Mobile Money Opportunities in SEA

May 2016

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Nathamaly SinbandhitDigital Banking Specialisthttps://sg.linkedin.com/in/nathamaly/en

Mobile Money

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Any opportunities in SEA countries

to launch new Mobile Money services?

● Mobile Money market (selected Asian countries)

● Outlook 2016

● Opportunities in countries with the highest potential

● Current competition landscape

● Main types of products/ offer that could be launched

● Key success factors of an entry strategy

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Agenda

What is Mobile Money?

1. Mobile Banking — use of a mobile phone to remotely access a bank account, primarily for account balance checkup and bill payment services

2. Mobile Money transfer (remittance) — a peer-to-peer application making use of a mobile phone to send money to family or friends, primarily across international borders

3. Mobile Commerce (payment)— use of a mobile phone to perform financial transactions for purchases or sales, either remotely or on-site, retrieve promotion information or coupons, and deliver gift items

Source: Ernst & Young, Mobile Money - An overview for global telecommunications operators, report 2015

http://www.ey.com/Publication/vwLUAssets/Mobile_Money./$FILE/Ernst%20&%20Young%20-%20Mobile%20Money%20-%2015.10.09%20(single%20view).pdf

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Mobile Money Objective

Universal access to safe and convenient financial services.

Easy, Fast and Safe

Mobile Money helps to:

- reduce the vulnerability of the financial system and - mitigate risks due to the widespread use of cash and informal financial services.

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Mobile Money market in 2014-15

6Source: The Singapore FinTech Consortium, As of Q4, 2014

Outlook 2016

The global Mobile Money market is expected to grow from $12.34 Billion in 2014 to $78.02 Billion by 2019, at a Compound Annual Growth Rate (CAGR) of 44.6% during the forecast period from 2014 to 2019.

Source: Expert Interviews, Secondary Literature, and MarketsandMarkets Analysis

According to research firm Gartner, the value of mobile payment transactions in Asia-Pacific is expected to reach $165 billion in 2016, overtaking Africa as the largest region for mobile payments.

Source: Capacity Magazine June-July 2015 Asia Pacific

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Opportunities in countries with the highest potential

8Source: The Singapore FinTech Consortium

Why?

● High penetration of mobile○ Population is comfortable with mobile technology○ Limited fixed line infrastructure○ Mobile operator is trusted brand

● Limited access to financial services○ Low banking penetration○ Financial services mainly available in urban areas○ Limited credit and debit facilities available to mass

● Migrant population○ High need to transfer money from urban to rural areas

● Poor infrastructure/ security○ Limited public transport○ Traditional money transfer services are costly○ Security concerns associated with carrying cash

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Mobile Money - Current competition landscape

Players

● Mobile Network Operators: Vodafone Group PLC, Bharti Airtel Limited, Orange S.A.

● Device Manufacturers and Mobile Operating System Providers

● Financial Institutions

● Payment Networks: Paypal, Alibaba, Globe, Alipay, UnionPay, YeePay, Taobao

New entrants

● Online messaging service providers: KaoKao Talk (South Korea), Line (Japan), WeChat (China)

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38 Mobile Money Operations in Asia Pacific

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Focus in Indonesia

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Mobile Money - Launch new products and services

Products/ Services Indonesia Philippines Vietnam

Banking services ✓ ✓ ✓

P2P transfers ✓ ✓

P2B payments ✓ ✓ ✓

Bill payments ✓ ✓ ✓

Public Service Access

Airtime purchase ✓ ✓ ✓

G2P transfers ✓ ✓

Savings accounts ✓ ✓ ✓

Micro-Credit ✓ ✓ ✓

Micro-Insurance ✓ ✓ ✓13

The future of Mobile Money products

Mobile Money in particular has become the foundation for a range of other innovative financial products:

● Life and health insurance coverage paid for by topping up prepaid airtime● Interest-bearing savings accounts for non-banked customers● Instant personal and small-business micro-loans, and even investment bonds bought

through a mobile phone.

Mobile value-added services: promotions (advertising, loyalty, couponing, promotions/ offers, shopping assistant)

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Key success factors of an entry strategy

MarketCompetitive (low) pricesInnovative offeringBreakthrough innovationDifferentiation Early starterMarketing (branding and communication)Customer centric experienceCustomer segmentation

TechnologyInteroperability: NFC technology could be a way to address interoperability between all parties offering services and technology standards Enhanced security

Business model Partnership: establish strong partnerships with other financial institutionsJoint venture

InfrastructurePayment networkPoint of saleAdoption of the system by agents and susbcribers

RegulationFinancial regulations and legislationRegulatory complianceLicences under domestic legislation and regulations

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Thank you

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Nathamaly SinbandhitDigital Banking Specialisthttps://sg.linkedin.com/in/nathamaly/en