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10 the evolving_mobile_money_landscape


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  • 1. ©2013 MasterCard. Proprietary and Confidential. Rachel Bale, European Head of Mobile Converged Payments, MasterCard The evolving mobile money landscape Page 1
  • 2. ©2013 MasterCard. Proprietary and Confidential. AGENDA • What is Mobile Money: key trends and MasterCard’s role • Why is Mobile Money growing? • Resilience and role of Mobile Money in an emergency: – Safe place to store money – Safe way to transfer money between individuals – Efficient way to distribute aid – Growing channel for donations Page 2 Agenda
  • 3. ©2013 MasterCard. Proprietary and Confidential. Airtime top-up, closed loop P2P transfers and bill payments remain the most popular use cases Page 3 Source: GSMA MMU State of the Nation February 2014
  • 4. Some key stats • There were over 200million registered accounts globally in June 2013 • 9 markets have more Mobile Money accounts than bank accounts • In 44 countries there are now more mobile money outlets than bank branches • 52 markets have at least 2 mobile money services => need for interoperability • Agent sharing is becoming formalised • 23% of survey respondents also use ATMs for cash in / out Page 4 Source: GSMA MMU State of the Nation February 2014
  • 5. ©2013 MasterCard. Proprietary and Confidential. Page 5 CONSUMERPRODUCTS Mobile Companion Prepaid Card •Accepted anywhere MasterCard is—over 35 million locations •ATM access at over 2 million locations •Leverages mobile account through a prepaid card for in- store, e-commerce, mail/phone payments MasterCard Mobile Remote Payment •Top up mobile airtime •Pay bills remotely •Instant confirmations via device •Ability for program participants to connect with multiple MNOs at once, instead of forging bilateral agreements Mobile P2P •Make secure, reliable P2P payments via mobile •Works domestically and cross-border •Connect to more senders and receivers via MasterCard partners like Western Union and HomeSend MasterCard participates in Mobile Money by enabling an interoperable (open loop) system through working with partners to deploy its mobile payment products
  • 6. ©2013 MasterCard. Proprietary and Confidential. Use your mobile wallet to receive funds from a sender’s card account Page 6 Damla regularly receives funds from her son Hasan, who lives in Germany, to help meet her day-to-day living expenses in Turkey. Partnerships with Western Union and HomeSend extend the reach of our P2P services Hasan enters Damla’s mobile phone number and amount, 500 lira, and then hits send. C R O S S - B O R D E R I L L U S T R A T I O N Hasan uses his MasterCard card through his mobile phone to send money to Damla. Damla receives a text message that 500 lira has been transferred to her mobile wallet. MEALS Damla no longer waits in a long line to get money. She can now easily and quickly cash out the funds at an ATM, purchase goods, pay for additional airtime/data, or pay a bill with her mobile phone! GROCERIES T U R K E Y MasterCard’s Mobile P2P
  • 7. ©2013 MasterCard. Proprietary and Confidential. e-commerce Bill Payments Airtime & Data TopupP2P money transfers Transit & rail tickets in-app m- commerce Parking fees Live services also in Africa and Latin America MMRP in Europe: m-wallet based mobile-initiated payments. Nine services live in 7 countries Taxi fares Cinema Tickets MasterCard Mobile Remote Payments
  • 8. ©2013 MasterCard. Proprietary and Confidential. AGENDA • What is Mobile Money: key trends and MasterCard’s role Why is Mobile Money growing? • Resilience and role of Mobile Money in an emergency: – Safe place to store money – Safe way to transfer money between individuals – Efficient way to distribute aid – Growing channel for donations Page 8 Agenda
  • 9. ©2013 MasterCard. Proprietary and Confidential. Many consumers in emerging markets have needs that are not being met through traditional financial services. Access AffordabilityConvenience Security Page 9
  • 10. ©2013 MasterCard. Proprietary and Confidential. • Cost of travel and queuing to pay or collect • Risks of carrying cash • Lack of access to insurances Transacting in-person, especially with cash, can mean inconvenience, waiting, and lost productivity. SITUATION PAIN POINTS Mobile Money Benefits • Transact with a device that’s already in-hand • Get greater value from existing mobile account • Reduce travel time to pay in-person • Avoid waiting or queuing to pay in- person • Reduce reliance on cash and ensure correct pay • Reduce the risk of cash theft • More discrete and private way to electronically provide payment and benefits to employees Convenience & Security Page 10
  • 11. ©2013 MasterCard. Proprietary and Confidential. • No credit or expensive credit • Expensive money transfer options • Difficulty making time to travel and pay in-person • Few or no insurance or mainstream financial services • Losses due to theft, missed work, and traveling to either collect or pay For the underserved, mainstream financial services are limited, non-existent or expensive. Access & Affordability SITUATION PAIN POINTS Page 11 Mobile Money Benefits • Access funds securely from anywhere, 24/7/365 • Save money securely • Remit money at lower cost • Reduce the costs associated with paying in-person and in cash • Build a financial history to enable future financial service access • More ways for consumers to shop and pay, including online
  • 12. ©2013 MasterCard. Proprietary and Confidential. To meet their customers’ needs that are not being met by existing services. Serve the Underserved High mobile penetration among the unbanked and underserved creates an opportunity to leverage mobile accounts to provide needed financial services. Create New Revenue Channels Leverage your existing subscriber base to open up new revenue opportunities and increase revenue per subscriber. Revenues from M-Pesa in Kenya and Tanzania account for almost 20% of the MNOs total revenues according to GSMA Deepen Relationships Differentiate yourself to increase loyalty and retention by expanding the utility and value of devices consumers already rely on. Optimize Revenue Potential For MNOs who offer closed-loop mobile payment solutions, migrating to open-loop expands acceptance, features, and revenue opportunities. Page 12 Why do MNOs provide Mobile Money services?
  • 13. ©2013 MasterCard. Proprietary and Confidential. • The increasing use of electronic payments, from the purchase of goods from retailers to the payment of salaries, has added $983 billion in global economic growth from 2008 to 2012. • It contributed: – 0.8% increase in GDP in emerging economies – 0.3% in developed markets • Value is derived from: – higher tax revenue – lower cost of handling cash – guaranteed payments – reductions in the grey economy – and greater financial inclusion. Page 13 Mobile Money, as a growing form of electronic payments, benefits whole economies Source: Zandi, M., Singh, Impact of Electronic Payments on Economic Growth. Moody’s Analytics
  • 14. ©2013 MasterCard. Proprietary and Confidential. AGENDA • What is Mobile Money: key trends and MasterCard’s role • Why is Mobile Money growing? Resilience and role of Mobile Money in an emergency:  Safe place to store money  Safe way to transfer money between individuals  Efficient way to distribute aid  Growing channel for donations Page 14 Agenda
  • 15. ©2013 MasterCard. Proprietary and Confidential. Mobile Money accounts are seen as a safe and convenient place to store money • In Cambodia, rural Wing customers valued a plastic companion card as – Provided tangible proof of service – Enabled travel to city without carrying cash (cash out at ATM) • In Kenya, a study showed that men identified physical security, in terms of reduced mugging and thefts, as an effect of M-PESA • Women viewed improved money security — in terms of ability to accumulate cash and keep it secure from theft—as the most important type of security effect associated with M-PESA • Many mobile money consumers also have bank accounts but choose to store money in their MM accounts as cash out options are closer to home (agent vs bank branch / ATM) Sources: Community Level Economic Effects of M-PESA in Kenya March 2010 Page 15 Mobile Money brings security Safe place to store money
  • 16. ©2013 MasterCard. Proprietary and Confidential. • A study has shown that the impact on household consumption in the event of a shock depends on mobile money usage: – Non mobile money users see on average a 6 percent reduction in consumption – M-PESA users see no impact • Mobile Money provides a convenient and safe method of saving, enabling some self-insurance • The study found the key use case lying behind the improved risk spreading is remittances • When faced with a shock, households with M-PESA are more likely to: – receive a remittance, – receive a larger amount, – and the remittances they receive come from further afield Source: survey of ~ 3000 Kenyan households in September 2008; then resurveyed Dec 2009 and July 2010 Page 16 Money transfer usage may increase as a result of crises Safe way to transfer money
  • 17. ©2014 MasterCard. Proprietary and Confidential Page 17 World Food Programme Partnership: Digital Food (different solutions for efficient distribution of aid) Beneficiary holds a card, Trader operates a terminal To the card is associated a monetary value that the beneficiary can use for any type of purchase at the authorised points (restricted or open) Beneficiary holds a phone, or a x-digit number, Trader operates a phone To the beneficiary phone or x-digit number is associated a monetary value or a list of commodities with individual balances Prepaid card - Cash account Mobile MoneyPrepaid card - Commodity-based vouchers Beneficiary holds a card, Trader operates a terminal To the card is associated a list of commodities, with a quantity balance for each commodity. In addition, the card can also be associated a monetary value for non-food or exceptional assistance Efficient way to distribute aid
  • 18. ©2013 MasterCard. Proprietary and Confidential. • Beneficiary – No need to queue for grant collection – Convenience to purchase ‘as you need’ (allows to buy fresh food, …) – Security (biometrics reduces risk of stealing) • Trader / Merchant – Rapid payment (typically 2-3 days vs. 20+…) – Incremental business for local economy • WFP – Scalability – Significantly lower cost – Accountability for fund usage (less fraud, corruption, …) – Leverages business model that is transparent and regulated (e.g. by Central Banks) Benefits for different stakeholders (vs. cash or paper vouchers) Page 18 Efficient way to distribute aid
  • 19. ©2013 MasterCard. Proprietary and Confidential. • Requires mobile network, which requires power • Some services will require access to agents (e.g. cash in / out) which displacement or other impact may hinder • Agents require liquidity management, which may be hampered logistically • Service requires consumer trust (will have knock on effect of any outage) Page 19 How resilient is Mobile Money in an emergency?
  • 20. ©2013 MasterCard. Proprietary and Confidential. Recent examples have shown the growing value of the mobile to encourage donations • In March 2013, mobile donations for DEC Philippines disaster fund hit a record breaking £6m in the UK – Donated over a much shorter time period than for previous DEC appeals – More than one quarter of a million pounds was raised via text messages in the first hour, compared to almost £100,000 during the first hour of the DEC East Africa Crisis Appeal. • The highest ever number of mobile donations to the DEC reflects an overall trend for increased giving via electronic methods, with more people than ever before using tablets and smart phones to send their appeal donations: – £3.5m was given by donors using tablets – £1.3m has been donated via text messages – £5.7m was given by e-wallets, including £1.75m on tablets and smart phones. • Similar trends are evident elsewhere. For example US Haiti earthquake relief effort in 2010: – Following a TV campaign to text donation of $5 or $10, 50 percent of donors made their pledge immediately, and an additional 23 percent donated on the same day Sources: disaster-hit; Page 20 Growing role of mobile in enabling donations
  • 21. ©2013 MasterCard. Proprietary and Confidential. • Mobile money is an increasingly important part of life in emerging markets – Brings benefits of financial inclusion; including economic growth, security and resilience to shocks – MasterCard enables partners to bring secure, interoperable, flexible services to market • In emergencies, mobile money: – Is impacted by infrastructure challenges (power / mobile network availability, agent liquidity and access) – Can play important role in enabling: – Savings and Remittances – Disbursements – Donations Page 21 Mobile Money Summary
  • 22. Thank you!