Mobile Money Africa

Salimotu Idirrissu, a middle age woman in the North western region of Nigeria, living in Bunza local government which is 35 kilometers from the state capital shared her story with me some weeks ago. She lives in the rural town of Bunza and actively engaged in fish mongering from the local River which is seasonal in nature and some times send some to her excess processed fish during bountiful harvests to relatives in the National capital to get better prices. She coordinates her business remotely through her mobile phone.

On the advice of her customers at Abuja, She was advised to open a Bank account to enable them pay her conveniently without the need to send the money through the Cattle truck drivers (Dogo Baro) that ply the Abuja – Bunza – Birrin Kebbi route.She yielded to their advice and decided to visit the nearest Bank branch which is 35 kilometers away.

At the preferred Bank of Her choice, her application for a savings Bank account was rejected because she has no valid ID card and utility bill which are standard documentations for such account class. Despite the letter from Her Local Islamic Cleric and a Local Government origin certificate, rejected and dejected, She returned back to her rural town to face the reality of keeping cash at home and receiving her sales cash via the Dogo baro Drivers (She did not like this particularly because of the security implication of everyone in the small town knowing about her improving sales and cash at hand).

The above represents the typical situation of the unbanked in Africa’s largest Country, Nigeria, with less than 22 million Bank accounts in a country of 140 million.

The authorities are quite mindful of such challenges in Nigeria and in the last few decades, efforts has been channeled to community, rural and micro finance Banking but all met with little or no success. The MFI’s in Nigeria are largely concentrated in the urban areas and they equally compete with the large commercial banks in urban districts for a share of the market at the detriment of the rural unbanked. It is common place to see MFI’s build their branches close to the LCB’s,in same architectural style with grand furnishings and to cap it all, benchmark their service requirements like commercial Banks.

The Central Bank of Nigeria in its wisdom decided to take a deep look at mobile financial services and the last twenty four months, efforts and resources are being channeled in the sector with a view to opening more opportunities and creating formal financial access for the unbanked in rural and urban areas using the mobile channel.

Month of April witnessed the submission of proposals by interested solutions providers, technology firms and financial institutions to qualify for license short listing which results will be made public in the month of May. If Central Bank of Nigeria is able to overcome the licensing challenge and launch mobile money in Nigeria, the likes of Salimotu will not need to travel up to a distance of 35 kilometers for Basic Banking services in near future.

To understand and view some potentials services in the offing for Nigeria, visit the mobile money hub at the AITEC AFRICA Banking and Mobile Money Conference,May 11 – 12, Eko Hotel and Towers and request for free demo from firms like Celltrust, Maxim –Pro, Tagattitude, Graditim, Nihilent, Ingres, MMIT, M-Naira, Mypesa and Easipay.

Emmanuel Okoegwale
Director @ Africa Centre for mobile financial inclusion, UK – Sponsors of the mobile money hub.

Emmanuel Okoegwale

The African Centre for Mobile Financial Inclusion, a recently launched international non-profit organization registered in the UK, will be hosting the first African Mobile Money Hub at the AITEC Banking and Mobile Money Event at the new Eko Conference Centre, Eko over 11-12 May.
Twelve months ago, at the same event in Lagos, AITEC hosted Financial Inclusion Innovation Hub was hosted by mobile money Africa where some of the players shared their plans and concepts with participants. Since then the young innovators have been working on developing their ideas and some are now a reality and this time round conference participants will be able to experience live demos and may even test some of these innovations that will help accelerate access to formal financial inclusion to millions who are currently unbanked but do own a mobile phone.
According to Sean Moroney, AITEC AFRICA’s Chairman, the Mobile Money Hub will be a major attraction at the annual event and some leading solutions providers from India, Ghana, Lagos and Abuja are already confirmed to showcase their solutions at the hub.
Profiles of some providers that are already confirmed for the Hub are:

PAYSTAR is a direct distribution company. It is an exclusive new business that provides a state-of-the-art financial opportunity for “virtual entrepreneurship”. It is a direct distribution network dedicated to helping success-minded individuals achieves financial independence through helping others earn more income and achieve lasting success in their lives, careers, and businesses.

Ingres is focused on the unbanked and the rural areas as a way of improving the lives of a majority of the Africans by eliminating multiple paperwork often associated with opening bank accounts., while enabling an environment with the basic functionality of being able to transfer and receive funds from loved ones and benefactors in the rural and urban areas.
This in turn creates additional revenue streams for the microfinance banks and contributes to Africa????s move towards achieving its millennium development goals.

MyPesa is a mobile payment system that enables businesses to accept payments from users with mobile phones. It can be used for a wide range of services. MyPesa can be customized to suit your business model and quickly make it possible for you to collect payments from millions of customers who own a mobile phone.

CellTrust SecureSMS provides de-facto two-factor authentication with a combination of the device ID and a secure PIN sent via AES encrypted SecureSMS representing a cutting-edge, disruptive technology which makes the need for today’s commonly used two-factor authentication scenarios obsolete. With CellTrust’s Mobile Banking and Finance solution, no longer is security an obstacle and no longer are multiple technology providers or an expensive infrastructure required.
The Secure Mobile Banking and Finance Solution from CellTrust provides an automatic, transparent and comprehensive audit trail meeting most major compliancy requirements.

Tagattitude’s NSDT allows a phone to be used the same way a credit/debit card is used. The phone can be used to withdraw money from an ATM, pay at a merchant POS terminal, conduct peer-to-peer transfers and payments, remit money locally or internationally and pay for online goods and services. NSDT uses the voice channel of a phone to accomplish this. Tagattitude has several patents and has won numerous international awards for the development of NSDT.

MMIT Mobile Wallet provides EASY ACCESS to the financial system via Airtime credit which literally, is everywhere. Just buy the credit (from any network), load it through a simple but secure process onto the Mobile Wallet for storage for a rainy day or immediately transfer to the mobile wallet of a family member in need, living far away; or into a microfinance bank account as part of loan repayments; or into the mobile wallet of a small or large-size merchant. Exit points depend on the final terminal point of use – it could be the account of a microfinance institution or it could be an ATM through which the funds are transferred as cash out.

In addition to the Expo, which will include the Hub, the event includes a two-day conference with an impressive line-up of expert speakers from 13 countries. For the full conference programme and to register as a delegate log on to www.aitecafrica.com or email info@aitecafrica.com.To participate in the mobilemoney hub,please email emmanuel@mobilemoneyafrica.com

Share your management background with Africans?

Jide Akindele is the MD/CEO of Mobile Media Info Tech Limited with three other partners playing key strategic
roles. Jide Akindele comes from a VAS background, before starting this company, Jide was the Vice President of International Sales and Marketing for The Mobile Media Group LLC also known as MMG. A company based in Miami Florida and was a sister company to Neo-Media on the marketing arm of VAS products. Jide has had the opportunity to help build and develop a variety of mobile applications and products for numerous companies.

While with MMG, Jide helped build Virgin Nigeria’s Mobile Website (Wapsite) which allowed consumers to book their tickets via their mobile phones and check on flight updates. Jide also provided Promoworld (the leading airport advertising firm in Nigeria) with Bluetooth Marketing solutions for deployment at the International Airport in Lagos. On the international scale, Jide has helped build mobile app. campaigns for the likes of Universal Records, Def Jam Records, Mobsvideo, and Firefly Capital ITX, etc.
Jide’s background in the VAS industry has given him insight to what can work in different markets.

What influenced your choice of technology?

I was influenced to build a MMT (Mobile Money Transfer App.) when an opportunity to work for Money Gram Nigeria came up. I was wondering how Money Gram would be able to help the citizens of Nigeria to move funds to their loved ones and also fall under the CBN regulation. The one thing that came to mind was through the mobile phone, but before doing so I decided to study the market and I came up with a philosophy which most companies don’t follow: “by studying the business structure of an environment first you can now develop a business model that will work for the environment, each market environment is different from the next so not all markets can work with the same solution.”

Your solution is quite innovative and clearly differentiated. Will this influence the market?

Thank you for noting that the Mobile Wallet solution is truly a differentiated service. Unlike existing mobile money systems such as the popular (and pioneering) M-Pesa, our Mobile Wallet offers the unique distinction of being the first to offer consumers the easiest source of funds – your ever available airtime credit! We believe that one of
the core reasons for the poor results in the war to migrate significant millions of unbanked but economically active Nigerians to traceable financial systems is largely due to the access and exit points of the existing mobile money systems. Currently, you can only access cash via going to a bank to make the transfer or receive the transfer. We are all familiar with the various psychological and physical barriers banks represent to the unbanked rural and periurban dweller living somewhere like Ipaja Lagos, or Oro in Kwara State or Batagarawa in Katsina state.

The MMIT Mobile Wallet however provides EASY ACCESS to the financial system via Airtime credit which literally, is everywhere. Just buy the credit (from any network), load it through a simple but secure process onto our Mobile Wallet for storage for a rainy day or immediately transfer to the mobile wallet of a family member in need, living far away; or into a microfinance bank account as part of loan repayments; or into the mobile wallet of a small or large size merchant like a trader at Oke Arin, NEPA Bill. Exit points depend on the final terminal point of use – it could be the account of a microfinance institution or it could be an ATM through which the funds are transferred as cash out. Amazing!

We believe that with unique Mobile Money Transfer solutions, the adoption of mobile money and other simple but relevant electronic forms of payment will grow faster than before as real value is realized through it.

We want the average Nigerian (people in the C2DE sociodemographic categories) and who make up more than 50% of our population as a country to be able to rest easy knowing there is a superb back up plan to the existing money payment systems out there that will ensure they achieve what they desire and on time.

Uniqueness of your platform?

SMS applicable: that is because we want it to be usable in every environment and also to boost reliability of the service. Though it also has Java functionality for java enabled handsets. KEY BENEFITS OF MMIT Mobile Wallet.

- Network neutral (Users of different networks have unrestricted access to use)
- Encourages effective and rewarding inter dependencies
in the banking industry.
- Bank neutral (Rather than being tied to a specific bank, which would defeat the CBN objectives, MMIT
Mobile Wallet offers a centralized solution wherewith users will not be restricted in any part of the
country.
- Multiple Cash Out/Usage points (Our solution, by virtue of the package can work on:
- POSes across switch enabled network platforms,
- Transfer from your Mobile Wallet to another Mobile Wallet
- Mobile Wallet to ATMs
- Mobile Wallet to Online payment interface if using a Wap or GPRS enabled phone)
- Mobile Wallet for Bill Payment (Merchants, Utility bills etc)
- Easy Documentation and report management. This allows for easy reconciliation of transactions across our
services and every third part provider on the M-wallet platform.

What strong compelling needs will it address?

I believe our M-Wallet will tackle consumer’s day to day needs from family issues, personal issues, which are the core essentials that went into building this application.
My partners and I feel that placing ourselves in the shoes of the consumer and seeing what frustrates them on a daily basis enables us to see what needs to be implemented into the application and run with it. Please it is important to note that MMT is more than just moving funding and making payments it is giving consumer’s the comfort of taking care of their needs in real-time.

How can the unbanked benefit?

The unbanked can benefit from the M-Wallet application because it gives them the opportunity to store their funding and can be utilized at any point in time. We are giving the unbanked the opportunity to keep and monitor their money in the palm of their hands and also have access to their funds at any time of the day. It also gives them the same opportunity as the banked in making payments for day to day needs that must be met with family, trading partners etc…

Potential working relationship with mobile network operators, financial institutions and other stakeholders?

MMIT has been in talks with MNO’s and aggregators and we are looking to build a strong relationship with them as the industry forges ahead. MMIT has just signed with a partner in South Africa that is linked to 14 countries in Africa and South America to provided MMT infrastructure for its consumers.

What should Africans expect in coming months?

We are looking at a lot more opportunity opening up in the upcoming months with more partnership and roll outs in other African countries that are looking at MMT as a way of keeping families connected, and easing the day to day needs of individuals without carrying cash.

What should Nigerians expect from your firm at the Mobile Money Hub event?

Oh, we fully intend to make a presentation of the process and a simple demonstration of the solution. We will be available to discuss potential collaborations with serious minded partners looking to integrate this solution to offer a very robust, and secure mobile money solutions for all consumers

Contacts:
Jide Akindele
www.mmitonline.com
009-8051-780-338
009-7062-279-365

Third Batch Training – July 6th, 2010.

Central Bank of Nigeria will be licensing firms in the next few weeks to provide mobile payments in Nigeria for an addressable of 140 million people where only 22 million are banked with more than 70 million mobile subscribers.

Mobile payment license will cover mobile Banking, payments, savings, person to person payments, remittances and other mobile related commerce which are currently lacking in the Nigerian economy. Mobile payment agents are the main actors for any successful mobile payment deployment and Nigeria will require minimum of 60,000 agents to cover the 34 states and 744 local governments.

MobileMoneyAfrica is actively leading the trail in opening up in sector all over Africa by providing media, event, news and education in the emerging sector. The training event will empower potential agents to understand how mobile payment works, their role and benefits as a Business Venture in the emerging industry.This is a certificate training course.

Areas of focus:

• Understanding mobile payments.
• Types of technologies,applications,Handset management.
• How it works.
• Agent recruitment.
• Agent point branding.
• Managing Operations at Agent locations – efloat and Till management.
• Security and Fraud management.
• Operational risk for agents.
• Basic Accounting for agents.

The training will also showcase technologies and applications from players in the industry in Nigeria and attendees will also get listed in agent database for providers in Nigeria.

For whom:

Merchants, Store owners, Pharmacy and drug stores, Retired teachers (Rural and Urban areas), entrepreneurs, airtime dealers, Micro finance Banks, Loan and thrift societies, cooperative societies, Transport hub managers, Gas stations owners, Eateries, Hotels, Lottery operators, Retail distributors, retail store owners and others.

Venue:

University of Lagos
Guest House and Conference centre
Akoko
Lagos – Nigeria

Date: July 6th, 2010 at 10 am

Facilitator:
Emmanuel Okoegwale
Mobile payment Specialist

Registration:

Training duration is a day with a short break for refreshments. Accommodation can be arranged for travelers outside Lagos at the University of Lagos Guest House.

Early Registration cost – N8,000.Closes on June 30th.

Email:ehi@mobilemoneyafrica.com or call – 08030818868 / 01-2212869 for payment details.

Or Pay Direct into Bank  account and send us your details:

Go Mobile Nigeria Company

UBA Bank Account: 03550160000794

(Nigeria Naira Account)

Pictures from Training on May 25th / June 16th @ University of Lagos.

Tayo Oviosu – Founder and CEO

Jay Alabraba – Co-Founder andHead- Business strategy and Development.

Introduce your organization and management to our global audiences?

Pagatech was founded in early 2009 with a vision to enable a cashless society and bank the unbanked in Africa. Our first focus market is Nigeria where we are launching a direct-to-consumer mobile payments service called Paga, which is underpinned by our secure payments platform built with the flexibility to operate in any environment. We have taken a multi-stakeholder approach in the design of Paga – it works on all mobile networks and our strategy involves partnering with a variety of local banks, MFBs, retailers, NGOs, public sector organizations, etc. to achieve our bringing high-quality financial services to a broader segment of the African population.

Paga will launch with three products this year: person-to-person money transfer, bill payments, and airtime top-up. Our services are available on several channels, including SMS, mobile java application, online application, IVR, and USSD where it’s available. We have a broad set of game-changing consumer products in the pipeline for release on the Paga platform over the next several years. Innovation is in our DNA, which is something that our partners value greatly – they know that by working with us they will stay ahead of the curve.

Our founding management team includes Tayo Oviosu, Pagatech’s CEO; Jay Alabraba, who heads up Strategy and Business Development; Aisha Bashir, leads Operations and; Philip Uwumarogie leads our Engineering team. Readers can see all our bios at www.pagatech.com, our corporate website, but suffice to say that each of us has excellent work experience and strong relationships that we are putting to use in execution of the Pagatech vision. We also work very well together, so cultural fit is an important consideration as we continue to add people to the company.

Background of the Nigerian challenge and why the choice of mobile channel to address these challenges?

Well, the statistics highlight the problem. Fewer than 20% of Nigerians have access to formalised banking services, and the majority of those with access are primarily within the upper end of the socio-economic ladder. In contrast, we are seeing upwards of 40% or more of Nigerians across all socio-economic classes owning at least one mobile phone. This translates to a clear and present opportunity to transform the mobile phone into a vehicle for reaching individuals and families with targeted information, products and financial services. To be specific, we believe that the ubiquity of the mobile telephone creates the ideal avenue for tackling two major issues that continue to plague Nigeria and many other developing economies: a reliance on the use of cash and the financial exclusion of a significant portion of the population.

People tend to overlook the costs associated with the use of cash as the primary payment instrument. In fact, these costs are quite high relative to the GDP of most countries, and this is especially so for developing countries like Nigeria. The majority of these costs are borne by the central bank and commercial banks, which directly or indirectly impacts the common man in the form of inflation, high interest rates and even higher transaction fees. It also introduces inefficiencies across the economic spectrum. Mobile payments, as an avenue for reducing any society’s reliance on cash, holds great cost-saving and efficiency benefits for individuals, businesses, banks, and the government.

Another major area of opportunity for mobile payments is in the delivery of high quality and affordable financial products and services to all levels of society. The majority of Nigeria’s population is unbanked or underbanked. Even among the banked population, cashless payment options such as debit and credit cards are in limited use for payment because the supporting infrastructure has not been properly deployed. Given that mobile telephony has penetrated even the poorest regions of Africa, we believe that our secure and flexible mobile payments platform will quickly be accepted as a low-cost and secure way to transact electronically.

The continued growth of mobile telephony infrastructure is important for the continued growth of commerce in Africa; it is also critical for the success of mobile payments. Similar to how the companies that developed the backbone of the Internet brought great productivity gains to all, the mobile network operators have a key role to play in enabling new businesses scenarios. We are engaging with all the MNOs to ensure that our service is delivered at an affordable price riding on their networks. Of course, they too can expect to enjoy the benefit of increased voice and data traffic on their networks related to use of Paga.

How will your solutions bring convenience and ease of use to millions that are still finding it a challenge to engage in commerce, anytime and anywhere?

Well, by design, our service is available to facilitate business or personal payments, anytime, anywhere, from even the most basic SMS-enabled phone. Also, in building out our nationwide network of agents, it is our goal to have a reliable Paga agent just around the corner from every Paga customer.

What does the future hold for Pagatech in Nigeria.

Nigeria is our first focus market. We have spent a lot of time building relationships and alliances in this market, and we have defined a long-term strategy for rolling out several other value added products over time. We believe that Nigeria will be the biggest market for Pagatech and will drive our expansion to other markets in Africa when the time is right.

What should be expected from Pagatech in the post licensing era in Nigeria?

We are laying a strong foundation for our launch of Paga this year. We’ve been in process with the CBN and upon licensing we will begin our nationwide roll-out. The CBN must really be commended for the way it has approached developing the mobile payments space in Nigeria. They spent time reviewing and understanding the various models around the world, and have involved all the relevant stakeholders in developing the current mobile payments licensing framework. Of particular note is how the framework CBN approved avoids the errors made in other countries such as India and South Africa where there the focus is primarily on the banked portion of their population.

Is Regulation catching up with innovation in the African Markets?

Absolutely! As we look at various other African markets we see regulators paying closer attention to new types of innovation that could change lives in significant ways. We have also begun to see regulators take the approach of working with the industry to develop the appropriate frameworks. Technology will continue to evolve at great speeds and Africa will leap frog the more developed world in many of these areas. As such, African regulators will not always have the luxury of evaluating regulations in developed countries about a certain new innovation. Going forward we expect to see even stronger partnerships between regulators and industry in developing regulatory frameworks that fit their particular markets. Sometimes this will mean that the regulators allow for the dynamics of a new sector to play out a bit before tighter regulations are put in place.

Is Paga poised to be the M-Pesa of Nigeria or even surpass it?

If the comparison relates to M-Pesa’s impact on the Kenyan society, the answer is a definite Yes. We are confident that our strategy and open access approach positions us to be very successful in this market. However, the truth is that we really do not believe that the comparison with M-Pesa is apt. We perceive Paga to be a different kind of business and our approach and motivations are not that similar.

M-Pesa has grown in a market where its parent telecom company, Safaricom, has a super-majority market share. Even then, it has experienced its own growing pains which are quite well documented. In contrast to M-Pesa, Paga is a telco independent scheme with partnerships across all key sectors of the economy. We are also operating in a very fragmented telecom market – no MNO in Nigeria claims the kind of market share numbers that Safaricom enjoys in Kenya.

To be clear, mobile payments is a local business. It is not enough to transplant technology and some branding from a different market and expect to be successful in a new market. Especially in Nigeria, one has to be on ground refining and tweaking things to fit our peculiar environment. What will work in Nigeria will be quite different than what will work in Algeria, Botswana, or Kenya.

What should Stakeholders and Investors expect when they meet your management at the forth coming Mobile payment Investment safari in Lagos?

We believe that the investment Safari will be a great venue to meet potential partners and share ideas about achieving our shared goals in this market. Stakeholders who have not met our management team can expect to meet a team passionate about deepening financial access in Nigeria. Additionally, Investors can expect to meet a high calibre team with the know-how and capability to execute the business.

Do you foresee any potential for collaborations in the Nigerian market space.

Our strategy for growing the Paga network is anchored on a collaborative spirit. As has been the case over the last year, we remain open to discussion with parties interested in working with us. Of course, right now we are focusing all our energy on getting Paga ready for nationwide launch, but we welcome expressions of interest.

Can you summarize the key ideas presented in the “To compete or collaborate” article featured on your website. What is the message?

That article focuses on the fact that mobile payment services deployed around the world help to fulfil a need for a more efficient and convenient way to make payments. In the developing world, this includes a need for an increase in financial access to a large portion of the population that is underserved by the formal banking sector.

As in every other market, we expect that there will be competition in the mobile payments sector in Nigeria. However, we still see great value in collaboration. Stakeholders need to focus on the long term potential for positive impact of mobile payments. We support collaboration because the combined effort of institutions in various sectors is necessary if we will see a critical mass of adopters and active use of mobile payments. It is only then we can achieve increased financial inclusion and the long term economic development we expect.

Pagatech Limited
224 Etim Inyang Crescent
Victoria Island, Lagos, Nigeria
+234.1.810.2633
info@pagatech.com / www.pagatech.com

The African Center for Mobile Financial Inclusion is an International not—for-profit entity to serve the African continent in the emerging Mobile Money ecosystem. Formal Financial access is still a mirage for millions of Africans across the Continent but they do have access to mobile phones, in Cities, towns, rural areas and on transit. The mobile phone is largely becoming a tool and channel to engage the unbanked all across Africa and many people are having their first time ever, formal financial service through the medium.

The Center’s goal is to connect the mobile money community with the major drivers of the African financial services and economies. The acmfi will achieve this by accelerating the adoption of mobile money systems all over the continent working with academic institutions, regulators, software and solution providers, Mobile network operators, mobile money agent aggregators, Financial institutions ,researchers and subject matter experts.

Mobile Money space in Africa is currently calling for Logo designers from all over the world with the sponsorship of RedCloud Technologies TM.The acmfi welcome web page which was designed by Josef Scaratino of Webstart Africa is now live with Newsletter sign on and the Logo contest announcement.

With the active participation of some experienced and knowledgable subject matters experts in the financial inclusion landscape, Santanu Sengupta – Change Innovators Society,Catherine cgichunge,formely of MPESA and CEO- RedAnt International,Franck Detoh,formely of Orange Mobile Money Academy and many leading players from all around the world whom will be present at the formal launch in Lagos during the AitecAfrica Banking and Mobile Money Event, May 11th – 12th,the acmfi is already generating industry buzz all over Africa and Europe.

Some of the core activities of the centre apart from hosting the largest collection of library materials on mobile financial inclusion covering technology,research, case studies, journals and indsytry newsletters, the centre will also be active in conducting industry Research, Trainings, Agent Network development and management ,Mobile Money pilots and customer protection.

To get a pass to the Launch in Lagos – Nigeria, email the following for a pass:

Santanu Sengupta, acmfi2010@gmail.com or info@acmfi.org

Okuttah Mark

Lack of a secure delivery and payment system is blocking Kenyans from buying products online, according to a survey by TNS Research International.

The research notes that 88 per cent of the Kenyans interviewed would like to buy goods and pay using mobile money transfer services but have concerns about local delivery channels, making those who would like to buy goods online opt for direct purchases.

Buying goods online locally is a growing trend due to the improved telecommunication infrastructure in the country and existing online payment gateways which allow users to pay using credit cards or mobile money transfer services.

This in turn has opened new business opportunities for local IT firms who are developing payment portals and has also widened the market for traders who are using this platform to sell their products while providing consumers with goods conveniently.

Ms Melinda Baker of TNS research International says providing a reliable delivery system for goods bought online will make consumers experience the benefits that come with online purchasing such as saving on time and transport costs.

“Lack of local delivery services and secure online payment systems are the main problems cited by those who would like to embrace online transactions” said Ms Baker.

This has made online buyers go for items that do not need to be delivered physically such as air tickets, music, movies, software downloads and bookings for hotels and restaurants.

Local firms that are selling their goods online mainly relay on the existing courier services to deliver their goods to customers.

However, unlike some established international courier services, it is not easy for a consumer to track the goods especially for upcountry consumers.

In urban areas, lack of clear residential markings by local authorities is making it difficult for courier services to deliver parcels to consumers, forcing them to pick goods from the nearest drop-off points.

Mr Agosta Liko of Pesapal, an online payment gateway, says his company is developing software that will enable merchants and consumers track their goods using the mobile handsets.

Mr Liko says there is increased uptake of online buying especially clothing.

“We are working on integrating Motorola M75 or similar Phones to enable us to notify PesaPal and the Merchant Immediately when a package gets to the buyer’s town and is ready for collection” said Mr Liko. “The whole idea is to track products online and give up-to-date information throughout the life of the transaction. If anything happens and a package is lost, we would know immediately who had it,” he said.

DHL express marketing manager Bob Odhiambo says while it is possible for the company to deliver goods purchased abroad, it is currently impossible to deliver the goods to residential areas.

“Clients have to identify points of collection, although they can still pay the extra fee for delivery at their business premises” he said. “The current structure, however makes it difficult to deliver goods outside the central business district”

DHL charges Sh3550 for goods of up to 1.5 kilograms and Sh900 for any additional kilogram for transporting goods purchased online from US to Kenya, however, if a client wants the goods to be delivered to his business premises then he or she has to pay an extra fee of between Sh500 and sh1000.

Recently the two leading mobile operators partnered with a local IT company to address the issue online customers using their mobile money transfer services not being certain if the seller they are dealing with will deliver the goods.

The deal enables Safaricom’s and Zain Kenya to hold on to a buyer’s money until they receive confirmation that the goods have been delivered.

This settles a challenge that online buyers have been facing, of not being certain if the seller they are dealing with online will deliver goods once payment has been made.

The move by Intrepid Data System allows those buying goods online to use either M-Pesa or Zap to receive payments for goods through their iPay platform.

The sellers are charged up to five per cent of the total value of goods bought through the system. However, this is after paying a one-time fee of Sh4,600.

The key differentiating factor in this deal is that money is only released after confirmation by the buyer that the goods have been delivered.

Tagattitude

Femi Akinware is the CEO of Tagattitude Nigeria and He will be Showcasing the NSDT technology at the MobileMoneyAfrica’s – Mobile payment and Micro finance Investment safari in Lagos, April 28th – 29th.
Tagattitude’s technology, NSDT™ (Near Sound Data Transfer), transmits an electronic signature, one time password, and cryptographic key to secure electronic transactions and provide strong authentication services. NSDT™ uses the audio chanel and security features of any mobile phone. As a result, no software downloads or hardware modifications are required.

Share the Tagattitude’s vision with Africans?

Tagattitude’s mobile banking platform is the only one of its kind; it works on any phone, on any network, without any hardware or software modification on the phone. TAGPAY is multi-channel (POS, ATM, web, peer-to-peer), secure and very cost-effective. Our multi-application POS terminals are the cheapest in the world.

TAGPAY’s technology allows banks to bank the unbanked, provide mobile banking, remittance services, payments, branchless banking, web payments etc to anyone who has a mobile phone.

What is innovative about the NSDT technology?

NSDT uses the sound-channel of the phone is authenticate and sign transactions in a secure, efficient and dynamic way. Therefore, it is the immediately compatible with any of the 4 billion phones in the world today. Any bank that implements TAGPAY can potentially bank 4 billion customers immediately.

How does the NSDT work with the ATM?

A customer goes to the ATM, types in his mobile phone number (which is a unique ID) & PIN on the ATM keypad. If the phone & PIN correspond, then the TAGPAY server calls the customer’s phone and the customer takes the call and is asked to place their phone near the speaker of the ATM. The one-time authenticated sound is played through the ATM and the user is authenticated and allowed to make transactions on the phone.

Interestingly, any ATM can be upgraded to work with TAGPAY. This allows an ATM that serves only card-holders become a service that can be used by anyone with a mobile phone. The customer can be a bank customer, a local or remittance recipient or a someone receiving a payment, salary or pension.

How does this work for an unbanked individual with no relationship with a formal financial institution?

The goal of Tagattitude is to provide a technology that allows banks provide banking services to the unbanked in a profitable, user friendly, multi-channel way. Banking the unbanked must be profitable and mobile banking must be profitable; or banks will never do it. Therefore, the technology that enables it must be cheap, use existing infrastructure and be open such that it be deployed for the mass market.
Official statistics show that only 25% of the money in the Nigerian economy goes through the formal banking system. I believe several African countries have figures. If we are able to increase this figure significantly, the positive effect on the overall economy will be massive.

What is the current deployment status for Tagattitude’s technology in Nigeria and Africa?

Tagattitude is active Congo, Kenya, Zimbabwe, South Africa, Zambia, Ivory Coast, Tunisia, Mali, Senegal and of course, Nigeria. Most of these projects are in pre-launch stage. For example, Orange is using TAGPAY for its Orange Money service in Ivory Coast and has just completed a successful pilot. A launch is imminent, after which the service will be replicated in 5 other countries.

Handset compatibility is an issue for many mobile wallets technology. How will NSDT address this?

TAGPAY is immediately compatible with any phone in the world today. No competing multi-channel mobile banking technology offers this.

What should Nigerians expect from Tagattitude in coming months, post licensing era?

We will partner with banks and other service providers and licensees who wish to provide mobile banking services.

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Serge Olivier Atchu is the Managing Director at Greenventuresmanagement, a customized Adapted Management Processes consultants to Sub-Saharan African firms .He will be sharing His knowledge on Mobile Money bank model to the Telecommunications model,His experiences in the market with emphasis on the issues of Financing and Business Development at the forth coming MobileMoneyAfrica’s – Mobile Payment and Micro Finance Investment Safari in Lagos – Nigeria, April 28th -29th as a workshop leader.

Share your background with Africans?

Today I am married to a beautiful wife and we have three daughters.

I was born in Cameroon where, I finished high school before leaving in 1993, to the University of Brighton for a Bachelor in Engineering in the field of Electronics and Computer Engineering.

I started my career as an Information Technology integrator, and then went on to be the Purchasing Director of Launchmart Digital. In 2001 I returned to Cameroon, worked as a Consultant in the fields of in Project Management and Information Technology implementation.

I worked for a series of banks in Cameroon, going from Standard Chartered Bank, to Amity Bank (today Banque Atlantique) and ending up in Union Bank of Cameroon (UBC today a member of the Oceanic Group). During my time in the different banks I developed SWIFT Support skills and was a technical member of the local SWIFT User Group. Between 2005 and 2006 while working for UBC I enrolled in the University of Douala and obtained a Masters in Business Administration (MBA).

Union bank of Cameroon S.A (UBC) was created by a group of Credit Union Cooperatives (Cooperatives as well as other microfinance institutions lead by Cameroon Cooperative Credit Union League [CamCCUL]) to cater for their needs which the other banks were not ready to cater for. It is worth mentioning that CamCCUL is meant to be the biggest association based on the amount of savings in Africa.

As project manager in Union Bank of Cameroon I was in charge of migrating the bank from manual regional clearing to an automatic one, move from a heavy regional interbank settling system that took an average of a month within the country with the regional average at 3 months to a Real Time Gross Settlement (RTGS) system that is almost instantaneous.

In January 2008, I left Union Bank of Cameroon to become the Project Manager and General Manager of Mobile Money Cameroon. Mobile Money Cameroon S.A implemented a financial institution footprint Mobile Money model which is different to the Telecom Model.

Your experiences in the Mobile Money space?

Well my experience in this space comes because it was my job to solve the same problem using very similar tools before the outburst of Mobile Money.

I have extensive experience I picked up in the implementation of the CEMAC sub-regional switching Hub, called SMAC (Société Monétique de l’Afrique Centrale). This company is connected directly to VISA and any bank in the sub-region could connect to VISA through them. I was amongst the signatories of the first assembly creating OMAC (l’Office Monétique de l’Afrique Centrale) which is the payments systems body for the CEMAC sub-region. OMAC would have a regional product and is the aggregator of VISA in the sub-region. I was a member of the technical Commission of APECCAM (Association of banks of Cameroon) and a member of the technical Commission of CORENOFI (the Normalisation of financial instruments regional commission)

These experiences mean I have been in the middle of the new dynamics in Payments Systems in the sub-region.

As the project manager of the bank, we had been studying means of integrating the different cooperatives to the bank so as to add value to the services offered to their members. We experimented in 2005 and 2006 with an SMS based Transfer solution and an SMS based Mobile Banking with Push and Pull options (send information to customers as per an event is push and allow the customer queries is pull). We started working on a model to integrate some services and with the hub made up of the CamCCUL permanent secretariat and UBC. This feat through SMS could be possible then because, of the network developed by Mobile Operators. We decided to talk to the local operators so as to see if we could put synergies in place to reduce cost. I think more than 80% of CamCCUL are from semi-urban and rural areas.

I worked on the bank’s first Mobile Money project with MTN Cameroon. We launched an SMS based money transfer system as phase one and we were in the Pilot phase of the SMS Banking pilot project, which we abandoned to follow the Mobile Money Project as a complete solution to the cooperative integration solution. UBC was trying to come up with ways of integrating our owners (Credit Unions) so as to enable them to leverage on their footprint to add value to their propositions to the members and other customers. We started by working on the interesting banking tools we could integrate such as the MaatCard, an acoustic secured card.

Realising MTN had done something we could adapt, like their Mobile Money in South Africa we contacted them. It seems they had been thinking about the Mobile Money project out of South Africa but were not so sure about the model. They were not too keen in working with third parties like the MaatCard, because the one thing they brought on the table was a secured chip in Mobile Phones.

When we held the first project meetings their project manager would come in from South Africa. We had working sessions with Fundamo their technical partner. UBC and Fundamo understood the need to simplify the whole process especially compared to the Mobile Money South African Model. The actual agreed process flow was developed by the then General Manager of UBC, Mr. Julius Akene. Regrettably the project fell apart after the death of MTN’s CEO in the Kenya air crash. He was a visionary.

UBC with me as project manager then continued on the project with their local stakeholders. Mobile Money Cameroon (2M) was created in December 2006. UBC obtained their licenses to roll-out their Mobile Money from the sub-regional Banking authority and from the Ministry of Telecommunications. 2M applied and obtained some resources from the Telecommunications Regulatory Board (ART in French). They were attributed 1 three figures (XXX), 1 four figures (XXXX), and 10 000 eight figures (XXXX XXXX).

Specific projects?

I implemented the MyMoney solution from the project phase, through the purchasing phase, to its operational phase and to the commercial launch. I can not go in to the details as to the reasons for the lack of instant success of the MyMoney project. However to two main factors has been the lack of goodwill from some local Mobile Operators (some of the actions they have taken is the reason why I can not really answer this question today) and the difficulty in raising expansion financing for local technology projects.

Suffice to say that a complete project with licenses exist in Cameroon and has been launched.

How is Green Ventures Management (GVM) adding value in the MMT space in Africa?

During the 2 years spent implementing MyMoney, for 2M, I came across a lot of hurdles. Emmanuel to put it in context with your questions some of these problems have developing countries particularities. I have had the opportunity to live and manage businesses in two different cultures (England and Cameroon). I can say without doubt that the problems in Africa are more a people’s problem than a structural one.

The African particularity in my opinion stems from the fact that we have not been doing our strategic thinking for a while now. Others worry about us more than us on paper and in deeds. Others are always coming up with solutions to solve our problems. These “others” are listened to more than us. Without being specific, I know of international social organisation with goodwill who would finance a commercial multinational firm to implement a solution but would not look at existing local solutions which needs to help. Don’t get me wrong with my finance background I can see why, considering the apparent risks these multinational take. It is becoming a “known” fact that doing business in Africa is difficult, I say, it is not as risky as some people would want you to believe. Africa does not have a serious nationalisation history as South Americans and they rarely do voluntary default on their debts.

The risk of investing in Africa is more than 50% less than what is calculated today. GVM has set out to prove that on a project by project base.

We also have more than 5 years Mobile Money experience in sub-Saharan Africa we are ready to propose to organisations who are interested. We believe there is a cheaper and more secured way of rolling out Mobile Money solutions in Central and West Africa:

1. A bank Mobile Money model where the telecommunications sector as one is a stakeholder. Key foot prints Microfinance institutions.
2. A hybrid Telecoms/Bank with a 50/50 partnership with the bank being the lead in financial matters.
I will explain why these models are the most comfortable for Central Bankers and the public at large on the 28th and 29th in the Mobile Money Lagos Safari.

The regulatory Landscape in Cameroun and the region?

Things have changed since I managed the task of applying and successfully obtaining two Mobile Money licenses in the sub-region. In 2006, you talked directly to the Central Bank and that was it. BEAC the sub-regional bank with the help of the World Bank has since reformed the banking system. Today you have organisations like OMAC and companies like SMAC implemented by BEAC, with the help of the World Bank with the mission to promote payment systems in the sub-region.

BEAC though is very security conscious. Their biggest problem is to protect the final users and economic operators. This means they will not approve a project without built in security all along.

The regulators see Mobile Money as real money and want to make sure the different propositions should not create unnecessary inflation for example. They also want to make sure that it is handled with the same precautions as real money is. They also want to have the same if not more visibility with the upgrade in technology. Quite a few projects have not been able to start because they wanted to convert airtime to money directly for Mobile Money. The issue here is normal money within an economy is converted only based on the perceived value of the goods and services it is exchanged for.

What are your views about investment in flows for Mobile Money in Africa?

As I mentioned earlier the perceived risks is a big hurdle in the investment flow. I think the AfDB should look into how it can promote the sector. We have approached the AfDB and other similar institutions in the sub-region; they start by seeing the project as an Information Technology project and not an infrastructural one (a perception we need to change). Though it exists with examples like the IFC with Wizzit, Bill and Melinda with GSMA and Orange, logically there should be some flow between GSMA and Orange and MTN in Cameroon, it is really an affair of multinationals with the Exception of Wizzit (May be South Africa country specifics kicked in; less “risky”).

Any take away lessons for stakeholders?

Mobile Money is here to stay. Like most new technology there is a lot of Education to be done. A properly implemented Mobile Money means an increase in liquidity in the economy. It also means in its creation we should start thinking of how to protect the less technology savvy users.

What should they expect from your presentations at the mobile payment safari in Lagos?

Well I want to compare the Mobile Money bank model to the Telecommunications model. I will also talk about my experience in the market with emphasis in the issues of Financing and Business Development.

Emmanuel once again I have to thank you for all you are doing in the sector. We hope the rest of us would help you in carrying out your mission.
Thank you for having me.

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Emmanuel Okoegwale
Principal Consultant – MobileMoneyAfrica

All over Africa, Big commercial Banks, Mobile network operators, Micro Finance enterprises and independent providers are actively seeking for a piece of the unbanked market using trusted technology platform like the mobile phones. In some other climes, Mobile network operators are even buying financial institutions to gain advantage, in what is now termed, If can’t beat them, buy them.

By June, the Central Bank of Nigeria will be licensing providers in Nigeria and it will be a mix of Financial Institutions and Independent providers which are not adept in the strategy of ‘Low value and high volume’ businesses and managing extensive third party agent relationships like the airtime dealers that vends airtime for the MNO’s all across the length and Breath of Nigeria. The potential players will be faced with the most important aspect of the mobile money Business, the agent networks. The success of mobile money transfer depends on the availability, spread and positions of the agent network.

The providers will have to quickly gain deep insights into low value retailing which mobile money is, develop an extensive agent network with unfamiliar partners across the length and breath of the country.
Agency Business in itself cannot be promoted as a stand alone but rather an add on to existing retail business in neighborhoods that are currently serviced by the retailer or store owner. Agents are the face of Mobile Money Transfer and same as mobile subscribers commence and end all their airtime dealings at airtime vendor’s stand or storefront.

In many Countries in Africa where mobile money works, evidences has shown that many of the agent vendors signed up to become agents to explore cross selling opportunities for their existing Businesses like retail store owners, grocery and pharmacies. In absence of large retail chain networks like Shoprite, DunHill and the rest, the providers in Nigeria will have to settle for the eateries, corner shops, pharmacies and local store outlets.Nigerian Mobile payment agent demands will be in excess of 60,000 in the next 24 months according to country perception survey.

Agent points will significantly influence either wining or losing the subscribers and they must be adequately trained and constantly retrained to meet the challenges of serving customers, a service that they are not used to doing optimally as we speak. Agents will need to understand basic book keeping, physical and logical security, cash management, customer services and fraud prevention.

Providers will have to present the agents with a compelling business case as the commission might be lower, in some cases than existing airtime commissions (Philippines and Ghana) and may not be an attraction to potential agents in Nigeria. How do you go about doing all these without losing grip of your core Business? Why will agents be attracted to serve your Business? What model will work in the Nigerian mobile landscape that is highly fragmented with four major MNO’s and six CDMA providers?

Register for the Mobile payment safari where we will be hosting a workshop on Shared Agent Network model for Nigeria on April 28th – 29th.

Email workshop manager at Kwest@mobilemoneyafrica.com
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