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Mahindra Comviva-Promoting Financial Inclusion in Peru - V1.2 - October 2013
Mahindra Comviva-Promoting Financial Inclusion in Peru - V1.2 - October 2013
TM
mobiquity mMoney deployments best practices
2
Scale of the opportunity
--20% of the populace has access to financial services
--Enormous cash conversion opportunity
Source: World bank Global Findex 2012 Note: Adults refers to people above the age of 15
3
Quintiles: Each quintile represents 20% of population. Quintile I represents poorest 20% and quintile V represents richest 20% of population
Unbanked have financial service needs, but
lack access
Need ways to: Current solution:
Someone in family
12% -20
already has an account
Affordability, trust and convenience are important factors for deepening banking penetration
Source: World bank Global Findex 2012, BBVA, CGAP, BCG analysis 5
Mobile can address infrastructure deficit
-- Decreasing cost and increasing power is driving adoption of mobile for
financial services delivery
6
Extend a range of products
-- Issue prepaid value electronically that can be redeemed for goods and services
-- Cement formalized financial relationship with unbanked consumers
Banked 20%
Affluent 2% Speed and convenience of payments
Cosmopolitan Various payment instruments converges on mobile
professionals 7% Informational services – Bank statement, transaction SMS notification
Transactional services – Fund transfer, utility and merchant payments
Rising strivers Personalization - Offers, location based services, loyalty programs
20%
MFS for unbanked customers
Unbanked: 80%
Access to formal financial services
Working
30% Safe storage of money
families
Single payment instrument
Send and receive money (P2P, B2B, G2P, Salary)
Payments (bills, merchants, recharge etc)
Asset based products – saving and insurance
Basic 41% Liability based products – Loan and credit
survivors
Merchant
Banked Unbanked
Employer/
Govt
Access banking
services
Banks
66% of Peru’s GDP is generated by the informal economy - Bringing the informal economy
into an electronic transaction system would capture massive amounts of payment flows
9
Multiple issuers in the market
Banks
39 banks: 16 commercial banks, 13 municipal saving banks, 10
rural saving banks
Authorized to offer a full range of mobile transactional and
banking services
10
Banks have a distinct advantage
-- Stakeholders in MFS ecosystem have distinct advantages but up to a point
-- Partner with efficient entry economics but plateau quickly, banks have financial
sophistication but are unable to get early economics to work
Diminishing benefits as
Driven by simple individual actors go beyond
products that leverage core product competencies
MNO airtime distribution
Driven by complex
infrastructure
products that leverage
bank transaction and
account systems
12
Levers to displace cash
13
Tips for take-off
Customer experience
Awareness on service features and benefits
Contextual service portfolio
Simplicity: easy to sign up, easy to use
Device agnostic
Affordable: Prices lower than other channels
Agents
Choose brand ambassadors - not all can sell financial services
Employ mix of direct distribution model and third party model
Educate and incentivize
Link commissions to activation and transaction completion
rather that customer registration
Offer loyalty points (prizes on reaching targets/milestones)
Track campaign effectiveness/per agent
Train customer regularly on service features and benefits
Channel/Distribution Management
System flexibility
Flexibility to change the distribution hierarchy
Send commissions in near real-time
Float and liquidity management
Frequent visit by agent network managers to
rebalance cash and float
14
Phased services approach critical to
drive growth
Saving Loyalty
account card
Salary
transfer Credit
Merchant Insurance
payment
G2P
payment
Utility
payment
P2P
transfer
15
In conclusion
16
Case studies
Extending the role of mobile Deepening
financial
Inclusion
17
Branchless Banking from mobile
Tapping into India’s domestic remittance market
Need Solution Results
Third largest private sector Launched ‘ MyCash’ a convenient, low- Launched service pilot along a
bank in India cost, mobile money transfer product for single inter-city remittance corridor
Improve NII performance by unbanked migrants together with one of (Mumbai-Allahabad)
mobilizing zero interest mobile- India’s largest GSM operators, with 128 With 2,000 registered users, the
wallet accounts million customers service is handling 3,000
Bring unbanked, domestic Allows users to conduct wallet-based transactions monthly
migrants, a representative and over-the counter transactions at Average transaction size is USD 20
base of 100 million people into authorized partner outlets using a USSD
the banking mainstream service code
1000
Rapid Urbanization Bank Branch Spread
880
815 2000
750
636 590 1500
Millions
500 1000
290 340
220 500
0
0 Mar- 2008 Mar -2009 Mar- 2010 Mar-2011 Dec-11
1991 2001 2008 2030
Rural Population Urban Populaton Rural Semi-Urban Urban Metro
Balance
Deployed mobiquityTM to extend convenient banking Inquiry
services and drive financial inclusion 73.9%
Our
The service allows customers to conduct fund-based
solution transactions (pay bills, transfer money to own and third
party account) as well as non-fund transactions (balance
inquiry, mini statement, order cheque book)
19
Formalizing inbound remittances in Americas
15.416.4 Remittance inflows
Remittance inflows
Remittance as a % of
10 16.7% 15.9% 20%
8.0 8.1 9.1
(US$ bn)
6.3 4.9
5 9.6% 10%
GDP
1.9 1.0 0.6 2.9
3.9
Remittance values are sum of remittance inflow to Honduras, Guatemala and El Salvador
Source: World Bank 2011 20
from four major remittance corridors
Partnered with Western Union for services
Cash
Cash -out Agent
-in
Use for
mWallet
services
IR contributes 30% to beneficiary household income, deepens Tigo entrenchment into the household
Partnership with Western Union facilitates expansive network of 510,000 agents worldwide
Customers can encash money at 6,000+ Tigo agents or use the funds for mWallet transactions
USSD storefront supports Spanish
Customers using IMT receive free international minutes along primacy corridors
21
US$ 9.3 million received in remittance in a year
Transaction values
12,000 1,500
IMT transactions
1,102 1,131
(‘000 US$)
718 684 917 1,006 938
8,000 730 826 1,000
671
235 300
4,000 7,984 8,178 500
4,576 6,145 6,799 4,731 6,141 6,880
1,512 1,906 3,935 3,915
- -
Oct/12 Nov/12 Dec/12 Jan/13 Feb/13 Mar/13 Apr/13 May/13 Jun/13 Jul/13 Aug/13 Sep/13
Market landscape
13.3 mn 12.9 mn
populati mobile
on connectio 3.1 mn
ns banked
Narrow Wide
Gap Gap
23
Digitizing payments in Zimbabwe
Econet , Zimbabwe’s largest mobile operator with 8 million subscribers launched EcoCash, enabling
customers to transfer money, pay merchants and utilities, receive salaries and buy airtime
Econet adopted a comprehensive strategy to drive service adoption:
Focus on distribution
7,300 agents pan-Zimbabwe; 40% located rurally
Partnership with post office - Service available over 300 ZimPost outlets
Incentivize agents
80% revenues given in agent commissions to build a motivated agent network
Extra perks such as solar kiosks to top performing agents
Aggressive marketing
Use of 300 brand ambassadors to educate people and register customers
Promotions to increase transaction frequency – 25% off on bus fare, $100
to 100 people
24
22% of the country’s GDP flows over Ecocash
2.8 million customers (33% of the Econet’s
customer) uses Ecocash
Processes USD 2 billion transaction value
annually – equivalent to 22% of Zimbabwe's
GDP\
Channels US$ 100 million flows monthly to
rural Zimbabwe
Bought 12% ex-banked into the financial
mainstream
31.8% $282
2.5 26.4% 28.7% 20 $247 $242
26.1% 30% 300
2.0 15 $190
3.6 3.7 3.7 4.5 200
1.5 2.8 20% 10 2.9
2.3 2.6
1.0 1.9 2.1 11.8 100
10% 5 9.5 10.4 10.3 10.6
0.5
0 0
0.0 0%
Sep-12 Dec-12 Mar-13 Jun-13 Aug-13
Apr/13 May/13 Jun/13 Jul/13 Aug/13
Non financial transaction volume (mn)
EcoCash customers (million) Financial transaction volume (mn)
EcoCash service penetration (%) Total transaction value (USD mn)
25
Advancing financial services in Guyana
unbanked segments
Wallet linked to
NFC existing account
QR code Banked Cash based
wallet for
unbanked
USSD
Under-banked/
Flexible access Unbanked
mechanisms
Addresses user
preferences J2ME
P2B
SMS payments
Domestic & international
G2P Money transfers
IVR payments
P2P Bill and merchant payments –
STK payments remote & proximity
Salary transfer
28
Mahindra Comviva - leader in MFS
Vodafone M-Shop
Vodafone, India
MobiCash
• Bill payment
Maroc Telecom, Morocco
• retailer payment
Hello Money
• IMT • mTicketing
Barclays, India
• DMT
• Bill payment • mBanking
Orange Money Idea MyCash
• retailer payment • Fund Transfer
Orange, Niger Idea, India
• Bill payment
• DMT • DMT
Orange Money
Orange, Mali • Bill payment
Tigo Money
Tigo, Guatemala MobiCash
• DMT Tigo Cash Grameenphone, Bangladesh
• DMT Tigo, Rwanda
• Bill payment
Orange Money • DMT
Orange, Senegal • mTicketing
Tigo Money
Tigo, El Salvador • DMT Mobile Cash
• Bill payment Banglalink, Bangladesh
• DMT
Hello Money
Orange Money • IMT
Barclays, Kenya
Tigo Money Orange, Ivory Coast • Bill payment
Tigo, Honduras • mBanking • mTicketing
• DMT • Fund Transfer • Insurance Payment
• DMT • Bill payment • Bill payment
• retailer payment
Tigo Pesa
Tigo, Tanzania
TM
Orange Money
• DMT
Mahindra Comviva mobiquity deployments Orange, Cameroon
• Bill payment
• DMT
Country with single deployment • Bill payment Orange Money Orange Money
• retailer payment Orange, Botswana Orange, Madagascar
Country with two deployments • DMT
Key
• DMT
• Bill payment • Bill payment •DMT: Domestic money transfer
Country with three deployments •IMT: International money transfer
30
Thank you
Visit us at www.mahindracomviva.com
Contact us at
ricardo.madronero@mahindracomviva.com
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