vf cr dialogue 3 economic empowerment

8/8/2019 VF CR Dialogue 3 Economic Empowerment

1/20

The VodafoneCR dialogues

economicempowerment

through mobile


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The VodafoneCR dialogues

ContentsIntroduction 01

Mobile phone banking and low-income customers:EvidenceromSouthArica,byCGAP 02

A sense o balance:Asocio-economicanalysisoairtime

transerservicesinEgypt,byForumortheFuture 05

Mobile-enabled transactions or the base o theeconomic pyramid:Abriereviewothe2006state-o-play,bytheWorldResourcesInstitute 11

ThisseriesopapersTheVodaoneCRdialoguesexploreskeyissuesweaceinmanagingourrelationshipswithsociety.Ouraimistoconsidernewideasandstimulatedebate.

IourCRreportocusesonourmostmaterialissues,theVodaoneCRdialoguesexplorethemindepth.Theyalsoextendourengagementprogrammebecauseweinvolveexpertsandstakeholdersoneachissueinordertoenrichthedebate.

TheVodaoneCRdialoguescovertopicsthatarespecictothetelecommunicationsindustry(suchasprivacyoraccessibility)andalsothosethatrefecttheprocessesoacorporateresponsibilityprogramme(suchasstakeholderengagementorassurance).Weaimtoullyexploretheseissuesandthereorevaluegreatlytheopinionsoothers.

Wewelcomeyourthoughtssopleasesendusyourcommentsorideasto:

[email protected]

Wewouldliketothanktheollowingorganisationsortheirhelpinproducingthispaper.


3/20VodaoneGroupPlcEconomicempowermentthroughmobile

Introduction

IntroductionWelcometoourthirdCRdialogue,oneoaseriesopapersdesignedtoexploreissuesthatarespecictoourindustry(suchasprivacyandaccessibility)andalsothosethatrefectapproachestocorporateresponsibility(suchasstakeholderengagementandassurance).Ouraimistoshareourlearningsandthelearningsootherswithaswideanaudienceaspossibleandtoprovideaorumtoconsidernewideasandstimulatedebate.Wewelcomeyourthoughtsandactivelyencourageyourinvolvementinthediscussion.

Webelievethatthemobileindustryhasgreatpotentialtogeneratepositivesocialandeconomicdevelopmentparticularlyorindividualsinthedevelopingworld.IndeedtwoyearsagotheoverwhelmingamountoevidencearoundthisresultedinourrstSIMreportwhichoutlinedthebroadimpactthatmobilephoneshavehadindevelopingcountries.Sincethenthedebatehasmovedorwardandthepotentialormobilestoactasconduitsorbankingservicesisnowbeingexplored.

VodaonehasbeeninterestedinmobilebankingandmicropaymentsorsometimenowandoursuccessindevelopingM-PESA,amicropaymentsolution,istestamenttoourlong-termcommitmentinthisarea.M-PESAhasbeendevelopedasapartnershipwiththeUKDepartmentorInternationalDevelopment(DID)andisexpectedto

launchinmarketsacrossAsiaandAricashortly.

Itisclearromthecombinedresultsothethreereportsoutlinedinthispaper,thatthepotentialormobilebankingtoassistpeopleonlow-incomeisenormous.Isuccessullymanagedwehopeitwillhaveadramaticandpositiveeectonthelivesopeoplewhocurrentlylackaccesstotraditionalbanks.Thisiswhywesupportknowledgesharingandwanttoworkwithotherstoexplorenewwaystoreachthosewhoneedtheseservicesmost.

TheCRdialoguebeginswithasummaryoarecentlyreleasedstudytitledMobilephonebankingandlow-incomecustomers:EvidenceromSouthArica.IwouldliketotakethisopportunitytothanktheConsultativeGrouptoAssistthePoor(CGAP)oragreeingtosharethisstudy,whichwasdesignedbyCGAPandproducedthroughapartnershipbetweenCGAP,theUnitedNationsFoundation,andtheVodaoneGroupFoundation,withimportantcontributionsromSouthAricasFinMarkTrust.ThestudyshowsthatpoorpeopleinSouthAricaareusingmobilebankingservicesandvaluethemhighly.Italsoidentiesthechallengesinbringingmobilebankingtomorepoorconsumers,includingtheneedtobetterunderstandpoorpeoplesperceptionsobanking,technologyandmobile-banking.

ThesecondreportisasummaryoourworkwithForumortheFuturetounderstandthesocialandeconomicbenetsoaspecicproduct,AirtimeTranser,whichhasbeenwidelyavailableandusedinEgyptsinceSeptember2004.Thekeylearningromthiswasthat,inadditiontotheeconomicbenetthatsharingairtimebrings,thesocialbenetisalsoconsiderable,particularlyoramilies,whichareotenseparatedoreconomicreasons,andwhomightotherwisebeunabletokeepintouch.Finally,wehaveaskedtheWorldResourcesInstitute(WRI)tooutlinethevarietyowaysthatmobiletelephonesarecurrentlybeingusedtodeliverdierenttypesonancialservices,includingmobilepurchasing,electronicmoneyandelectronicbanking.Thisreportexploreswaysinwhichtraditionalbusinessmodelsarebeingchallengedandoutlinesthecommercialopportunitiespresentedbyservicingthebase-o-the-pyramidmarket.

Inordertobesuccessulwemustlistentoourcustomersandadaptouroeringstosuittheirneeds.In2005therewere.4billionmobilephoneusersindevelopingmarkets,theWRIestimatethattherewillbe3billionby200.Individualswhowerepreviouslysilentandignoredcannowbeheardandindustrymusttakeaccountothis.Thesethreereportssuggestthatthismeanschallengingtraditionsandadaptingexistingbusinessmodelsinorderto

providereal,relevantbenets.

Itsachallengewelookorwardtoembracing.

Charlotte Grezo

Charlotte GrezoDirector o CorporateResponsibility

CharlottejoinedVodaoneinJanuary200witharemit

toestablishaGroupCorporateResponsibilityunction.ThisincludesworkingwiththeGroupssubsidiariesandaliatestoestablishthepoliciesandprocessestomanageCorporateResponsibilityattheGrouplevel.CharlottesroleistoleadCRortheVodaoneGroup;toensuretheachievementothestrategicgoalonresponsiblebusiness,promotethevaluePassionortheWorldAroundUsandtoensurethatthecommitmentsmadeintheVodaoneCorporateResponsibilityReportaredelivered.SheisaTrusteeotheVodaoneGroupFoundationandtheVodacomFoundation.DrGrezohasservedonarangeoGovernmentCommitteesandtaskorcesincludingACCPE(AdvisoryCommitteeonConsumerProductsandtheEnvironment)andtheSustainableProcurementTaskorce.CharlotteGrezojoinedVodaoneromBPwhereshewasDirectoroGlobalEnvironmentalIssues.



1 Wetermthedeliveryobankingservicesthroughmobilephonesmobilebanking,orm-banking.Thetermsmobilepayments(m-payments)andmobilecommerce(m-commerce)arealsoused,butusuallytoreertotheuseomobilephonestomakeretailpaymentsandperson-to-persontransersonly.

2 GSMAssociation.GSMHitsTwoBillionMilestone.16June2006.3 BAI2005.TowerGroup2004.BoozAllen2004.4 FinmarkTrust.FinscopeSouthArica2005andFinscopeBotswana2004.5 Thecompletereportprovidesadetaileddescriptionothestudymethodology,includingimportantinormationaboutitslimitations.SurveyswereconductedinJulyandAugust2006.6 Porteous,David.MakingFinancialMarketsWorldorthePoor.PreparedorFinMarkTrust.October2004.

Asmobileusageexpands,somayopportunitiestobanktheunbanked.Withm-banking,low-incomepeoplenolongerneedtousescarcetimeandnancialresourcestotraveltodistantbankbranches,otenlocatedarrom

low-incomecommunities.Andsinceanm-bankingtransactioncostsarlesstoprocessthanatransactionstransactionatanATMorbranch,3bankscanmakeaprothandlingevensmallmoneytransersandpayments.

Mobileisalreadyreachingtheunbankedpoor:inSouthAricaandBotswana,one-thirdopeoplewithoutbankaccountsownamobilephoneorhaveaccesstoone.4Manyothesepeoplearepoor.M-bankingthereoreholdsgreatpromise.Butquestionsremainaboutwhetherpoorcustomerswilladoptm-banking.Forexample,willlow-incomecustomersviewbankingthroughtheirmobilephonesasreliable?Willlimitedschoolingandunamiliaritywithtechnologyslowtheiradoptionotheservice?

Thispaperpresentstherstpublicndingsonhowlow-incomepeopleviewandusem-banking,usingresultsromasurveyo55low-incomeindividualsinSouthArica.5Threehundredothosesurveyeddonotusem-banking,while25arecustomersoWIZZIT,astart-upmobilebankingproviderthattargets

the6millionSouthAricanswholackorhavedicultyaccessingormalbankingservices.WIZZIToersabasiccurrentaccountaccessibleviamobilephoneandaMaestro-brandeddebitcardthatcanbeusedatATMsandbranchesotwomajorbanks.WIZZIThasaccumulated50,000customerssincebeginningull-scaleoperationsin2005.

Whilethendingsothisstudyarenotrepresentativeoalllow-incomem-bankingusersandpotentialusersinSouthArica,theyareencouragingandpointtoimportantchallengesandopportunitiesorthoseseekingtoincreaseadoption.Low-income WIZZIT customers value the m-banking service or itsaordability, ease o use, and security.RespondentsindicatedtheyuseWIZZITbecauseitischeaper(70%),sae(69%),convenient(68%),andast(68%).Oallbankingchannels,m-bankingallsclosesttowhattheWIZZITuserssurveyedsayistheiridealwayodoingbanking.Nineouto0surveyedsaythem-bankingserviceisnotexpensiveorinexpensiveorthebenetsitgives.Incontrast,theseuserssaybankbranchesandATMshavehigheesandlongqueues,poorcustomerservice,andcarrytheriskorobbery.

ThecostoanaveragebasketotransactionsappearsconsiderablycheaperthroughWIZZITthanthroughtheleastcostlyull-serviceaccountsoeredbySouthAricasBigFourbanks.WIZZITalsoappearslessexpensivethantheMzansiaccount,anentry-levelaccountdesignedbySouthAricasbanksespeciallyorlow-incomecustomers.Forthesamebasketotransactions,WIZZITchargesaboutUS$6permonth,whiletheBigFourbankschargeUS$9withthecheapestull-serviceaccountandUS$8withtheMzansiaccount.FinMarkTrusthasdetermined2%oincometobethemaximumpoorpeoplecanaordtopayoraccesstobasictransactionbanking.6Atthesecosts,WIZZITallsbelowthethresholdowhatwouldbeaordabletothe

poor,whiletheull-serviceandMzansiaccountsareaboveit.

Perhapsbecausetheyperceiveittobelowercost,convenientandsecure,WIZZITscustomersconductmorebankingtransactionspermonthusingtheservice(9.3permonth)thannon-usersconductatallotherchannelscombined.WIZZITcustomerspreertousetheirmobilephoneoverotherchannelstopayorpre-paidelectricity,transermoney,buypre-paidairtime,checkaccountbalancesandpaystoreaccounts.

Gautam IvaturyCGAP

GautamIvaturyisamicronancespecialistwiththeConsultativeGrouptoAssistthePoor(CGAP),

aglobalresourcecentreormicronancestandards,operationaltools,training,andadvisoryserviceswhosemembersincludingbilateral,multilateral,andprivateundersomicronanceprogrammesarecommittedtobuildingmoreinclusivenancialsystemsorthepoor.IvaturymanagesCGAPsTechnologyProgramme.BeorejoiningCGAP,hewasVicePresidentoFinanceandAdministrationatSKSMicronanceinIndia,aninvestmentanalystatInternationalFinanceCorporation,andco-oundedastart-upeducationtechnologyventure.IvaturyalsoworkedasaninvestmentbankeratDonaldson,Lukin&Jenrette(nowCreditSuisse).HehasaMastersdegreeinInternationalAairsromJohnsHopkinsUniversity.

Mark PickensCGAP

MarkPickensisamicronanceanalystworkingwithCGAPsTechnologyProgramme,with

responsibilityorshapingstrategyaroundbranchlessbankingandrontiermarkets.PriortojoiningCGAP,heconsultedorbanksandmicronanceinstitutionsinBosnia,Cambodia,andMadagascar,helpedgrowaleadingNewYorkCitymicrolender,andwasseniormanagerinanaward-winningInternetstart-upnewsportal.HebeganhiscareerwithDevelopmentAlternatives,Inc.,aconsultingrmspecialisinginsolutionstosocialandeconomicdevelopmentchallenges.HehasaMastersdegreewithaspecialisationinmicronanceromColumbiaUniversity.

Mobilephonebankingandlow-incomecustomers:EvidenceromSouthArica

The ollowing is an executive summary o a longer study designed bythe Consultative Group to Assist the Poor (CGAP), and produced througha partnership between CGAP, the United Nations Foundation, the VodaoneGroup Foundation, with important contributions rom South AricasFinMark Trust.

Bankingthroughmobilephoneshasbeencommonindevelopedcountriesor

years.Buttherealpotentialom-banking

maybetohelpgivemillionsopoorpeopleaccesstonancialservicesorthersttime.Earlierthisyear,themobilephonebecametherstcommunicationstechnologytohavemoreusersindevelopingcountriesthanindevelopedones. 2Morethan800millionweresoldindevelopingcountriesinthepastthreeyears.

Authors



Awareness o m-banking is low, and non-users have negativeperceptions about banking and m-banking that are restrictingtheir rate o adoption.MostpeopleinSouthAricahaventheardom-banking.Althoughnon-usersliveinthesamemunicipalitiesasWIZZITusers,65percentonon-userssurveyedwerenotamiliarwiththetermcellphonebanking.Amongsurveyrespondentswhowereamiliarwithm-banking,only%namedWIZZITasaprovider.Thismaybeonereasonwhynon-usersperceivem-bankingascostly.Non-usersguessedthatanaverageWIZZITtransactionwouldcostUS$.70,whereasWIZZITactuallychargesbetweenUS$0.3andUS$0.66pertransaction.ButonceinormedthatamonthlyaverageoreesmaybeaboutUS$2.62,74%onon-userssaidthiswouldbeaordableorinexpensive.8

Asignicantnumberonon-usersarepessimisticaboutm-banking.Onlyaboutoneinthreerespondedthatm-bankingwillmakebankingmoreaordableandlessthan40%saidm-bankingwillbeassecureasotherbanks.ATMsareseenasconvenientandaordableandbankbranchesassecure,althoughtherearecomplaintsohigheesandlongqueues.

Attitudestowardsbankingingeneralareanotherchallenge.About84%onon-userswhoareunbankedsaytheywouldliketoopenabankaccount,butmanyseemtobelievethattheirincomeandemploymentstatusexcludesthemrombanking.Sixty-vepercentounbankednon-userscitealackoregularincomeasthemainreasonornothavingabankaccount,and60%citealackoemployment.

Signifcant numbers o WIZZIT customers are low-income, but theyoccupy the upper end o South Aricas low-income population on incomeand assets, and are more fnancially and technologically sophisticated.ThesurveyresultsdonotrevealwhethermostoWIZZITscustomersarelow-income,orwhethermostareafuent,butWIZZITdoeshavealargelow-incomecustomerbase.Forty-threepercentoWIZZITuserhouseholdssurveyedallbelowSouthAricaspovertylineoUS$257permonthoraamilyove,andaurther2%haveincomesupto50%othepovertyline(whichlikelymeansthattheyarestillvulnerable).

Thoughpoor,thesurveyedusersarebetterothanmostotherpoorSouthAricans.Only6%oWIZZITuserhouseholdsaredestituteaccordingtoaLivingStandardsMeasure(LSM)categorisationbasedonhouseholdassetsandincome.Bycomparison,6%oallSouthAricanhouseholds,and23%onon-userhouseholds,tthisdescription.Whileonly5%oWIZZITuserssurveyedreportedbeingunemployed,40%onon-usersand27%oallSouthAricanshavenojobs.AndonlyaquarteroWIZZITuserssurveyedwouldbedescribedasnanciallyunsophisticatedbyFinMarkTrustintermsotheirattitudes,knowledgeandbehaviourtowardsnancialservices,asopposedto93percentonon-usersand45%oallSouthAricans.

Comparedtonon-userswhoownmobilephones,WIZZITusersarealsomorelikelytousetheirmobilephonesoradvancedtasks,suchasusingitasadiary(62%ousers,9%onon-users)andplayinggames(64%ousers,39%onon-users).

Although users and non-users say they are open to using newtechnology, they still value human interaction.AlmostallWIZZITuserssurveyed(97%)saidthattheyarepreparedtousetechnology.Eight-onepercentonon-userssaidthesamething.Butothersurveyresultssuggestthatusersandnon-usersstillhavedicultywithtechnology,andmaypreerhumaninteraction.Fity-onepercentonon-usersand49%ousersagreewiththestatementthatyouwouldratherdealacetoacewithapersonratherthananelectronicdevice,evenithedeviceisaster.AndthemostcommonreasonwhysomeWIZZITuserssurveyedhavestoppedusingtheserviceisbecausetheydontunderstandthetechnology(27%).Thethirdmostcommonreasonisthatusersndtheservicetoocomplicated(23%).7

Mobilephonebankingandlow-incomecustomers:EvidenceromSouthAricacontinued

Table:CostousingWIZZITvstraditionalbankaccountorMzansiaccountTransactions Same transactions SameWIZZIT users w/ Big Four ull- transactions

conduct service account with Mzansi

Rand US$ Rand US$ Rand US$

Bankeescharged/mo 36 5 55 7 49 6

Airtimeees/mo 2 0 0 0 0 0

Transporttobank/mo 7 TOTALMONTHLYCOST 45 6 66 9 60 8

ANNUALISEDCOST 537 70 790 03 78 94

Annualcostasdaysoincome 7.5 0

Annualcostas%oannualincome 2.% 3.% 2.8%

Table2:AveragebasketotransactionsconductedbyWIZZITuserspermonthElectronic Set up Set up

Buy Balance Cash Cash Money Pay Mini- Pay store bank debit stop CheckTotal airtime inquiry withdrawal deposit transers electricity statement accounts transer order order deposit

Allbankingtransactions 2.8 3.7 2.7 .7 0.8 0.8 0.7 0.7 0.5 0.4 0.35 0.2 0.

TransactionsusingWIZZIT 9.3 2.6 .9 .3 0.7 0.5 0.4 0.5 0.5 0.5 0.3 0. 0.

7 RespondentswhostoppedusingWIZZIThadeducationandemploymentlevelssimilartocurrentusers,andweremorelikelytobeLSM5andliveinhouseholdswithhigherincomes.8 WIZZITsUS$2.64estimateisbaseduponcustomersusingelectronicdepositandcashbackatmerchantsormostotheirwithdrawals.UsersinthisstudyconductedmorecashdepositsandATMwithdrawals.



0 20 40 60 80 100Users Non-users (cellphone) Non-users (no cellphone)

You try to avoid technology as much as possible

If you could, you would make more use of technology

Cellphone/mobile banking will makebanking more affordable to use

With cellphone banking, your moneywill be as secure as with other banks

Cellphone banking can be trustedif backed by a bank

Cellphone banking can be trusted

if backed by a cellphone company

26

24

2796

8779

9437

3193

4236

8856

5082

5745

Table3:Perceptionsamongusers(25),non-userswithmobilephones(49)andnon-userswithoutmobilephones(5)

Forexample,thestudyrevealsthatsomeSouthAricanswhoareunemployedandearnnopersonalincomeseemtobelievethattheydonotneedbankingservices,cannotaordthem,orareineligibletohavethem.Withaclearerunderstandingothisunemployedandunbankedsegment,m-bankingprovidersmaydiscoverbetterresultsinbrandingtheirserviceasasaer,moreconvenientpaymentmechanismratherthanasabetterbankaccount.Qualitativeresearch,suchaswithocusgroupdiscussions,maybehelpulinisolatingcriticalvariables.

Ultimately,allpoorpeopleneednancialservicestoincreasehouseholdincomes,buildassets,andbecomelessvulnerabletocrises.Withmillionsomobilephonesalreadyinpoorpeopleshands,CGAP,UNFandVGFseetremendouspotentialinthepoweronetworkoperators,banksandnewentrantstodelivernancialservicesthroughthischannel.

Theullreportcanbeaccessedatwww.cgap.organdwww.unoundation.org

ConclusionsThisstudyhasyieldedseveralinsightsromoneotherstinitiativesdedicatedtooeringm-bankingservicestothepoor.Itshowsthatm-bankingservicesarevaluedbypoorpeopleinSouthAricaandmaybemoreaordablethantraditionalbanking.Italsosuggeststhatm-bankingprovidersmustbuildgreaterawarenessotheirservices,andmustndtherightbalancebetweenahumantouchandtechnologytoappealtomorelow-incomecustomers.

Moreimportantly,thestudysuggeststhatlow-incomem-bankingusersinSouthAricatodayareearlyadopterswhoarewealthierandmoretechnologicallyandnanciallysophisticatedthanmostpoorpeopleinthecountry.Byidentiyingthatperceptionsaboutbanking,m-bankingandtechnologymaybeasimportantasincomelevelsindeterminingtherateoadoption,thestudyarguesoradeeperexplorationotheseperceptionsandhowtheymaybeusedtosegmentthelow-incomemarket.

Mobilephonebankingandlow-incomecustomers:EvidenceromSouthAricacontinued



ForumortheFutureisaUK-basedsustainabledevelopmentcharity.Ouraimistoshowthatasustainableutureisbothpossibleanddesirable.Weworkwithorward-lookingorganisationsinbusinessandthepublicsectortondpracticalwaystobuildauturethatisenvironmentallyviable,sociallyjustandeconomicallyprosperous.Ourpartnerswhichincludecompanies,localauthorities,regionalbodiesanduniversitiesworkwithustoidentiyandovercomebarrierstomoresustainablepractice.Weidentiyopportunitiesorsustainablebusinessandchangethewayleadingcompaniesoperate,promotinggreenprocurement,encouragingethicalmarketingandosteringinnovation.

IntroductionMobilephonesarehavingatransormativeeectacrosstheglobe.Theyoeraccesstopeople,goodsandservicesandeconomicopportunitiesonascale

inthedevelopingworldthatismuchgreaterthanbeore.Theyconstituteanopportunityormoresustainablesocialandeconomicdevelopment,andnewmobile-basedservicesarecontinuallyappearingtosupportthis.

Person-to-personairtimetranserisonesuchservice,allowingmobilesubscriberstosendandreceiveairtimeorasmallee.Intheorythebalancetranserservice(BTS)isamechanismortheecientsharingoairtimewithinanetwork,makingmobileservicesmoreaordable.BTShasbeenintroducedintomanydevelopingworldmarketssuchasthePhilippines,SouthAricaandKenya.AlthoughanecdotalexamplesothepositivesocialandeconomicimpactsoBTSareemergingsuchasitsabilitytoenableairtimetobeusedasaninormalormoelectronicmoneytherehasbeenlittlesystematicresearchtodate.

ThispaperprovidessummaryndingsoastudyothesocialandeconomicimpactsoBTSinEgypt.Aullreportispublishedseparately 2.VodaoneEgyptlaunchedBTSinSeptember2004andthisstudyisbasedonprimaryresearch

conductedbetweenJanuaryandJuly2006. 3Duringthistime,weconducted:

James GoodmanHead o FuturesForum or the Future

JamesisresponsibleorFuturesworkattheForum,usingstrategic

uturesthinkingtohelporganisationsaddressemergingandlong-termsustainabilityissues.Hehasworkedextensivelyonthesocialandenvironmentalopportunitiesothedigitaleconomy,andwasaleadauthoroMakingtheNetWork:sustainabledevelopmentinadigitalsociety.

Vedant WaliaSustainability AdviserForum or the Future

Vedantworksinthebusinessprogrammemanagingcorporate

partnerships,providingstrategicadviceandconductingresearch.Keyocusareasincludeinnovativebusinessmodels,newnancingmethodsorsustainabilityandimplementationstrategiesacrosssectorswithaocusonnancialservices,transportandglobalbusinessinemergingeconomies.Heisparticularlyinterestedinexploringthesynergiesbetweennewtechnologies,productsandbusinessmodelsthatcanhelpdeliversustainablepro-poordevelopment.

AsenseobalanceAsocio-economicanalysisoairtimetranserservicesinEgypt

Sixocusgroups,eachwitheightBTSusers,inthreedierentlocationsandcoveringbothgenders,withdierentsocio-economicgroupsandages

Sixollow-upinterviewswithocusgroupparticipants

Fourinterviewswithphoneshopdealersandourinterviewswithairtimeresellers

Anationallyrepresentativequantitativesurveyo700BTSusersand300non-users.

Key fndingsWehavedevelopedvepropositionsbasedontheresultsoourresearchintothesocialandeconomicimpactsotheBTS:

Balance transer increases access to mobile servicesthroughenablinguserstoobtainreeorpaidorairtimeremotely

Balance transer improves aordabilitybyallowingairtimetop-upsinsmallerincrementsandaccesstoreeairtime

Balance transer creates commercial opportunitiesorresellerso

airtime,providingaviableandfexiblebusinessopportunityorawiderangeomicroentrepreneurs

Balance transer use supports social networksthroughreinorcingexistingrelationshipsandredistributingairtimewithinamilyorriendshipnetworks

Balance transer is not used as a proxy currencyduetosignicantcostandculturalbarriersaswellasalackoawareness,buthasthepotentialtosupportmobilepaymentsandmobilebankingservices.

Balancetranserhasmanysocialandeconomicimplications.However,wehaveoundthatthesocialaspectsaremorevisibleatpresentparticularlyintermsoreinorcingexistingamilyandriendshipnetworksandbuildingsocialcapitalastheserviceisnotdeliveringonitsullpotentialorenablingeconomicactivity.BTScanprovideeconomicbenetsdirectlythroughcreatingincomeearningopportunities,orindirectly,throughallowingmorelow-incomeindividualstoaccessmobileservicesorasanenablerorimprovingaccesstonancialservicesorunderservedgroups.Wepresentsomeoptionstodevelopthispotentialattheendothispaper.

WenowbriefyoutlinehowtheBTSworksandcategorisebroadusergroupsbeoreexaminingeachoourvepropositionsinmoredetail.

The balance transer serviceVodaoneEgyptisoneotwomobileoperatorsinEgypt,agrowingmarketwithapproximately2%mobilepenetrationinJuly200690%owhichareonprepaidtaris.4VodaoneEgyptoersdierentprepaidtariswithvaryingpricingandusagestructuresbutallthesetarisrequireairtimerechargecardssoldindenominationsstartingrom0EgyptianPounds(LE)/US$.73withoutaddedsalestaxgoingupinincrementsto200LE/US$34.84. 5Atersalestaxandvendorcommissions,retailpricesorthecardsstartat3-5LEor

the0LEcard,goingto4-8LEora00LEcard.The0LEcardhasrapidlygrowntobethemostpopularsinceitsintroductionin2005,indicatingthepricesensitivityotheEgyptianmobilemarket.The200LEcardhasamuchlowermarketpresenceandwasnotmentionedbyanyrespondentsinthisstudy.

Inordertoensurerevenuelevelsaremaintainedinlow-incomemarkets,manyoperatorsrequireprepaiduserstoconsumeairtimewithinaxedtimeperiod.PrepaidsubscribersinEgyptcanonlyusetheirphoneswithinvalidityperiodsprovidedbytherechargecardtheyusetotop-uptheirairtime.A00LE/US$7.42rechargecardgivesthebuyer90LEworthoairtimeandourmonthsvalidityinwhichtouseit.Lowerdenominationcardshaveshortervalidityperiods.TheBTSservicewasintroducedbecauseoseveralinstanceswherethevaliditysystemdidnotmatchamobileusersairtimeconsumption,eitherleavinglightuserswithtoomuchairtimeattheendotheirvalidityperiodorcausingheavyuserstorunoutoairtimeearlyonintheirvalidityperiod,orcingmanytorationtheirmobileuse.BTSenablesusersto

redistributeairtimeaccordingtotheirneeds.

1AirtimetranserisreerredtoastheBalanceTranserService(BTS)byVodaoneEgypt.WeusethetermBTSthroughoutthisreport.2Aullreportthatcontainsmoredataandanalysisaswellasaseriesocasestudiesisavailableatwww.orumortheuture.org.uk3Thisstudyreerstotariplansandbalancetranserservicesthatwereavailableduringthisperiod.TheBTSandVodaoneEgypttariplanshavechangedslightlysincethecompletionothisstudy.

4Source:VodaoneEgypt5Allcurrencyconversionsusedinthisstudyarebasedonratessuppliedthroughwww.XE.cominOctober2006.Theexchangerateusedis1US$=5.742LE.

Authors



Thebalancetranserprocessisdescribedinthegurebelow.ItusesthestandardVodaonebalanceenquiryIVR(interactivevoicerecognition)costing0.2LE/US$0.03pertransaction.BTShasbeendesignedtobeeasytouseorthemajorityoEgyptians.Itdoesnotrelyonliteracy,abilitytousetextmessagingorothereatures,butisbasedonasimpleautomatedvoicecallwithapre-recordedmessagegivinginstructionsonwhichbuttontopressorxedairtimeamountso5,0or5LE.

Profling BTS usersBTShasprovedtobeoneotheastest-growingvalueaddedservicesintroducedintotheEgyptianmobilemarket.Forty-vepercentotheVodaoneEgyptcustomerbasehadusedtheservicebetweenSeptember200405andguresromJuly2006show5,624LE(US$8,994)beingtranserredin4,400transactionsinthatmonth. 6Inourqualitativeresearch,BTSwastheourthmostmentionedmobileserviceatercalls,missedcalls,andtexts.Theserviceisveryimportanttomanyusers.OnerespondentevenclaimedPeoplewoulddemonstrateinthestreetsitheBTSwaswithdrawn.

Weinterviewed,000Vodaonecustomers700BTSusersand300non-usersacrossEgyptbetween3and26July2006.7Comparedtonon-users,BTSuserstendedtobeyounger,single,morelikelytobestudentsandmorelikelytobeemale.Therewerenosignicantdierencesaccordingtosocio-economicclassicationsA/B,C,C2andD/Eorregion.Inordertoinvestigateuserproles,wesegmentedBTSusersintoourbroadcategories.Thetablebelowpresentsabriedescriptionoeachcategoryaccordingtosignicantsocio-economicanddemographiccharacteristics.

ThendingsrevealthatBTSisnotaveryregularlyusedserviceormostusersthelightuserscategory,whichmakesup58%otheBTSuserbase,onlysendsandreceivesairtimeonceinathree-monthperiodandevenheavyusersonlysend7timesandreceive0times.

Table:Thebalancetranserprocedure

Customer A

CustomerAnotiedosuccessultranserduringcall

CustomerBsentconrmationmessageincludingsenderdetailsandamounttranserred

Vodaone

Customer B

Call868,enteroption,2,3or5,0,5LE,keyinCustomerBsnumber

Sender Receiver

Table:Thebalancetranserprocedure

Customer A

CustomerAnotiedosuccessultranserduringcall

CustomerBsentconrmationmessageincludingsenderdetailsandamounttranserred

Vodaone

Customer B

Call868,enteroption,2,3or5,0,5LE,keyinCustomerBsnumber

Sender Receiver

Proposition one: Balance transer increases accessto mobile services

Balancetranserusersingeneralusetheirphonesmorethannon-users,makingandreceivingmorecalls,textsandmissedcalls,astable3belowshows.HeavyusersoBTSmakeandreceivemorecallsandsendandreceivemoretextsthananyotheotherBTSusergroups.

Itislikelythatheavierusersomobileservicesareattractedtobalance

transer,asitallowsthemtomaintainaccesstothenetworktowardstheendovalidityperiods.BeoreBTSwasavailable,peoplewouldotenrunoutoairtimewhilestillintheirvalidityperiod.Sincecardsarerelativelyexpensive,thiswouldmeanrationingoutairtimeuntiltheywereabletoaordanothercard,ineectlimitingtheuseotheirmobilephone.Onerespondentclaimed:Inthepast,IhadtotrytomaintainmycreditwhichIgetroma00LEcard,throughoutourmonths.SoIwastalkingoronlyoneortwominutesperday,butnowIspeakasmuchasIwant,bypaying0LEor5.

Thereore,BTSisassociatedwithheaviermobileusage.Evidenceromoursurveysupportsthis.WeaskedBTSuserswhethertheythoughtthatusingBTSmeantthattheyusedtheirmobilephonesmore.Themajority55%saidthatitdid,withonly2%disagreeing.Heavyusersandreceiversweremorelikelytoagree,with69%and73%respectivelysayingthatBTSmeanttheyusedtheirmobilesmore.

Balance transer users spend more on their mobilesItisnotsurprisingthatBTSusersspendmoreontheirmobilephones,giventhattheyusethemmore.Intermsooverallspendonrechargecardsoverthelastthreemonths,BTSusers(99LE/US$34.66)spentalittlemorethannon-users(78LE/US$30.9).However,whentheBTSusergroupissegmentedaccordingtoourtypology,wecanseethatheavyusers(230LE/US$40.06)andsenders(223LE/US$38.84)spendsignicantlymoreonrechargecardsthennon-users(seetable4onpage7).SomeotheairtimethatsenderspurchaseviarechargecardsislatersenttoothersusingBTS,ineectredistributingsomeothatairtimearoundthemobilenetwork.Heavyusersalsotranseralototheairtimetheybuy,butreceivesubstantialamountsoairtimeusingBTS.

Table3:MobileusagehabitsamongstBTSusersandnon-users

BTS Non- Heavy Rece- LightAverage times/week user user user Sender iver user

Giveamissedcall 22.3 6. 22.3 22.6 26.6 20.8

Receiveamissedcall 23.4 7.3 2.8 23.4 27.6 22.

Callsomeonetotalk 4.2 3.8 7.6 7. 3.7 3.2

Receiveacalltotalk 8.8 8.5 22.7 2. 9.4 7.4

Sendatext 8.4 4.5 2.3 9.3 9 7.4

Receiveatext 8.9 5.7 .8 8.8 9.3 8.2

Table3:MobileusagehabitsamongstBTSusersandnon-users

BTS Non- Heavy Rece- LightAverage times/week user user user Sender iver user

Giveamissedcall 22.3 6. 22.3 22.6 26.6 20.8

Receiveamissedcall 23.4 7.3 2.8 23.4 27.6 22.

Callsomeonetotalk 4.2 3.8 7.6 7. 3.7 3.2

Receiveacalltotalk 8.8 8.5 22.7 2. 9.4 7.4

Sendatext 8.4 4.5 2.3 9.3 9 7.4

Receiveatext 8.9 5.7 .8 8.8 9.3 8.2

AsenseobalanceAsocio-economicanalysisoairtimetranserservicesinEgyptcontinued

Table2:CharacteristicsoourbroadBTSusersegments

Category Heavy users Senders Receivers Light users

Percentageototal 0% 2% 20% 58%sampleN=700 (68people) (86people) (39people) (407people)

Timessentorreceived Sentairtime:7 Sentairtime:7 Sentairtime: Sentairtime:airtime(averagein Receivedairtime:0 Receivedairtime: Receivedairtime:9 Receivedairtime:previous3months)

Genderdierence Morewomen Moremen

Distributionacross Morebetween3-2, Fewerbetween3-2, Slightlymore3-2 Morepeopleagedover30agegroups ewer45andover more45andover andewerover30

Socio-economicclassication MoreSECC MoreSECA/B MoreSECD/E SlightlymoreSECC2

Occupation Moreull-timeworkers Fewerstudents,more andslightlymorestudents housewivesandretirees Morepart-timeworkers

6Source:VodaoneEgypt.7Respondentswereselectedrandomlyrommobilephonenumberlists.UsersweredenedaspeoplehavingusedBTSwithinthelastsixmonths.



BTS enables remote airtime top-upsRemotetranseroairtimetoriendsandamilyisanimportantwayomakingsurethattheycanstayintouch.Examplesincludeemergencysituationsorwhereapersonisunabletophysicallyaccessshopsthatsellrechargecards.Forinstance,someonewhoworkedonashipandcouldntbuyrechargecardsreceivedairtimeromriendsusingBTSandcouldstayintouch.WeheardomanyanecdotalexampleswhereBTSwasusedtosendtop-upsinanemergency.

Airtimeisalsosharedremotelywithincloseamilyandriendgroups.Weheardanexamplewheretheuseracednancialdicultiesandwasregularlysent

airtimebyhissisterwholivedinanothertown.BTSprovidestheabilitytoobtainairtimeromamilyandriendsorthroughcommercialdealersandresellers(exploredlaterinthispaper)andthusmaintainaccesstomobileservices.

Proposition two: Balance transer usage increasesthe aordability o mobiles

Mobiles are a vital but costly toolAlthoughourocusgroupparticipantsgaveusastrongmessagethatmobilephoneswereanessentialtoolorliving,inourquantitativesurveywecanseethatpeopledonotthinkthattheyaregettingmorethantheypayor.Mobilesareseenasavitalbutcostlytool.

Overall,aroundhalooursurveyrespondentseitheragreedorstronglyagreedwiththestatementIspendtoomuchmoneyonmymobile(50%),withslightlyewerdisagreeingorstronglydisagreeing(3%).Onanothermeasure,themajorityorespondents54%thoughtthatthebenetsandcostsomobilewereaboutthesame.Twenty-sixpercentsaidthebenetsoutweighedthecostsand20%saidthecostsoutweighedthebenets.

Making mobile use more aordableAordabilityisamajorbarriertoincreasingthetakeupomobileservicesinlow-incomemarkets,wheretheabilitytopayisseverelyrestrictedbeyondthetopsocio-economictierothepopulation.Mobileoperatorshavetakenanumberostepstoaddressthislow-incomemarket,includingoeringprepaidtariswithlowentrycosts.Low-incomecustomersotenhavesporadiccashfowandareusuallyondailyorweeklywages.Oneothemostcrucialissuesisenablingsuchcustomersnotonlytopurchaseahandsetandline,butalsotomanageairtimecosts.Ahighvaluedenominationcard,suchasthe00LE/US$7.42rechargecard,isbeyondthereachomany,andawidevarietyotechniquesareusedtomanageairtimecostsamonglow-incomeusers.The

useomissedcalls,textsandcareulmanagementotarisiscommon.

Balance transer improves aordabilityTheabilitytotop-upairtimeinsmallincrementsenableslow-incomeuserstomanagetheirairtimeconsumptioninlinewiththeirrestrictedandunpredictablecashfow.BTSenablesuserstotop-upairtimeinsmallerincrements(5LE/US$0.87)thanpossiblebyarechargecard(0LE/US$.73).SinceBTSwasintroduced,customershavebeenabletospreadthecostotheirairtimebyregularlytoppingupsmallincrementswhentheirundsallow.

Inoursurvey,usersviewedBTSasanimportanttooltomaketheirmobileusemoreaordable.Fity-sevenpercentoBTSusersthoughtthatBTSmadeusingmobilesalittle(25%)oralot(3%)moreaordable,withonly4%thinkingtheoppositeand39%thinkingitmadenodierence.Eightypercentoreceiversagroupthathasmorelow-incomeusersandreliesonBTStoobtainasignicantproportionototalairtimethoughtBTSimproves

aordability,indicatingthatBTSplaysavaluableroleinenablingaccesstomobileservicesorsomelower-incomeusers.

Manyuserspurchaseairtimeusingbalancetranserromresellersanddealers.Althoughsomeuserswillpurchaseairtimeromriendsandamilyinexchangeorcash,themainsourceopurchasedairtimeisthediusenetworkosmall-scaledealersandresellersthatoerairtimeviaBTSwithasmallprotmargin.

Fity-sevenpercentoheavyusersand68%oheavyreceivershaveboughtairtimeusingBTSromaphoneshop

Resellers8areusedbyewerpeople(23%oheavyusersand28%oheavyreceivers),indicatingthatdealersdominatethecommercialBTSmarket

Low-incomeBTSusers(SECD/E)havedonethismore(5%)thanmoreafuentconsumers(33%oSECA/B).

Remotetop-upusingBTSalsotookplacecommercially.WeoundmanyBTSuserscallingtheirlocalmobilephoneshoportrustedresellerandaskingoratranseroairtime,promisingtovisitlatertopay.Almosthaloheavyusersandreceivershaddonethisatsomepoint,andaroundathothesamegroupsdidthisotenorveryoten.

Proposition three: Balance transer createscommercial opportunities or users.

Inaseriesoin-depthinterviewswithdealers,BTSemergedasauseulsourceorevenuebutwasnotsignicantcomparedtothemainrevenueearnersrechargecards,linesandhandsets.

Intheocusgroupsandthroughsubsequentin-depthinterviews,weidentied

severalmicroentrepreneurswhohavebuiltviablebusinessesonBTS.Theseairtimeresellersoperateaninormalserviceasasourceosupplementaryincome,andtranserairtimeusingBTSatasmallprot.Thequantitativesurveyoundasmallbutsignicantnumberoinormalresellers.Peoplewhosaidthattheyhadsoldairtimeataprotmadeup.4%oBTSusers,or0people.Thismayappearinsignicant,butiextrapolatedtotheBTSuserpopulationasawhole,couldmeanapproximately40,000to50,000inormalresellersthatareactivelysellingairtimeatprottosomedegree.

Thereissignicantvariationinthiscategory,whichcouldincludeindividualswhohaveoccasionallysoldairtimetoacquaintancesonanad-hocbasisanddonotpursueitasabusinessopportunity.However,aewindividualshavestartedtooerBTSasacommercialserviceonaregularbasis.Theaverageamountoprotwas35LE/US$6.09inonemonth,equatingtoeitheraloworverylowproportionototalmonthlyincome.However,signicantlyhigherguresabove200LE/US$34.84emergedinourin-depthinterviews.

Thedataisunreliable,especiallysincemanywerereluctanttorevealguresoraninormalgreymarketactivity,butitisclearthatsomeresellershavebuiltlivelihoodsonBTS.

Table5:AgreementwiththestatementBTSmakesusingmobilephonesmoreaordableTable5:AgreementwiththestatementBTSmakesusingmobilephonesmoreaordable


Table4:AveragespendonairtimerechargecardsandBTSsent/receivedinthreemonths

Category Average spend on Average amount o Average amount orecharge cards (LE) airtime received (LE) airtime sent (LE)

Heavyusers(68) 230 44 33

Senders(86) 223 6 3

Receivers(39) 73 39 9

Lightusers(407) 68 8 9Non-users(300) 78 - -

8AresellerisdenedasanindividualthatsellsairtimeusingtheBTSserviceata protandwhoisnotlinkedwithamobiledealerorphoneshop.Thisexcludestransersmadeatacevalue,evenitheairtimeissold.

A lot more affordable A little more affordable No difference

A little less affordable A lot less affordable

Heavy user

Sender

Receiver

Light user

46% 27% 25% 2%2%

38% 21% 39% 1%

45% 35% 16% 2%2%

23% 23% 49%3%

3%



Itisverydiculttoaggregateresultsandquantiywhatproportionothetotalbalancetranserredisromresellerstocustomers.Aswementionedearlier,commercialbalancetranserseemstobedominatedbysmall-scaledealersratherthanresellers.However,ourin-depthinterviewsrevealthattheresellerbusinessmodelhasstrongpotentialtoprovidepro-poorlivelihoods;itissuitedtooperatinginbase-o-the-pyramidmarketsduetolowentrybarriersintheormoacceptablestart-upcosts,beingeasytouseandthefexibilitytointegrateintodierentliestyles.Potentially,anyonewhohasamobilephone

canbecomeasuccessulreseller.Oursurveyidentiedonehousewiewhowasmakingaprotromsellingairtime.Resellersobtainairtimeeitherbypurchasingarechargecardatretailpricesandthusincurringadministration,salestaxandotherchargesortoalesserextent,throughvaliditytransactions. 9Atthemoment,resellersarepayingtheadditionalcostswithintherechargecardsystemastheyareessentiallyretailcustomersratherthanairtimedistributors.Thisincreasestheircostsandunderminesthepro-poorbenetsotheirbusinessmodelastheyhavetochargehighermark-upstostayprotable.Mostwillbeorcedtochargeupwardso6.50to7LEor5LEoairtime.0Itheywerebroughtintotheocialairtimedistributionnetwork,thiswouldsignicantlyimproveboththeirbottomlineaswellastheaordabilityoairtimeincrementstotheirendcustomers.

Proposition our: Balance transer use supports

social networksEgyptianmobilephoneusersthinkotheirmobilesasinvaluablesocialtools.Inoursurvey,overall76%oBTSusersand77%onon-userseltthatusingmobilephonesstrengthenedtheirrelationshipswithamilyandriends,withonly6%ousersand4%onon-usersthinkingtheopposite.

BTS strengthens relationships within existing social networksAlthoughrespondentsinoursurveywerelessemphaticaboutthesocialroleobalancetranserthantheywereaboutmobilephonesingeneral,theystillsawtheserviceasatooltostrengthenrelationships.Overall49%oBTSusersthoughtthatusingtheservicestrengthenedrelationships,withanother50%thinkingthatitmadenodierence.BTSalsoallowspeopletosendlow-valuegits,orbirthdaysorduringestivals.Overall29%oBTSusershaddonethis,and4%saidtheydiditotenorveryoten.

BTSusersmostlyexchangeairtimewithintheirexistingsocialnetworks,closeriendsinparticular.Forexample,astable6shows,5%oBTSuserssendairtimetocloseriendsmostand4%receiveairtimeromcloseriendsmost.

51%

42%

28%

1%

16%

11%

11%

14%10%

12%

5%

10%

8%

4%

4%

7%

2%

2%

Receive from most

Send to most

Close friends

Children

Sisters

Brothers

Cousins andother family

Spouse

Parents

StrangersColleagues

BTS USER

Table6:WhoBTSuserssendandreceiveairtimewithmost.

51%

42%

28%

1%

16%

11%

11%

14%10%

12%

5%

10%

8%

4%

4%

7%

2%

2%

Receive from most

Send to most

Close friends

Children

Sisters

Brothers

Cousins andother family

Spouse

Parents

StrangersColleagues

BTS USER

Table6:WhoBTSuserssendandreceiveairtimewithmost.

Thereisvariationbetweenthedierentusergroupsandaccordingtosocio-economicanddemographicprole.

Womensendandreceivemorewiththeirsistersandparents

Olderagegroupssendandreceivemorewiththeirchildren,andyoungeragegroupsmorewithcloseriends

Peopleromhighersocio-economicgroupssendandreceivemorewith

theirparentsandcloseriendsLowersocio-economicgroupsreceivemoreromstrangersinrealityphoneshopdealersandairtimeresellers.

Mobiles are valued by womenWomenvaluemobilephonesorincreasingreedom(52%othewomensurveyedsaidthatmobilesgavethemmorereedomwithonly5%sayingtheopposite).TherewasacontrastbetweenemaleBTSusers(56%agreeing)andnon-users(33%agreeing).Inocusgroupswithyoungerwomen,weoundthattheyareadeptatnavigatingtraditionalgenderrolestoobtainreeairtime;askingorairtimerommaleriendsratherthanemaleriends,knowingthattheirmaleriendswereunlikelytowantanythingbackinreturn.

Especiallyoryoungpeople,theexchangeoairtime,alongwithexchangeomissedcallsandothermobile-basedbehaviour,hasbeenabsorbedintonormalsocialinteraction.Mobilesormuchotheyouthareapartoyouth

cultureandbalancetranserisanessentialpartothat.

Tosendsomeoneairtimetoavalueo5,0or5LErequiresacertainamountotrustthattheairtimeoritsequivalentmoneyperhaps,oraavourwillbereturnedatsomepointintheuture.Sendingandreceivingairtimerearmsthattrust.Arespondentsaid:SayInowsenthimthe5LEandhesinneedoitbecauseheisbrokeandcantevenbuyarechargingcard,thenIcansendhimandhereturnsitbackwheneverpossible,noproblem.

Proposition fve: Balance transer is not used as aproxy currency

Thereareseveralemerginginitiativeswheremobilesarebeingusedasachanneltodelivernancialservices.Theoretically,aperson-to-personbalancetransersystemoersaplatormorconductingnancialtransactions,eveniithasnotbeenexplicitlydesignedtodoso.Airtimehasthepotentialtobecomeaproxyorvirtualcurrency;itsharesthesamecharacteristicsasmoneymediumoexchange,storeovalueandunitoaccountandtheabilitytotranseritelectronicallymakesitaviablepaymentmechanism.2Anecdotalevidenceromotherregionssuggeststhatinormalad-hoctransactionsusingairtimeasaormoelectronicmoneyarecommoninKenya(usingtheSambazaairtimetranserservice)andSouthArica(usingtheMe2Uservice).3

Inourocusgroups,wedidencountersomeisolatedinstanceswhereparticipantshadusedairtimeinexchangeorgoodsorservices.Butthisseemedtobetakingplaceonlyinspeciccircumstanceswhenthevendorwantedairtimetouse:theairtimewasnotactuallytreatedasacurrencyorasbarter.

Wetestedthisinourquantitativesurvey,askingrespondentswhetherthey

hadeverboughtsomethingusingairtime.Mosthadnot,but%olightusers(ourpeople)and4%oreceivers(sixpeople)saidtheyhad.Onlyonepersonsaidthattheydidthisotenorveryoten.

Cost barriers to using airtime as a proxy currencyWehadexpectedtondmoreusageoairtimeormobilepaymentsasEgypthasmanycharacteristicswhichwouldmakesuchanactivityvaluable,particularlyorlongerdistancetransers.Thereareewalternativesthatcantransercashaseciently,saelyorcheaplybecauseothehighuseocashortransactions,verylimitedpresenceoelectronicpaymentsystemsandlowlevelsobankpenetration,combinedwithincreasingmobileownership.

ThereareseveralbarriersthatneedtobeaddressedbeoretheBTScanactasachannelormobilepayments.Themostimportantcostbarrieristhecurrentpricestructureswithinairtimedistribution.Atpresent,thereisasignicant


9Avaliditytransactionentailssplittingarechargecardintoairtimeandvalidityportionsa100LEcardwillnormallyprovide90LEoairtimeandoursmonthsovalidityandthensellingonlythevaliditywhileretainingtheairtime.Acustomerwillbuya100LEcardromtheresellerandthentranserbackmostotheairtime,evenalloit,andretainthevalidity.Thecustomerwilltypicallypay30LEortheservice,whichcoversallchargesandtaxesandprovides5to10LEprotortheresellerinadditiontoairtimeatalowercostthanthroughbuyingrechargecards.Theresellergetsairtimewithoutincurringanyextracharges.

10Resellerprotmarginswereestimatedwitharangeovariables.Seeullstudyormoredetails.11SeepaperbyWorldResourcesInstituteinthispublicationoranoverviewocurrentexamples.12Porteous,David(2006)TheenablingenvironmentormobilebankinginArica,DFID.13Ibid.



discountincashcomparedtoairtimebecauseoadministrationcharges,taxesandcommissionpayments.90LEoairtimeloadedontoaphonecosts5LEatertaxesandcharges.Iauserwantstoexchangethisairtimeorcash,the25LEdierenceinvaluewillneedtobeabsorbedbytheuser.Thismakesituneconomicorhighvaluetransactionsororregularuse.

Cultural barriers to adoptionThislowusageoairtimeasaproxycurrencymayinpartbeduetoa

perceptionoairtimeasmoreoasocialresourcethananeconomicone,particularlyorhigherincomeusers.Oncetheairtimehasbeenbought,itcanberedistributed,butnormallyinreturnormoreairtime,tobereceivedlater,orasagit.Veryrarelyisairtimecashedin.Inoursurvey,only4%oBTSusershadeversentairtimeinreturnorcash(notataprot)andonlyaewmore(7%)hadeveraskedsomeoneelsetosendthemairtimeinreturnorcash(again,notataprot).

Theconceptooeringairtimeinsteadocashtobuysomethingmightimplythatthebuyerdidnthavethecashtopay,leadingtoanegativeconnotationandalossoace.Thisissuewasraisedrepeatedlyinourocusgroupdiscussions,withsomereerencestohowsuchpaymentswerenotappropriateinEgypt.Essentiallythisisasignicant,butaddressable,barrierthroughawarenessraisingandmarketingoairtimeasaproxycurrency.Focusgroupparticipantsweremorepositiveaboutusingairtimeasaproxycurrencyiitwaswithinaormalisedandwell-marketedramework.

TherewasalsoappreciationothesecuritybenetsohavingvirtualmoneythatcouldnotbestoleniprotectedthroughaPINsystem.

Attitudes to mobile banking servicesAlthoughitwasnottheprimaryocusoourresearch,wedidexplorethepotentialousingmobilesasabankingchannelinourocusgroups.

Mobilebankingmetwithalukewarmresponseinsomeotheocusgroups.Thekeyissuesseemtobeamistrustoincludingathirdpartyintherelationshipbetweenthecustomerandthebankandconcernsoverthesecurityothesystem.However,therewaspositivediscussionotime-savingpotentialandincreasedsecurity.

Options to enhance the positive socio-economic

impacts o BTSWenowsketchoutsomepotentialwaysinwhichtheBTScanenhancethesocialandeconomicbenetsomobilephonesinEgypt.Thesearebroadrecommendationsandneedtobedevelopedurtherwithregardstoeasibility,marketviability,regulatoryissuesandsoorth.

Using BTS to improve the aordability o mobile servicesAtthemomentBTSisnotociallyusedasanairtimedistributionchannelbyVodaoneEgypt.AllcommercialsaleoairtimeviaBTSbydealersandresellersisnotwithintheormaldistributionnetwork,whichisentirelybasedonprintedrechargecards.However,thexedcostsassociatedwithprintinganddistribution,currently0.55LE/US$0.09inEgypt,makeituneconomictooerverylowvaluetop-upsthroughrechargecards.BTSisalreadyoperatingasaperson-to-personormoe-rell.Extendingittoallowvendorstoelectronicallysellairtimeinverysmallincrementstocustomersasan

alternativetocardswillimproveaordabilityandormalisetheexistingdealerandresellercommercialbalancetransermarket.BTScanurtherimproveaordabilityismallerincrementsbelow5LEareallowedandvaliditytransersarepossible.4

BTS is a viable means to distribute airtime but must be able to operate oncommercial scales.AwiderangeomobilesubscribersareusingBTSasaormoe-topup,indicatingthattheEgyptianmobilemarketwillbecomortablemovingtoane-rellairtimesystemintheuture.However,orthedealersandresellersthatoerBTS,theserviceistooslowandcumbersome,andotenailsduringheavynetworktrac.InordertodevelopBTSasaplatormorbuildingurthervalue-addedservicesorasasignicantchannelordistributingairtime,itneedstooerdierentwaystoconducttransactions,perhapsbyaddingastreamlinedSMS-basedsystemtotheexistingserviceoradedicatedcommercialservice.Otherwisedistributorswillpreertouserechargecards.

Dealers and resellers have existing trust-based relationships withcustomers that can help introduce new value-added mobile services.Mostresellersservespecicsmallneighbourhoodclienteles,withmarketingthroughwordomouthandarosteroregularcustomers.Resellersbuilduptrustwithcustomersandareabletooerserviceslikeremotetop-uporairtimeoncreditthatdependonacertaindegreeotrusttowork.Resellerscanpotentiallybecomeinvolvedinawidernetworkomobile-enabledserviceslikem-paymentsormobilebanking.

Enhancing commercial opportunitiesBTSoersahighlyadaptablebusinessmodelthatistoroperatinginbaseothepyramidconditions.Itoersbenetsbothtomicroentrepreneurs,intheormoincreasedincome,aswellastotheircustomers,byenablingthemtopurchasesmalldenominationtop-ups.Bothaccessandaordabilityareurtherincreasedbyanexistingtrustrelationshipthatallowsremotetop-upsandtheprovisionoairtimeoncredit.

Bring resellers into the ofcial airtime distribution network.Keepingresellersoutsidetheocialdistributionnetworkcompromisestheirpro-poorpotential.ResellersareunabletoearnenoughrevenueandhavetoonlyuseBTSasasourceosupplementaryincomewhilecustomersarepayinghigherpricestomaintainthinresellermargins.

Iexistingresellers,andotherpotentialnewentrants,werebroughtintothe

distributionnetwork,theywouldbeabletoobtainanddistributeairtimemuchmoreeciently.Bycuttingouttheretailmargins,theycouldpurchaseairtimeatwholesalepricesandbeabletodistributethemorlowermark-ups,improvingaordabilityortheirend-customers.SMARTinthePhilippinesollowsthismodeloritsSMS-basede-rellsystem,withanetworkoover800,000resellerswhoearna5%commissionromairtimesales.Competitor,GlobeTelecoms700,000strongdistributionnetworkwillsoonalsoearnincomeromactingasagentsoritsG-Cashe-moneyservice. 5

Thisalsosignicantlyincreasestheavailabilityoairtimeinmoreremoteareas;comparethePhilippineswithapopulationo89millionandservedby.5millionretailersoairtimewithEgypt,whichhasabout0,000ocialairtimeretailoutletsorits72millionpeople.

The pro-poor benefts o BTS can be enhanced through targetedinitiatives.OperatorssuchasVodaonecantargetspecicresellermarketsasawaytodistributeairtimewhileprovidingpro-poorincomegenerationopportunities.Thiscanincludeprovidingdiscountedairtimetospecicgroupslikeruralwomensco-operativesorunemployedyouthineconomicallydeprivedareas.

Using BTS to acilitate fnancial transactions and delivery o mobilebanking servicesAlthoughBTShasexpandedrapidlyinEgypt,wewereunabletondmanyinstancesoairtimebeingusedasaproxycurrencytobuygoodsandservices.Thismaybeduetoalackoawareness,astheoperatorhasnotmarketedairtimeinthisway.However,costbarriersalsoplayastrongpart:therelativelylowamountsoairtimethatcanbetranserredandthesignicantdierenceinairtimeaceandcashvalueundermineitsviabilityorregularusage,particularlyorhighervaluetransactions.

Cultural interpretations o mobile payments, mobile banking and othervalue-added services must be more careully researched.Inourocusgroups,theideaointroducingmobilepaymentsandmobilebankingwasmetwitharangeoresponses.Mostcrucially,thereisasensethatoeringtopayviaairtimeratherthancashgivestheimpressionthattheuserispoor,andisorcedtouseairtime.InordertosucceedinEgypt,m-paymentswillneedtomanagethisissuethroughmarketingcampaignsandensuringthatthesystemisrolledoutwidely.CashalsoseemstohavemorerespectthanvirtualpaymentsinEgyptiansociety.AlthoughusersarehappytoparticipateinBTStransactions,perhapsevenremotely,implyingasignicantdegreeotrustinboththetechnologyaswellasthedistributor,therearemorereservationsaroundsecuritywhenitcomestom-commercetransactions.

There may be potential to introduce mobile banking services ormicrofnance clients.Egypthasanascentmicronanceindustrywithlargeunullleddemandornancialservices.Roughestimatesindicatethatthe

Egyptianmicronanceindustrycouldpotentiallyhavebetweentwoandthreemillionclients,owhichapproximatelyonly220,000arecurrentlybeingserved.6MobilebankingcouldplayaroleinhelpingEgyptianmicronance


14TheBTSserviceenhancementsromAugust2006includefexibleamountsbetween1-50LEandvaliditytranserat1LEperday.15SeeWorldResourcesInstitutepaperonpage11ormoredetails.16UnitedNationsDevelopmentCapitalFund.http://www.uncd.org/english/countries/egypt/index.php



institutionsincreasetheiroutreachandsignicantlyscaleuptheiroperations,perhapsusingasimilarmodeltoM-PESAinKenyaorpartneringwithsomeothepioneeringcommercialbanksinEgypt,suchastheNationalBankoEgypt,thatareprovidingmicronanceservices.

Remittance services rom key markets may have strong potential.Egypthasasignicantremittanceeconomyaround3.9%oGrossNationalIncomeisromoverseasworkers7andthereareconsiderabledomesticremittances

romurbanworkerstoruralareas.IelectronicmoneyserviceswereintroducedontotheBTSplatorm,allowinginternationalremittancesmightthenenablecheaper,asterandmoreaccessiblecashtransersalongwithsubsequentsocialandeconomicbenets.

ConclusionsBTShasbecomeintegratedintomobileusagehabitsorasmallbutsignicantsegmentoEgyptianusers,andisusedmoreoccasionallybyawiderrange.Itisprimarilyusedasasocialresourcetoshareairtimewithinexistingamilyandriendshipnetworks,beingusedinwaysthatalignwithdominantculturalbehaviourssuchasgenderrelationships.

BTSalsoplaysanimportanteconomicroleinincreasingtheaordabilityomobileservices.Ineectitenablesaninormalairtimerechargesystemthroughwhichuserscanpurchasesmallincrementsoairtimecommerciallyromdealersandinormalresellers.

ThismeansthatBTSalsoprovidessomecommercialopportunitiesorairtimeresellers.BTSoersaviablebusinessmodelorbase-o-the-pyramidconditionsandcanpotentiallydeliverbenetsormicroentrepreneurs,theirlow-incomecustomersandoperatorslikeVodaoneEgypt.

Thepositivesocio-economicimpactsoBTScanbeincreasedthroughtargetedinitiatives,buttheymustrefectlocalculturalandoperatingcontexts.Thisresearchaddstothebodyoevidencethatshowslow-incomeconsumersassophisticatedusersoservicesandhowtechnologiesareutilisedinuniquelocalways.

This is an abridged version o a uller report which includes case studiesand more data rom the survey. Please visit www.orumortheuture.org.ukto download a copy.


17WorldDevelopmentIndicators2006,WorldBank.



William J. KramerWorld Resources Institute

WilliamJ.KramerisDeputyDirectorotheDevelopmentThroughEnterpriseprogramme.Hiswork

inavaried30-yearbook-centredbusinesscareer,duringwhichhecreatedKramerbooks&aterwords,therstbookstore/cae,ledhimtoestablishanon-protorganisationexploringtherelationshipbetweennewknowledgeandeconomicdevelopment.AtWorldResourcesInstitutehisworkalsoincludesthedevelopmentoeducationandtrainingmaterials,andleadingintensivelearningseminars.HehastaughtacourseonsustainabledevelopmentattheUniversityoMarylandGraduateSchooloPublicAairs,andlecturedatnumerousuniversitiesandcollegesonthebaseotheeconomicpyramid(BOP)issues.

John PaulWorld Resources Institute

Johnhasworkedonissuessurroundingtheintersectionotheprivatesectoranddevelopment.For

veyearsatWRI,heresearchedandwroteextensivelyaboutthewaysinormationandcommunicationtechnologiescanimpactdevelopment.Hehasworkedasadeveloper,moderatorandcontributortoNextbillion.net,andhasbeenaconsultantortheUSAIDLastMileInitiative.JohnalsospentayearlivinginIndia,workingorn-LogueCommunications,aprivatesectorcompanythatworkswithindependententrepreneurstoestablishinternetkiosksinruralvillages.JohnhasperormedeldresearchinNepalandKenya,andwrittentwoull-lengthcasestudiesbasedonresearchconductedinIndiaandNepal.AgraduateoCarnegieMellonUniversity,(BS,MechanicalEngineering),heiscurrentlyanMBAstudentatCornellUniversityJohnsonSchooloManagement.

Mobile-enabledtransactionsorthebaseotheeconomicpyramid:Abriereviewothe2006state-o-play

IntroductionIntheeorttocreateullyinclusivenancialsystemswhichreachallsocio-economicstrata,includingthebaseotheeconomicpyramid(theBOP),inormationandcommunicationstechnologies(ICTs)areincreasinglybeingdeployed.ICTs,andinparticular,mobilephones,areprovidingameansby

whichtoprocessnumeroussmalltransactionsecientlyandaordably,thusenablingalargerprivatesectorroleinservicedelivery.Hardwarecostsandnetworktransmissioncostsarebothallingrapidly.Newtechnologies,suchasWi--enabledcellphones,Wi-max,voice-over-internet(VoIP),andlow-power/high-qualityservers,showpromisetodelivermobiletelephonyandwide-bandcapabilitytoincreasinglyremotemarkets.

Inthisbriereviewothestate-o-playasomid-2006,weexplorearangeotechnologies,enterprises,andbusinessmodelsthatdelivernancialservicesacrosscommunicationsnetworks,andinparticular,mobilephonenetworks,withaocusontheirapplicationtoBOPmarkets.Weprovideafavourotheenterpriseandproductset,touchlightlyonthedevelopmentotheproductand/orserviceandexplorewhatbusinessmodelsareworkingandhighlightpromisingpilotsandullcommercialroll-outs.Wherepossible,webriefyanalysewhethertheproduct/servicesrespondtomaniestBOPneeds,andpointtopositivesocialandeconomicimpacts.Finally,weoersome

observationsabouthowtomakenewproductsandservicesdirectedtowardtheBOPsuccessul,bothorthecompaniesandorthecustomers.

Deployment o servicesMobiletelephonesarecurrentlybeingusedinavarietyowaystodelivernancialservices.AsdenedbyourcolleaguesatCGAP,theseservicesall

generallyintothreecategories:mobile-purchasing(m-commerce),electronic-money(e-money),andelectronicbanking(e-banking).2

M-commerce.Largelydeployedtodayintheadvancedindustrialcountries,particularlyJapanandtheNordiccountries,itislimited,orthemostpart,tosmallpurchases,suchaspublictransportationandvendingmachines.Inthesetypesopaymentsystems,themobilephoneisordinarilyreplacingadebitorcreditcard.Asitisatpresentatop-o-the-marketapplicationprimarily,wewilltouchonitonlylightlyinthisreview.

E-money.Allowsstorageocashvaluesonmobiles,eitherthrougharealvaluesystemoravirtualvalueequivalentinairtimecredit.Itisgrowingrapidlyoutoprepaidtext-messagemobilephonecardsystems.Inthisreport,weocusonthePhilippinesexperience.

Banking channel.Mobilephonesareincreasinglyutilisedasplatorms

ortransactingbusinesswithnancialinstitutions,andoraccessingbankaccounts,whetherchecking,savings,orloan.Balancesinaccountscanbeaccessedoranumberopurposes:purelyinormational,makingpaymentsonbankloans,transerringmoneyromoneaccounttoanother,selectivebill-paying(e.g.,toutilitycompaniesandretailstores).Thee-moneyandbankingchannelscrosspathsrequently,asinthecaseomobilephone-basedrepaymento,ordepositsto,micronanceinstitutionloans.TheAricanexamplesM-PESA,WIZZITandothersoermultipleperspectivesorthesetypesoservicesandproducts.Weincludeinthiscategorynewsystemsevolvingorthetranseroremittancesromonecountrytoanother,suchastheExchangeWallet.

Micropayments are the key; technology is the enablerAsignicantelementinthesuccess(orailure)oanyproductsisthecapacitytohandlelargenumbersosmalltransactionsecientlyandprotably.Acrossthethreecategoriesoservicesdescribedabove,onendsthreemajortypesopaymentsystems:credit-based,account-based,andstoredvalue.Credit-basedsystems,deriverom,andrelyon,thematuresystemotraditionalcreditcards:buy-then-pay.Thesecond,account-based,employthesomewhatmorerecentsystemodebitcards,whichdirectundstobemovedromonedepositoryaccounttoanother:pay-then-buy.Debitcards,likecreditcards,requireconnectionto,andapprovalrom,acentralnetworkwhichcanauthenticatethetransaction.Stored-valueisanevenmorerecentinnovation,andunctionsmuchlikecurrency.Cashisloadedontoanelectronicwalletacard,usuallyandallowsortranserotheappropriateamountwithouturtherapproval.Itoundearlyandwidespreadapplicationintransitpaymentsystemsandthegitcardindustry.

Telephonecompaniesarehistoricallywell-suitedbythenatureotheirenterprisetounderstandthenatureomicropayments.Theevidenceisalreadycompellingthattheyarerespondinginnovativelytothebusiness

opportunitiespresentedbymicropayments.HandsetproducersandnetworkmanuacturersareincreasinglyawareothepotentialotheBOPmarket,andareactivelydevelopingandmarketingBOP-targetedgoodsandservices.TheEmergingMarketHandsetProgramattheGSMAssociationisagoodcaseinpoint.IttookonlyaboutayearrominceptiontomarketdeliveryorstproductstheMotorolaC3andC3ahandsets.

Atthesametime,boththetelecomandnancialserviceindustriesarerespondingpositivelytoinnovationandenergythatiscomingromoutsidetheirownclosecircles,rom,orexample,technologyentrepreneurs,whoareseizingonthecapabilitiesoast-evolvingchipsetsandapplyingthemtonewunctions.Alongtheway,allthestakeholdersarerevolutionisingaccesstonancialservicesortheBOP.

Toconclude,itisworthnotingthatthenumberomobilesubscribersindevelopingcountriesgrewmorethanve-oldbetween2000and2005,

reachingmorethan.4billion.Theestimateoworldwidesubscriberstodayisjustover2billion;developingcountriesaccountsor70%otheglobalmarket.3Theestimateisthattherewillbe3billionmobilephoneusersby

1Foradiscussionolow-costruraltelephonysystems,seehttp://www.nextbillion.net/blogs/2006/05/09/a-new-model-or-rural-connectivity2MobilePhonesorMicronance,CGAPBrie,April2006.3www.itu.int/ITU-D/ict/statistics/at_glance/cellular05.pd

Authors



200.Theindustryhasmuchothegrowthcurveaheadoit,andasunctionalityincreases,thesizeothemarketisurtherenlarged. 4Industryanalystsandexpertsagreethatthebiggestchallengesacingthisexplodingsectorarenotthetechnologies,butthebusinessmodelsusedtoservethegrowingmarketsagoodlead-in,then,toadiscussionosomeexamples(indicative,butnotexhaustive)omobilenanceinemergingmarkets.

Case studies rom emerging markets

WIZZIT, MTN Banking and FNB, South AricaInSouthArica,20-25%othepeoplewhohaveneverhadabankaccounthaveaccesstoacellphone.5FinMark,aBritish-backednon-governmentalorganisationthatlooksatwaysnancialmarketscanhelpthepoor,estimatesatleasthaloallbankaccountsinSouthAricawillbeadministeredviacellphoneswithinveyears.6ThreecompaniesWIZZIT,MTNBankingandFNBhavelaunchedmobilenancialservicesaimedatthismarket.

WIZZIT7wasrsttomarketinNovember2004.ThroughapartnershipwithSouthAricanBankoAthens,customersareabletouseSMStopayorgoods,transermoneytoriendsandamilyandtopupthecreditontheirpre-payphones.Accountholderscanalsohavetheirsalariesdepositeddirectlyintotheircellularaccounts,andcandepositcashatPostOcesandsomebankbranches.

WIZZITdoesnotrequireuserstohaveabankaccountandiscompatiblewith

earlygenerationandpay-as-you-gocellphones.AccountholdersareissuedMaestrodebitcardsthatcanbeusedatanyATMorretailer.WIZZITchargesper-transactioneesthatrangerom99c(US$0.5)toR4.99(US$0.78)anddoesnotchargeamonthlyeenorrequireaminimumbalance.

Theservicehasprovedparticularlysuccessulduetoitsunconventionalmarketing.Thecompanyemploysover2000WizzKidstypicallyunemployeduniversitygraduatesromlow-incomecommunitiestopromotetheproductintownshipsandruralcommunitiesandhelpun-bankedcustomersopenaccounts.ThecompanyislookingtoexpandintoKenya,Botswana,Namibia,ZambiaandMalawi.CustomersandmanagementoWIZZITconrm(anecdotallyatthisjuncture)thesocialimpactoseekingoutunemployedindividualsandprovidingthemmeaninguljobsthatempowerothermembersothecommunitythroughcommunicationsandaccesstonancialservices.WIZZITisontargettoreachprotabilityandtoserve00,000customersbytheendo2006.

ThroughajointventurebetweentelecomMTNandStandardBank,MTNBanking8isalsoprovidingbankingservicesthroughcellphonesinSouthArica.CustomersopenaMobileMoneyaccountoveranMTNcellphone,andalltransactionscanbedoneoutsidetheconnesoatraditionalbank.AccountholdersalsoreceiveaMobileMoneyMasterCardthatcanbeusedtomakepurchasesorwithdrawmoneyromanyATMinSouthArica.

MTNBankingmayeventuallyexpanditsservicesintoothersub-Saharancountrieswhereitalreadyoerscellphoneservices,suchasNigeria,Uganda,CameroonorRwanda.

UnlikeWIZZIT,whichworksonanynetworkwithanymodelphone,MTNBankingcustomersmusthaveacompatiblecellphonethatusestheMTNcellularnetwork.Althoughthereisnomonthlyee,thestandardR3eepertranseristoohighorsomemicrotransactions,reducingtheservicesvaluetothosewithlowerincomes.

MTNBankingisnottheMTNsonlyorayintotheBOP.InUganda,thetelecomhaspartneredwiththeGrameenFoundationandlocalmicronance9institutionstoreplicateBangladeshssuccessulvillagephoneprojectinArica.MTNsVillagePhoneproject0hasgivenmorethan2,000entrepreneursaccesstostart-upcapital($230)whichincludesacarbatteryorsolarpowerpanel,awirelesshandset,ausermanualandaxedlinededicatedSIMcardthatcanbeloadedwiththeprepaidairtime.

Finally,FirstNationalBank(FNB)

haslaunchedacellphonebankingservice,butonlyorusebyitsexistingcustomers.FNBexpectstheelectronicbankingchanneltoincreasethenumberoitsMzansientry-levelaccountsorlow-earnerswhohaveneverhadabankaccountbeore.LikeWIZZIT,theFNBprogrammehasnospecialrequirementsintermsohandsetmakeormodelorSIMcardtobeused,andtheservicecanbeusedonanycellphonenetwork.FeesarecomparabletothoseromMTN.

TherapidemergenceovirtualbankingthroughWIZZIT,MTNBankingandFNBdemonstratesagrowingbelieamongbankingandtelecomproessionalsthatthereisabigmarketintheun-banked,andthisisencouragingcompetition.Sincetheirlaunch,allthreeinitiativeshaveexceededtheirinitialsubscribergoals.Asvolumesgrow,thebanksplantodevelopnewapplicationsaimedattheunderservedmarkets.

M-PESA, Kenya

In2005,Vodaonepartneredwithitslocaltelecomaliate,Saaricom,toprovidenancialtransactionsovercellphonesinKenya.TheM-PESA2servicewaspilotedasapublic-privateventure,asapartnershipwiththeUKDepartmentorInternationalDevelopment(DID)(providingmatchingunding),theCommercialBankoArica(providinglocalbankingservicesandinteracetotheregulatorysystem),andthemicronanceorganisation,Faulu(providinglocalexpertise).

Throughthepilot,existingmicronanceclientsreceivedacellphonethroughwhichtheycouldelectronicallymakepaymentsontheirloans.Eachphonewasequippedwithaspecialsubscriberidentitymodule(SIM)card3thatallowsthetransactionstotakeplace.

Severalservicesareavailableinadditiontoloanrepayments.M-PESA usersareabletodepositorwithdrawcashromauthorisedM-PESAagents,typicallyasmallstoreownerthathasenoughcashonhandtocompletethetransactions.Clientsarealsoabletomakeperson-to-personmoneytransers,purchaseairtimeorre-saleorpersonaluse,andreceiveaccountstatements.

Pilottestingconrmedseveralimportantbenetstousers.

Time-saving and convenience:ThesystemhasreducedthetimeittakestorepaytheirFaululoans,asthetransaction,completewithconrmation,isimmediate.Clientshavealsosavedtimeandmoneybyreducingtheirvisitstobanks,andhavereceivedtheaddedconvenienceoeectivelylongerbankinghours.

Saety and security:TheM-PESAsystemreducestherequirementtocarrysignicantamountsocash,thusreducingthepotentialorloss.M-PESAwasdevelopedtobanktheun-banked.Accordingtooneclient,they[thelowincomepeople]willnolongerhavetostoretheirmoneyunderthemattress

butinM-PESAwhichisasae4

Reduction o deault rates:Astransactionscanbecompletedduringalongerbusinessday,andatmoreconvenientlocations,thesystemhasencouragedandenabledmorepromptandregularloanrepayment,anoutcomewithclearbenetstothebankinginstitutions.Asasidebenet,theregularFaululendingcirclemeetingscouldmoveawayromdiscussionsorepaymentissuestoaddressotherconcernsandissues.5

Mobile-enabledtransactionsorthebaseotheeconomicpyramid:Abriereviewothe2006state-o-playcontinued

4ThesizeandcharacteristicsoBOPmarketsisdiscussedextensivelyinTheMarketotheMajority:Poverty,ProtandUnmetHumanNeeds,WorldResourcesInstitute/InternationalFinanceCorporation,tobepublishedFebruary2007.

5http://www.kalahari.net/BK/product.asp?toolbar=none&sku=27978928&ormat=detail6http://www.nextbillion.net/newsroom/2005/11/02/cell-phones-plug-aricas-poor-into-mobile-banking7http://www.wizzit.co.za/Wizzit_index.htm.CurrentnumbersconrmedbyauthorinpersonalcommunicationwithBrianRichardson,CEO,August2006.8http://www.mtnbanking.co.za/9http://www.nextbillion.net/node/142910http://www.mtnvillagephone.co.ug/index.htm11https://www.nb.co.za/personal/transact/accessyouraccounts/cellHowDoI.html12PesameansmoneyinSwahili13CurrentcostotheSIMcardisUSD$2.14SecondPilotReview,Microsave,April2006.15Interestingly,thePilotReviewhighlightedsomeconcernsthatthemobilesystemwouldnegativelyimpactthegroupcohesionthatotencharacterisesmicronancelendingcircles.Theintroductionothisnewtechnologysuggestsare-thinkingotheruleswhichattendmicronanceloanparticipation.Intheviewotheauthorsothispaper,abroadeningotheagendaormicronanceorganisations,romanexclusiveocusonloanstowardsullnancialservicesliteracyandempowerment,willproveapowerulpositiveimpactotheseeorts.



Thesmallpilotprovedtothesatisactionothejointventurepartnersthevalueomobile-basednancialservicestocustomersandmerchantsalike.Italsovalidatedthetechnologyortheseniorproviders,VodaoneandSaaricom,andgavethemtheopportunitytoimprovetheunderlyingplatorm.Nonetheless,usersoM-PESAhavebeenslowtoadoptotheravailableservicesbeyondloanrepayment,indicatingalingeringlackoamiliarwithandtrustothenewtechnology.6Theservice,andthephonesonwhichtheservicewasdelivered,wereprovidedreetotheclientsduring

thepilot.Fullcommercialacceptancewillbedeterminedduringtheroll-out.

Somepracticalandmarketchallengeswererevealedinthepilotprogramme,anumberowhichareapplicabletoothermobile-basedsysteminitiatives.Inthepilot,M-PESAplacedalimittothetotalamountthatcouldbewithdrawnatanyonetime,withtheresultthatclientswererequiredtoseekoutmultipleagentsorlargetransactions.Thenumberandavailabilityoagentsavailableduringthepilotwaslimitedanditslowedthesystemsadoption,althoughrecruitingnewagentsprovednottobeaproblem.ReceivingcustomerinormationandreplacinglostSIMsalsowasoundtobeaninconvenience.Thesespecicissueswereaddressedasthepartnersmovedrompilottoullroll-out.

Inacommercialmode,theprogrammeplanstotargetthe200,000-300,000usersomicronanceservicesinKenya.Itwillalsoseektobecometheplatormochoiceorthenearly$500millioninremittancesthatarereceived

annually.7PartnershipswillbekeytoM-PESAsexpansion.Thesepotentialpartnersincludebanks,SMEs,agriculturalcompanies,andotherbusinesseswheremovingtoacashlesssystemaddsvalue.Expansionintoruralareaswilloccurwherecellularcoverageisavailable.TheKenyanroll-out,nowunderway,maybeollowedbyexpansionintoTanzaniaandotherAricanmarkets.

Celpay, Democratic Republic o Congo and ZambiaAnotherSouthArican-basedcompanyisprovidingmobilecommercesolutionsdirectlytobanks.CreatedbyCelTel8in2003andpurchasedbySouthAricanFirstRandBankin2005,Celpay 9isanancialservicescompanyoperatinginboththeDemocraticRepublicoCongo(DRC)andZambia.Thecompanyprovidesmobilebankingandpaymentsolutionsorbankslookingtooeraccesstonancialtransactionservicestotheircustomers.TheservicesareaccessedthroughtheuseoGSMcellphonesandPOSdevicesusingmobileoperatorsasthedeliverychannel.

UtilisingtechnologyprovidedbythemobilebankingandtransactingsolutionscompanyFundamo20,Celpayallowsregisteredcustomerswithanexistingbankaccounttousetheircellphonesormerchanttransactions,monthlybillpayments,andundtranserbetweenparticipatingphones.

CustomersregisteringorCelpayreceiveanewsecureSIMcard,addingamenutotheircellphonesthatacilitatesthepaymentsandprovidingaccesstotheirCelpayaccounts.MoneycanbeaddedtoCelpayaccountsviatransersromabankaccount,orbydepositingcashorachequeataparticipatingCelpaypartnerbank.TransersmadeusingCelpayarereetothepayer,whilethepayeeischargedasmalleeoreachtransaction.

IntheDRC,Celpayiscurrentlypartneredwithourlargetradebanks:CommercialBankoCongo(BCDC),RawBank,theInternationalBankorAricainCongo(BIAC),andtheCongoleseUnionotheBanks(UBC).Thecompanyis

responsibleorover3milliontransactionsamonthinthecountry.2

Smart Communications and GlobalTelecoms G-Cash, PhilippinesSmartCommunicationsisthePhilippinesleadingwirelessservicesproviderwith22.5millionsubscribersonitsGSMnetworkasosummer2006. 22Thecompanylaunchedtheworldsrstelectroniccashcardlinkedtoamobilephonein2000throughapartnershipwithMasterCard.TheSmartMoneyserviceenablesuserstotransermoneyromabankaccounttoaSmartMoneyaccount.SubscriberscanthenuseaSmartMoneycardlikeadebitcardtopayoravarietyogoodsandservicesatanetworkoretailstoresandrestaurants,andtransermoneyromoneSmartMoneycardtoanotherviaSMStexting.

AlthoughSmartMoneyisbeingmarketedprimarilytothetop-o-the-pyramidbecauseitrequirestheusertohaveanexistingbankaccount,thecompanysrapidgrowthisduelargelytoitsBOP-orientedbusinessmodel.SmartBuddy,thecompanyspre-paidGSMproduct,isusedby99%oSmartssubscribers.CustomerscanactivateanaccountoraslittleasP00(US$.80),andtopupelectronicallyusingtheSMS-basedSmartLoadserviceinincrementsassmallasP30.ThelowdenominationshaveopenedupanentiresubsetotheBOPmarket,enablingSmarttoretaincustomerswhomaytemporarilybeunableto

aordhighertop-upamounts.

Smartsellsitsairtimethroughmorethan800,000smallmerchantsthatmarketpredominantlytolow-incomepopulationsincommunitiesthroughoutthePhilippines.ManySmartLoadretailersareestablishedneighbourhoodstoresthatareabletosellre-loadstopeoplelivingunderthepovertylinebyextendingtheirexistingon-creditpurchasingmodelalreadyusedorstaplesandsachets.Housewivesandstudentsactingasrovingagentsarealsoearningincomeasretailers.PasaLoadpushestheserviceurtherdownthepyramid,byallowingcustomerstotranserunitsaslowasP2tootherSmartcellphones.

Smartssensitivitytolocalbusinesspracticesatthesmall-andmicro-enterpriselevelallowedthemtocapitaliseonanexistingdistributionnetworkthattheydidnothavetocreatebythemselves.Thecompanyprovedtheviabilityotargetinglower-incomemarketsegments,encouragingurtherpricecompetition,andcatalysinganewmarketorsellingusedhandsets.

Bypayinga5%commissiononre-loadsales,Smarthasalsosignicantlyincreasedtheincomeolocalretailers.

Thecompanyplanstocontinueocusingdown-marketasitgrows.Futureplansincludeintroducinglower-costhandsets,andloweringthecostoinrastructureexpansionintoareasthatwerepreviouslyuneconomicaltoserve.Smartalreadyallowscustomerswithabankaccounttotransermoneyandmakepaymentsthroughthecellphone.IncreasedmobilebankingactivityromSmart(thecompanyalreadyhas3millionSmartMoneysubscribers)coupledwithmoreinclusionotheBOPinormalbankingchannelscouldresultinnewopportunities,particularlyintheareaoremittances.

StrongcompetitionorthecellphonebankingmarketinthePhilippinescomesromGlobeTelecomsG-Cash23service.Launchedin2004,theservicesText-a-Paymenteatureallowsuserstosendandreceivecashandmakepayments,includingbillpayments,donations,andonlinepurchases,viaSMStexting.G-Cashalsoenablesthetranserodomesticandinternationalremittances.GlobechargesafateeoPhp0oranytransactionbelowPhp,000,anda%eeoranytransactionabovethatamount.

LikeSmart,usersotheservicemustbeasubscriberothetelecomsnetwork.UnliketheSmartMoneyeature,however,usersarenotrequiredtohaveanexistingbankaccounttoregisterortheservice.

Globesreachhasrapidlyexpandedthroughitswidenetworkopartners,includinggovernmentagencies,utilitycompanies,ruralbanks,cooperatives,insurancecompanies,universities,andcommercialestablishments.AsoMarch2006,therewereapproximately.3millionG-CashregistereduserstranserringaboutUSD$00millionperday.Globeboastsavastdistributionnetworko700,000airtimeloadingretailersthroughoutthecountry,manyowhomwillsoonbeabletoprovideG-Cashtotheirclients. 24

BothSmartandGlobeareusingtheirmobilecommercesolutionstoexpandtheircustomerbase.Althoughthereareveactivemobilebrandsinthecountry,Smart(witha59%marketsharein2005)andGlobe(36%)controlmostothecellularmarketinthePhilippines.25Betweenthetwocompanies,morethan.5millionindependententrepreneursareengagedinresaleoairtimeandacilitationomobilenancialservices.Thisrepresentsasignicantemploymentsourceorthecountry.


16SecondPilotReview,Microsave,April2006.17http://www.nextbillion.net/newsroom/2006/02/22/remittances-dwar-aid-investment-in-kenya

18http://www.celtel.com/19http://www.celpay.com/20http://www.undamo.com/21http://www.undamo.com/index.asp?pgid=4522www.smart.com.phCurrentnumbersveriedinpersonalcommunicationwithRamonIsbertoVP,SmartCommunications,August2006.23http://www.myglobe.com.ph/24http://www.chemonics.com/projects/content/GCash.pd25RobinSimpson,GlobeTelecomsG-CashaMobileCommerceSuccessStory,Gartner,March2005.



Remote Transaction System, UgandaCellularnetworkshavealsobeenusedtoenablenancialtransactionswithoututilisingmobilephones.In2002,HewlettPackardormedapartnershipwithanumberomicronanceorganisationsandcommercialpartners26workinginrelatedareastoexplorehowtechnologycouldbeusedeectivelytohelpscalemicronance.WhatemergedromtheeortwasaRemoteTransactionSystem(RTS)27thatsupportsbothgroupandindividuallending,onlineandbatchofineprocessing,andbackocesynchronisation.

TheRTSisbasedontheuseosturdyhand-helddevicesthatcancommunicateoverGSMcellularnetworks.Combinedwiththeuseosmartcardsgivenouttoclientsandmicronanceagents,thesystemallowstocollectcrucialnancialdataintheeldandsubsequentlytotranserthedatadirectlyintotheMFIscomputerisednancialmanagementsystem.TheRTSeliminatestheneedtoprepare,transport,andenterhand-writtenreports,reducingcostsorruraloperations.

FollowingthecompletionothepilotinMay2005,theMFTdisbanded,passingalongtheintellectualpropertyrightstotheRTStoSevakSolutions. 28Thenewcharitablenon-protorganisationisnowpromotingglobaldisseminationothetechnologybyprovidingopen-sourcelicenceagreementstointerestedparties.Inaddition,SevakSolutionsiscontinuingthedevelopmentotheRTSandrelatedtechnologies,andsupportstheRTSusercommunity.

UAE Exchange WalletUAEExchangeWalletisaglobalmoneytransersystem,establishedrstintheUnitedArabEmiratestoallowIndianstowiremoneyhometoIndianbanksusingtheircellphone,andneitherthesendernorrecipientneedstovisitabank.ThesendercallsupExchangeWalletonhisphone,entersaPINnumber,indicateswhethertheundsshouldbesenttoabank,WesternUnionoceoranotherExchangeWalletcustomer,andsendsthemoneyovertheInternettoitsdestination.ThecompanyisthebrainchildoSamPitroda,apioneeringgureintheIndiantelecomindustry,andnowtheounderandChairmanoC-SAM,withocesinChicago,ILandIndia.C-samhasawideproductoeringcoveringahostobrandedandsecuremobiletransactionplatormproductsbothornancialandnon-nancialsectors.29

Business briesThissectionpresentsshortcapsulesintroducingavarietyomobile-basednancialservicesbeingintroducedaroundtheworld.Thereisverylittleinormationavailablepubliclyinprintormoronthewebaboutmostotheseinitiatives.Takentogether,however,theysuggesttherangeandvitalityoeortsinthisdomain.WeprovideURLstoinormationresourceswhereavailable.

BangladeshGrameenPhone(GP),Bangladeshstopmobileserviceprovider,recentlypartneredwithDutchBanglaBanktoprovideitsuserswithamobilebankingservice.Theserviceallowscustomerstousetextmessagesontheirmobilephonestopaytheirphonesbillbydebitingagainsttheiraccountsdirectly,checktheiraccountbalance,changetheirPINcode,andperormotherbankingunctions.GPoerstwoservices,oneavoicemail-basedsystemandtheotheranSMStext-basedsystem.

http://www.nancialexpress-bd.com/index3.asp?cnd=8/0/2006&section_i

d=7&newsid=33770&spcl=no

http://www.grameenphone.com/modules.php?name=Content&pa=showpage&pid=58

BrazilBancodoBrasilandBrazilianwirelessoperatorVIVO,EverSystemslaunchedMobileBankinginFebruary,2006.Initialreportsindicatethatthepartnersareveryimpressedandsatisedwiththeusability,perormanceandsecurityoMobileBanking.Theresalottocelebrate!BancodoBrasilcustomersarenowabletousetheircellphonestoaccessaccountinormation,andperormcomplexnancialtransactions.ThebankreportsthattheseunctionscanbecarriedoutwithauthenticationandsecurityeaturesidenticaltothoseoInternet-basedbanking.

http://brew.qualcomm.com/brew/en/developer/resources/news/

archives/2005/nov_2005.html

ColombiaBancolombia,Colombiaslargestbank,startedamobilebankingserviceinJune2006,whichallowscustomerstomakepayments,moneytransers,andinormationrequestsbymobile.TheserviceisknownasBancoMovil.BancolombiaispartneringwithComcelandOla,twocellularphoneserviceproviderstoprovidetheservice.

AccordingtoJorgeLondooSaldarriaga,thepresidentoBancolombia,the

banksnewserviceisspecicallytargetedatthosecustomersorwould-becustomerswhodonothaveeasyaccesstophysicalbankinginrastructure:ThebankwillarriveinareaswherewedonthaveocesorATMs,butwewilltakeadvantageocellularphonetechnologywhichcoversalltheterritory.

http://www.la-republica.com.co/noticia.php?id_notiweb=6346&id_subseccion=&template=noticia&echa=2006-08-04

India ABN AmroABNAmrohasprovidedmobileservicesince2004.Theirproduct,Mpower,usesSMStexting.Customerscanaccessawidevarietyoservicesincludingbalanceandtransactioninquiries,shareholdingsindemataccounts(dematerialisedaccount,usedorpurchase/saleostocks),undstranserstoABNAMROandotherbanks,billpresentmentandpayment,chequeinquiryandstoppaymentrequests,openingonlinexeddepositaccounts,requestsorchequebooksandstatements,andrequestsornewPINnumbersandto

changePINnumbers.MpowerassignsauniquePINtothemobilephonenumberregisteredatthebankorsecuritypurposes;ithephoneisstolenandsomeonetriestoaccessthecustomersaccount,thesystemblocksalltransactionsaterveailedattemptsataccess.

http://www.epaynews.com/index.cgi?survey=&re=browse&=view&id=0832378706222522&block=

http://www.abnamro.co.in/ProductsnServices/Consumer/Services/mobile_banking.html

KenyaTheCooperativeBankoKenyaoersvebasicservicesviamobile:accountbalanceverication;purchaseand/ortranseroairtimeromtwocellproviders,SaaricomandKencell;directsalarydeposit,withSMSimmediateverication;mini-statementsothelastthreetransactions,withcurrentbalance;utilitybillpayment.Eachservicecosts30Ksh,orapproximatelyUS$0.40pertransaction,whichseemsaairlyhighbarrierorlow-incomecustomers.

http://www.co-opbank.co.ke/epayments.php?cat=6&sub=72

NigeriaInFebruary2005,GlobacompilotedamobilebankingprogrammeinNigeria.Justonemonthlater,Globacomannouncedthatitwasreadyoracommerciallaunchoitsservice.InAugust2006,pressreportsindicatethattheGloM-Bankingserviceisaveragingover200,000transactionsaday,whichindicatesstrongmarketacceptance.Mobilebankingsubscriberscancheckbankaccountbalances,viewthelastvetransactionsontheaccount,transerundsromoneaccounttotheotherinthesamebank,andrechargeaprepaidlineocredit.

AccordingtobankocialstheGlobacomserviceistherstoitskind,allowingbankcustomerstointeracewithavarietyobanks.Aso2005,theollowingbanksparticipatedintheprogramme:FirstBankNigeriaPlc,GuarantyTrustBank,ZenithBank,Aribank,OceanicBank,WemaBank,CharteredBank,PlatinumBank,PrudentBank,StandardTrustBank,UniversalTrustBank,BondBank,GulBank,NationalBank,FirstCityMonumentBank,UnitedBankoArica(UBA),ContinentalTrustBank,DiamondBank,EIBInternationalBank,EquitorialTrustBank,MagnumTrustbank,UnionBankandAcessBank.Tousetheservice,acustomermustregisteratanyotheparticipatingbanks.Oncetheserviceisactivated,thecustomerwillreceiveawelcometextmessageonhismobilephone.Fromhere,toaccesstheservice,thecustomerwillneedthePINissuedbythebank.

http://www.mobilearica.net/n40.htm

http://www.sunnewsonline.com/webpages/eatures/suntech/2006/aug/6/suntech-6-08-2006-00.htm


26http://www.hp.com/e-inclusion/en/project/uganda2.html?jumpid=reg_R1002_USEN27http://www.nextbillion.net/les/RTS.pd28http://www.sevaksolutions.org/29http://www.c-sam.com,http://timesondia.indiatimes.com/articleshow/1051551.cms



South KoreaWhilenotadevelopingcountry,SouthKoreahasadoptedmobilebankingwithenthusiasm.AccordingtoBusiness Week,aso2004,asmanyas58,000Koreansmadeabout4millionbanktransactionsusingtheirmobilephones.AlloSouthKoreasretailbanksnowoermobilebanking,andeverymonth,morethan300,000peoplebuynewphonesequippedwithaspecialslotwheresubscriberscanpluginatinymemorychipwiththeirbankingdataandanencryptioncodeorsecuretransactions.

Already,tensothousandsorestaurantsandstoreshaveterminalsthatreadcreditcardinormationromphonesviainraredbeams,lettingcustomersavoidthehassleoswipingcards.AndSeoulcommuterscanhavebusandsubwayaresdeductedromtheiraccountsbyfashingtheirphonesastheypasstheturnstiles.

Carriersbenettoo.Theygainanewrevenuesourcesubscriberspayamonthlyeeo70ortheserviceandanewwaytokeepcustomersromdeectingtorivaloperators.LGhasevenusedtheservicetoexpanditsretailpresence:Thecompanynowsellsphonesandsignsupnewsubscribersat2,800bankbranches,inadditiontoits580storeronts.Thishasbecomeapillarooursalesdrive,saysLGsHyun.AsoAugust,LGhadsold.millionbanking-readyhandsets.

Anotherplus:Theservicegetsanewsetocustomershookedonusingtheir

cellphonesormorethanvoicecalls.Whereasothertrendynewmobileservicessuchasmultimediae-mail,videoclips,andmusicdownloadsappeallargelytotheyoung,bankingismostpopularamongpeopleintheir30sand40s.Tobetterservethesenewcomers,SKTelecom(SKM)maysoonstartoeringticketsalesandshoppingservicestoitsmobilebankingclients.Bankingwillbeanotherleaporwardorourdataservice,saysChaJinSeok,vice-presidentinchargeothemobilenancialdivisionoSK.

Korea:Mobilebankingtakeso.http://www.businessweek.com/magazine/content/04_39/b390068.htm

Lessons being learnedOurintentionherehasbeentopulltogetherarangeoactivitiesromaroundtheworld,andromabroadrangeostakeholders,toprovideevidenceotherevolutionunderway.Whileeveryoneislearningastheygo,onecandrawsomeearlylessons.

First,inBOPmarkets,asinallmarkets,therstruleistoknowthecustomer.TheBOPhassueredbothromalackoappreciationasanaccessibleandworthymarketandromanacutelackoharddataonlow-incomeindividualsaseconomicactors.TheexperienceintheITsectorandnewresearchisbeginningtoelevatethoseinbase-o-the-pyramidmarketstotheirully-justiedpositionasrealcustomers,onaparwithotherhigher-incomepopulationmarkets.

Second,toachievesuccessintheBOP,newbusinessmodelsareprovinganecessityortheBOPawillingnessandabilitytomoveawayromtraditionalAmarketmodels(highgrossmargin,highunitcost)andadapttotheeconomicrealitiesothe(nowmoreullyunderstood)consumers.Asacorollary,BOP-specicproductsandservices(asopposedtostrippeddownversionsotop-o-the-marketproductsandservices)designedaroundbetter

knowledgeothecustomer,andbasedonpurpose-builtadvancedtechnologyseemtobendingtraction.

Third,successulentrantsarebuildingromthegroundup,engaginglocalcommunitiesdeeplyandareappreciatingthepotentialsizeandstrengthothemarketandthuscommittingorthelonghaul.

Suggested urther readingCastello,SergioA.InnovativeTechnologiesinMicronanceorLatinAmerica:BuildingEectiveDeliveryChannels.5April2004.

CGAP.MobilePhonesorMicronance.CGAPBrie.April2006.

CGAP.UsingTechnologytoBuildInclusiveFinancialSystems.CGAPBrie.April2006.

CGAP.UsingTechnologytoBuildInclusiveFinancialSystems.FocusNoteNo.32.January2006.

Cracknell,David.ElectronicBankingorthePoor.MicroSaveBriengNote#3.

Cracknell,David,Ngurukie,Corrinne,andMurka,George.M-PESAPilot-TestRevieworFaulu/Vodaone.MicroSave.January23-27,2006.

Firpo,Janine.BankingtheUnbanked:TechnologysRoleinDeliveringAccessibleFinancialServicestothePoor.SEMBAConsulting.

Helms,Brigit.AccessorAll:BuildingInclusiveFinancialSystems.CGAP.2006.

Magenette,NicolasandLock,Digby.WhatWorks:ScalingMicronancewiththeRemoteTransactionSystem.IncreasingProductivityandScaleinRural

Micronance.WorldResourcesInstitute.August2005.

McGrath,JamesC.Micropayments:TheFinalFrontierorElectronicConsumerPayments.FederalReserveBankoPhiladelphia.June2006.

Mohiuddin,ShamarukhandHutto,Julie.ConnectingthePoor.ProgressivePolicyInstitute.March2005.

Smith,Sharon.WhatWorks:SmartCommunicationsExpandingNetworks,ExpandingProts.ProvidingTelecommunicationsServicestoLow-incomeMarketsinthePhilippines.WorldResourcesInstitute.September2004.

TheWorldBank.InormationandCommunicationsorDevelopment.GlobalTrendsandPolicies.2006.

WomensWorldBanking.UsingPalmPilotstoManageLoans.June2005.

Wright,GrahamA.N.,Hughes,Nick,Richardson,Brian,andCracknell,David.MobilePhone-BasedE-Banking:TheCustomerValueProposition.MicroSaveBriengNote#47.



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