Mobile Money Transactions

Telepin Powers New Etisalat Afghanistan mHawala Service

Today Etisalat Afghanistan commercially launched mHawala, its new Mobile Money Services platform and we are pleased to share that Telepin is providing the infrastructure for the service.   The mHawala service is a full mobile financial services (MFS) offering that includes central bank cooperation, banking ecosystem participation, utility merchant involvement, and salary disbursement, which enables complete mobile banking capabilities and future cross-border money transfers.
 
Dr. Ali Asgharzadeh, Chief Commercial Officer-Enterprise at Etisalat explains, “Mobile density in Afghanistan is currently at 50 percent and is growing rapidly. However, 95 percent of Afghan’s do not have access to banking infrastructure. This unique market cross-section creates a need for the investment we are making in Telepin’s Cayman platform.  We can now introduce a much-needed innovative service to the market with mHawala. We have chosen Telepin because the company is a key leader and innovator in the mobile money marketplace.”
 
Telepin’s Cayman Transaction platform plays a key operational role in the distribution and management of airtime, and will be extended with subscriber wallets for MFS services.
 
Etisalat Afghanistan is the first mobile network operator in Afghanistan to offer this entire range of Mobile Financial Services. Telepin MFS products provide mobile operators the ability to deliver robust financial services offering to their subscriber and merchant customers. Telepin’s software plugs seamlessly into existing mobile infrastructure, leveraging the investments already made in charging systems, replenishment systems, and value added service delivery platforms.

M-Pesa transfers more Kenyan money that Western Union

Listen carefully and you can hear champagne corks flying as mobile payments company M-Pesa confirms a huge milestone in Kenya... transferring over $1 billion dollars in a single month. They reckon that this is more than the incumbent company, Western Union, manage in the same period.

This growth, which has been achieved in around four and a half years is one of the success stories of not just mobile money, but in a connected internet service as well. While M-Pesa has some big backers, it's still had to go in and start the service, promote it, manage the growth, and continue to innovate and work to maintain its lead in the marketplace. Congratulations all round to one of the poster-children of the new payment industry.

The question now is where M-Pesa will grow. There are still huge opportunities in their home markets, where only one in three mobile phone users has a bank account, Given that mobile penetration is on the order of 40%, but growing, there are a lot of users and transactions for M-Pesa to work on winning over the next four and a half years.

We'll continue to watch their progress.

Africa continues to lead the way in Mobile Money deployment

With over 100 mobile money services around the world, it should come as no surprise to readers of Mobile Money Transactions that almost half of these are in the African continent. With 51 deployments it's very easy to say that Africa is where the revolution will start from.

For all the talk of potential systems from Apple, and trials on the New York MTA, the real action, and social change, is happening away from North America. But what's interesting to me is that as Mobile Money systems become more prevalent and accepted by a society, they begin to have positive side effects.

An increasing number of small businesses are using Mobile Money systems such as M-Pesa to bring down their per-transaction costs on goods and services, making their businesses more viable, more profitable, and able to offer a wider range of services to their customers... all because of the flexibility that they have to make and take payments.

Given that the current systems have a huge scope to be extended in the near future, it's going to be very interesting watching not just the systems, but what change they foster, over the next few years.

Telepin Powers Mobile Financial Services in Papua New Guinea

As a provider of mobile money transaction platforms, we get to work in some of the most interesting and remote parts of the world.  One such place is Papua New Guinea (PNG) where we were recently selected to power Digicel Group’s cellmoni mobile money service.  This service includes all the normal things you’d expect, as well as the ability to transfer money to friends and family anywhere in the country.  Also powered by Telepin and hosted on the Digicel network are Post PNG’s MobileSMK and MiCash from Nationwide Microbank.
 
There appears to be great demand by residents of PNG for a system that enhances cash safety, which includes phone transfers and a means to transact, store and accumulate value for later use.    The solutions from Digicel, Post PNG and Nationwide Microbank are delivering a best-in-class solution that extends value to PNG mobile subscribers, merchant networks and ecosystem partners.
 
Telepin’s Cayman Transaction platform is used by all three providers for mobile financial services (MFS) offerings.  The service is regulated by the Central Bank of PNG and has been developed in partnership with Pacific Financial Inclusion Programme (PFIP) with a view to promoting financial inclusion within PNG and the region.
 
For more details, you can read the press release.

Is NFC for commerce and when will it be a reality?

Insightful discussion around the future of mobile payment coming out of the GigaOM Mobilize Conference held earlier this week. It's great to see there are other people in the market that share the view that NFC may equate to "not for commerce" which is a view I shared with the Economist in this article earlier this year:

Critics of NFC technology argue that waving a phone around in front of a terminal hardly feels like an efficient and secure way to pay for something. Vincent Kadar, the boss of Telepin Software, a Canadian maker of software that supports mobile transactions, says that NFC should stand for “Not For Commerce”. NFC’s supporters claim that phones are at least as secure as cards and can be remotely “wiped” if they are lost.

I am rather curious as to who is paying for the infrastructure to take NFC from dream to reality. Same goes for the Isis, the carrier-led NFC venture (with AT&T, Verizon and T-Mobile) , as they may follow suit with other joint ventures like Zoompass here in Canada, limping along for several years until a real business model is found. Definitely check out the video of the panel discussion which includes reps from PayPal, Intuit, Visa, and VeriFone.

 

Watch live streaming video from mobilize2011 at livestream.com

The curious case of Jonathan's Starbucks card

A little experiment in social giving and taking held this past August might provide some clues to the promotion and uptake of mobile money, and is well worth studying.

Jonathan Stark had a Starbucks card, and it's replicated on his iPhone. But he wanted to carry it on another phone. Which didn't have a Starbucks card So he took a screenshot of the app, and displayed that picture at the counter. The barcode still scanned, and he could get coffee from his card no matter what phone he was using.

But would it work if someone else had the picture?

So the picture was posted online, tens of thousands of people around the world not only paid for coffee, but reloaded the card and passed on the value to others - it only stopped when someone publicly declared they were skimming value off the card's account and putting over $600 on their own Starbucks card - at which point the Seattle based company decided to void the account (but not before publicly supporting it and getting a shed load of goodwill and PR).

So what lesions can be learned from this virtually enhanced store card?

I can spot a few clear takeaways. The first is that a lot of people are happy to try something if it doesn't have any cost to them to try it. And in the majority of people there is an intrinsic honesty, they'll play fair.

It's also about reduced friction. For all the discussion over magstripe readers, NFC chips, wave and pay... what's easier than a single JPG picture making the transaction? Reduce the complexity for the user and you're on to a winner. The "slippiest" mobile solution is going to be the winner.

And of course, all that can be destroyed by one bad egg, so how do you balance ease of use with the security needed?

These questions are all basic ones, but any system needs to not only be able to answer them, but keep them updated throughout the product cycle. The Market will happily experiment with new ideas, especially if nothing critical is riding on it. Capture them at that point, use their experiences, and build a better product. Be quick, be innovative, iterate, and don't be too afraid of failure.

And I'll have a short cappucino with caramel!

Congratulations to Digicel: Papua New Guinea's Most Innovative Company of the Year

Congratulations to Digicel for being named PNG's most Innovative Company of the Year 2011 at the prestigious PNG Institute of Directors Awards held earlier this summer.
 
At PNGID’s Award Ceremony, the Institute’s Director Wayne Dorgan highlighted some of the most recent innovations introduced by PNG’s leading telecommunications company, including:  the launch of Digicel’s high speed broadband in May;  Digicel’s pioneering commitment to offering high quality Customer Care services which now sees it provide “outsourced” Call Centre solutions to other companies; the rollout in March of a new faster electronic top-up option with Post PNG and the development of the groundbreaking “cellmoni” mobile banking service, which looks set to transform the way Papua New Guineans handle and transfer money.

When receiving the award Digicel’s Operations Director, Lorna McPherson welcomed the recognition on behalf of all of Digicel PNG’s 600 strong Team saying; “Innovation comes from within and the success of Digicel is driven by our local team and their commitment to serving PNG.  Digicel has set the standards for telecommunications in PNG since our launch and we are determined to continue to offer the best value, superior customer care and most innovative and customer focused services.”

You can check out more on Digicel's work in PNG in this video:

UK networks join up their mobile phone wallets

It looks like one of the big worries over a smartphone based mobile money system might be sidestepped in the UK by three of the mobile phone networks. O2, Vodafone and Everything Everywhere (which runs T-Mobile and Orange) have set up an as yet unnamed  Joint Venture to run, administer and promote a UK wide mobile wallet system.

Writing on their blog, O2 said:

We believe the new business can deliver the services and technology needed to see faster adoption of the mobile wallet and related payment services. The wallet itself will enable customers to transfer their entire physical wallet onto their mobile device. And they’ll be able to purchase products or services online, or in-store through Near Field Communications (NFC). It’s about giving customers a great experience and bringing them new and innovative products that can make their lives easier.

That's something that many networks, handset providers and mobile money enabling organisations could write, but what's impressive is that this is going to be available to most of the mobile population in the UK, it's only going to need one marketing message pushed to educate the consumers and retailers. That's going to give a lot of confidence in the system, and in terms of adoption that's a huge win.

Yet there will be Anti-Trust issues in place here, but the Joint Venture should take care of that in a transparent way. What's important is a commonality across the majority of smartphone users in the UK. Much like email, SMS messages or the cassette player, agreeing on a standard allows innovation while protecting capability and consistency.

The goal is to have the Joint Venture in place by the end of 2011, so I'd expect it to be up and running, and very visibly on show for the London 2012 Olympics. We'll keep an eye on the progress here on the Mobile Money Transactions blog.

More building blocks for Visa, this time from South Africa

Visa has purchased South African based Fundamo for $110 million. Out of Cape Town, Fundamo is a "building block" company that helps other companies (especially mobile networks) deliver financial solutions, including a full Enterprise edition service, alongside a Mobile Wallet and Mobile Banking product that can be white labelled and a number of other services.

Partnered with the GSM Association, mobile service provider Gemalto, and Sun Computing (to name three), Fundamo is one of those quiet companies that has quietly got on with the job since they were founded in 2000. The purchase by Visa gives a good return to the investors, and bolsters the Visa portfolio in the mobile banking space.

Readers will recall that Visa have invested in Square for an undisclosed amount, but did receive a seat on iPhone payment system's corporate board; and in February acquired PlaySpan, an in-application payment system that's used by over 1000 online games and virtual worlds for the purchase of goods and services, including their real-world git card system that allows people to charge up their virtual accounts.

For all the disruptive tendencies these starts-up promise, once they get established the big boys are going to wonder if it's better to have a foot in the door, be it with a percentage of the company (Square) or by simply swooping in and making the acquisition. Being able to call on substantial cash reserves mean that covering the bases when a company shows success is a far smarter investment for Visa than potentially leaving a disruptive effort to build momentum on their own.

Google Checkout still not checking out around the world

Google Checkout is an interesting point in the map of Mobile Money. As with most Google products, it seems to be the answer to everything, and with the Mountain View based company behind it, why isn’t it everywhere and dwarfing other options just as Google does in search? Google Checkout was set up to take small payments for web services and other items, a central system for users and a single point of contact for developers and user.

And then Google Checkout was thrown into the front line of mobile payment... the Android smartphone application store. From a technical point of view Google needed a way for people to pay for applications on their ‘free’ mobile OS, and they had their own payment system in place.

It just wasn’t ready for the big time.

Checkout’s major issue right now is that the customer base is either not there or can’t use it. Handsets are bought, but only in a handful of countries can users actually pay for the applications. In most regions, the options are for the developer to offer the application for free and hope for residual income, or not offer their apps at all. In either case the levels of casual software piracy are significantly higher than on smartphones where payment options are available.

The problems with Google Checkout are  already having an impact on the Android smartphone. Rovio, developers behind the huge Angry Birds franchise, have already given up on charging for the app on Android because they can’t offer the same experience to their fans around the world. They’ve had to go for an ad supported model in the first instance and are trying to sort out carrier billing themselves – a herculean task attempted before by many, and one reason why Nokia’s Ovi Store proves so attractive.

While the issue of payment is not unique to the Android platform, two other major players have approached it from a different angle. Apple captures credit card details from every user when the phone is activated and ties this into the iTunes Store, while Nokia (still the biggest player in the smartphone market with Symbian OS) has carrier billing relationships in over 90 countries so far, and a guaranteed 70% cut of the gross selling price to the developer.

So what will Google do now? On previous form they’ll probably end up buying one of the established micropayment services that already have the global presence that would match with Android adoption. While so many companies focus on getting the payment system established and then finding a use for it, Google have got the opposite problem. They’ve got a use case, and a mobile payment system that doesn’t work.

Which means there’s one more opportunity for someone out there in 2011.