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Published on February 21st, 2010 | by Arsalan Mir


Mobile Money Round Up – MWC 2010

Mobile World Congress, the world’s biggest event for all things mobile lasted for three days from 15-18 February. Apart from developments in applications, new OSs, smartphones debut, alliance formations and much more, the 2010 also event featured two full days of mobile money.

Earlier the mobile money was limited to just a few hours side session, but with the growing global focus on mobile banking, this year it comes bigger.  Paul Leishman from GSMA’s mmublog shares his review of the event.

Day One:

The first day of the 2010 Mobile World Congress was eventful for anyone interested in mobile money: this year, we introduced ‘Mobile Money Monday’, an action packed day filled with presentations and panels from the likes of SMART, Telenor, Turkcell, Orange, Telefonica, Vodafone, Roshan, SingTel, Axiata, as well as the Gates Foundation, CGAP and more.

Not surprisingly, the day was filled with learnings… and numbers. I’ve taken a moment to share what I thought were the seven most interesting ones:

1: New deployment launched in India. Today, Nokia Money launched in India and this will certainly be a deployment to watch.

2: The number of years that it takes for a mobile money ecosystem to make money and become sustainable, according to Cenk Sedar, Director, Vodafone.

3: The number of developing markets that Telefonica will have launched in by the end of 2010. This follows on the release last week by Trivnet of their partnership with the operator.

13: the number of minutes that it takes for a customer to report their phone stolen, according to a study conducted by Telefonica. This compares to 1-2 days for a bank card.

500,000: the number of transactions that Pakistan’s easypaisa has processed in the last four months.

3 million: the number of customers that M-PESA in Tanzania has reached.

8 million: the number of customers that M-PESA in Kenya has reached.

And finally, we couldn’t put a number on this one, but it merits sharing. According to Vodafone’s Cenk Sedar, M-PESA will process more transactions per year than Western Union by the end of 2010. Truly a reflection of their growth.

Day Two:

Today, the highlight had to be the MMU Working Group. Mobile operators, vendors and other industry stakeholders convened to exchange learnings in our full-day interactive session.

The focus of the day was agent distribution, and conversations ranged from individual agent economics to the best practice for structuring an agent network, to the role that scratch cards might play. After some introductory remarks by Seema Desai, the day got started with a presentation on agent economics in Brazil by CGAP’s Mark Pickens. You can find his summary and presentation here, but I found a couple things particularly interesting:

– Agents handle 2.4 billion transactions per year
– Agents in Brazil make just $5.17 in profit per day, or 4 cents per transaction
– Agents do 166 transactions per day, or 1 transaction every 3 minutes

After Mark, I provided some learnings provided to me by Cambodia’s WING. Their model is particularly interesting and they’ve got some hard earned experience tackling key issues that many operators will face early on in their launches. Much of the conversation oriented around WING’s decision to use ‘Pilots’ for registration, and WING Cash Express Agents for cash in/out. Some operators, like MTN Uganda, have used a similar approach (although WING calls their staff ‘field registration agents’ rather than ‘Pilots’, so the learnings were timely. To help put WING’s model in context, we used M-PESA’s agent network as somewhat of a foil. Comparing the agent networks, it was interesting to see that there are two main differences: first, whereas M-PESA has one uniform agent that provides registration,c ash in and cash out, WING has two categories of agents – one category that does registration, and another that does cash in/out. Second, whereas M-PESA’s network of today has multiple tiers, WING’s had just one at launch – a second one was added about a year later and this looks like the tiering path that many models are following (including M-PESA).

Another highilght of the day was a discussion panel that included representation from Zain, Grameenphone, Roshan and Globe. The focus of the panel was on agent networks, and one learning that I found particularly interesting was the approach operators on this panel have taken to structuring agent incentives. Globe, Grameenphone and Zain all provide their agents with some degree of input into the ultimate price of the service, and thus, the agent’s commimssion. This approach varies notably from Safaricom’s fixed tariff structure, which is often touted as contributing to the consistent customer experience that fuelled the growth of the service.

In Pakistan, we have seen Telenor/Tameer Bank with easypaisa’s model succeeding and have been hearing of another coming from Mobilink. The third product from easypaisa,  Mobile Wallet, is now awaited. Lets wait and see how it will take on its distribution and tariff structure.

Paul Leishman is Knowledge Manager for the MMU programme, responsible for leading the development and dissemination of commercial content, including business strategy analysis focused on mobile money business models, and case studies profiling key success factors of deployments.

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About the Author

is a Telecom enthusiast with engineering background based in Lahore. On professional front, he is the Director Operations at the Target Group. He can be reached at arsalan (at) telecompk (dot) net

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