Mobile payment opportunity in the midle east and africa(mea) region

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  • 1. 1| Copyright © 2010 Grail Research, LLC Mobile Payment Opportunity in the Middle East and Africa (MEA) Region February 2010 Movotek Innovations Limited Suite 4, Level 7, Bright Way Tower, Mong Kok Road, Hong Kong Email: info@movotek.com Web: www.movotek.com
  • 2. 2| Copyright © 2010 Grail Research, LLC  The Mobile Payment (M-Payment) market in the Middle East and Africa (MEA) region is expected to grow rapidly over the next few years • MEA M-Payment transaction value is expected to grow at 66% annually over the next few years, reaching USD 28.1 billion or 11.3% of the global value by 2012  Key segments of the M-Payment market are M-Remittance (84% of the expected transaction value by 2012) and M-Money, which includes retail purchases, airtime top-ups and bill payments via mobile phone  Underlying drivers supporting this rapid growth in the market are: • The large (and growing) gap between bank penetration and mobile penetration in the region • A large number of contractual workers who typically do not have bank accounts • A sizeable immigrant population making regular remittances to their home country • The relatively low usage of credit cards in the region  The resulting economics and ROI for M-Payment service providers are attractive • M-PESA, developed with an initial investment USD 3.2 million by Vodafone, generated USD 42.5 million in M-Payment revenue for its affiliate Safaricom in Kenya (in 2009)  Attracted by the fundamentals of the market and validation of the business model by players like Safaricom (M-PESA), many of the telecom companies in the region have introduced M-Payment services  However, the market is still in the early stages of development and there is plenty of opportunity for new and existing players to create and capture value through a number of different business models Mobile Payment Opportunity in the MEA Region Executive Summary
  • 3. 3| Copyright © 2010 Grail Research, LLC Table of Contents  Market Opportunity  Competitive Landscape  Business Models  Case Studies  Challenges For more information, please visit http://www.movotek.com
  • 4. 4| Copyright © 2010 Grail Research, LLC Gross M-Payment Transaction Value by Region and Segment  Emerging markets such as Asia, MEA, and South America are expected to capture a global M-Payment market share of 65% by 2012 • M-Payment transaction value in the MEA region is expected to grow at a healthy rate (CAGR of ~66% over 2008-2012)  The expected increase in gross M-Payment transaction value will be driven by the rise in M-Payment subscribers and the greater value transacted per M-Payment user Market Opportunity Expected Growth in M-Payment Transactions USDbillion 151.6% 51.6% Africa Middle East CAGR 2008-12 84% 1% 4% 11% M-Money Segment Gross M-Payment Transaction Value1 by Region, 2008–2012E M-Payment Transaction Value2 by Segment, 2012E 14.5 18.5 18.5 2.6 5.0 9.6 4.23.5 0.70.2 0 8 16 24 32 40 +66% 2012E 28.1 2011E 23.5 2010E 17.1 2009 4.9 2008 3.7 2 1 RetailOthersTop upRemittance M-Remittance Segment  The M-Payment market is defined as: • M-Remittance, which includes international and domestic money transfers • M-Money, which includes retail purchases, top-ups, utility payments, and B2C transfers  M-Remittances comprise the majority of the market with USD 23.6 billion in expected transaction value by 2012 Note: 1The data has been sourced from an image and may not represent the exact values; 2Estimated Values – Grail Research Analysis Source: ‘M-Payments surging ahead: distinct opportunities in developed and emerging markets’, Arthur D Little, Aug 2009; ‘Mobile Commerce in MEA’, Delta Partners, Jan 2009; ‘Dialed into EMEA telcos’, Macquaire, Mar 2009; Grail Research Analysis The MEA region represents a significant opportunity for M-Payment services with transaction value expected to grow from USD 3.7 billion in 2008 to USD 28.1 billion in 2012 The global M-Payment transaction value is expected to reach USD 249.1 billion by 2012, implying an 11.3% share for the MEA region
  • 5. 5| Copyright © 2010 Grail Research, LLC Market Opportunity M-Payment Market Segments USDbillion 23.6 19.4 13.7 4.23.6 0 8 16 24 32 40 +60% 2012E2011E2010E20092008  Currently, mobile top-ups and other value added services form a major portion of the M-Money market in the MEA region  Retail purchase via mobile phone is expected to witness the highest growth in M-Money transactions • The transaction value of retail purchase is expected to rise from USD 26.3 million in 2009, to USD 405.7 million in 2012  Several companies are considering transferring employee salaries to their mobile phones. This may further increase the value of M-money transactions in the region M-Remittance Transaction Value, 2008–2012E M-Money Transaction Value, 2008–2012E USDbillion  In the Middle East, 70% of the recently launched M-Payment initiatives are related to money transfer through mobile, indicating a focus on M-Remittance related services • International transfers are expected to form a major part of M- Remittances because of the large immigrant population  In Africa, domestic remittances are expected to form the majority of M-Remittances, as a result of the substantial unbanked population Note: 1Estimated Values – Grail Research Analysis Source: ‘Mobile Commerce in MEA’, Delta Partners, Jan 2009; Business Intelligence Middle East; Middle East Mobile Money; Grail Research Analysis 9% 24% 67% While remittances dominate M-Payment transactions, M-Money transactions are expected to grow at a faster rate, as value added services like retail purchases via mobile phone will become more popular M-Money Transaction Value1 in the MEAM-Remittance Transaction Value1 in the MEA 21 Others Retail Top-ups  In the Middle East, 70% of the recently launched M-Payment initiatives are related to money transfer through mobile phones, indicating a focus on M-Remittance-related services • International transfers are expected to form a major part of M- Remittances because of the large immigrant population  In Africa, domestic remittances are expected to form a major part of M- Remittances, as a result of the substantial unbanked population 4.5 4.1 3.4 0.7 0.1 0 2 4 6 8 10 +164% 2012E2011E2010E20092008E
  • 6. 6| Copyright © 2010 Grail Research, LLC  M-Payment is a convenient ‘funds transfer’ option in areas with low bank accessibility  The large and growing gap between the number of mobile subscribers and bank account holders make MEA an ideal market for M-Payment service providers Market Opportunity Drivers of the M-Payment Opportunity Note: 1Calculated by Grail Research and refers to Workers' remittances, compensation of employees, and migrant transfers, debit; 2 Made primarily through credit cards Source: Business Intelligence Middle East; Gartner; IE Market Research; Arthur D Little; ‘Mobile Commerce in MEA’, Delta Partners, Jan 2009; First Arabic Financial Daily; International Trade Administration; International Organization for Migration ; World Migration Report 2008 Large Number of Transient Workers High Mobile Penetration & Low Bank Penetration 52% 30% 30% 22% 0% 35% 70% Middle East Africa Population’s Reluctance to use Credit Cards  Adoption and usage of credit cards is low in the MEA region • USD 6.9 billion in electronic payments2 in the region in 2009 represented only 1.8% of the global e-payment transaction value  Low credit card usage may be attributed to behavioral & religious reasons  Given the high mobile penetration, M-Payment can be a popular alternative to credit cards 1 4 Bank PenetrationMobile Penetration Gap in Mobile and Bank Penetration in MEA, 2007 2  Transient workers, form a significant proportion of the workforce in the Middle East, accounting for over 50% of labor force in the GCC  These workers have low/irregular incomes and can benefit from M-Payment as no minimum balance or regular installments are required  Contractual workers typically make frequent low- value transactions that have lower risk, thus making M-Payment a preferred transaction medium In MEA, factors such as the large number of migrants, transient workers and a substantial (and rapidly growing) mobile user base are driving the growth of the M-Payment market  The MEA region currently has ~40 million migrant workers, leading to a substantial outflow of funds from the region • M-Payment service providers can capture a sizeable share of the ‘international remittance’ market, given the cost advantage over traditional funds transfer mechanisms Large Immigrant Population in Need of Remittance Services 3 39.737.435.3 31.229.8 0 25 50 20082007200620052004 Remittances1 Outflow from MEA, 2004–2008 USDbillion
  • 7. 7| Copyright © 2010 Grail Research, LLC 427.5 587.5 702.9 122.5 0 400 800 1,200 1,600 2012E 1,280.0 2011E 773.0 2010E 466.9 2009E 282.0 2008 170.3 93.5 Investment for Money Transfer Platform Development Market Opportunity Economics and ROI in the M-Payment Market Market Potential (Range) for the M-Payment Services Sector in MEA, 2008–2012E USDmillion Market Potential for M-Payment Service Providers in MEA Returns – M-PESA in Kenya  In 2003, Vodafone invested USD 3.2 million to develop a cash transfer platform (other costs such as setting up infrastructure, e.g., POS and advertising not included). The M-PESA offering was piloted in 2006 and formally launched in 2007. This money transfer platform enabled: • Provision of cash balance on mobile phones (M-Wallet services) • Transfer of money to third parties such as non-Vodafone customers and non M-PESA account holders • Airtime purchases for an individual’s or a third party’s phone  In FY09, Safaricom, an affiliate of Vodafone (40% stake) generated USD 42.5 million in revenue from M-PESA with an estimated USD 4.26 million1 subscribers • This translates to an average incremental ARPU of USD 9.98  M-Payment penetration is ~46% of Safaricom’s subscriber base (as of Mar 2009) ROI on M-Payment Services – The Case of M-PESA Safaricom’s M-PESA service illustrates the strong ROI experts believe M-Payment providers can expect. M- Payment service providers are projected to capture 2.5%-4.5% of the transaction value by 2012 Note: 1Estimated Values – M-PESA customers for each month have been averaged out Source: ‘Mobile Commerce in MEA’, Delta Partners, Jan 2009; ‘Progress of Funded Projects’, Vodafone Group, Nov 2006; Grail Research Analysis Market potential for M- Payment services may range from USD 702 million to USD 1,280 million in 2012 (2.5%- 4.5% of the total transaction value) Range
  • 8. 8| Copyright © 2010 Grail Research, LLC Table of Contents  Market Opportunity  Competitive Landscape  Business Models  Case Studies  Challenges
  • 9. 9| Copyright © 2010 Grail Research, LLC Potential Opportunity – Gap Between Mobile and Bank Penetration, 2007 Zain Batelco Etisalat du Wataniya Telecom Orange MTN STC Jordan UAE # of Bank Branches1: 727 Bahrain # of Bank Branches2: 95 Kuwait # of Bank Branches3: 554 Saudi Arabia Oman Oman has two domestic mobile operators: Oman Mobile and Nawras. However, M-Payment services are not currently offered in Oman Competitive Landscape Telecom Service Providers in the Middle East Country Players  Mobile Network M-PaymentNote: 1Data for 2009; 2Data for 2003; 3Data for 2007 Source: ‘Mobile Commerce in MEA’, Delta Partners, Jan 2009; ITU; World Bank; IMF; Alrroya; Grail Research Analysis                              While a number of Telcos in the Middle East offer M-Payment services, there is significant opportunity for both new and existing players to capture value from this market 33% 77% 62% 101% 193%1 37% 77% Mobile Penetration Bank Penetration 64%2 97%3 In Feb 2009, STC announced plans to launch M-Payment services in Kuwait through its subsidiary - Viva # of Bank Branches in country ?
  • 10. 10| Copyright © 2010 Grail Research, LLC Competitive Landscape in the Middle East M-Payment services in the Middle East have been growing in the last few years; however Saudi Arabia continues to be an untapped market despite favorable fundamentals (mobile penetration, migrant population) Note: Pricing details are represented in USD using on-date conversion rate from oanda.com Source: ‘Value-Added Service and Applications’, GSA, Jan 2009; ‘Etisalat mobile payment’, AME Info, May 2007; ‘Visa International and Fastlink debut new mobile payment service in Jordan’, AME Info, May 2005; Primary Research Interviews with industry experts/ operators; ‘Consumers not prepared to pay for mobile banking’, egovonline, Jul 2009 Competitive Landscape Incumbent M-Payment Service Offerings in the Middle East Syria Iraq Jordan Israel Lebanon Saudi Arabia Yemen Oman U.A.E. Qatar Bahrain Kuwait  Mobile operators in Saudi Arabia have not yet launched M-Payment services. The market has high mobile penetration (120% in 2008) and a large immigrant population (over 6 million in 2007), thus providing significant opportunity for service providers  According to a survey in 2009, 67% of people in Saudi Arabia indicated a ‘high comfort level’ in conducting financial transactions via mobile phones Saudi Arabia  Zain: Launched in May 2005, Zain-M-Payment service allows users to transfer airtime to other customers. Zain charges USD 0.20 per transaction Jordan  Zain: Launched in 2006, Zain’s M-Pay allows users to recharge airtime with funds from their bank account  Wataniya Telecom: Launched in Feb 2006, Wataniya Telecom’s GoDo! portal allows users to access their bank accounts through mobile phones Kuwait  Du: Launched in Apr 2007, du’s M-Payment services allow users to pay bills and recharge airtime  Etisalat: Launched in May 2007, Etisalat’s M- Payment services allow users to pay their mobile bill via a pre-registered credit card UAE  Zain: Launched in Nov 2008, Zain Me2U offers remittance, top-ups and utility payment services. It charges USD 0.15 for money transfer in Bahrain. International remittances start at USD 2.64 per transaction. In 2009, the offering had between 3,000 and 4,000 customers  Batelco: Launched M-Payment services in Jul 2004, including a mobile bill pay service Bahrain
  • 11. 11| Copyright © 2010 Grail Research, LLC Potential Opportunity – Gap Between Mobile and Bank Penetration, 2007 Zain Batelco Etisalat Vodafone / Vodacom Orange MTN Glo Mobile Maroc Telecom Millicom South Africa Tanzania Egypt Kenya Uganda Nigeria Mauritius Morocco Competitive Landscape Telecom Service Providers in Africa  Mobile Network M-Payment Country Players                               Note: 1Data for 2008. Bank penetration is the average cited in news articles; 2Data for 2009 Source: Mobile Commerce in MEA’, Delta Partners, Jan 2009; New Vision; Grail Research Analysis  Most African markets have low bank penetration and a rapidly growing mobile subscriber base, making them attractive markets for M-Payment offerings 95% 46% 5% 22% 30% 15% 32% 10% 74% 54% 39%2 16%2 48%1 20%1 Mobile Penetration Bank Penetration     59% 28%     Vodafone offers M-PESA service through its affiliate Safaricom
  • 12. 12| Copyright © 2010 Grail Research, LLC Africa has been a test bed for M-Payment services. The early success of M-PESA and Glo has motivated pan- African rollout of these services and also served as case studies for M-Payment deployment globally Competitive Landscape Incumbent M-Payment Service Offerings in the Africa Niger Egypt Kenya Tanzania Nigeria Malawi Uganda South Africa Sierra Leone Competitive Landscape in Africa  MTN: Launched in Aug 2005, MTN-Mobile Banking allows users to check balance, view bank statements and transfer money. MTN charges USD 1.90 per transaction  Vodacom: Launched in Aug 2005, Vodacom- PayPoint allows users to accept payments from credit cards. The service costs USD 6.44 per month South Africa  Maroc Telecom: Launched in Jan 2010, Maroc Telecom is the first M-Payment service in Morocco. The service allows money transfers and bill payments through mobile phones Morocco  MTN: Launched in 2009, MTN Mobile Money service in Uganda allows users to transfer money. For money transfers above USD 5, MTN charges USD 0.40 per transaction. MTN had 100,000 customers as of Sep 2009  Zain: Launched its M-Payment services – ZAP in Uganda (2009) and in Niger, Malawi and Sierra Leone (2010). Zap enables customers to transfer money and manage bank accounts Uganda, Niger, Malawi and Sierra Leone  Glo Mobile: Launched in Mar 2005, Glo M- Banking allows users to access bank accounts, transfer money and buy airtime at a flat rate of USD 0.27 per request Nigeria  Millicom Mauritius: Launched in 2009, the Emtel Mobile Banking service allows users to conduct bank transactions through their mobile phones Mauritius  Safaricom: Launched in Mar 2007, Safaricom’s M- PESA allows users to access bank accounts and transfer money. Safaricom charges USD 0.37 for money transfer of up to USD 440 to a registered M-PESA user. It had 8.5 million customers as of Nov 2009  Zain: Launched in Feb 2009, Zap allows users to transfer money and manage bank accounts. Transaction fees of USD 0.13 are charged for the transfer of money between Zap accounts Kenya  Vodacom: Launched in Apr 2008, Vodacom’s M-PESA enables customers to transfer money. Vodafone charges transaction fees up to USD 0.14 for transferring funds to a registered customer  Zain: Launched in Feb 2009, Zain-Zap allows users to transfer money and manage their bank accounts Tanzania  Vodafone: Launched in 2007, Vodafone Mobile Banking allows users to access bank accounts and transfer money. Vodafone does not charge fees for transferring money. However, it charges a 2% transaction fee for recharging the M-Wallet account Egypt Note: Pricing details are represented in USD using on-date conversion rate from oanda.com Source: Value-Added Service and Applications’, GSA, Jan 2009; ‘Implementing successful millionT initiatives’, Octopus Consulting, Sep 2009; Zain; Primary Interview with customer care executives of telecom operators
  • 13. 13| Copyright © 2010 Grail Research, LLC Table of Contents  Market Opportunity  Competitive Landscape  Business Models  Case Studies  Challenges
  • 14. 14| Copyright © 2010 Grail Research, LLC Business Models Introduction to the Value Chain Three business models for M-Payment services have emerged; each differs based on the type of organization that plays the role of Issuer, Acquirer and Payment Network Business Model Role of Acquirer Payment Network Role of Issuer Operator-Centric Mobile Operator Mobile Operator Mobile Operator Financial Institution-Centric Financial Institution Financial Institution Financial Institution Collaboration Mobile Operator or Financial Institution Financial Institution Mobile Operator or Financial Institution Key Business Models – M-Payment Services A Key Parties and Their Role in an M-Payment Transaction  Payment networks connect and switch transactions between the acquirer and the issuer  Acquirers provide Point of Sale equipment to the merchant and charge the issuer for the transaction  Upon receipt of payment, acquirers credit merchants’ accounts Customer  Customers initiate the purchase or transaction through the mobile application/solution/SMS Customers receive funds on their mobile phones. They buy credits through the purchase of a ‘pre-paid balance’ or receive a charge in their mobile bill Transaction / Purchase  Merchants accept payments from customers and record them through Point of Sale equipment (reader or a mobile phone)  New technologies such as ‘Near Field Communication’ enable customers to use their mobile phone as a smart card B C Issuer (Bank/ Mobile Operator)  Issuers provide credit (M-Wallet) to customers on their mobile phones and manage their accounts Merchant Payment Network (Bank, mobile operator or financial institution such as Visa/ MasterCard) Acquirer (Bank/ Mobile Operator) http://www.movotek.coom MOVOTEK
  • 15. 15| Copyright © 2010 Grail Research, LLC Business Models Operator-Centric Model Customer Merchant M-Wallet Provision by Mobile Operator or Customer conducts a transaction using a mobile phone Mobile Operator (Acquirer + Payment Network + Issuer) Merchant transfers transaction information Operator adjusts customer’s mobile balance or charges the customer on his/her bill Customer has the required credit on his/her mobile phone Customers go to the mobile operator’s agent to receive a mobile balance in exchange for cash Operators charge customers for transactions via their mobile bill Operator credits merchant’s account 1 2 The Operator-Centric Model is particularly attractive in countries with weak a financial services infrastructure, because the telecom operator manages the entire M-Payment value chain Source: ‘Proximity Mobile Payments Business Scenarios: Research Report on Stakeholder Perspectives’, Smart Card Alliance, Jul 2008; ‘The M-commerce reality in the MEA’, Comm.ae, Feb 2009 Operator-Centric Model  In the ‘Operator-Centric Model’, the telecom operator manages the entire M-Payment value chain • The operator plays the role of acquirer, payment network and issuer. The operator is also responsible for providing the Point of Sale (POS) equipment to merchants  Examples: NTT DoCoMo FeliCa (Japan); G-Cash (Philippines), Mobipay (Spain), M-PESA (Kenya)  Key Features: • The operator leverages its existing infrastructure, customer base and experience in managing a wide distribution network » Operators can adopt this model in developing markets such as the MEA where there are large volumes of micro-payments (low-risk associated with such payments) • Since operators are managing the entire value chain, they need to make significant investments in POS equipment and customer service for merchants A
  • 16. 16| Copyright © 2010 Grail Research, LLC Business Models Financial Institution-Centric Model Financial Institution-Centric Model Customer has the required credit on his/her mobile Customer Merchant Customer conducts transaction using the mobile Acquirer (Bank / Financial Institution) Payment Network (Bank/ Financial Institution) Issuer Bank Information is transferred through payment network Issuer charges the customer for the purchase Issuer transfers payment Payment is transferred through payment network Acquirer credits the merchant’s account The Financial Institution-Centric Model works well in markets with an established and trusted financial infrastructure Source: ‘Proximity Mobile Payments Business Scenarios: Research Report on Stakeholder Perspectives’, Smart Card Alliance, Jul 2008; ‘Mobile Commerce in MEA: A Current Reality’, Delta Partners, Jan 2009; ‘DOCOMO to Launch Mobile Remittance Service’, NTT DOCOMO, Jul 2009 B M-Wallet Provision Customers’ banks provide the M-Payment application on mobile phones or enable the customer to conduct transactions via their mobile phone Merchant transfers the transaction information using the POS equipment provided by the acquirer Acquirer transfers transaction information to the network  In this model, banks and financial institutions are the only parties involved in processing the transaction and transferring funds • The acquirer and issuer bank may or may not be the same  Banks are responsible for providing customers with the M-Payment application/solution on their mobile phones and deploying Point of Sale equipment with the merchant  Examples: MasterCard’s Pay-Pass  Key Features: • Mobile operators are not involved in the process, except for the use of the mobile network (SMS/WAP) • The model reduces cash and check handling and improves customer loyalty for banks; customers benefit from improved transaction security since banks are involved • This model does not work in markets with poor banking penetration or for customers that do not have a bank account • Banks need to incur an additional cost for installation and maintenance of the mobile application, sometimes on multiple networks
  • 17. 17| Copyright © 2010 Grail Research, LLC Business Models Collaboration Model Collaboration Model  In the Collaboration Model, services across the value chain are distributed between telecom operators, banks and other financial institutions such as MasterCard and Visa  Examples: South Korean SK Telecom’s Moneta service launched in association with financial services companies such as Visa  Key Features: • Leverages the core competencies of financial institutions (credit and risk management) and telecom operators (mobile application and transaction) • Telecom operators do not need to take on the financial risk • Investment and revenue are shared among stakeholders • This model is effective in areas with low bank penetration, as the mobile operator plays the role of the issuer M-Wallet Provision Banks or mobile operators provide the M-Payment applications on customers’ mobile phones or enable customers to conduct transactions via their mobile phones Customer Merchant Customer conducts transaction using their mobile Acquirer (Mobile Operator/ Bank Merchant transfers the transaction information using the POS equipment provided by the acquirer Payment Network (Bank/ Financial Institution) Issuer (Mobile Operator/Bank) Transfer of information through payment network Issuer transfers payment Transfer of payment through payment network Acquirer credits merchant’s account Source: ‘Proximity Mobile Payments Business Scenarios: Research Report on Stakeholder Perspectives’, Smart Card Alliance, July 2008; ‘Mobile Commerce in MEA: A Current Reality’, Delta Partners, Jan 2009; ‘DOCOMO to Launch Mobile Remittance Service’, NTT DOCOMO, Jul 2009; FINsights Customer has the required credit on his/her mobile Issuer charges the customer for the purchase C Acquirer transfers transaction information to issuer The Collaboration M-Payment Model adapts to suit the requirements of different geographies. Telecom operators and financial institutions distribute the transaction-enabling roles (acquirer, issuer, etc.) as appropriate for the market
  • 18. 18| Copyright © 2010 Grail Research, LLC Table of Contents  Market Opportunity  Competitive Landscape  Business Models  Case Studies  Challenges http://www.movotek.com
  • 19. 19| Copyright © 2010 Grail Research, LLC Case Studies Safaricom’s M-PESA in Kenya – A Success Story M-PESA revenue grew 750% from USD 5.61 million (KSH 0.37 billion) in FY083 to USD 42.54 million (KSH2.93 billion) in FY093 Overview M-PESACustomers(million)  Launched in Mar 2007, M- PESA is the M-Payment solution offered by Kenya’s major telecom operator, Safaricom, in association with Vodafone • It was a initially a pilot project funded by Vodafone and UK’s Department for International Development  Services Offered: M-Wallet services, money transfer, withdrawal of money received through M-PESA, mobile top-up and bill payment for Safaricom customers  M-PESA customers can also receive money from senders in the UK MonthlyM-PaymentTransfers (USDmillion) Conducive Market Conditions Low Cost Accessibility Security  ~23% of the population had bank accounts; while the mobile penetration was ~40%  M-PESA is cost effective, compared to other alternatives • 27% less expensive than the post office’s PostaPay  Wide network of over 14,000 agent outlets2  Strong security features including PIN protection and value recovery in case of phone loss 1 2 3 4 Success Factors 0 2 4 6 8 10 0 100 200 300 400 Apr- 07 Jan- 09 Jan- 08 Nov- 09 Key Performance Indicators Note: 1The data is represented in USD using on-date conversion rate from oanda.com; 2As of Nov 2009; 3Financial year ending Mar 31 Source: ‘Safaricom Website’; ‘M-Payment surging ahead – Arthur D. Little’; ITU M-PESA, which follows the Operator-Centric Model, has been a huge success in Kenya. With over 8 million subscribers, it accounted for more than USD 300 million in monthly M-Payment transfers in Nov 2009 No. of M‐PESA Customers (million) Value of M-Payment Transfers (USD million)1
  • 20. 20| Copyright © 2010 Grail Research, LLC Case Studies Me2U Zain Wallet in Bahrain – An Emerging Story Zain had ~686,000 active mobile phone subscribers in 2008; This indicates significant untapped potential for the operator in the mobile payment services segment  In Nov 2008, Zain launched a mobile financial transaction service, Me2U Zain Wallet, in Bahrain • Zain Wallet, operates in collaboration with MODE Bahrain1 (financial institution partner) and enables users to transfer money domestically and internationally » The payment interface of Zain Wallet uses SMS, sent from the SIM Menu • The product is available at Zain outlets, under the Zain brand • Immigrants account for ~30% of the Bahraini population, so the potential for international remittances using mobile phones is high  Services Offered: Domestic and international remittances; top-up prepaid account; balance inquiry; money withdrawal or deposit at selected Zain or Nonoo exchange branches  Geographic Scope: Bahrain • International money transfers can be made to 32 countries  Challenges: Low education and awareness among customers may prove to be a constraint Low Cost Accessibility Security  Free monthly subscription; domestic funds transfer/payment costs USD 0.13; international remittances start at USD 2.66 • No charge to open a Wallet account  19 Zain and Nonoo branches throughout Bahrain • Looking to expand the number of outlets in the future to reach untapped areas  High security features such as PIN protection and account blocking on phone loss 1 2 3 Factors that may contribute to the greater adoption of Me2U Services Current Me2U Service Distribution, 2009a 30% 50% Payments 20% Remittance Airtime Purchase Note: 1MODE Bahrain is a money transfer company, owned by BMI Bank and Nonoo Exchange Source: ‘Zain Bahrain’; aPrimary Research with industry experts/personnel; Grail Research Analysis Overview Me2U Wallet, Zain’s M-Payment service in collaboration with MODE Bahrain, had between 3,000 and 4,000 subscribers in 2009. Low-cost and strong security features are expected to drive continued growth (Total Me2U subscribers: 3,000-4,000)
  • 21. 21| Copyright © 2010 Grail Research, LLC Table of Contents  Market Opportunity  Competitive Landscape  Business Models  Case Studies  Challenges http://www.movotek.com
  • 22. 22| Copyright © 2010 Grail Research, LLC Note: ‘Know Your Customer’ refers to a regulation that requires banks and financial institutions to verify the identities of their customers Source: ‘Mobile Banks face Challenges in Africa’, Wireless Federation; ‘Mobile Banking: Knowledge Map and Possible Donor Support Strategies’, InfoDev; ‘Consumer Protection a Key Issue for Branchless Banking’, CGAP, Mar 09 Challenges Barriers to Growth of M-Payment in the MEA Region  A large segment of the population in the MEA is not comfortable with the use of technology • Service providers will need to invest in simplifying the technology and interface, and in educating customers Lack of Technological Sophistication Among Customers Challenges in the MEA M-Payment Market  The regulatory framework for financial transactions via mobile phones is currently not well developed • As regulations evolve, M-Payment service providers may have to comply with stricter controls such as ‘Know Your Customer’ requirements (to prevent money laundering, terrorism funding, etc.), which may add costs and slow adoption Regulatory Barriers  A wide distribution network of agents is critical to success in this market, but setting up and maintaining such a network can be difficult and costly in a number of MEA countries  Low start-up costs and an attractive commission structure for their network of agents will be critical for service providers as they look to develop and maintain distribution networks Distribution  Some M-Payment service providers require customers to have a bank account, which limits the potential for services within the unbanked population, an important customer segment for growth  In addition, some service providers concentrate on existing bank customers rather than going after the unbanked population ,who are most in need of services like M-Remittance and M-Money for retail purchases Mandatory Requirement of Bank Accounts (by Some M-Payment Networks) While the MEA M-Payment market opportunity is significant, telecom operators face adoption, distribution and regulatory challenges
  • 23. 23| Copyright © 2010 Grail Research, LLC For More Information Contact: Grail Research (info@grailresearch.com) Copyright © 2010 by Grail Research, LLC No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means — electronic, mechanical, photocopying, recording, or otherwise — without the permission of Grail Research, LLC  Movotek Innovations Limited Email: info@movotek.com Web: www.movotek.com
  • 24. 0 Movotek Innovations Limited Turn-key Solution Provider Prepaid Airtime Voucher distribution Solution, Mobile Money Transfer Solution, GPRS POS, Handheld POS, POS Device, POS Machine, POS Terminal Provider. 2013
  • 25. Movotek Innovations Limited. info@movotek.com www.movotek.com 1 Mobile Money/Money Transfer Money Transfer Movotek has rich industry experience using POS (Point of Sale) terminals for money transfer solution while many developing countries are only filled with cellphones. Without a doubt, POS terminal has its unique advantage for money transfer solution due to receipts/slips printing functionality. When the point of sales is deployed at retail outlets and after each transaction, it can print out the mini statement in duplicate so that both the merchants and end users can have transaction receipts/slips in place.
  • 26. Movotek Innovations Limited. info@movotek.com www.movotek.com 2 POS Terminal for money transfer Movotek is headquartered in Hong Kong which enables us to offer you Made-in-China terminals to enhance product cost performance. Money Transfer, also referred to as mobile money, mobile money transfer, mobile payment, and mobile wallet generally refer to payment services operated under financial regulation and performed from or via a mobile device. Instead of paying with cash, check, or credit cards, a consumer can use a mobile phone to pay for a wide range of services and digital or hard goods. Although the concept of using non-coin-based currency systems has a long history, it is only recently that the technology to support such systems has become widely available. In developing countries mobile payment solutions have been deployed as a means of extending financial services to the community known as the “unbanked” or “underbanked”, what Movotek doing here is to serve the unbanked people. Features of using POS (Point of Sale) terminals for money transfer solutions: 1. Handy as cellphones 2. GPRS (TCP/IP), USSD, STK, SMS, etc. 3. Built-in thermal printer 4. Multi-functional for not only money transfer but also bill payment, mobile top-up, ticketing, lotto, betting, etc. 5. Secondary software development and remote update (over-the-air).
  • 27. Movotek Innovations Limited. info@movotek.com www.movotek.com 3 Prepaid Airtime Voucher Distribution Prepaid Airtime Voucher Distribution Prepaid Airtime Voucher Distribution (also known as Electronic Voucher Distribution System, EVD, E-Voucher Distribution, PIN code distribution, PIN Voucher, mobile top up, airtime top up, e-topup, mobile reload) has dramatically become an essential commodity for the emerging markets and truly the unbanked areas in the globe. It is one of the value added services that is of paramount importance for retailers/merchants to provide their customers. No physical airtime stock (vouchers/scratch cards) is kept on-site, reduction in risk of theft. Prepaid Airtime Voucher Distribution enables the vending of Prepaid Airtime for retailers and offers airtime vouchers from all network operators via its mobile carriers. Not only does it provide the opportunity to earn revenue from a new product stream, Prepaid Airtime Voucher Distribution is able to draw new customers into the stores/outlets. Movotek Innovations has the ability to apply diversified Prepaid Airtime Voucher Distribution onto POS (Point of Sale) terminals by the leading providers such as Ingenico, Verifone, PAX and many more, although each brand works on respective Operating Systems and Software Development Kits. With our professional team having years of experience in programming airtime applications, Movotek Innovations is capable of delivering tailored apps with customized features to customers within 3 weeks’ time. Movotek mobile top up solution
  • 28. Movotek Innovations Limited. info@movotek.com www.movotek.com 4 Mobile Operators Benefits: Reduces Operating Expense significantly Increase the number of point-of-sales without involving distributors Replace the Scratch card and Increase transaction revenue Low cost PIN Voucher Distribution End Customers Benefits: Fast, simplified & flexible transactions User Privacy management Freedom to choose any transaction value Simplified remittance orders, utilities payments and mobile commerce Guaranteed QoS and Rich user experience Retailers/Outlets Benefits: No inventory, no equipment investment (cellphone is enough) Diversified and dynamic mobile portfolio m-Payment point-of-sales (POS Terminal) Simple operations, no training required Movotek Prepaid Airtime Voucher Central Platform Features: Multi-channel network access (USSD, SMS, GPRS, Web) Multi-level distribution management Location based retail management Multi-Handset operation of single retail account Multi-Distributor feeding of single retail account Customizable credit and PIN transfer flows Unlimited denominations and transaction values Retailer self care, self registration and self inventory Reconciliation and audit options Low stock and low retail balance alerting USSD and SMS transaction notifications USSD Menu Driven Flexible customizable front end software for POS, Cellphone, PC etc. Customer Care API Movotek Keywords: Electronic Voucher Distribution, Electronic Voucher Distribution System, e-voucher distribution system, e-voucher management system, e-topup, e-top up, e-top up solution, e-top up system, epin software, epin system, eprepaid, e-recharge, e-recharge software, Mobile Recharge, mobile recharge system, Mobile top up, mobile top up software, voucher top up, prepaid top up, prepaid airtime top up, top up recharge, prepaid card system, POS Mobile Money Transfer, Prepaid airtime, Prepaid airtime Voucher Distribution, Loyalty Programs, POS Bill Payment, POS Terminal, POS Printer, POS Machine, top up terminal, prepaid vending machine, prepaid airtime machine, prepaid airtime vending machine, prepaid airtime POS terminal, airtime machine.
  • 29. Movotek Innovations Limited. info@movotek.com www.movotek.com 5 POS Terminal MIL300 This POS Terminal MIL300 is designated as the low cost all-in-one POS model, which is our hot selling POS Terminal model, it can be integrated with all the solutions that Movotek is offering now. It is the mainstream configurations with ARM9 Processor, high speed thermal printer. MIL300 has streamlined and modular design. NFC/RFID, Barcode scanner are optional for this POS. POS Terminal MIL300 is the ideal model for the customers who would like to carry out multiple business in just one POS Terminal with low cost. Movotek POS MIL300 Solutions Features Ergonomic design, backlit display, large keys, handheld or desktop usage Cost-effective design Quad-band GPRS Communication C-based SDK for secondary development NFC (Mifare)
  • 30. Movotek Innovations Limited. info@movotek.com www.movotek.com 6 MIL300 Airtime POS features Specification Processor ARM9 32-bit Memory 8 MB Flash, 16 MB SDRAM Display 128 x 64 pixel graphical (white backlight) LCD 4 lines x 21 characters Keypad 20 keys Thermal Printer 18 lines/second; paper roll size 58mm x 30mm Interface 1 RS-232, 1 USB Card Reader NFC/RFID (Optional) Communication GSM/ GPRS/SMS: 850/900/1800/1900 MHz Battery Li-ion Polymer, 7.4V, 1500mAh Voltage AC input 100 – 240 VAC, 50/60 Hz; DC Output 9V Operating Temperature 0°- 40°, relative humidity: 5% – 90% Dimensions 185 mm*90 mm* 53 mm (L*W*H) Solutions - Mobile Top-up, Electronic Voucher Distribution, Prepaid Airtime, PIN Voucher Distribution - Membership / Gift Card (Loyalty Programs) - Bus Ticketing, Policy Station, Logistics, Inventory Management - Money Transfer, Mobile Payment, Mobile Money - Utility (Electricity, Water, Gas) Payments - Mobile Banking Solutions, Micro Finance, Micro Loans, Micro Insurance, etc. - Gas Stations, Hotels, Metro, Cab Companies, Exhibition Fairs, Bus Transit Systems, Retail Stores, Chain Stores, etc. Download: POS Terminal MIL300 Specification
  • 31. Movotek Innovations Limited. info@movotek.com www.movotek.com 7 POS Terminal MIL300 Keywords– PIN code distribution devices, airtime machines, mobile reload point of sale, electronic payment terminals (EPT), prepaid airtime machines, electricity and airtime vending machine, prepaid airtime vending machines, mobile pos device, prepaid airtime vending machine, prepaid airtime machine, airtime vending machines, airtime vending machine, airtime printer, airtime vending, prepaid vending machine, mobile recharge machine, USSD airtime top-up, USSD airtime recharge, STK airtime recharge, STK airtime top-up, prepaid airtime terminals, prepaid airtime terminals, airtime voucher machine, mobile top up machine, prepaid terminals, airtime machine, airtime terminals, prepaid airtime terminal, prepaid airtime terminal, airtime pos, e top up terminals, point of sale, mobile vending machine, pos on mobile, voucher vending machine, voucher pos, top up terminal, mobile money, money transfer.