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1Universal Money un-                of people in the lower strata across the country.Click the link to open the document: ...
21. Money through Mobile (MTM) is different from Mobile Banking.1.1. Money through Mobile (MTM) is different from Mobile b...
32.1. Money through Mobile (MTM) as a Pay-by-Phone mechanism. Money throughMobile (MTM) is envisaged as a Pay-by-Phone ser...
42.3. Money through Mobile (MTM) for Micro-finance support: Money throughMobile (MTM) enable Micro-finance support of all ...
54.strata across the country. There is a need to urgently implement non-banking and non-internet dependent solutions to re...
6MTM can work with base model phones both Mobile phones: Technology used forMTM service suitable to work with base model l...
7                   Payment into any MTM account from any phone from any where.  Mobile A                      GSM        ...
8institutions, Public services such as Post offices, Banks, Co-operatives, Vendors, Malls,Cinema halls etc., as an interfa...
9       CLI and TPIN cross check, UUS authentication and encryption will enable       enough security.       IVRS incorpor...
1011. The business part: MTM deals being virtual e-transactions, and therefore, most ofthe real money remains within the M...
1112.4. MTM help to reduce subsidy burd MTM is the best way to get out of the                              
12a)   MTM system shall provide service to all Service providers across the country.b)    MTM shall be a common centralize...
13-----------------------------------Author: P. Abraham Paul e-mail: Tweet @PA_Paul                  ...
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Universal unbanked money management by phone(211212)


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Universal unbanked money management by phone(211212)

  1. 1. 1Universal Money un- of people in the lower strata across the country.Click the link to open the document: please see my blog Phones can save fuel, time and effort and cost of printingmoney htt:// pIntroduction: Universal money management using phone, a path breaking state of theart idea to enable all sorts of day to day money transactions through phones is a non-banking product that will accelerate F inancial Inclusion of people in lower economicstrata across the country and will become an effective tool for supporting their MicroFinance needs.Money through Mobile (MTM), is just an acronym used herein that explain in short theidea, features, products, services, the technology involved, the business aspects and theneed and advantages it can provide to society as a whole.Please see the PDF presentation on MTM attached. in Money Through Mobile Simple schematic. MTM System PSTN PLMN ST VOM USS USS P SSP SCP SMP MTM Mobile users ADM VENDORS, SERVICE PROVIDERS ETC. INTERNET PAYMENT FOR COMMODITIES AND ST MULTIPLE MOBILE MTM -ATM KIOSKS MTM SIM SET TOP BOX Franchise Mobile Switching systems SB and access Networks Accoun Post Offices BANKS 1
  2. 2. 21. Money through Mobile (MTM) is different from Mobile Banking.1.1. Money through Mobile (MTM) is different from Mobile banking: At the outset,Money through Mobile (MTM) is not to be confused with mobility in Banking service orservice of e-banking using Mobile phones as being currently provided by banks.other financial institutions; will in the same position and functional level, using sameproduct technology at par with other MTM users.1.2. Money through Mobile (MTM) will not disrupt Banking Industry. There is thisbiggest myth that Un-banked Pay-by-Phone service will be disruptive to Bankingindustry. From the foregoing it can be seen that the fact is actually other way around.2. Money through Mobile (MTM) can do all sorts of money management by phone. Money Through Mobile for Financial Inclusion of all. Mobile users Mobile Gateway MSC In the PLMN Switching Centers Other PLMNs MTM System S T Workers, Contractors, Physicians, Taxis/Autos. mTm- acc SavinSmall Shop owners, INTERNET gsMerchants, Vendors, Post OfficesCoffee shops. Small Money Lenders, Malls, Utility Service Institutions. Petrol Commission Super Providers, Schools, Bunks Agents. Markets. Ticket vendors, Hospitals, MTM- BANKS Vending machines. Business ATM units. SIM enabled Set Top Box KIOSKS 2
  3. 3. 32.1. Money through Mobile (MTM) as a Pay-by-Phone mechanism. Money throughMobile (MTM) is envisaged as a Pay-by-Phone service that enable easy paymentmechanism to directly transact (receive and send) virtually all forms day-to-daymicro/macro e-payments such as payment of utility service bills, taxes and servicecharges, School and College fees, Payment to job contractors and job workers byemployers to employees, Bill payment in shops, sales outlets & malls, cinema halls,petrol bunks, various travel ticket vendors and at vending machines, Taxi and auto fares,Road and Bridge toll payments, vehicle parking charge, quick transfer of money tofriends, spouse, pocket money to children etc,.2.2. Money through Mobile (MTM) for the welfare of the people: Money throughMobile (MTM) enable Financial inclusion of people by sending the Salary / Pension of(NREGA), Right to food, Right to Education and Health care, and various forms ofpensions, payments related to interest, dividend, bonus, deposits, etc., without involvingBanks, Post offices, Credit card companies and other money transfer agencies. DISPERSAL OF WELFARE PAYMENTS TO BENEFICIARIES VARIOUS WELFARE FUNDS AS BUDGETTED BY FEDERAL GOVERNMENT VARIOUS WELFARE FUNDS AS BUDGETTED BY STATE GOVERNMENTS DISTRICT LEVEL LOCAL WELFARE AUTHORITIES DISTRICT LEVEL AUTHORISED BANKS GSM NETWORK WELFARE FUND REACHED IN BANK A/C MTM SERVICE PROVIDER SYSTEM MTM-ATM KIOSKS MTM ACCOUNT HOLDERS (BENEFICIARIES) 3
  4. 4. 42.3. Money through Mobile (MTM) for Micro-finance support: Money throughMobile (MTM) enable Micro-finance support of all sorts ofmicro/macro money lendingon personal basis, by Micro-finance agencies and franchisees. Scope of business for SMEs MTM MTM MONEY BORROWERS APPROACH MICRO FINANCE COMPANIES T E N M O C F GSM NETWORK MICRO FINANCE COMPANIES L U A P M A H A R B A P. MTM ACCOUNT OF BORROWERSF O Y T R E P O R P L MFC S MTM ACCOUNT A U T C MTM SERVICE PROVIDER SYSTEM E L E T MTM A/C IN MTM- ATM KIOSKS MTM END USERS - MTM Franchisees -02/09/2012 Money thro Mobile for Financial Inclusion (mTm) Abraham Paul e-mail: 132.4. Money through Mobile (MTM) enable Post Office/Bank linked service: Moneythrough Mobile (MTM) provides provision for linking MTM users individual MTMaccount with Banks and Post offices, so that MTM users can pay in and take out moneyfrom their Bank /Post office accounts using the MTM feature.3. MTM enable saving of time, fuel and effort. -to-day moneytransactions could be done sitting at home/office or from anywhere - any time at userscomfort without need to commute and therefore, help to save time, effort, expense on fueland usage of roads reducing traffic congestion and pollution.3.1. MTM reduces to great extent need to print money. In addition to convenience ofanytime from any where transaction and micro money payments with e -moneytransactions, MTM drastically reduces the need to print money especially smalldenomination rupee notes and coins and Government can save huge expense on this.3.2. MTM enable discontinuation of all forms of subsidies. Most of the fund spent onsubsidized goods and services now are getting pilfered or squandered and go waste. WithMTM it is possible to do full value fund transfer without subsidy to the beneficiariesdirect without middlemen or agencies. 4
  5. 5. 54.strata across the country. There is a need to urgently implement non-banking and non-internet dependent solutions to realize financial inclusion of people in the lower socialand economic strata across the country, both in the Urban and Rural areas that can berealized with Money through Mobile (MTM) systems, networks, products and services.4.1. Banking service has limitations: The banks, both nationalized and private are whiteelephants always with an eye on profit rather than service. Whatever said and done,banks will not be able to effectively serve people in the lower economic strata in urban aswell as rural areas. Even with Banking Correspondents, formal banking procedures arenot user-friendly for illiterate and poor customers especially for the women and aged.4.2. Micro-finance support for the poor across the country: Services of most of theMicro Finance Institutions are also unaffordable to people in the lower economic strata.MTM system will make micro money payment facility available, accessible andaffordable to everyone; including people in the lower economic strata at an individuallevel who is able and eligible to have phone in urban and rural areas.Many user-friendly Micro Finance services can be provided to anyone who has aphone. See the feature list. For example: A person can avail cash loan against a smallgold deposit as collateral with MTM Service Provider or with a MTM Micro-financesupport franchisee, into his MTM account; use it for himself or giving small loans toothers, and pay it back with nominal interest in convenient ways, take again and pay backany number of times from anywhere any time, transparently, without much humanintervention.5. MTM can enable effective usage of ADHAR, the Universal Unique ID.Adhar as and when it become ready can be used for identification and information neededfor KYC of the MTM users which can be linked with MTM account number to enablepersonalized secure transactions to realize Financial Inclusion and Micro Financesupport services available, accessible and affordable to everyone; especially the people inthe lower economic strata, both in urban and rural across the country at minimum cost ofusage.5.1. MTM can help to remove subsidies without middlemen and pilferage. Asmentioned above, MTM is a means to effectively disperse Governments welfarepayments to real beneficiaries across the country so that the they can get the moneyreceived in their MTM account by the real beneficiaries without pilferage and third-partyintervention and can be transacted using their mobile phones sitting at their homes.6. MTM system and Network.MTM can work in the base GSM /CDMA network. MTM system can be a common,centrally placed, stand-alone third-party system that can be accessed by all phone users ofdifferent service providers over Mobile phone in the PLMN. 5
  6. 6. 6MTM can work with base model phones both Mobile phones: Technology used forMTM service suitable to work with base model low priced mobile phones that can beingeniously manufactured, programmed and supplied to users by MTM service provider.6.1. MTM can work with Land line phones in PSTN.MTM service such as paymentsof Utility bills, Service charges etc and transfer of money to any MTM user account canbe extended to Land Phones also as the numerals, * and # keys used in USSD messagingare available in land line phones. IVRS incorporated with MTM system can take care ofthe transactions between Land Phone and MTM system. As MTM use USSD signaling ofCCS signaling for its transactions between the phone and the system over phone network,most of the features could be availed using land line phones in PSTN through land linesystems that are capable of handling CCS signaling.This way MTM service can be quickly extended to areas where Mobile Telephonyservice have not reached yet. There need to have only a PSTN telephone exchange thatcan handle USSD over CCS7 signaling links with its the gateway systems.6.2. MTM service could be availed by those who do not have a phone of their own:Any one can become a registered MTM client at any MTM franchisee outlet or at localPost office or banks. Such MTM account holder can also link their MTM account withtheir Post office Savings bank account and normal Bank accounts or with MTM serviceprovider franchisee outlets directly or using any phone belonging to a relative or friendor even from public phones using ADHAR for identification and personal andadditionally password for fraud protection.Non-phone users such as mentioned above can avail MTM services using MTM-ATMcards provided by MTM service provider.6.3. Satellite connectivity. Government should implement IT enabled services usingcontemporary technology. Instead of waiting for years to get the digital technologyextended to rural areas, MTM service can be provide in remote rural areas by connectingthe telecom systems in these places to centralized MTM system via satellite links. MTMcan be implemented in base model GSM and also in Fixed line telecom systems and fixedphones where GSM is yet to reach.6.4. Solar energy powered phone chargers. To make available the eco-system to powerMobile phoor cannot be afforded by villagers in rural areas, solar powered mobile phone chargersetc., to be provided at subsidized cost. Facility for free charging mobile phones could beprovided at public places, post offices, Village / Panchayat offices, bus stations / Railwaystations, etc.6.5. Method of MTM money transaction. 6
  7. 7. 7 Payment into any MTM account from any phone from any where. Mobile A GSM GSM GSM +97150 7654321 MSC G/W G/W PLMN mTm-prc Mobile B +919446543210 GSM GSM Distant PLMN MTM System G/W MSC MTM Prepaid Coupon vendors IVRS mTm-acc Distant PSTN mTm-prc SC G/W G/W Land line+971 4 7654321 From Land Phone in UAE, to MTMCrediting money into users MTM account can be done:-- by buying and using MTM Pre-paid coupons available from MTM franchisee outlets ascurrently being done in pre-paid phone service,- through MTM franchisees by paying cash or by transferring money from Post office orbank accounts to MTM account- through any other MTM user by transferring fund from their account. For examplemoney can be transferred from MTM account of spouse or parent to children or betweenfriends.- hard cash can be had from MTM franchisee outlets at small discount by transferring- hard cash can be had from custom made MTM-ATM systems using MTM cardsprovided by MTM service provider.7. MTM Set Top Box. The killer application exclusive for MTM system that will make of end 7
  8. 8. 8institutions, Public services such as Post offices, Banks, Co-operatives, Vendors, Malls,Cinema halls etc., as an interface between their Local Area Network (LAN) and MTMthrough Mobile Net work in various Shops, Malls, Vendors, Utility and other Serviceproviders an institutions.This special purpose Set Top Box (STB) shall have facility to equip SIMs of variousmobile service providers, if necessary to provide multiple accesses to mobile network totake care of the call traffic and the MTM system through the signal transfer points (STP)of Mobile gateways. The STB will interface a local computer with MTM application in itto interact with MTM system via mobile network. MTM applications required in the userdevices can be download from the system.Alternately, a USB plug in dongle device can be developed to provide network access toMTM system by local computer or vending machines in small shops.8. Features of MTM : Initial subscription to become MTM user and recharging / refilling of users MTM account through Post Offices, Banks and MTM franchisee outlets. Recharging / refilling of the MTM account in the MTM system could be done by buying and using MTM prepaid recharge coupons marketed by the MTM Service Provider as being done now for prepaid mobile phone service. Every MTM user can pay-in money into own MTM account and any other MTM user account. Withdrawal and e-transfer of money can be done only from own account. MTM account holder can avail loan against small gold deposit with MTM Service Provider, credit the amount in his MTM account, use it and pay it back with nominal interest, any time from any where. Capability of e-transfer of money using the MTM prepaid coupons, by any Mobile phone or by Land line phone from anywhere to any MTM client account is another powerful feature envisaged of the proposed MTM system. MTM cash vending machines (MTM-ATM), identical to bank ATMs, provided by MTM system provider at MTM franchisee points and other secure places shall be used to deliver real cash to MTM users. MTM-Cards. MTM users can use MTM-VISA Cards identical to credit cards; issued by MTM service provider that can be used to receive or credit in real cash from MTM-ATM or any of banks ATMs. At locations where people need quick cash at malls, and other locations, licensed Money changers can dispense real cash at a discount in lieu of e-transfer of money to their MTM account. Government agencies can send welfare payments like NREGA etc to MTM As the transactions are recorded, it will be possible prevent avoidance of Tax collections and the Govt. can access / collect statistics to cross check it. MTM system and network use UUSD based real time transactions that is more secure and faster than web based services. 8
  9. 9. 9 CLI and TPIN cross check, UUS authentication and encryption will enable enough security. IVRS incorporated with MTM system can take care of the transactions between Land Phone and MTM system.9. Technology involved. Technology involved in MTM is identical to IN based pre-paidsystem and uses Mobile network and switching systems for access to MTM system andservice. However, the MTM system shall have connectivity with Mobile SwitchingGateways so that MTM system can reside outside the Telecom network and it shall betransparent to any particular Telecom network or Service provider but accessible by usersof all Mobile Service providers.9.1. USSD based technology. The message transactions between MTM mobile andMTM server will be USSD based as in pre-paid system. Unlike web based mobilebanking services through INTERNET access, USSD is a highly secure CC7 signalingwith additional security with Calling Line Identification (CLI), personal password andencryption making the MTM operation safe and secure. User-to-User signaling (UUS)feature can be incorporated for additional authentication for secure money transactions.Unlike the store and forward feature used in SMS, USSD is capable to support real timetransactions. It is fast, easy and convenient to use. Anyone familiar with making normalphone calls can use MTM facility without any difficulty as the transactions between thephone and MTM system is by keying in of few numerals in the key pad like *123# etc asused in prepaid service.USSD can work in basic 2G environment and does not need of GPRS and 3G. MTMsystem can be directly implemented in the areas where already mobile networks areavailable and can be spread to other areas along with provision of mobile access.10. MTM-ATM Kiosks. Connectivity between MTM-ATM kiosks and MTM system canbe through Internet where available or through Mobile network using STB at MTMKiosk end. Withdrawal of cash can be done using MTM Card (identical to ATM VISA /MASTER cards) provided by the MTM service provider or by accessing the MTM-ATMby mobile phone over mobile network and interacting with it with the Mobile.10.1. Connectivity between MTM system and its peripheral systems. IP connectivitydirectly or via Web based service over INTERNET can be also options can be deployedfor inter working of MTM system with Banks, Post Offices, Pint of Sales and Point ofServices, major malls, utility service provider betweenMTM system and MTM-ATMs.10.2. Hard cash transaction through MTM franchisees. Hard cash can be obtained atMTM franchisee outlets or from MTM cash vendors on nominal discount. Bytransferring money into their MTM account. 9
  10. 10. 1011. The business part: MTM deals being virtual e-transactions, and therefore, most ofthe real money remains within the MTM system. This opens out enormous businesspotential for various stake holders associated with MTM business.There will be above billion phones in India soon. With a modest assumption of amonthly average of Rs.10000/- transaction per phone, the annual turn around of thebusiness will be a mind bogging sum in hundred of Trillions. The huge excess liquidityavailable with MTM Service provider can be profitably deployed in various instrumentsof money management products within regulatory norms.11.1. MTM service can be provided free of charge to users. With above businesslogic, it is possible to provide MTM service free of cost to users which will make thesystem popular with all types of phone users that will enhance MTM usage.11.2. With the enhanced money business from this un-banked value added service, therewill be enough profit share for various stake holders, the Telecom service providers andothers, involved in MTM business.12. Government need to act fast. There are many discussions going on about how toidentify the poor (as if they are a scare community), how to provide them financialsupport without middlemen swindling it etc. etc in every sphere for many years now. Thehigh level advisers in Planning Commission etc., talk of big ideas that could be achievedmany years ahead. The basics of planning especially in a govt. set up that has a limitedmandate, is to quickly roll out useful schemes making use of the contemporarytechnology and systems to the possible extent without delay along with the futuristicideas and plans.12.1 MTM can work on basic GSM network: The greatest advantage of MTM that Ihave been propagating for over ten years now is that it can be straight away implementedin places were basic GSM network is available. Technology is identical to Pre-paidsystem and prepaid service that is widely used in every network.12.2. MTM fetaure can be extended to land line phones also. Where there is no Mobilenetwork, it can be implemented using modern land line systems linking these to MTMsystem over PSTN gateway until Mobile networks are made available. Every land linephone user can have an MTM account in MTM system and receive payments and transactit to other accounts sitting at home.12.3. MTM service can be provided for non phone users through MTM franchisees.Those who have no phone can avail MTM service from can be availed using a familymembers or fr iends phone or from public call offices using the MTM cards supplied byMTM service provider. Any one can register and open a MTM account with the MTMservice provider franchisee and will be provided with MTM-CARD identical to a Creditcard that can be used for transactions as being done in the same way as with credit cards.This feature enable MTM as an universal service that can be availed by anyone anywhere in the country by just having a MTM franchisee in every locality. 10
  11. 11. 1112.4. MTM help to reduce subsidy burd MTM is the best way to get out of the en.economic peril caused by ever mounting and poorly managed subsidies. MTM as I havebeen suggesting for years can pave way to do away with subsidies by giving out fullamount for procurement of food, Kerosene, Electricity, transportation etc., withoutsubsidy and welfare payments of right to employment, right education & healthcare to the beneficiaries.12.5. MTM can reduce tax evasion: In addition, as every payment transaction usingMTM as a service are recorded and statistics can be readily made available to authoritiesconcerned, it is possible to avoid various tax evasion that is currently rampant in everysystem.12.6. The urgent need for Government to act without delay: From the foregoing it canbe seen that the whole emphasize is that, the Government and its planning wing insteadwaiting years to make available digital connectivity to villages, it is possible to empowerthem by providing MTM to them with readily available systems and methods. By thisway many hurdles of pilferage in various govt. welfare payments could be resolved.12.7. MTM will not disrupt banking industry. As can be seen from the foregoing MTMwill in no way disruptive to banking industry. In fact it will only enhance it.The huge amount of micro money transactions in retail business will not reach banks.With MTM in place entire money transacted at various POS, utility service points etc willultimately will have to be transacted through banks for settling accounts between themand MTM service providers.13. Why Telecom industry should promote MTM business? With 3G and NGN, Transition from Voice call business to direct and IP based Data and Multimedia, substantial amount of business revenue will also move out of Telecom Industry to external industries such as banks, content providers, and other multimedia service providers. These industries use the use access through Telecom systems and networks that are set up and run with heavy CAPEX and OPEX. Since entire customer base, technology involved, systems and network involved in the business belong to various telecom service providers, the industry has all the right to get adequate share of revenue from MTM business. It is suicidal for Telecom service providers to remain as mere onlookers while their, system and network and their customer base are used by other industries and hijack their revenue potentials. It is necessary for telecom Industry to ensure adequate share of this revenue from these external users, to survive. There is limitation in Telephony related usage and revenue. MTM offer an excellent non-Telephony related VAS that can enhance Telephone usage and revenue.14. Success of MTM service depends on the following aspects: 11
  12. 12. 12a) MTM system shall provide service to all Service providers across the country.b) MTM shall be a common centralized system that shall be available, accessible andaffordable to all types of users.c) Since the system involves high volume of very low value money transactions, theservice shall be without any additional charge. Any cost involved on service shall becompensated by profitably deploying the liquidity available to them in the operationprocess.d) It is necessary that MTM subscribers, utility providers, vendors, shops, banks, Postoffices etc involved in MTM service are able to deal with a common MTM serviceprovider, to make the service simple, user friendly and efficient, and to become profitableand effective.e) Therefore, to make the system and service succeed, the money management systemshould be able to offer universal service anytime, anywhere, for every form of payment.To realize this, the MTM system shall be ideally a common, centralized, stand-alone,third party system that is set up by the consortium of Telecom service providers or by athird party on revenue / profit share basis with the stake holders involved.15. Un-banked Mobile Money Management need to be regulated to make itsuccessful. Setting up of disparate Money management systems, product and services byvarious parties without any regulatory arrangement will not deliver desirable resultsespecially for financial inclusion and empowerment of people in the lower strata acrossthe country. Therefore, government should take immediate steps to bring un-bankedmoney management service under regulatory controls through National PaymentsCorporation of India (NPCI) under the ambit of RBI.A solution to resolve this impasse between Government and telecom Serviceproviders is to have an exclusive banking system associated with the MTM serviceproviders that is set up as a 3rd party system by the consortium of MTM Serviceproviders and controlled by NPCI under the ambit of RBI.16. Scope of exclusive GSM network and MTM system by BSNL in tie up withPostal Department.It is even worthwhile for the government to set up the MTM system by BSNL tied upwith Postal department. It is also necessary for the government to have an exclusiveGSM network that can be used for Disaster / crisis management, security, terrorismprevention, Adhar implementation and servicing, administration and dispersal of welfarepayments, pensions,, payments for disabled and old aged, money for Right toemployment (NREGA), Right to food, education and healthcare, using the network andMTM system. It is also worthwhile for the government to provide low cost phones andservices for the poor to avail the service so that they can get the welfare payments in fulldirectly into their MTM account as a step towards removal of subsidies. 12
  13. 13. 13-----------------------------------Author: P. Abraham Paul e-mail: Tweet @PA_Paul 13