Using Mobile Money to Promote Financial Inclusion in Pakistan

Transcription

Using Mobile Money to Promote Financial Inclusion in Pakistan
Imran Khan and Naeha Rashid
2
CURRENT STATE OF FINANCIAL INCLUSION
MOBILE MONEY
OTC AND M-WALLETS
AGENTS
OPPORUNITIES: INCREASING M-WALLET UPTAKE
www.karandaaz.com.pk
© 2015 Karandaaz Pakistan. All Rights Reserved.
FINANCIAL INCLUSION
INSIGHTS
10%
13%
10%
7%
8%
ACCESS TO FINANCE
FINDEX
23%
Pakistan’s Financial Inclusion numbers are improving according to
most sources
3
2013
2014
2011
2012
2013
2014
2008 2009 2010 2011 2012 2013 2014 2015
InterMedia
World Bank
State Bank of Pakistan
n = 6000 (individuals)
Adults 15+
n = 1000 (individuals)
Adults 15+
n = 10,000 (households)
Adults 18+
Financial inclusion is defined as “having a
registered account with a financial
institution that provides a full suite of
financial services.”
Financial Inclusion is defined as “having an
account either by oneself or together with
someone else, at a bank or another type of
financial institution, or having personally
used MM in the past 12 months.”
“Formally served”
*To be released In 2015
Variations in Financial Inclusion numbers can be explained by
definitional differences
16%
14%
12%
5.7%
5.8%
10%
0.3%
8%
1%
6%
4%
8%
8.7%
FII 2014
FINDEX 2014
2%
0%
Bank account (registered)
Non-bank Financial Institution Account (registered)
Mobile Money Account (used in the previous 90 days)
OTC (used in the previous 90 days)
Financial Institution Account alone or with some else (registered)
Mobile Money Service (personally used in the last 12 months)
*Numbers do not account for double counting
4
Yet, despite significant progress, Financial Inclusion in Pakistan is low
in comparison to regional and global standards
SHARE OF ADULTS WITH AN ACCOUNT – FINDEX 2014
83%
62%
53%
46%
31%
34%
34%
51%
54%
34%
23%
14%
13%
PAKISTAN
BANGLADESH
NEPAL
BHUTAN
SOUTH ASIA
INDIA
SRI LANKA
MIDDLE EAST
SUB
SAHARAN
AFRICA
SOUTH ASIA
LATIN
DEVELOPING
AMERICA & COUNTRIES
CARRIBEAN
WORLD
5
6
Some groups are more financially excluded than others
%AGE OF POPULATION THAT IS FINANCIALY INCLUDED
GENDER
LOCATION
Men are 3x more likely to be
financially included than women
23%
Urban dwellers are 1.5x more likely to
be financially included than rural
dwellers
20%
7%
13%
While half of all adult Pakistanis took loans in the last year,
only 5% borrowed from formal financial institutions
BORROWED IN THE PAST YEAR (%)
SOURCE OF BORROWING FOR MOST
RECENT LOAN
90
80
79
70
Misc
7%
60
50
40
Bank/MFI
5%
46
48
50
52
Family and
friends
46%
30
Shopkeeper
42%
20
10
0
India
Bangladesh
Pakistan
Low Income
Kenya
7
8
Savings too, remain largely informal
SAVINGS AND FORMAL SAVINGS %
TYPES OF SAVINGS
80
Bank or MFI
3%
76
70
60
50
47
40
38
30
20
32
30
24
10
0
14
7
Bangladesh
Pakistan
India
Advance
purchase/deposit
With shopkeeper
6%
In cash at home
51%
Committees
(ROSCA)
27%
10
3
Misc
3%
With a family
member
5%
Buying Durable
for Dowri
5%
Low Income
Kenya
Saved any money in the past year
Saved at a financial institution
Awareness and penetration of insurance remains low
TOP REASONS FOR NOT HAVING INSURANCE
Misc
27%
Only 1% of respondents to the
Financial Inclusion Insights
2013 survey had insurance.
90% of this group had life
insurance.
I do not need one
35%
I do not own
anything valuable
7%
I do not know how
to get one
9%
I do not know
what it is
22%
10
Compared to peer countries, incidence of domestic money
transfer to relatives and friends is higher in Pakistan
REMITTANCES %
METHODS FOR SENDING MONEY
70
61.0
60
53.0
50
Direct deposit to a
bank
Agent's m-money
4%
account
3%
40
30
24.8
20
10
9.8 9.9
14.1
10.4
25.6
18.3
15.7
0
India
Bangladesh
Pakistan
Low Income
Kenya
Received domestic remittances in the past year
Sent domestic remittances in the past year
Personal delivery
by self
93%
Pakistanis don’t use formal financial services due to a lack of either
awareness or income
TOP REASONS FOR NOT USING FORMAL FINANCIAL SERVICES
Never thought about it
41%
No regular income
41%
Not enough money to open an account
31%
Lack information about products/services
15%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
11
12
MOBILE MONEY
OTC AND M-WALLETS
AGENTS
13
Adult Females
38%
Adult Females
70%
ATMS
COMMERCIAL BANK
BRANCHES
473.1
Adult Males
89%
Global
47.1
Adult Males
80%
Pakistan
12.2
All adults (15+)
79%
9.3
All adults (15+)
59%
INFRASTRUCTURE OF FINANCIAL
SERVICES DELIVERY CHANNELS
58,499
%AGE OF ADULTS WHO HAVE
ACCESS TO MOBILE PHONES
33.9
%AGE OF ADULTS WHO OWN A
MOBILE PHONE
…which make these devices the most viable channel to enable
financial outreach
6.5
The majority of Pakistanis
have access to a mobile
phone…
93,100
Branchless Banking provides an opportunity to kick start financial
inclusion
POS
MOBILE PHONE
SUBSCRIPTIONS
In Pakistan, Branchless Banking is characterized by two mobile money
delivery models
OVER THE
COUNTER
MOBILE
WALLET
Register
Put money in account
Conduct Transactions Directly
Convenient, secure,
integrated on- and
offline payments.
Register to provider’s
wallet via BVS.
Add money digitally or
through a CICO point
Conduct transactions from mobile
device without any 3rd party assistance
14
Currently, fewer than 1 in 10 Pakistanis have full service accounts
that can be accessed digitally
7% have digital
finance
accounts*
39.3 % of adult
Bangladeshis have
full-service financial
accounts
6.8% of adults
have digital bank
accounts
Bank accounts are more
likely to be digitally
accessible vs. non bank
accounts
0.3% of adults
have mobile money accounts
An additional 8% of adults
are non-registered mobile
money users
*Digital accounts are those that can be accessed through ATM/debt cards, online or through mobile phones
Overlap representing those who have multiple kinds of financial accounts is not shown.
15
Pakistan’s Branchless Banking policy environment
has come a long way
December 2009: SBP and PTA draft framework for Third Party Solution
Provider system.
2014: Daily limit for Level 0 transactions
increased from Rs. 15,000 to Rs. 50,000
16
November 2014: NADRA
lowered fees.
April 2008: Branchless Banking regulations issued.
?
June 2007: SBP released Policy Paper on Regulatory Framework for Mobile Banking.
November 2006: First public discussions on branchless banking.
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
N
E
X
T
2008 : CGAP invested in Easypaisa; catalytic impact on market
2010: CGAP coordinated an exchange between SBP and Mexican regulators on “level 0” accounts.
2011: KYC requirements relaxed, Level 0 accounts introduced.
December 2012: At CGAP workshop, SBP and PTA assured no introduction
of anti-market regulations.
May 2015: NFIS
launched
2015: SBP gave limited
permission for remote wallet
opening (biometric verification)
April 2015: Pakistan joins BTCA
17
The market is competitive
To Date
2009
October 2009
2010
 8 live mobile money services
April 2010
 4 different models: 3 telco-owned
MFBs, 3 banks, 1 telco-bank
partnership, 1 third-party
2011
 7 product types: Bill Payments,
P2P Transfers, Airtime Top Ups,
Bulk Payments, Loan Repayments,
Merchant Payments, International
Remittances
2012
November 2012
December 2012
2013
April 2013
 New product innovations in the
market:
 Health Insurance
 Life Insurance
 Alternative energy financing
September 2013
2014
 1 Primary, and 1 Secondary
Regulatory Body: SBP, and PTA
January 2014
TIMELINE
18
Within 5 years, the value of mobile money transactions have
reached 3.5% of GDP
160,000
Value (PKR millions)
2.45%
140,000
25
120,000
20
100,000
80,000
15
60,000
10
40,000
5
0.98%
20,000
-
Sep-11
PAKISTAN
2011
2012
2013
30
Mar-12
Bill Pmt Value
Gment Pmts value
Top-up value
Bill Pmt Volume
Top-up volume
Loan repmts volume
Mar-13
Mar-14
P2P Value
Merchant pmts value
Loan repmts value
P2P Volume
Gment pmts volume
Merchant pmts volume
Volume (millions)
3.50%
VALUE OF MM TRANSACTIONS AS % OF GDP
(reference year)
VOLUME AND VALUE OF KEY MM
TRANSACTIONS
19
Use of mobile money seems to be increasing
8,000
900,000
7,000
800,000
700,000
6,000
600,000
5,000
500,000
4,000
400,000
3,000
300,000
2,000
200,000
1,000
100,000
0
0
Dec-11
Av. Value per Transaction
Dec-12
Dec-13
Deposits as of date (PKR in millions)
Dec-14
Av. Volume of Transactions (per day)
While early entrants had first mover advantage, relative market
share is shifting as new providers enter the market
SHARE IN NUMBER OF TRANSACTIONS
Dec-14
MOBICASH
TIMEPEY
UPAISA
HBL EXPRESS
0%
5%
1%
1%
OMNI
3%
4%
EASYPAISA
4%
3%
6%
14%
27%
20%
59%
54%
Dec-13
MOBILE
PAISA
MCB LITE
20
21
MOBILE MONEY
OTC AND M-WALLETS
AGENTS
22
OTC dominates the market
TRANSACTION TYPE (VOLUME)
6,000,000
8,000
M-WALLETS
7,000
5,000,000
6,000
5,000
14%
3,000,000
4,000
3,000
2,000,000
2,000
80%
1,000,000
1,000
0
0
Dec-11
OTC
M-Wallet
Agent Liquidity
Dec-12
Number of Accounts
Dec-13
Dec-14
Deposits as of date
PKR in Millions
4,000,000
6%
Pakistan lags behind leading countries in uptake of m-wallets in
comparison to phone ownership
100
mobile phone
ownership
mobile wallet
usage (transaction in last 90 days)
50
0
Kenya
Tanzania
Bangladesh
Pakistan
India
23
24
Many who do open m-wallets do not use the accounts
This is a common trend, and is seen in mobile markets globally
ACTIVE VS. INACTIVE
ACCOUNTS
42
5,000,000
43
ACTIVE ACCOUNTS AS A % OF TOTAL REGISTERED
ACCOUNTS
42
6,000,000
29
4,000,000
22
22
3,000,000
2,000,000
1,000,000
0
Dec-11
Dec-12
Dec-13
Number of Inactive Accounts
Number of Active Accounts
Dec-14
EAST ASIA
AND
PACIFIC
MIDDLE SOUTH ASIA
LATIN
SUB
EAST AND
AMERICA SAHARAN
NORTH
AND THE
AFRICA
AFRICA
CARRIBEAN
PAKISTAN
25
Who are the users of mobile money in Pakistan?
AGE DISTRIBUTION OF MOBILE MONEY USERS
GENERAL PROFILE OF MOBILE MONEY USERS
77% are men
7.0
6.0
41% live in urban areas
5.0
4.0
%AGE
70% have a primary
education
3.0
20% already have a bank
account
2.0
54% live above the
poverty line
1.0
AGE (YEARS)
90.00
73.00
68.00
64.00
60.00
57.00
54.00
51.00
48.00
45.00
42.00
39.00
36.00
33.00
30.00
27.00
24.00
21.00
>35
18.00
72% are aged 35 and
under
15.00
.0
26
A TYPICAL MOBILE MONEY TRANSACTION
Mobile Wallet
Transaction
OTC
Transaction
Rs. 4214
AMOUNT
Rs. 5181
0.75 km
DISTANCE TO AGENT
n/a
Rs. 21
TRANSPORTATION COSTS
Rs. 0
26 min
TRANSACTION TIME
n/a
3%
TRANSACTION FEE
0% - 5%
89%
SUCCESS RATE
100%
27
MAIN REASON FOR NOT HAVING AN M-WALLET
REASONS FOR STARTING TO USE MOBILE
MONEY
I do not see any
additional
advantages to
registration
4%
40%
47%
OTC users are satisfied with the service
Misc
12%
21%
There is no
point-ofservice/agent
close by
6%
Using such
account is
difficult
8%
6%
RECEIVE MONEY SEND MONEY TO SEND MONEY TO
ANOTHER
ORGANIZATION
PERSON
OR AGENCY
I can have all the
services through
an agent, I do
not need
31%
I never have
money to make a
transaction
12%
MISC.
I do not understand the purpose of this account
12%
I do not need to, I do not
make any transactions
15%
28
MOBILE MONEY
OTC AND M-WALLETS
AGENTS
29
The agent network is growing…
250,000
900
Total: 204, 073
200,000
LOW LEVELS OF EXCLUSIVITY AND
DEDICATION
Kenya
Bangladesh
Pakistan
Exclusivity
87%
44%
34%
Dedication
36%
4%
23%
800
700
600
150,000
500
400
 66% of agents are non-exclusive and are
shared by a median of 3 providers
97, 642
100,000
50,000
0
300
 58% of exclusive agents are in rural areas
200
 Agents are profitable due to non
exclusivity and low operating expenses,
however, transactions per day remain low
at a median of 8 in comparison to
countries like Kenya (46) and Bangladesh
(15)
100
0
Dec-11
Dec-12
Dec-13
Dec-14
Number of Active Agent Outlets
Number of Inactive Agent Outlets
Transactions/Active Agents (in a quarter)
Number of Unique Active Agent Outlets (ANA 2014)
30
Customer satisfaction with agents is high
SATISFACTION WITH MM AGENTS
(n=85)
PROBLEMS WITH AGENTS
60%
22%
I did not get a receipt
50%
40%
52%
46%
32%
Agent system was down
30%
34%
GSM or mobile network was down
20%
10%
0%
1%
0%
40%
Agent was absent
Very
Somewhat Somewhat
Very
satisfied satisfied dissatisfied Dissatisfied
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
However, the agent network still lags behind regional and global
counterparts
ACTIVE AGENT OUTLETS PER 100,000 ADULTS
309
209
441
2013
124
2012
2
42
84
28
18
2011
PAKISTAN
BANGLADESH
KENYA
ACTIVE AGENT OUTLETS PER 1000 KM 2
PAKISTAN
2013
BANGLADESH
KENYA
199
135
89
1,047
347
2012
20
131
42
27
2011
31
32
MOBILE MONEY
OTC AND M-WALLETS
AGENTS
OPPORTUNITIES: INCREASING M-WALLET UPTAKE
New regulations have made it increasingly easy to open a m-wallet
account
LEVEL 0
LEVEL 1
•
•
•
•
•
BVS verified customers can
open their MA by dialing string
Non BVS customers have to
visit Franchise
Instant Registration
•
Only CNIC required
No KYC fields are required for
account opening
Instant Registration
LEVEL 2
•
•
•
•
HOW TO OPEN
•
•
•
Day: 50,000
Month: 80,000
Year: 800,000
•
•
•
Day: 25,000
Month: 60,000
Year: 500,000
ACCOUNT LIMIT
•
•
•
•
CNIC along with other supporting
documents required
Transaction Limits defined
according to customer needs and
documentation
KYC fields must be filled by the
customer
Account instantly registered with
level-1 transaction limits, and
upgraded within 3 days of
document verification
Day: 50,000 – 500,000
Month: 100,000 – 1,000,000
Year: 600,000 – 6,000,000
Max Balance: 300,000 –
3,000,000
33
34
While only 1 in 4 agents are able to help customers open accounts…
ABILITY TO REGISTER CUSTOMERS FOR
ACCOUNTS
Can register accounts
Can not register accounts
25%
Only 26% of those who don’t
open accounts, view mobile
wallets as a threat to their
business
75%
84% of agents who are
capable, do open accounts
…Biometric verification technology has overcome this hurdle for Level 0
account opening
In Q4 of CY 2014 701,510 new M-Wallet accounts were opened
NEW ACCOUNTS IN Q4
Level 0 Accounts
METHOD OF ACCOUNT OPENING
BVS
Other Accounts
Other
5%
37%
63%
95%
The Jan-April 2015
SIM re-verification
drive spurred
providers to start
remote account sign
ups; the results of this
push will be seen in
the coming months
35
36
Opportunity 1: Improving Customer Awareness and
Understanding
37
Brand awareness about MM providers is increasing but low, and
few people have a full understanding of MM
36%
2014
UPAISA
TIMEPEY
MCB LITE
MOBILE
PAISA
6%
10%
16%
12%
5%
OMNI
5%
EASYPAISA MOBICASH
G2 P
P2G
n/a
0%
14%
13%
15%
25%
29%
22%
31%
22%
30%
33%
32%
46%
61%
2013
MOBILE MONEY AS PEOPLE SEE IT
41%
73%
AWARENESS OF MOBILE MONEY BRANDS
HBL
EXPRESS
S E N D RECE IV E
M ON E Y M ON E Y
TO
FROM
OT HE R OT HE R
P EOP LE P EOP LE
PAY
BILLS
BUY
SAV IN G
A IRT IM E
TOP - UP S
M IS C
38
Generally banks are perceived as being more trustworthy than
mobile money
Rather trust
Rather do not trust
Do not trust at all
Neither trust nor distrust
STATE OWNED BANKS
PRIVATE BANKS
20%
M-MONEY SERVICES
9%
15%
17%
19%
FOREIGN BANKS
27%
28%
27%
10%
11%
10%
18%
16%
22%
7%
10%
13%
14%
19%
26%
29%
29%
31%
36%
37%
Fully trust
M-MONEY AGENTS
Being a subscriber to a provider’s parent company, doesn’t mean
that people recognize its MM brand
CELL PHONE PROVIDER OF
CUSTOMER
RECOGNITION OF DIFFERENT MM BRANDS
TELENOR
UPHONE
WARID
ZONG
MOBILINK
EASYPAISA
MOBICASH
UPAISA
MOBILE PAISA
TIMEPEY
89%
58%
43%
31%
36%
85%
60%
52%
37%
42%
89%
62%
53%
48%
50%
84%
63%
51%
44%
53%
85%
61%
37%
29%
32%
Most
recognized
MM service
Second most
recognized
MM servicewww.karandaaz.com.pk
39
40
Even awareness levels of OTC users regarding product mix is low…
95%
PAY BILLS
SAVE
RECEIVE
WAGES
5%
DON'T
KNOW
1%
SEND
PAY FOR
MAKE
INSURANCE
MONEY TO GOODS IN A PAYMENTS
OTHER
SHOP
ON CREDITS
PEOPLE
AND LOANS
12%
16%
17%
25%
G2P
25%
P2G
1%
RECEIVE
MONEY
FROM
OTHER
PEOPLE
28%
BUY
AIRTIME
TOP-UPS
29%
45%
81%
96%
AWARENESS LEVELS OF OTC USERS
NONE
NO
RESPONSE
Communication is needed throughout the m-wallet adoption
process
WALLET
ADOPTION
PROCESS
Unaware
•
EASYPAISA IN PAKISTAN
Launched an ad campaign explaining mobile money
in 2010
Low uptake of wallets, but continued uptake of OTC
•
•
M-PESA IN KENYA
Launched a send money campaign
Only 3% of non-users did not recognize the campaign
after 21 months
TIGO IN DRC
Developed a song in partnership with a popular singer explaining MM, how it could be used in different
situations, and how to access the service
Drove up registration 50%
(UNTARGETED)
USE CASE
CAMPAIGN
TRUE MONEY IN THAILAND
Launched a national ad
attractive only to high
income earners
•
Alienated a number of
potential low income
customers
•
Trial of m-wallet
service
PRODUCT KNOWLEDGE
CAMPAIGN CAMPAIGN
•
•
Knowledge of
how to conduct
transactions via
m-wallet
AWARENESS
CAMPAIGN
•
Understanding
of how m-wallet
could be useful
personally
Awareness of
what m-wallet is
Regular use of
m-wallet
41
42
Opportunity 2: Circumventing Customer Skill Deficits
43
Mobile phone ownership and capabilities affect m-wallet uptake
ABILITY WITH MOBILE PHONES
ACCESS TO MOBILE PHONES
Female
80%
Male
MOBILE OWNERS
ACCESS TO
SOMEONE ELSE'S
MOBILE
30%
NO ACCESS
Send/Receive
Receive
Text
Calls
Messages
62%
63%
34%
Somebody helps me with part
of the activity
4%
3%
2%
Somebody helps me with entire
activity
3%
3%
1%
Do everything myself
12%
9%
32%
38%
Make
Calls
During FGDs, women revealed key details about mobile ownership:
 Most do not see their mobiles as personal devices; mobiles are shared with husbands and children
 Women have to justify calls and messages to family members
Sending a text message is a relatively more difficult task for
individuals
DO YOU NEED HELP IN DOING THESE TASKS?
80%
70%
60%
50%
40%
30%
20%
10%
0%
Dial a number
Add contacts to phone
I never do this on my phone
Very poorly, always need help
Somewhat well, occasionally need help
Very well, never need help
Send a text
Somewhat poorly, often need help
44
Pakistanis find it relatively more difficult to understand messages
from Cellphone Providers, vs. Family and Friends
UNDERSTANDING TEXT MESSAGES
50%
45%
40%
During an HBL experiment with BISP
beneficiaries, it became clear that the
beneficiaries did not understand HBL
messages which contained both text and
numeric information about their
transaction
35%
30%
25%
This phone receipt
was not understood
by recipients
20%
15%
10%
5%
0%
Very Easy
Easy
Friends and Family
Difficult
Very difficult
Cellphone providers
45
46
Moving towards human centered design can circumvent the skills gap
PRODUCT
CENTERED
Business
Viability
Technology
Feasibility
These are examples
of communication of
amount paid that are
more transparent
because illiterate BISP
recipients are more likely
to understand them.
People
Desirability
HUMAN
CENTERED
Business
Viability
One of the findings of the HBL HCD experiment, was that
redesigning products like receipts, can significantly improve
illiterate people’s understanding
Technology
Feasibility
New User Interface Design innovations may revolutionize the mobile
wallet experience and encourage uptake
TYPES OF MOBILE PHONES USED IN PAKISTAN
Don't Know/Refused
Globally, smartphone penetration
2.2
Smart Phone
will increase 1.7 fold by 2017
3.3
Feature Phone
28.4
Basic Phone
76.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
THE MOVE TO SMARTPHONES OPENS UP THE POSSIBILITY OF IMPROVED UI DESIGN BASED ON HCD
BEFORE
GRAPHICS
Use icons or imagery to overcome
literacy barriers
CONVENIENCE
Leverage smartphone capabilities to
move away from complicated USSD
menus
ENGAGEMENT
Leverage social networks and/or
gamification to keep customers
engaged, and minimize trust barriers
1
2
3
4
5
6
7
8
9
AFTER
Smartphone
applications, and new
products for MM are
already present and
can be adapted to the
Pakistani context.
Some key examples
are:
 Globe’s Gcash
(application Philippines)
 Zuum (application Brazil)
 pesaDroid
(product)
 Mledger (product)
47
48
Opportunity 3: Diversifying Product Mix
More Pakistanis have borrowed and saved in the last year, than
those who have received or sent remittances
16%
25%
32%
50%
%AGE OF PAKISTANIS WHO HAVE ENGAGED IN THIS FINANCIAL BEHAVIOUR
(LAST 12 MONTHS)
BORROW
SAVE
RECEIVED REMITTANCES
SENT REMITTANCES
49
50
Yet the product mix offered by all providers remains skewed towards
payments
Bill Payments
Airtime Purchase
Money Transfer through Agents
Formal Account
Money Transfer to Bank Accounts
Donations
Salary Disbursement
Life Insurance
ATM Card
Retail Payments
International Remittance Transfer
Ticketing (Airlines, railway etc.)
Savings Account
Health Insurance
Corporate Services other than Salary Disbursement
Internet Banking
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
USING WALLETS ALLOWS PEOPLE TO EFFICIENTLY ACCESS A WIDER PRODUCT MIX
Mobile Wallet
Product Mix
OTC
Product Mix
AVERAGE COSTS
Rs. 21
26 min
3%
Bill Payments
Airtime Purchase
Money Transfer through Agents
International Remittance Transfer
Formal Account*
Money Transfer to Bank Accounts
Donations
Salary Disbursement
Life Insurance*
ATM Card
Retail Payments
Ticketing (Airlines, railway etc.)
Savings Account*
Health Insurance*
Corporate Services other than Salary
Disbursement
Internet Banking
AVERAGE COSTS
Rs. 0
n/a
0% - 5%
52
Opportunity 4: Promoting Interoperability
Success in achieving interoperability remains limited across the
globe
Interoperability is defined as “the possibility to transfer money between
customer accounts at different mobile money schemes and between accounts at
mobile money schemes and accounts at banks”
- GSMA report on Implementing Mobile Money Interoperability, 2013
INTEROPERABILITY IN PAKISTAN
 OTC services are available to all customers
 Mobile accounts are “closed loops” meaning that they are restricted to customers of a particular mobile
operator
o IBFT (Inter Bank Funds Transfer) through 1-Link offers significant potential but is not yet live on all
mobile wallets
53
Recent developments prove that interoperability can spur mobile
money use
In Tanzania…
2012
2013
2014
2014: Tanzania becomes the “first country to
successfully develop and implement standard
business rules for interoperable MFS
transactions”
- IFC case study on Achieving Interoperability, 2015
2011/2012: Tigo
starts
conversations
about
interoperability
•
•
•
•
Nov 2013: First
bilateral
interoperability
agreement between
Tigo and Airtel signed
Jun 2014: Tigo,
Airtel and Zantel
announce
interoperability
agreement
Aug 2014: Tigo and Airtel
launch W2W interoperability
using ATL campaigns
“Exponential increase post launch
Widespread acceptance and awareness
High visibility due to press release
Exponentially faster adoption than that of Voucher
transaction”
- GSMA report on Operator’s Journey, Nov 2014
TIGO/AIRTEL: COMBINED VOLUME AND VALUE OF P2P TRANSACTIONS
54
55
The Tanzanian case reveals some key ingredients for achieving
interoperability
PHASE I:
COLLABORATION
PHASE II:
DEVELOPMENT
PHASE III:
IMPLEMENTATION
Allow all industry players a voice in
creating interoperability rules and
regulations
Have an industry champion
Pilot the initiative prior to
commercial launch
Successful execution based on
foundation built in Phase I and II
Identify a neutral broker to act as a
facilitator
Market the new initiative to
increases customer awareness
Ensure clarity of definitions across
parties
56
Opportunity 5: Digitizing Government to Person (G2P)
Transfers
57
Global comparisons reveal the scope for G2P digitization
“G2P payments have the most potential to accelerate
financial inclusion in the short to medium term as it is
easier for government to dictate how it pays recipients than
to influence how other parties transact.”
- McKinsey & Company report on Government Payments in Nigeria, 2014
BANGLADESH
LOW INOCME
PAKISTAN
INDIA
Used an account to receive government transfer
Used an account to receive wages
18%
6.4%
4%
3.6%
1.4%
1.8%
3.2%
1%
1.3%
0.4%
USING ACCOUNTS FOR OFFICIAL TRANSFERS (%)
The Kenyan Government
has been a huge
proponent of going
“cash lite” since 2008. As
of 2013 the value of
mobile money
transactions equaled
50.03% of Kenya’s
GDP in the same year.
KENYA
58
A large proportion of G2P payments in Pakistan can be digitized
LEVEL OF DIGITIZATION OF KEY GOVERNMENT PAYORS 2013
Cash
Digital
6%
30%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
CDCP
ARMY JAW ANS &
JCOS SALARIES
AGPR SALARIES
PUNJAB PROV
SALARIES
ARMY JAW ANS &
JCOS PENSIONS
AGPR PENSIONS
PUNJAB PROV
PENSIONS
NAVY PENSIONS
AIRFORCE
PENSIONS
FRONTIER
CONSTABULARY
PENSIONS
94%
70%
BUM UNICEF
BISP
Social Protection Cash Transfer
7 million beneficiaries
Government Payroll
Government Pension
EOBI PENSIONS
BENEFICIARIES
The benefits of G2P digitalization include and extend beyond
Financial Inclusion
GOVERNMENT
A 2014 McKinsey study on
G2P payments in Nigeria
2
important lessons for
those using G2P
digitization as a way to
also spur digital account
adoption
BANKS
revealed that 3 distinct
groups will benefit from
G2P digitization
i
Ensure a value
proposition for
customers
ii
Communicate
sufficiently with
customers
20 million direct
beneficiaries
US$10-20 million p.a.
in additional benefits
US$600-800 million
p.a. in additional taxes
US$150-160 million
p.a. in additional
revenue
59
60
THANK YOU

Using Mobile Money to Promote Financial Inclusion in Pakistan

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