Mobile Money Africa

Gertrude Majyambere

Government through the e-soko project will next month buy 35,000 mobile phones for farmers, a move that is meant to bridge the information gap between farmers and buyers.

The e-soko is a project designed to give farmers access to up dated market price information for particular commodities. Through public private partnership, talks are in the final stages with MTN Rwanda to procure the phones.

The e-Rwanda coordinator, Wilson Muyenzi said that at least one cooperative in every district has been identified to benefit from the project. Muyenzi said that government will pay 50 percent of the cost, MTN 25 percent and beneficiaries 25 percent of the phone prices.

“The whole idea is to empower farmers with market knowledge give them bargaining power to make better decisions and improve on their income, Muyenzi said.

Farmers will be able to call and identify profitable places to sell their commodities instead of dealing with middlemen who dictate the prices and in most cases exploit them.

Muyenzi said that in the first six months, farmers will have preferential calling rates to create awareness of the system and know the power of reaching out to buyers.

Currently farmers have been accessing market prices, only through text messages where farmers would request for prices from a particular market and for specific commodity, but with the mobile phone it will be interactive voices to help farmers who cannot write or read.

Before, market information used to be gathered by employees from the Ministry of Agriculture across the country and they would be sent to Kigali to be computerised.

“The system at the ministry of agriculture was too manual and slow because by the time prices are computed things have changed at the market,” he noted.

The success of the project will depend on the number of subscribers. The project targets at least 5 percent of the population to have access to the system. Muyenzi emphasised that the system will benefit both farmers and government to monitor food prices for food security.

The e-soko project was supposed to be on internet but more Rwandans use mobile phones more than the internet. The development of e-soko and procuring of 35,000 mobile phones is expected to cost $175,000.
“The subscription rate is at 20 percent of the total population, and the e-soko project will grow as the subscription rate increase that’s why government came up with a second option,” he added.

Government targets 40 percent subscription by the end on next year and 50 percent in 2012.

The e-soko project was a result of the social assessment study that identified the kind of information needed by majority of Rwandans.

In the pipeline e-soko targets electronic market, a platform to sell and buy different commodities, but it will depend on the national fibre-optic backbone with high speed connectivity and later electronic payment.

Africa Map

Leading mobile banking software vendor M-Com announced today the global availability of a solution meant to deliver mobile payments functionality to banks and payment processors, the M-Com BankAnywhere. The new solution, which uses Microsoft technologies (including Windows and Microsoft SQL Server), is set to enable banks to provide mobile payments services to users, while also helping them enhance their revenues.

Mobile payments solutions have seen a great adoption lately, and M-Com BankAnywhere comes to the market to deliver deployment flexibility for banks so as to drive the success of these financial services even further. The new solution has been announced at the Sibos 2009 global financial services forum.

According to the company, the banking industry around the world will benefit from a complete end-to-end mobile payments solution with the adoption of M-Com BankAnywhere. It ensures that banks can easily manage their services in the mobile market, while also providing them with risk management and best-practice security capabilities. At the same time, the solution is also capable of reducing the total cost of ownership for mobile channels.

“With the increasing adoption of mobile applications running on smartphones, the mobile channel can no longer be ignored by banks,” said Red Gillen, senior analyst at Celent. “Mobile payments continue to be at the top of the list of applications that will entrench mobile financial services in consumers’ daily lives, propelling it into the mainstream. As banks look to invest in this strategic area, vendors that can provide solutions which go beyond simple mobile banking informational services to address other value-added services such as bill payment will be the ones that come out on top.”

The mobile payment services, M-Com states, should become available to consumers via a variety of handsets, manufacturers and carriers. Its BankAnywhere solution on the Microsoft platform can address these factors by providing new revenue opportunities from different types of transactions, including payment and value-added ones, reducing costs and delivering control over the bank’s mobile channel.

Leverages mobile opportunity to ‘Bank the Unbanked’ – a $5bn industry by 2013, Juniper Research

Roamware Inc., a global leader in mobile roaming solutions, announced that it has completed the acquisition of Macalla Software Ltd., a leading developer of mobile financial services (MFS) solutions. Macalla’s m-commerce and mobile banking solutions are successfully deployed by banks and operators around the world; these solutions include adding prepaid minutes, credit transfers, international remittance, person to person transactions and bill payment. With Macalla’s acquisition, Roamware aims to build upon its roaming expertise and become a market leader in MFS, specifically addressing the needs of low income, unbanked communities across the world.

According to Juniper Research, the Service Provider market revenues will exceed $5bn globally by 2013. These revenues are based on the commissions and charges acquired from the gross value of money transactions derived from mobile money transfer services and remittances. Juniper Research highlights a significant opportunity for the providers and vendors of mobile money transfer (MMT) services as the market takes off, beginning as early as 2010.

“We are clearly the market leader in roaming with over 60 percent global market share and 382 global network operators as customers,” said Bobby Srinivasan, CEO of Roamware. “The move into mobile banking and m-commerce is a natural extension for us as it leverages our customer relationships, business partnerships and technology innovation – banking for the un-banked is a massive market opportunity for Roamware. The Macalla acquisition brings us domain expertise and a proven platform that will enable us to take a leadership position in this emerging category.”

Niall O’Cleirigh, co-founder and CEO of Macalla said: “Macalla has been a leading innovator enabling mobile money transactions across banks, remittance service providers and mobile operators. By joining forces with Roamware, we can benefit from its global reach and relationships within the mobile community to build a true global ecosystem of mobile financial services.”
Macalla will adopt the Roamware brand and the expanded team will continue to be based out of Dublin servicing existing and new clients.

###

About Roamware Inc.

Roamware Inc. is the global leader in voice and data roaming solutions that enhance the roaming experience for users in over 140 countries worldwide across 390 mobile operator networks. Roamware’s product portfolio consists of over 30 solutions for voice and data roaming for mobile network operators using different technologies like GSM, 3G and CDMA. Roamware is the established thought leader in the space with several key patent wins and applications for breakthrough technology that has helped operators establish, manage, optimize and enhance their roaming business.

For more information about Roamware, please visit

http://www.roamware.com

About Macalla

Headquartered in Ireland, Macalla leads the way in innovative mobile financial services software solutions across Europe, the Middle East, Africa and the Caribbean including mobile banking, credit transfer, international remittance, top-up and bill payment. Macalla recently won an ICT Excellence Award 2009 for an application which enabled Permanent TSB’s customers to carry out text banking, top up their mobile phones and obtain emergency cash from an ATM without the use of an ATM card.

http://www.macalla.com

BY LEIGH-ANN FRANCIS

According to the UN Department of Economic and Social Affairs, there are 300 million reachable adults in Africa that currently have no access to formal financial services.

The greatest requirements of this unbanked market are “access to simple payments and real P2P solutions that will fuel greater economic growth and inclusion for the unbanked,” states Adrian Vermooten, head of mobile and digital channels at Absa.

Vermooten, together with a range of high-level speakers, will discuss the potential of mobile payment platforms in addressing the needs of Africa’s unbanked market at the upcoming ITWeb Mobile Payments event. The event will take place at The Forum in Bryanston, Johannesburg, on 3 and 4 November.
Banking and payment solutions need to be geared towards basic banking services such as providing a safe place to store money; financial literacy, education and training; and access to credit, savings, and transactional capability, if the needs of the unbanked market are going to be met, states Brian Richardson, CEO of Wizzit.

Richardson will identify the key characteristics of the unbanked market in his keynote speech at the event. He will also discuss the technology and models used to develop mobile banking services that address the issues mentioned above.

Local banking trends seem to reflect a move towards mobile banking and payment solutions. Vermooten explains: “Increased customer awareness and usage of the mobile device as a commerce tool are creating an increased pull demand.

“Simultaneously, the scope and depth of services and functionality offered via the mobile is growing, and becoming more meaningful to the lifestyle requirements of the respective market segments,” he adds.

“In addition, there is a desire to find mechanisms which allow for our customers to interact in a more convenient way and at a lower cost than traditional channels,” says Vermooten. “Add to this the cost of handling cash, the development of our national public transport infrastructure, and the depth of penetration of mobile handsets, and you have a series of market dynamics that are supporting growth and development in the mobile banking space.”

Vermooten will explore the key motivating drivers for banking leadership in the mobile payments ecosystem in his keynote session at the event. He will also debate the extent to which banks should co-operate with retailers and operators in creating a new financial channel.

Event Link Page:http://www.itweb.co.za/events/mobilepayments/2009/

Washington Gikunju

Kenya engraved her name in history books by becoming the first country to activate what has been termed as the world’s first ever mobile phone based money transfer system in March 2007.

The M-pesa service which is run by Safaricom has since captured its users’ imagination, drawing in about seven million users in just over two and a half years.

This figure eclipses the estimated six million commercial bank account holders and has raised hopes that mobile technology could be used to expand access to financial services and rope in populations that are currently excluded from the formal banking system.

Zain’s equivalent mobile phone money transfer service, Zap, has reportedly recruited 300,000 users since its launch in February. M-pesa has moved an estimated Sh130 billion in this period in small tranches of about Sh1,500 per transaction — which mirrors its predominant use by low income earners.

But according researchers at the World Bank funded Consultative Group for Assisting the Poor (CGAP), little study has gone into the socio-economic impact of mobile banking and money transfer technology on the lives of users.

Formulate policy
In an interview, Central Bank of Kenya governor Njuguna Ndung’u admitted as much, but added that CBK was “organising some knife-edge studies” on the phenomenon which will then be used to formulate policy on this new brand of banking and money transfer.

By tracking money sent via M-pesa from a sample study group in Kibera to recipients in Bukura — a farming village in Western Kenya — CGAP has captured some of the initial impacts of the growing technology driven service.

The CGAP study, released last month, is expected to form the basis for further studies on the impact of mobile financial services.

Besides documenting an increase of between five to 30 per cent in net remittances sent by urban workers to their rural folk, the report also captures some of the subtle shifts in social habits influenced by mobile money transfer services.

For example, the report establishes that urban migrants who used to deliver money in person before the advent of Mpesa have reduced the frequency of their visits to rural areas.

Respondents said they now “M-pesa” their relatives instead of paying visits, during which they would spend several days at home with their families.

Even though the mobile remittances have cut down transportation and other transaction costs and to an extent increased net remittances to the rural folk, the reduced frequency of visits by husbands has become a concern for rural wives.

Washington Gikunju

The collapse of Kenya’s rural economy has left urban folks with the burden of meeting the financial needs of rural-based relatives, raising the level of dependency in the country by the largest margin in a span of three years.

Fresh data on movement of money in the economy indicates that the majority of rural homes are relying on cash remittances from relatives and friends in towns to meet two thirds of their daily consumption needs.

CGAP, a World Bank funded research group, says remittances from Kenyans living in towns to their relatives in the countryside have increased by 30 per cent in the past two years, helped by increased efficiency of delivery and a steep fall in the cost of transactions since the launch of mobile-based money transfer platform M-Pesa.

In one of the initial studies to establish the social and economic impact of mobile phone money transfer services, Financial Services Deepening (FSD) group found that the dependency ratio in Kenya has risen above 20 per cent since 2002 as more rural folks turn to relatives and friends for support in meeting their daily consumption needs.

A fifth of Kenyans living in the countryside said remittances from relatives have become their main source of livelihood compared to 14.3 per cent who confessed to living on handouts in 2006.

The M-Pesa mobile money transfer service was launched in March 2007 and has since registered a steady growth in the number of registered users to about seven million in just over 30 months. During the period, M-Pesa has moved an estimated Sh130 billion in small amounts averaging about Sh1,500 per transaction.

Safaricom’s main competitor in the mobile phone money transfer business is Zain, which is estimated to have about 300,000 registered users since launch of its “Zap” service in February.

“The financial diaries (of research respondents) reveal that such remittances constitute as much as 70 per cent of rural household income,” says the CGAP report.

The report echoes a recent study by FSD, which showed that slowing economic growth and acute food shortages has doubled the number of dependants that Kenyans with a regular income are supporting.

Analysts attribute the unfolding trend to the shrinking agricultural output —the buttress of the rural economy that supports an estimated 80 per cent of Kenya’s population.

“Food production is going down, while the population is rising,” says John Akoten, an economist at the Institute of Policy Analysis and Research (IPAR). “A huge proportion of income of rural populace is spent on consumption.”

Persistent drought has pulled back the agricultural sector’s contribution to the total gross domestic product (GDP) by one percentage point to about 23 per cent in the last one year.

Shanna

The microfinance subsidiary of World Vision Kenya, has rolled-out the use of MPESA money transfer service for loan transcations by her customers across the country. The roll-out follows a successful pilot phase that ran between April-August 2009.

The use of the MPESA Money transfer is expected to lower the cost of loan repayments for most customers as they will no longer be required to travel long distances to the bank, where loan repayments have previously been made. KADET’s Chief Executive Officer, David Ruchiu informs that KADET has found MPESA to be a reliable, efficient and fast way of transacting business. Ruchiu adds that through MPESA, KADET customers have been able to make their loan transactions with ease and at a minimal cost.

KADET’s operations in remote locations such as Maralal, Moyale, Keiyo, Nyatike, Budalangi, Lamu and others, prompted the use of the MPESA money transfer in these and other locations. In locations listed above, banks are either far away or not available. Consequently, customers delay in making their loan repayments, which often delay their application for new loans. Thankfully, the presence of MPESA agents in these locations allows customers to make loan repayments on time and with great ease. “We are very happy with the progress of the pilot and are looking forward to improving the MPESA product offering to our customers,” concludes Ruchiu.

According to Emmanuel Khisa, Information Technology Manager at KADET, the MPESA service is one part of the company’s Automation of Processes Strategy which aims at applying technology to make financial access convenient, affordable and flexible for the rural populace. “We are looking at further enhancements to the MPESA system such as SMS-based account services and others. These enhancements will eventually allow a seamless interaction between our clients’ phones and our banking system. This will open up a whole new exciting phase for our customers”, said Khisa in conclusion.

The mission of KADET Ltd is to provide financial services to low income entrepreneurs. Financial services, coupled with Business Training, can be an expensive and rigorous excercise if the standard approaches to MFI are followed without technological innovation. The technological wave brought about by MPESA money transfer has revolutionalised how MFIs can effectively run their businesses especially for establishments with a wide geographical spread.

ABOUT KADET LTD
The Kenya Agency for the Development of Enterprise and Technology (KADET) Ltd is a microfinance subsidiary of World Vision Kenya that was formed in 2000. KADET is committed to economically empower her clients by providing financial services in order to improve living conditions in communities across Kenya. KADET has a strong rural presence and an innate concern for the welfare of children. The company’s operations span in 42 sites and 11 branches countrywide; 80% of the site offices are in rural Kenya.Obtain more information on Kadet from the website: www.kadet.co.ke

Fundamo of South Africa, Uniswitch of Zimbabwe and the Finmark trust are some of the organisations that will take part in the forthcoming, first ever mobile banking conference in Zambia.

According to a press release issued to the Watchdog, other speakers at the conference will represent Celpay International BV, Zain, MTN Zambia, Net One, The Communications Authority of Zambia, The Bank of Zambia, Multichoice, Stanbic Bank (Zambia), Mobile Transactions Zambia Ltd and many others.

The two-day conference will be held in Lusaka from the 16th to 17th September, during which mobile technology and banking industry leaders from across the SADC region will unite to pave the way for the future of mobile payments.

“The conference will provide a wonderful new opportunity for industry players to learn and debate a wide spectrum of issues including regulatory, technological and supply issues. With the continuing boom in the cellphone market, the SADC region needs to prepare ourselves for the next wave of opportunities,” says Celpay International BV Chief Executive Office Lazarus Muchenje.

Celpay will host the conference that has been fully endorsed by the Zambian government,. It will highlight new technologies, strategies and approaches to mobile banking.

The participating countries include Tanzania, South Africa, DRC, Zimbabwe and Zambia and Namibia.

According to the press release, application forms for the conference can be downloaded here: www.zm.celpay.com

Roamware Inc., a global leader in mobile roaming solutions, announced that it has completed the acquisition of Macalla Software Ltd, a leading developer of mobile financial services (MFS) solutions. Macalla’s m-commerce and mobile banking solutions are successfully deployed by banks and operators around the world; these solutions include credit transfer, international remittance, person to person transactions, top-up and bill payment. With Macalla’s acquisition, Roamware aims to build upon its roaming expertise and become a market leader in MFS, specifically addressing the needs of low income, unbanked communities across the world.

According to Juniper Research, the Service Provider market revenues will exceed US$5bn globally by 2013. These revenues are based on the commissions and charges acquired from the gross value of money transactions derived from mobile money transfer services and remittances. Juniper Research highlights a significant opportunity for the providers and vendors of mobile money transfer (MMT) services as the market takes off, beginning as early as 2010.

“We are clearly the market leader in roaming with over 60 per cent global market share and 382 global network operators as customers,” said Bobby Srinivasan, CEO of Roamware. “The move into mobile banking and m-commerce is a natural extension for us as it leverages our customer relationships, business partnerships and technology innovation – banking for the unbanked is a massive market opportunity for Roamware. The Macalla acquisition brings us domain expertise and a proven platform that will enable us to take a leadership position in this emerging category.”

Niall O’Cleirigh, co-founder and CEO of Macalla said: “Macalla has been a leading innovator enabling mobile money transactions across banks, remittance service providers and mobile operators. By joining forces with Roamware, we can benefit from its global reach and relationships within the mobile community to build a true global ecosystem of mobile financial services.”

Macalla will adopt the Roamware brand and the expanded team will continue to be based out of Dublin servicing existing and new clients.

About Roamware

Roamware Inc. is the global leader in voice and data roaming solutions that enhance the roaming experience for users in over 140 countries worldwide across 382 mobile operator networks. Roamware’s product portfolio consists of over 30 solutions for voice and data roaming for mobile network operators using different technologies like GSM, 3G and CDMA. Roamware is the established thought leader in the space with several key patent wins and applications for breakthrough technology that has helped operators establish, manage, optimise and enhance their roaming business.

www.roamware.com

About Macalla

Headquartered in Ireland, Macalla leads the way in innovative mobile financial services software solutions across Europe, the Middle East, Africa and the Caribbean including mobile banking, credit transfer, international remittance, top-up and bill payment. Macalla recently won an ICT Excellence Award 2009 for an application which enabled Permanent TSB’s customers to carry out text banking, top up their mobile phones and obtain emergency cash from an ATM without the use of an ATM card.

www.macalla.com

Emmanuel Okoegwale

Jeppe Dorff

The following is part of a series of articles on mobile financial services written by Clickatell. To read the full series, please visit http://www.clickatell.com/solutions/financial.php

Does past experience combined with the current global financial setting provide insight for creating a successful mobile business model?

Since the late 1990’s analysts have asked how and when mobility will impact the established financial landscape. The Silicon Valley boom at the end of the 20th century boosted online commerce, while making household names out of organizations that still thrive today. People are less likely to know, however, that one of these brands, PayPal, started out as a Palm-based mobile payment solution. PayPal quickly moved beyond mobile and ultimately found its niche to help change the way consumers purchase goods online. More importantly, they spurred a stream of consciousness from Denmark to Israel and back to Silicon Valley where the dream originally hatched. Today, eBay-owned PayPal is the No. 1 online “alternative” payment method and enjoys hundreds of millions of customers worldwide.

The online commerce market hit the world by storm, giving organizations a new way to think about buying and selling. Many new businesses—eBay, Amazon, buy.com—created new models and increased revenue by utilizing only the Internet. For a decade, experts have pontificated about a similar promise in mobile, yet it hasn’t yet experienced explosive growth.

Typically, markets are driven by a number of factors: pain points, market readiness, consumer education, technology barriers, overpromising vs. underperforming, etc. Mobile isn’t “just” another credential to be utilized for payments. In fact, mobile payments are likely to emerge as the primary payment channel substituting the incumbent’s cash and plastic in less than five years. This, paired with the complex value chain and subsequent claim of customer ownership, presents a bigger question: “How is the global financial sector going to accommodate the onset of the mobile commerce market?”

More Questions than Answers

Until now, the industry has been keenly aware of its position in the four-party system: acquirer, issuer, merchant, customer. The advent of mobile payments introduces additional parties, which will likely change the status quo. The entry of more players may seem simple, but numerous issues complicate the opportunity. Questions such as: Who pays to support new mobile devices, new software and POS devices? Who supports the customer when transactions fail or cards are stolen? Who determines the standards for interaction? Will there even be standards? What technologies will be used, or will the agenda continue to steer towards proprietary solutions giving more control to carriers? And, the biggest question: Who owns the customer?

The Case for Mobile Payments

“Everyone” has a Mobile Phone: Compare the mere 1.4 billion credit cards in use today with the 4 billion mobile phones around the world, with 99.9 percent supporting SMS, USSD, WAP, and voice “out of the box” to facilitate financial interactions. ABI forecasts that approximately 30 percent of mobile devices shipped by 2011 will support NFC, a wireless technology making it possible for cell phones to interact with existing payment infrastructures. Jupiter predicts that mobile payments, including those from contactless NFC, will generate transactions worth around $600 billion globally by 2013. The sheer scale of the mobile opportunity is staggering. There is clearly an opportunity for a myriad of billion dollar businesses to be created.

“Everyone” Makes Payments: According to Unisys, nearly 45 percent of a bank’s revenue comes from payments, which represents about 40 percent of total profit. Gartner estimates that 104 million global citizens will make mobile payments by 2011. A study compiled by the Federal Reserve found that more than 65 billion electronic payments were made in 2007; a majority of which were “low” value of around $50. Additionally, the Center for Financial Services Innovation reported that FIs are tapping into the cash-dominated micro-payments market ($5 or less), valued at $4 trillion globally.

The financial world needs to acknowledge the ubiquity of mobile and the success that other sectors have experienced when integrating this forward-moving technology into commerce. Given the current federated model operating in today’s banking systems, the established participants should address the questions that such an incorporation yields: revenue, customer retention, and remaining in the center of financial transactions. It is also important to transcend the current discussions and define the framework of how the ecosystem fits together and how the stakeholders support each other.

Based on customer experience, initial deployments, headlines, and supporting statistics, mobile payments is the next tsunami to hit the financial world. Right now, however, mobile payments is still in the deep waters gathering its strength. When it arrives, FIs need to be fully prepared. Much is already happening in the industry and every institution should keep close tabs on global current events including analyst reports and published studies regarding mobile pilots, so they can tap into the rich field of knowledge held by mobile banking and payments vendors.

Jeppe Dorff is VP of mobile financial services for Redwood City, Calif.-based Clickatell, a provider of mobile messaging services around the world.