121010_Mobile Banking & Payments for Emerging Asia Summit 2012_Reviewing Growth of Mobile Wallet Ecosystems in Emerging Markets
Reviewing Growth of Mobile Wallet Ecosystems in Emerging Marketsby :Ichwansyah PutraProduct Development & Management ManagerM-Commerce and Money DivisionPT. Indosat Tbk
Growth of mobile wallet initiatives in emerging markets Opportunities in the mobile wallet space for stakeholders, especially in under-banked or un-banked markets Identifying control points for mobile wallet and importance for commercially viable growth
What Next for Mobile Money Facts : 75% of people in the world have access to mobile phone
More Mobile in Developing World Most Phones are Owned by People Living in Low-Income Regions% National Population Send SMS Take Picture or Video with a mobile Use Mobile Internet 77% Developing Country 29% High-Income Country 23% 71% Y 2000 Y 2010 0.7 Billion Subsc. 5.9 Billion Subsc.
Micropayment Market in Indonesia Indonesian potential micropayment transaction US$ 20 Billion – 30 Billion 77% retail transaction mostly done by cash Big opportunity to move cash transaction to non-cash Collaborate between Bank and Mobile Operator can complement each other
• Population: 240 million• GDP per capita of more than US$ 3,000• In 2009, there are estimated 87-88 mil savings accounts. However, as many have multiple accounts, the number of account holders is around 60-66 mil• IFC estimates that in 2009, there were estimated 96-115 mil individual mobile phone subscribers, growing to 133-180 mil by 2013 (even in fact there are 250 mil mobile phone subscribers in 2012)• IFC states that the base of bank customers is growing much more slowly than the number of mobile phone subscribers • There are 20-30 mil phone subscribers without bank accounts • Another 20-30 mil mobile phone subscribers with bank accounts and phones, who’re “underserved” by financial institutions • Many users find it difficult or intimidating to go into bank branches, challenging to find and use ATMsConclusion: There is significant demand for mobile payments solong as it meets the requirements of convenience, trust and cost 8
Capability of Adoption the System Tailoring the business model to suit the type of product and type of consumer Developing a cost-effective solution Provide consumers with a secure, widely accepted and easy-to-use payment method The service needs to gain critical mass quickly There has to be a fixed focus and it has to be ensured that all stakeholders are fully aligned Service providers need to be mindful of regulatory requirements Service providers need to be able to integrate data with customer profiles and transaction data
Developing E-Money in Indonesia Developing E-Money in Indonesia 20101. Transactions Volume - e-money = 31 % - Credit Card = 129% - ATM Card + debit = 349% Credit Card2. Transaction Value - e-money = US$ 3/trx - Credit Card = US$ 93/trx Values Volume - ATM Card + debit = US$ 126/trx ATM Card+Debit3. Number of ATM Card + debit = 3.5 x number of Credit Card = 7.5 x number of e-money VOLUME NUMBER OF VALUES (RP (MIO TRX) CARD (MIO) BILLION)
E-Money Services inServices in Indonesia E-Money Indonesia 2010
IFC survey indicates that, even for mobile phone users with bank accounts, a large number are ‘under-served’ as they find it inconvenient, costly or challenging to use bank channelsSource: IFC Report On Branchless Banking In Indonesia and estimates
White Collar 45%Blue Collar 100%Home-Maker 80%Youth 75%
Products To Value To Value ToSurvey on why consumers would want Focus On Consumers?to use mobile payments? N=50 Operator? • Convenience • Value to customers Air Time Reload • Product Availability • Cost Savings • Pricing • Recurring Transaction • Convenience • Value to customers Bill Payment • Recurring Transaction • Pricing • Synergy/Partnerships Remittance • Wide Cash-Out • Value to customers Network • Pricing • Value to customers P2P Transfers • Wide Cash-Out Network Convenience, access, reliability and trust will be the key to winning!
SMS USSD Applet (J2ME, BB, Sticker (*789#) Android, I-phone)Payment- Matrix Postpaid √ √ √- PLN Postpaid √ √ √- Telkom (PSTN), Speedy & Flexi √ √ √- Cable TV (TelkomVision, yesTV, Aura, Indovision) √ √ √- Leasing & Insurance thru Artajasa (Q3-2012) √ √ √Purchase- Airtime Top-Up √ √ √- PLN Prepaid √ √ √- Games On-Line (Zynga, Travian, AsiaSoft…20 games type) √ √ √- F&B Service Delivery (es teler 77, Dunkin, etc) √ √ √-Online Purchase internet based (blibli.com, i-surf, deal keren…and more) – Q3- √ 2012- Merchant Partner, phase-1 target +/- 200 edc reader/POS for cash-in and √ √ √ √ purchases (Q4-2012)Transfer- P-to-P e-money transfer √ √ √- Cash-in via all ATM in Indonesia (ATMBersama, ALTO & Prima)- Cash-in and cash-out via partner for e-money and remittances at POS office √ √ √ (Q4-2012)- In-bound Remittances from QMM and other (Malaysia, HK, etc) – Q4-2012 √ * The red sentences are services will commercial
Convenience Payment :In Store & Home Delivery Services • Currently the www.restodb.com has listed 1129 dining places that provide delivery service in main cities in Java, Sumatra, Bali and Sulawesi. • Home delivery service is part of the urban lifestyle, and a practical solution for every one that do not want to deal with the traffic jam to get their meal. • However, aside from the increasing revenue from it, offering delivery service also make the dining places to be exposed by the common risk of carrying cash money around the city. • dompetku can be the solution to complete this practical service
Convenience Payment : at Home Services• The need of easy & simple payment transaction doing from home.• Reduce the cost of transportation to do a payment “easy and simple”.• The same aspect that can be addressed with e-wallet is the security. Mobile-wallet can reduce the risk of carrying cash.
Remittance Key SuccessKey Success Factor – Customer Perspective Factor RemittancesKey Success Factor: • The well-known player in remittance business are successfully running1. # of outlet this particular business because they are doing well in these KSF2. Accommodate • And every player that provide remittance services aims to improve these specific needs two success factor Key Success Success Story Improvement/ Development Factor# of Outlet ► Western Union has over 386,000 ► Both Western Union & Money Gram were keep agents worldwide develop the partnership with local banks, ► PT Pos Indonesia has 3,700 online pengadaian and PT Pos Indonesia as their offices and 24,410 point of sales. agent. ► M-Pesa (Safaricom, Kenya) has ► Withdraw balance through License Agent nearly 20,000 agents nationwide. Remittances (stores, etc). ► Withdraw balance through certain ATM.Accommodate ► Most of the money transfer agent ► Emphasize on saving habit, targetingspecific needs targeting migrant worker that Indonesian overseas migrant workers to send need to send money home. money to local bank account. ► Western Union is used by Google ► Transfer Tunai service offers the sender a Ad sense to pay its publishers convenience way to transfer fund through ► ATM Bersama offers a mobile application, and targeting the un- convenience way in transferring bankable receiver by partnering with PT Pos fund between banks. Indonesia as the cash outlet.
Key Success Factor PaymentKey Success Factor: • The well-known player in payment business are successfully running this 1. Building Ecosystem particular business because they are doing well in building ecosystem. 2. Device Integration • The device integration factor is additional key success factor for mobile payment • Whoever stand between customer and merchant should offer convenience and reliability in conducting payment. Key Success Success Story Improvement/ Development FactorBuilding ► Visa-Master network ► Engagement with various merchant:Ecosystem connection with many bank ► Benefit from large customer base merchants: and merchants ►Expand Networked stores ► NTT DoCoMo’s Felica ►Utility provider (Billing payment service by bank & payment services. credit card) ► PayPal offer a convenience ►Transportation provider (e-Toll, GazCard,Ticket way to top up the virtual payment by bank & credit card) wallet by connecting to ► Mandiri prepaid and BCA Flazz offer virtual wallet by customer’s saving or credit connecting to saving account. card account. ► Sinar Mas group trying to link their bank and mobile service through mobile payment (SmartDompet) via sms which is actually mobile banking service.Device ► NTT DoCoMo conducts a ► Common mobile banking offer bill payment, bankingIntegration strong partnership with the (smartDompet), mobile client (Dompetku, T-Cash, handset manufacturer to FlexiCash, BSM Mobile Banking) manufacture the mobile payment platform
Key Success Factor Chain Have large subscriber on mobile phone Building Simple comm. thousands(P-to-P transfer) trusted KEY agents SUCCESS FACTOR Good Quick response relationship to consumer need with regulator and Banks
Micropayment Market PotencyMoney Circulation Number of highway Number of passenger users Game onlineRp 292.98 Trillion 273 thousand/day 294 thousand players cars/day 6 million Number of e- commerce Number of Number of Un-bankable transactions MRT passenger Indonesian Labour potential market 80 Rp 30 Triliun 344,287/day +/-6 million million users
email@example.comProduct Development & Management Manager Div. Mobile Commerce & Money PT. INDOSAT, tbk