ENABLING ENVIRONMENT FOR MOBILE BANKING IN AFRICA. CGAP/Infodev workshop 9 June 2006

Transcription

1 ENABLING ENVIRONMENT FOR MOBILE BANKING IN AFRICA CGAP/Infodev workshop 9 June

2 DRIVING QUESTIONS 1. Which models of m-banking are emerging globally? Will they accelerate expansion of access to financial services? 2. Will this happen spontaneously or is enablement required? If so, what forms of enablement? 2

3 Mobile penetration Source: ITU SA Western Europe SSA Source: ITU Mobile subscribers/100

4 The proposition: % mobile phone usage 97% 45% 15% 10% Kenya ($1 050) South Africa ($10 960) Finland ($29 560) 10% 45% 96% % banked 4

5 1. Emerging models: M-payments Europe: Fragmentation; limited use outside of micro-payments and in Nordic countries US: Limited due to internet (e.g. PayPal); now PayPal Mobile Asia: Japan: DoCoMo: FeliCa 10m users by end 2005 Korea: 10m enrolled after 2003 Philippines SMARTmoney (2000 )& Globe G-Cash (2004 ) 5

6 Africa today: models represented Zambia & DRC Celpay: 2002 onwards South Africa: MTN Mobile Banking: Wizzit: Kenya: M-Pesa: 2005 pilot started 6

7 How to categorize models? Market focus: Additive: add on to existing bank channels Transformational: target unbanked Safe Cash in and out easily and cheaply Ability to transfer P2P 7

8 Emerging models 1. Bank driven Account/ deposit Brand Bank Bank Access points Carrier/ Gateway Examples Bank Any/ Many e.g. FNB/ Paym8 8

9 Emerging models Bank driven 2. JV 3. Nonbank led Account/ deposit Bank Bank Bank Brand Bank Joint nonbank or telco Access points Joint nonbank or telco Bank Bank Bank + alternative Carrier/ Gateway Examples Any/ Telco Telco/ any Many e.g. FNB/ Paym8 MTN Mobile Money Wizzit 9

10 Emerging models Bank driven JV Non-bank led Non-bank driven Account/ deposit Bank Bank Bank Telco/ NB Brand Bank Joint nonbank or telco Access points Joint nonbank or telco Bank Bank Bank + alternative Telco/NB Telco + other Carrier/ Gateway Examples Any/ Telco Telco/ any Telco Many e.g. FNB/ Paym8 MTN Mobile Money Wizzit Globe; Celpay 10

11 2. Can takeoff of m-banking happen spontaneously? Barriers arising: Providers view Customer adoption issues Trust security perception Convenience simplicity Fragmentation/ lack of interoperability Non-viable business models Regulatory issues CDD; access to payment system 11

12 Overlapping domains & issues E- commerce Telco regulation AML-CFT M-PAYMENTS & M-BANKING Competition Deposittaking Consumer protection Payment systems 12

13 What is an enabling environment? Openness 2. Low certainty; High Openness 4. Low certainty; Low Openness 1. High certainty; High Openness 3. High certainty; Low Openness Certainty 13

14 Principled framework=road map Necessary, not sufficient, conditions for openness & c certainty Tier 1: Basic 1. There should be sufficient certainty around electronic contracting 2. Customers should be adequately protected against fraud and abuse 3. Interoperability should be encouraged, through ensuring that providers have access payment platforms and that consumers are able to switch financial providers Open -ness Cert ainty 14

15 Tier 2: Transformational Open -ness Cert ainty 4. Account opening CDD procedures should be risk based and not prejudice remote opening of small accounts 5. Customers should be able to make deposits and withdraw cash though agents 6. Adequate provision should be made for issuance of e-money by appropriately capitalized and supervised entities who are not necessarily only banks 15

16 Conclusions 1. Additive and transformational models of m-banking are emerging, in which banks and telcos play different roles There is considerable potential for transformational models to address unbanked needs 2. Transformational models are unlikely to emerge spontaneously. They need sufficient openness and certainty in the environment. A high level roadmap of principles is a useful starting point in defining this 16

17 Which trajectory? Enabled No of consumers Not enabled