Mobile Money Africa

Joseph Arinaitwe
Head eBanking
UBA Bank – Uganda

How do You describe Mobile Money in Uganda and the uptake?
In Uganda Mobile is about one half years old with MTN leading the pack followed by Zain (ZAP ,this has since been acquired Bharti Airtel) and M-sente (Uganda Telecom).We are expecting Warid Telecom to shake up the Mobile Money market with the coming of age of the long awaited partnership with Obopay.Currently MTN has about I million MM customers moving about $22 million worth of MM volumes per month.

Share with Africans the role of UBA Bank in the emerging mobilemoney landscape in Uganda?
Our role really has been to embrace and promote the birth of Mobile Money in this market be it through a bank led Mobile money product(U-Pasha) or through supporting a Telco led model. Either way we have led the space and its now clear the much craved for convergence between Banks and Telco to offer premium financial service is now a reality in Uganda. The same will happen in territories where UBA is present all over Africa. The days of expensive brick and mortar branches will soon be a model of the past.

What was the strong compelling reason why a leading Bank like UBA will take interest in mobile financial services?

Given that we started our operations Green field, MM presents us an opportunity to migrate those MM customers into full/proper banked customers, there by creating a large customer base over relatively short period time.Pls note that whereas bank accounts in Uganda have stagnated at about 3million (even with banks growing to 22) the number of Mobile phone users has rocketed to almost 10 million in the last 10 years. Mobile Money presents the bridge to tap into this lucrative market.

UBA Uganda as the first commercial Bank to explore such partnership,what influenced the decision?
Same as above, but secondly to stamp our authority as leader in the Mobile Money space and lock UBA in the mind of the Mobile Money consumer when it comes to matters Mobile Money. Thirdly we also realized that apart from growing our customer base,MM provides an additional income stream from cash in and cash out services.

The spread and benefit of the UBA Bank agent network in Uganda. Benefits are basically threefold:-

o As a bank we constantly have Money and therefore we can guarantee service as we will always have sufficient transactional float, the lifeline of the MM service.
o We have plans of extending Cash out services to be done on all our ATMs there by turning all our ATMs into agents that will be able to provide service 24/7 to any MM customer (all they need is the right pin!).
o As a bank, customer service comes naturally and therefore you can’t get a better partner for service than a Bank.
o When it comes to Managing Antimoney laundering risks and KYC issues Banks do it better.

Since the agreement signing,Have You opened the doors to mobile money Customers in Uganda already? Yes our doors opened on the Ist July and we so far moved close to $100,000 worth of volumes. With Increased awareness we are confident the numbers will only grow.

In Years to come,Should we expect a borderless Agent network in the East Africa Region or across Countries where UBA Group operates?Yes, plans are underway to have a Mobile Money platform for UBA to be deployed in all countries in Africa where UBA is present. The network should will also carter for Africans in the Diaspora wishing to send money back home to their loved ones.

How would You describe the MTN / UBA agreement and what it means for
the unbanked in Uganda?
This partnership has changed the landscape of Banking in Uganda, it answers the call of millions of Ugandans who hitherto could not afford or simply shunned the rigorous process of opening and maintaining a formal account. For us at UBA this partnership is going to boost micro savings as people will now be able to keep e-money on their phones and by so doing will financially liberate the masses. MM is the next black oil of Africa…watch this space.

Visa Inc. has announced its intention to invest £6.6 million in London-based mobile banking and payments service provider Monitise plc to increase its stake to 14.4%. Earlier the company has announced that the existing agreement with Monitise was prolonged to 2015.

Last June Visa invested $13 million in the company by signing a 5-year strategic agreement called “Global Alliance Agreement”. Under the agreement Monitise was to develop technology to provide SMS alerts and secure payments to 2 billion clients of Visa worldwide.

During the last 2 years Visa has partnered with a number of financial institutions, mobile network operators and technology providers in order to smoothen and commercialize the mobile banking services for an enhanced consumer-base across the globe. The company believes that such partnerships will help to popularize the company service and to provide access to online payment services to more people worldwide.

mpesa

The US will leverage her technology by importing innovations from Africa as part of the Obama Administration’s bid to strengthen relations with the continent.
Citing the M-Pesa evolution, US Under Secretary of State for Public Diplomacy and Public Affairs Judith McHale said her country’s economy could benefit by importing the revolutionary mobile money transfer system from Kenya.
“We do not have such a system in America and we could import it to make it part of our national payment system,” said Ms McHale.
M-Pesa is run by Kenya’s largest mobile phone service provider, Safaricom, as a platform to send and receive money by its subscribers using their handsets. The technology is a first in the world.
Ms McHale spoke on Friday after paying a courtesy call to the Nairobi Stock Exchange. She is on an official visit to the country.
In return, America will support local universities and colleges by initiating an exchange programme between her institutions and those in Kenya. And instead of going the traditional way of exchange programmes of moving people, the proposed exchange will also leverage on technology.
“We appreciate that it is a limit in the number of people we can move to America from Kenya and America to Kenya. We thus want to use technology to link universities and colleges so that they can share knowledge,” she added.
On increased trade, she said, the Obama Administration is keen to see African countries focusing on serving home markets and thus supporting governments to address challenges of lack of links within the continent.
“We know there are impediments to more intra-continent trade in terms of communication and infrastructure. We want to encourage African governments to address these impediments,” said Ms McHale.
Appointed in President Obama’s Cabinet in May last year, Ms McHale’s duties are aimed at helping the American administration strengthen its relations with the rest of the world.
She is the former president and chief executive of Discovery Communication, which runs the Discovery Channel popular for airing documentaries on science, technology, adventure and nature news in over 170 countries.

Nidhi Subbaraman

Thanks to a mobile banking system launched last month in Senegal, people with no previous access to bank accounts were able to watch the World Cup via satellite services that they paid for electronically with a few taps on a mobile phone. The service is a clear sign that mobile banking is taking off in Africa, giving some of the world’s poorest people a way to access financial services.
“In developed countries, there were a lot of mobile banking services and they failed,” says Ignacio Mas, an economist who works for the Bill and Melinda Gates Foundation. The reason, he believes, is that for people who already have access to banks, as most people in the developed world do, it’s difficult for such services to compete.

For poor people in the developing world, however, banking facilities are limited, and almost all transactions are carried out with cash. “There’s no business case for banks to build banks and ATMs where poor people live,” says Mas. Typical transactions in such places would be so small that it’s not cost-effective for banks to operate there. With no way to store or send their money electronically, people who want to give money to family in another village have to bring it themselves. Mobile phones offer banks a way to tap into existing infrastructure to deliver these services inexpensively. In the last 10 years, a bevy of mobile service providers, banks, and independent organizations have launched mobile money transfer facilities in the Philippines, India, Pakistan, and Kenya.

The system, which is called Yoban’tel by Obopay and was launched on June 24 by Obopay and Société Générale de Banques au Sénégal, lets customers use text messages to transfer money to satellite and cell-phone providers. Users walk into a participating store and make a deposit into their Yoban’tel account. They can then use that money to pay bills. Obopay hopes to extend Yoban’tel to other utilities, like electricity and water. Other collaborators in the country include Tigo, a telecommunications provider; CanalSat Horizons, a satellite provider; and Crédit Mutuel du Sénégal.

“[People can] load money into their account, pick up money if someone sent it to them, and also pay their bills,” says David Schwartz, Obopay’s head of product and corporate marketing. Obopay’s goal, Schwartz says, is to “empower people by giving them the first access to financial services.”

“In terms of strategic fit, you see Africa as the place where this has a lot of potential,” says Mas. “That has to do with the magnitude of the need [for financial services] and the fact that connectivity is available for the first time.”

Kenya’s M-Pesa is by far the most successful example of a mobile money transfer service anywhere, says Mas. Launched by the mobile provider Safaricom in 2007, it started as a way for people to send money home to their families. The service quickly evolved to let people transfer money to business partners, pay bills, and create savings accounts. In just three years it has grown to include more than nine million users, representing about 40 percent of the country’s adult population. Encouraged by M-Pesa’s success, mobile operators, banks, and independent companies are introducing variations of the money transfer system in other areas of the continent.

“In Africa we are seeing an explosion of these things in terms of mobile operators or people who want to do it,” says Mas. “It’s hard to get off the ground, but once you do that, you a see a snowballing effect and can make them extremely powerful, as M-Pesa has demonstrated.”

Obopay was founded in the United States and launched in India in 2007 in partnership with Nokia, which dominates the mobile-phone market in that country. Nokia invested $70 million in the company in 2009. Earlier this year, Obopay launched a banking service in collaboration with Yes Bank in India. It also has a Kenyan operation called yuCash, which opened in December of last year. Securite General and Obopay hope to expand Yoban’tel’s reach, possibly to Senegal’s neighbors.

Simon Russell
www.bizcommunity.com

Twelve years ago the retail banking industry thought the end of ‘bricks-and-mortar banking’ era was close, with the introduction of mainstream internet banking. However, this did not materialise as banks in their quest to differentiate, realised the value of the branch in the selling process and its necessity for customer acquisition and authentication.
The internet became a convenience channel and every customer with access to a PC expected their bank to provide an internet enabled banking service. In addition, without a clear integrated multi-channel approach, banks have in general not realised the expected cost savings and revenue opportunities of introducing an internet channel.

African revolution

In certain cases in the developing world, beyond South Africa, we have seen a revolution in the payment and remittances process led by MNOs (Mobile Network Operators). Kenya is a great example where Safaricom, a MNO, with its mobile banking offering M-PESA have gained more than 78% of the mobile phone market. In countries like Kenya, where there is a high population of unbanked and a high penetration of mobile devices, we can expect this trend to continue if the relevant banking or communications regulator does not check it.

South Africa however is different. It has a relatively ‘mature’ regulated banking industry and, thanks to the Mzansi product, has seen a 17% growth in the banked population since the launch of the account. FinMark Trust believes the Mzansi product accounted for just under half of that growth.

In comparison to other emerging markets, South Africa has a relatively high percentage of banked population around 46% compared to Kenya’s 15% banked population prior to the arrival of M-PESA. So it is highly unlikely that MNO led mobile banking play will dominate in South Africa.

Mobile banking could have rapid adoption

However, with more than 60% of the adult population in South Africa owning a cellphone, the highest on the continent, the stage is set for the rapid adoption of mobile banking.

In addition to the existing economic challenges, SA banks face significant pressure in the form of the competition commission, government access targets and more demanding consumer requirements. The winners, in the fight for market share, will be those banks with high customer loyalty delivered through greater customer centricity, convenience and low cost processing.

Mobile banking enables all three and we are already seeing extensive positioning in our market with some innovative products such as FNB’s Send Money and Standard Bank’s Mimoney.

Mimoney enables payments between domestic users through SMS based vouchers with PINS that can be redeemed at large retail stores. Not only is this type of innovation convenient but it demonstrates how mobile can simplify a bank’s distribution network – money is being transferred between clients without the need of an ATM or branch.

The scramble for banks to partner with retailers, government institutions, gyms and other ‘go to’ locations, to provide cash out points has already begun.

Time for small innovative banks

This is good news for smaller innovative banks wanting to take on the mass market and take market share from Tier 1 Banks. It is a challenge for the Tier 1 banks to defend with huge investments in ATM and branch networks. Approximately 60% of a bank’s cost is typically in its distribution network.

Small innovative banks, using existing mobile technology, leveraging agents and through partnerships in other industries, can bring low cost, convenient transactional banking to consumers country wide thereby challenging the previous exclusive domain of the Tier 1 Banks.

The ‘attack strategy’ will be to acquire customer transactional business through a combination of convenience and a low cost play – ownership of the transactional account is a prerequisite for understanding a customer’s behaviour and for executing a successful customer centric strategy. A successfully executed customer centric strategy increases loyalty (stickiness), decreases customer churn, increases the number of products sold to clients and increases profitability and Return on Equity.

Evolution of mobile

Mobile will evolve quickly from P2P payments, wallet, bill payments and general banking to more complex banking processes such as Account Origination (identification and authentication) and finally the holy grail of them all true M-commerce – point of sale transactions – in 2006 there were 160 billion POS transactions globally.

Account Origination identification and authentication processes are dependent on mobile devices with camera and biometric capabilities, with implementation by roving sales and service agents. It will take time before these devices become affordable for the majority of the population. However, when they do become available, they will transform the mobile handset into a sophisticated banking sales and service channel that will challenge the prevalence of ‘bricks and mortar’ banking.

The success of M-PESA in Kenya has shown that in the mobile banking age, speed is critical and a well thought through offering is vital to ensure market success. For banks to execute an effective mobile banking strategy they will need a clear vision and an operating model that enables low cost processing, and for more sophisticated customers a customer centric approach to banking that is seamlessly integrated to the bank’s other channels.

How does your platform work?

The platform www.CashEnvoy.com is an internet payment service that allows Nigerians to make payments, send money and receive payments with ease and convenience in a secured environment.
Once you sign up for a free CashEnvoy account, you can make payments, send money and receive money online.

To make payments using CashEnvoy, you have to fund your CashEnvoy account using Nigerian debit cards, online bank transfer or bank deposits and then select Cash Envoy during checkout on a merchant website.
Funds are then transferred securely through CashEnvoy and money is deposited into the seller’s Cash Envoy account.
When you make payments or send money, the amount is deducted from your CashEnvoy account balance. Both parties are notified via an email from CashEnvoy.
Funds can be withdrawn anytime from your Cash Envoy account.Funds withdrawn are paid into users’ registered bank account.You need no special technology to send/receive money through CashEnvoy. The only requirement is a valid email address.

In a Country like Nigeria with Security issues, how has it been for you?

Internet security is a major issue in Nigeria today; hence, security issues are handled with great importance.
Guaranteed security of transactions has always been the foundation of CashEnvoy. For an internet payment platform to survive in our environment, efficient and dependable security measures must be built into the foundation.

CashEnvoy was developed with this in mind, hence the reason why we have a myriad of security measures, some of which include account auditing, unique transaction references, user verification, 24/7 monitoring etc. Also CashEnvoy can only be accessed via secure http thus ensuring that all data sent to and from the service is encrypted.

We also do not hesitate in cooperating with anti corruption bodies like the Economic and Financial Crimes Commission and the Nigerian Police Force in bringing internet scammers to book.

As a first time user, do I need to Sign Up to make a payment?

Yes, all first time users have to go through a quick registration process.
This is the first step in user verification. Signing up is also very important for security reasons.

Cost of using your platform?

CashEnvoy charges only per transaction.
CashEnvoy does not charge any up front fees, withdrawal fees or any other fees.

Challenges in the Nigeria financial system and the effect on your operations?

One of the major challenges is – collaboration. We hope that in the future, users can make transactions on the internet directly from their bank accounts using our secured payment gateway.
Another major challenge presently is in the efficiency of the available Nigerian debit cards.
Internet banking is also an area that can be improved in some banks.
In all, we make the very best use of available resources to produce optimum performance in our services.

What are the cost elements for sender and receiver?

For the sender or the payer, using our service is totally free.
However for the receiver or the payee, there is a fixed service charge and an operational cost that depends on the amount being received.

Where Can I sign up or use your services?

To sign up or the registration for our services is available only on the internet through our online portal: https://www.cashenvoy.com

A brief background on the management?

Our management philosophy is centered on trust, relationship and friendship. We believe people are the greatest assets.
We also accept that the business would face challenges every day. Therefore the attitude is that regardless of the degree of difficulty, if the business is to survive, we must face each challenge as it comes.

Plans for the future and the unbanked Nigeria?

We are looking to a future where we would not only be the most prevalent means of online payment in Nigeria but also across Africa thereby promoting business transactions between Africa and across the world via the internet.

Plans for the future and the unbanked Nigeria?

We are looking to a future where we would not only be the most prevalent means of online payment in Nigeria but also across Africa thereby promoting business transactions between Africa and across the world via the internet.

A brief background on the management?

Our management philosophy is centered on trust, relationship and friendship. We believe people are the greatest assets.
We also accept that the business would face challenges every day. Therefore the attitude is that regardless of the degree of difficulty, if the business is to survive, we must face each challenge as it comes.

Olaoluwa Awojoodu

Head Business Development Unit

B.Sc Computer Science and Engineering, Obafemi Awolowo University

Member – Nigerian Institute of Management

SAP Business One consultant.

Olusegun Okin

Head Technical Support Group

B.Sc Electronic/ Electrical Engineering, Obafemi Awolowo University

PRINCE2 Registered Practitioner

Olusegun possesses vast knowledge in planning, design and development of business applications.

uniBank Ghana Limited, one of the vibrant indigenous banks in the country, intends to roll out more e-zwich Automated Teller Machines (ATMs) which will be located at strategic places in the country, beginning this month.

Though the bank will not disclose the areas that the ATMs will be sited, CITY & BUSINESS GUIDE gathers that they would be placed in Accra and Kumasi.

According to Rev Edward Randolph-Koranteng, Head of Electronic and Transaction Banking, the financial intermediary is in the process of installing a biometric ATMs at the Spintex road.
The ATM at the Suame branch has been functional since June 23, 2010.

It would accept all e-zwich cards regardless of the bank, which makes it accessible to many people.

Rev Randolph-Koranteng said the time has come for customers of uniBank to derive full benefits from the e-zwich ATMs since the bank can now link the traditional accounts of the customers to their e-zwich cards.

Biometric card holders, he said, can therefore perform various transactions including the transfer of money from one card to the other.

These services, according to him, would benefit the card holders.

Rev Randolph-Koranteng expressed satisfaction with the e-Week celebration which he said was timely.

It was aimed at creating awareness about electronic banking products.

He noted that uniBank wants to launch products that would enhance various transactions.

Some of the electronic products of the bank include uni-Alert, uni-Mobile and uni-Web.

Some US$ 16 million will be rewarded to institutions that can set up mobile banking services in Haiti.

The Bill and Melinda Gates Foundation pledged US$ 10 million and the United States
Agency for International Development (USAID) will add another US$ 5 million to coax telecommunications and finance companies to set up mobile phone banking services for Haiti’s poor.

“After the earthquake on 12 January, we saw huge demand from Haitians who needed to receive money from family and aid organizations, but we also saw a severe reduction in the capacity of the banking system to get the cash into their hands,” Amolo Ng’weno of the foundation’s Financial Services for the Poor unit, said.

The powerful quake in Haiti killed up to 300,000 people and knocked out a third of banks, automated teller machines (ATMs) and money transfer outlets.

The multimillion-dollar pledge will offer cash incentives to companies that set up mobile financial services in Haiti, the poorest country in the Americas.

The first company to launch a mobile money service that reaches certain benchmarks within six months will receive US$ 2.5 million, and the second operator to launch and reach the same targets within 12 months will receive $1.5 million.

The remaining $6 million will be awarded as the first five million transactions take place.

The US$ 5-million USAID pledge will actually be in the form of technical and management assistance.

Phone service providers, banks and technology companies can bid to provide mobile banking services in Haiti-and compete for the Gates Foundation incentives-provided they have “a track record of commitment to the country that goes beyond the emergency period and a strong likelihood of success,” foundation officials said.

For the program to work, it must get off the ground rapidly and be deployed on a very large scale.

The Gates Foundation hopes at least one company will provide mobile banking services-also known as M-banking-in Haiti within a year and that five million mobile phone transactions will take place on the island nation within two years.

Around 40 percent of Haiti’s nine-million population have mobile phones, and those who don’t usually have access to one through a friend or relative.

Foundation officials hope that mobile phone financial services will enjoy the same success in Haiti as Kenya’s M-PESA mobile money service, used by nine million Kenyans just three years after its launch.

Anyone who can receive a mobile phone text message can receive money by M-PESA, and then merely have to go to the retail outlets of the mobile phone service provider that runs the M-banking program, or to a gas station, supermarket or local shop, to withdraw their cash.

M-PESA has caught on so dramatically in Kenya that everything from taxi fares to school fees is paid by mobile phone, according to the Gates Foundation.

In Haiti, the foundation hopes M-banking won’t only help people get much-needed cash but also stimulate local economies because “people who receive money on their phones, in their communities, are more likely to spend it there,” Ng’weno said.

mpesa

vigilantkenyan

Have you heard of this incidents?? – better be safe than sorry!
This incident happened to a colleague recently.A bad experience indeed.
He received a call from someone claiming to be calling from
Safaricom.The caller was very composed.
The caller told him ‘thank you for being our loyal and valuable MPESA
customer.You recall we had initially given you a black Sim card but
changed to green”.He answered in the affirmative. The caller then went
ahead to tell him that Safaricom was running a reward promotion
scheme for their loyal MPESA customers and went ahead to ask him to
confirm his National ID number and year of birth.Unsuspecting, he
disclosed that information. Coincidentally his birth year was also his
Mpesa PIN No.
The guy posed for a while and asked him whether 19- – (say 1967) was
his year of birth .He again answered in the affirmative.

The caller then told him he would be sent Nokia 8230, but before then
he needed to dial *33*0000# ,which he did.He was then told not to
call or transact anything using his line for the next ten minutes as
they perfrom transactions, purportedly at Safaricom,facilitating the
process of receiving the Nokia 8230 set.He complied.He is asked about
his current location,which information he gives.

After 10 minutes he tried to call back the number to confirm status of
the alleged gift only for the following message to appear :”Barring
all outgoing calls activated for SMS services activated for all data
circuit async”.

After 15 minutes the wife calls him on his alternate line claiming
that some one had called her using his (husband”s ) safaricom line
telling her to send them Ksh.10,000 for his release from arrest.She is
baffled and hence decides to use alternate line,only to discover he is
safe and sound.

In the meantime the wife calls safaricom to block the line,but it was
too late,as all the money in his MPESA had been withdrawn.

What is apparent is that this line was blocked by the code he typed
,viz *33*0000#.

The question uppermost in mind is how it could be unblocked without
some form of connivance by Safaricom staff.He had a substantial amount
in his Mpesa account.Could these thugs be getting targeting lines-with
good balances through connivance with Safaricom staff.

It is unlikely Safaricom will admit culpability, but tujichunge
wenyewe.

Keep safe.

The caller identified himself as Alex Omondi(Of course fake name) and
called using 0720 464 777

It is safer to tell this caller to call back in a while whilst you
check with Safaricom customer care by dialing 100 from your Safaricom
line or 020 4272100 from land line or any other line. Do not carry out
any instructions on phone without firm confirmation that you are doing
the right thing.

Competition in the mobile money business continues to bring better services to mobile phone users as Uganda Telecom’s (UTL) M-sente joined the school fees platform. This comes just over a month since Zain launched its Zap school fees portfolio in the market.

The mobile money market since its inception has been a battle for innovative partnership that improves on efficiency and effective service delivery. At the M-sente launch, UTL announced that it had partnered with Dfcu bank in bringing the School Fees platform closer to the people and make it more efficient to make these payments.”Students do not have travel with cash. It can be transferred onto an m-sente account and sent to the schools’ account in DFCU bank,” Alex Waiswa from the M-Sente team told East African Business Week.

With mobile money transfers the question of secure transactions can be read from the lips of some of the customers. At a breakfast for head teachers hosted by Dfcu bank, secure transactions were a key concern. UTL which looks to implement the new school fees platform by the end of august was put to task to explain how secure these transactions will be.

“What if an m-sente agent runs away with the money that has been given to him by the various parents who have made the payment?” One headteacher asked.

According to UTL, before an agent is selected, a particular amount of money is deposited by the agent on a UTL account. This way the agent will not be able to take off with schools money but instead will be working to recover the money already paid to UTL. The technology being used by UTL is a concept designed by MapSwitch a technology solutions company. MapSwitch Uganda Director of Mobile Banking Phil Levin said that m-sente platform has various security checks that effect the transactions. The checks include a pin number and some verification codes.

“The transaction is safe. Once money is paid and the agent sends the virtual money to the school account, it is immediately deposited on the account of the School at Dfcu bank,” Phil added.

The partnership with DFCU, schools will need to open accounts with bank so that when the money is paid it directly goes to the schools account. Unlike the Zap system, where the bursar can access the platform and be able to see who has paid, the m-sente system is different as it is the bank that accesses these payments.

“DFCU will have access to records of payment on a daily basis. The bank on receiving the report, will then deposit the money on the different schools’ accounts. Daily the schools will receive an e-mail with a report on which student has paid,” said Wilbrod Owor the head of Consumer Banking at DFCU bank. With convenience in the minds of parents, school fees payment platforms on mobile money then banks will not want to be left behind as the future technology now is visible in the telecom sector.