for other schemes to use USSD. This is not always in place.
East Africa is leading the rest of Africa in the Mobile Money Race,Why is this so?
The answer is rather complex but can be addressed as follows:
1. mPesa became the lighthouse project for Africa, and of course pulled east African countries in to doing business in a similar manner.
2. East Africa is perhaps a more open and less complicated environment to do business
3. NGOs and GOs have tended to provide lending & grants to EA more than other regions
4. Easier access to corporate funding / capital, likely to be linked to a perceived lower risk
5. The big multi-national Telcos (e.g. Vodafone/Vodacom, Zain, MTN) have been more concentrated in East Africa as a block where as West and Central Africa is still perhaps a little more fragmented
6. Vodafone Group have a large footprint in east & southern Africa – hence the rollout of mPesa in various countries
7. mPesa is the most established mobile money Telco service amongst the Telco players, rolling across the region
8. Regulators in EA are a little more advanced in their thinking, partly due to mPesa’s success.
Do you think Regulators are doing enough to understand the Challenges faced by potential stakeholders and what do you think is the way out?
The regulators could be more pro-active in understanding the issues, best practices and models. This can be solved by regulators talking to each other more often, and, for a regulatory focus group to be set up in Africa where telcos, banks, independents and vendors are invited to participate in discussing these factors.
An overview of your technology and How it promotes the frontier of Mobile Financial Inclusion.
Sybase has a full bouquet of mCommerce functionality (P2P, payments, remittances, mBanking/MFI, corporate/government, content) – deployed, tried and trusted globally. The breadth and depth of the solutions is particularly complimentary to the needs of Africa where a full range of services for the unbanked, semi-banked and banked is needed. We work with banks, telcos, corporate, independents, governments, utilities, MFIs, SACCOs, VAS providers to provide solutions for the mobilization of commerce at the ‘street’ level.
What should Africans expect in coming months and Years from Sybase?
Sybase work in every region of Africa in conjunction with telcos, banks and independent projects. Regarding mCommerce, Sybase is launching a number of projects in east, north, central, southern and west Africa in the coming months, many of which are independent mCommerce schemes targeting the unbanked and MFIs. The next year is a definitive one for the mCommerce industry and for Sybase.
About Sybase:
Sybase 365 enables interoperability between mobile payment networks and has established industry reference
points; live mCommerce deployments are catered to more than 15 million end consumers and 20,000 merchants.
Sybase 365 is the global leader in mobile messaging services delivering 200+ Billion messages a year with reach to
more than 2.7 billion mobile subscribers.
Sybase customers include more than 200 leading financial institutions, and more than 700 operators worldwide.
Meet Sybase 365 mCommerce Team at the following events:
- Mobey Forum, 20-21 October 2009: Utrecht, The Netherlands
- MMT Global Summit, 26-27 October 2009: Dubai, UAE
- AfricaCom, 11-12 November 2009: CapeTown, South Africa
www.Sybase.com
The Interview was conducted by Okoegwale Emmanuel.
