Visa hosted a mobile money conference in the capital of Myanmar, Naypyidaw in December 2012. Over 200 government, industry and development representatives attended. #mobilemoney #digital #fintech #Myanmar #financialservices #mobile

1. Mobile Money – An
Overview
Brad Jones
Managing Director, Mobile Accelerate

2. Introduction
• Access to finance is indelibly linked to improvement of
livelihoods for those who live at the bottom of the economic
pyramid.
• Financial inclusion is becoming a major driver for
governments and central banks in emerging markets in
Africa, Asia and Latin America.
• Mobile penetration is rising sharply in these markets, fuelled
by low cost handsets, cheap SIM cards and calling rates.
• Coupling the massive growth of mobile to financial inclusion
objectives presents significant opportunities to governments
in emerging markets.

3. Financial Inclusion Metrics
55%
35%
28%
Account at a formal financial
institution (% age 15+)
East Asia &
Pacific
Debit Card (% age 15+)
Saved at a financial
institution in the past year
(% age 15+)
24%
15%
14%
Sub-Saharan
Africa
33%
7%
11%
South Asia

4. Financial Inclusion and Mobile
• Mobile based financial inclusion is essentially where
financial institutions or entities regulated by central banks
provide access to financial services through the mobile
channel.
• Various names are used to describe these services,
including mobile money, mobile banking, agent banking,
branchless banking and mobile payments.
• Focus of this discussion will be on the provision of financial
services to the unbanked, using mobile as a channel, and
non-financial services entities as distribution partners, or
agents – let’s call this mobile money.

5. Mobile Money Enablers
• Low Banking Penetration
• High Levels of Urbanization
• Significant Remittance
Corridors
• Large Percentage Under
Poverty Line
• Significant Population
• Young Population
• High Mobile Penetration

6. Mobile Money Enablers
• Low Banking Penetration
• High Levels of Urbanization
• Significant Remittance
Corridors
• Large Percentage Under
Poverty Line
• Significant Population
• Young Population
• High Mobile Penetration
Market opening of mobile
services in Papua New Guinea
saw mobile penetration increase
from 13.4% to well over 50% in
less then three years.

7. Barriers to Banking the Poor
• Customers are intimidated by bank branches and feel that banks
aren’t relevant to them – only rich people go to banks!
• Customers may live in locations geographically remote to bank
branches, and there is little incentive for banks to open branches in
these locations
• Customers who are poor may find it difficult to provide necessary
KYC information to open an account
• Banks often require minimum deposits to open accounts which may
be more then monthly salary for someone who is poor and bank
fees can be a significant proportion of monthly income for the poor
• Banks in emerging markets will focus on customers who provide
higher profitability, such as emerging middle class and high net
worth

8. Mobile Money can address
these barriers
• No need to visit a bank branch to become a customer –
customers have accounts, or mobile wallets activated
remotely from bank branches by ‘agents’, who are appointed
to perform these services by the service provider.
• No need to visit a bank branch for transactions – the mobile
becomes the channel to access account information, transfer
money and conduct deposits and withdrawals at agents.
• No need for full and intensive KYC processes – transaction
limits apply and often central banks take a moderate risk-
based view on KYC requirements for the poor.

9. Mobile Money in Emerging Markets
Customers are acquired through agents
who do KYC checks and acquisition
A customer only needs to use a basic
feature phone to access the service,
through SMS or USSD
Customers can purchase mobile air time,
make purchases or pay bills using their
electronic wallet
Customers deposit and withdraw cash
through an agent network, tapping into
existing local liquidity
Make purchase
$12.95?
Fee $0.06
Accept?
Reject?

10. Customers are signed up and activated through
agents, who are responsible for collection of KYC
information and registering customer details.

11. Source: http://thereboot.org/blog/project/china/
Customers use their mobile phones to access
account information, send money to friends and
family, and to authenticate transactions. Phones
can be low-end feature phones using USSD/SMS.

12. Customers transact through agents, who provide
the ability for customers to deposit and withdraw
their funds. Agents are appointed and managed by
the mobile money service provider.

13. Agents can be any type of shop, including mobile
retailers, grocery stores or microfinance branches.
Agents need to be monitored and controlled to
ensure compliance.

14. Saving through Mobile Money in
Cambodia – short video

15. 38 Mobile Money Operations in Asia Pacific
Source: GSMA Mobile Money Deployment Tracker

16. Benefits to governments on
introduction of mobile money
• Leverage Mobile Money for
Government and Donor Payments
and Collections improving
transparency and efficiency of
payments
• Leverage Mobile Money to monitor
financial flows, collect tax
revenues, and reduce illicit activity.
• Leverage Mobile Money to improve
financial inclusion and aid poverty
alleviation programs.

17. • Approvals to launch
• Risk Management Framework of
the Operator / Bank
• Compliance with AML / CTF
• Deposit of funds for e-money
providers
• Use of agents
• Consumer protection
• Minimum technical standards
• Reporting
• Fair access to channels
Regulators need to ensure that
they focus on:

18. Summary
• Mobile money is an innovative method to improve
access to finance through alternative channels.
• Models are emerging, but there are many
precedents to observe from a regulatory and
operational perspective.
• Governments can leverage mobile money to
assist with poverty alleviation, transparency and
efficiency of payments.