Interoperability - Realizing the Full Potential of Mobile Money

Mobile Money Market Scenario in Africa

Current Mobile Money Deployments in the Continent

Close to 80 Mobile Money Deployments in Africa

Contributed to more than 4.5 % of the Sub Saharan

Africa’s GDP or $32 Billion

80% of worlds mobile money transactions

happen in East Africa

The industry accounts for 350 million jobs

High mobile phone adoption – 1 Billion

people in Africa with 700 million connections

Source: Africa Review - December 30th 2012, GSM Association

Current Market Overview in Nigeria

Mobile Money agents currently stand at 3000

Expected to grow to 50,000 by 2015

2012 Mobile Money transactions: N228 million

Expected Mobile Money transactions by 2015: N151 Billion

Non Store shopping increased from N62 Million in 2011 to N77.5 billion 2012

Non store shopping expected to grow by N658 Billion by 2015

26 million banked out of 167 million Nigerian population

Source: All Africa 3rd January 2013

Interoperability is the ability of

diverse systems and organizations, to work with each other, in the present or the future, without

any restricted access.

Customers

Limited universe to do m-Commerce

True value of Mobile Money not unleashed

Policy Makers Struggling to understand regulatory approach

Businesses Would want to recoup investments made

Apprehensive of government intervention, to give up advantage

Interoperability - Current Scenario

Current Scenario – Only On-Network Transactions

Cross Network Mobile Money transactions not possible

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Why Interoperability ?

• Subscribers are restricted to on-network transactions,

• Agents are exclusive to one mobile money service provider

• Subscribers are limited to accessing their mobile money account only from one SIM

SMS usage before July 98

SMS usage post April 99 after SMS interconnection between operators

Has Interoperability been achieved in the Mobile

industry….??

Yes, cross network SMS is an example of interoperability success

Source: Mobile Data Association

With Interoperability Cross Network Transactions are possible

Cross Network Mobile Money transactions are possible

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Payment Switch

Interoperability – An Enabler

Product Innovation

• Remittances and Airtime top-ups are 95% of the Mobile money transactions in the world

• Invite banks, micro finance institutions, third parties to use Mobile Money infra • Make a greater range of products and services available to customers

Enable payments to and from the unbanked

• Distribution of cash remains expensive and insecure • Need of industry collaboration to enable bulk electronic payments • Ease payment acceptance from completely unbanked population

Replace cash with e-money for day to day transactions

• Still the most dominant - money transfer followed by complete cash out • Establishing interoperability allows operators more frequent and proximate

transactions • Lesser reliance on cash, provide convenience and increase relevance of e-money

INTEROPERABILITY brings in

SYNERGY where interconnections

with external parties can create greater value for customers and service

providers than a single mobile money service provider can create alone.

Options to Achieve Interoperability Across Mobile Payments Services

Platform Level Interoperability

Agent Level Interoperability

Customer Level Interoperability

Benefits of Interoperability

• Interoperability will benefit service providers by expanding the pool of customers

• Increased revenue through transactional volumes

• Minimises the need for retail agents to have cash, which is costly to move around between different agents.

• Interoperability could serve as a primary lever by which to reduce redundant costs and expand access

Interoperability Use Case 1

Abike, a fruit vendor in the local market in Abuja has an MTN mobile money account. After a busy

day, Abike secures her days’ takings by paying into her mobile wallet via the agent in the town.

Since there is no MTN agent near the market, Abike goes to an Airtel agent who helps her in

depositing her money into her MTN mobile money account.

Interoperability Use Case 2

Ameerah, an Airtel mobile money account subscriber wants to send money to her friend

Abike, an MTN mobile money account subscriber. Interoperability makes it easy for Ameerah to send money to her friend who is

on a different network (cross-network)

Chalapathi Rao Immidi Director of Business Development mFino