Experts Call for Collaboration among Stakeholders at M-PAY Confab

Lagos, Nigeria: Global and regional experts in the deployment and management of mobile payment system gathered in Lagos on Tuesday at the maiden edition of Mobile Payment Nigeria conference (M-PAY) and urged all stakeholders in the emerging industry to collaborate for the smooth take-off of mobile banking in Nigeria.



The M-Pay Nigeria conference, which was organised by financialtechnology magazine, the Pan African financial service technology publication and sponsored by Medallion Communications, Tagattitude and others, attracted mobile payment experts from France, South Africa and the World Bank, Washington as well as audience from Mobile Network Operators (MNOs), banks, insurance, MFBs, third-party operators, telecommunications hub service providers, and switching companies.



Mr. Deji Oguntonade, co-founder, SugarAnt Technologies and pioneer manager of FlashMeCash, the premier M-banking services in Nigeria, powered by FinBank says collaboration would ensure the success of mobile banking in Nigeria. According to Oguntonade, the new generation models for mobile payments create a huge role for payment intermediaries.



Oguntonade, who delivered a paper titled “How to Make Mobile Payment Work for Banks”, argues that past efforts by the banks to introduce m-Banking failed because priority was accorded to other channels over model. He identified five stages of adoption of m-Banking by Nigeria banks.



According to him, the first phase is denial. During this phase the bank vehemently denied that they would ever need m- Banking. The banks explained why customers do not want to do transactions from silly machine like the mobile phone. A clear exception was First Atlantic Bank which launched mobile banking in 2002.



He called the phase two, the time of experimentation. During this period, he stated, a few young people in the IT department convinced some managers to experiment with unimportant things like alerts. “The take-up was slow especially because no marketing budget is spent on this and this fueled the opinions of skeptics. Most Nigeria banks are still hovering in this space”, he says.



According to him the phase three was a period of collaboration. The stages of adoption by banks’ marketing executives, seeing that this is not going to go away began to collaborate with (especially) mobile operators. “Many different models for this exist, but all produced a solution partly mobile operator, partly bank. The marriage is uneasy but executives tried to make it work and limited success is seen. A good example of this is Glo Mobile Banking”.



The phase four of his elucidation was what he called the mainstream. He says at this stage, the realization suddenly dawned that it would be impossible to do banking without mobile banking. As a result, banks invested heavily on leveraging existing infrastructure. Existing internet banking or ATM solutions were ported to many different types of handsets. Marketing budgets were spent on this new thing and uptake is good. “The business case is however under pressure and doubts are raised regarding security”.

At the point of maturity, which is the fifth phase, he said lots of experienced banks realize that this is not a channel play; that it not an extension of classic banking, but a totally different thing. The banks finally realised that many existing truths must be changed in order to grasp the full context of what mobile would bring to banking.



Oguntonade, however, urged banks to separate mobile banking operations from regular banking. “Key stakeholders should compete to launch the next best payment system; rather they should collaborate to offer a robust, widely acceptable platform. The widely acceptable platform can only be realized by each stakeholder focusing on its core competencies. There is no reason for a bank to delve into extensive system development. It should concentrate on clearing and settling transactions. MNOs should provide stable and reliable channel to carry out transactions and payment intermediary should process and switch transactions between all parties in a quick, secure and seamless manner.”



In his own presentation, “Regulation & Innovation in M-Payment System,” Mr. Barry Coetzee, CEO of IVeri, a South African based e-payment company identified the need for comprehensive regulation of the m-payment system. He argues that insufficient or lack of regulation is leading to rampant innovation of “mobile financial products” the effects of which are yet to be experienced, noting that while innovation generally leads to a need for new regulations; “regulation can be a major cause of innovation if well structured and managed”.



Coetzee, however, appealed to Central Banks across Africa to use regulation to maintain a level playing field while accommodating innovations in the industry. “A level playing field is a concept about fairness, not that each player has an equal chance to succeed, but that they all play by the same set of rules,” he quips.



Specifically, he warned that the regulatory bodies should always realise that regulation and innovation are two side of a coin such that regulation can lead to financial innovation through the creation of environment for vendors and banks to evade regulations that are restrictive or to move investment in innovations to greener pastures.



Mr. Ike Nnamani, CEO of Medallion Communications on his part, presented a paper on “The Roles of Telecom Gateway in M-Payment Ecosystem,” says telecommunications gateway or hub operators have dynamic role to play in the emergent mobile banking industry. According to him, such hub provides an infrastructure for interoperability for all mobile commerce transactions.



Nnamani posited that the value proposition of m-payment hub is anchored on three major functionalities. “The first is aggregation and interoperability, then robust infrastructure and the third is compliance. These functionalities enable the m-payment service providers to focus on the establishment of their own brands while the technical work is left for the hubs to worry about”, he says.



He adds that Medallion Communications is already positioned to provide seamless interconnection services between the various telecommunication operators. “Our vision is to ensure a seamless interconnection amongst all the telecommunications operators interconnected at our facility in a timely and cost effective manner. The goal of our company is to ultimately become the largest single telecommunications interconnect exchange in Nigeria and one of the best in the world in terms of efficient service delivery to the subscribers.”



“Deployment of simple and cost effective M-Payment in Africa was the title of Mr. Yves Eonnet’s presentation, CEO of Tagattitude. He explained that five technologies are today available for m-payment deployment. These are USSD, SMS, SIM Tool Kit, NFC, and Near Sound Data Technology (NSDT). According to him the right technology for m-payment system depends on the operator.



While explaining the functionalities, benefits and drawback of each technology, Eonnet says that SMS is available on every phone, it is simple to use and economical. However the drawback is that SMS have been found to be insecure, unfriendly in stores and has difficult ergonomics. Also, he said USSD is available on every phone and it is simple to use, rather economical, but available only to telcos. “It is also not user friendly in stores and has fundamental security issues”.



He says SIM Tool Kit is secure, simple to use but available only to telcos. However, “it is not user friendly in stores and has difficult ergonomics”. According to him NFC is simple to use but the phone is unavailable while the technology is available to only telcos. Besides, the business model is unknown and may never be universal. However, he argued that Tagattitude’s technology is simple to use NSDT “is the most secure, available on every phone, independent of telco and has very sexy business model. It also respect privacy and very innovative”, he explains.

 

M-Banking: Wizzit Targets Nigeria Market

Lagos, Nigeria: WIZZIT, the South African Bank led model cell phone-based banking facility is targeting Nigeria, the largest mobile phone market in Africa.

The founder and Chief Executive Officer of the company, Brian Richardson confirmed the development in Lagos last week at Payment Technologies Exhibition and Conference, hosted by Aitec Africa.

“Wizzit is interested in Nigeria market. We are already talking to some banks for partnership arrangement,” he says. WIZZIT does not require users to have a bank account and is compatible with early generation cell phones popular in low-income communities. WIZZIT account holders are issued Maestro debit cards in South Africa that can be used at any ATM or retailer.

WIZZIT charges per-transaction fees that range from 99c (USD 0.15) to R4.99 (USD 0.78) and does not charge a monthly fee nor require a minimum balance. There are no transaction limitations - the service is purely pay-as-you-go.

WIZZIT employs over 1000 "Wizz Kids" - typically unemployed university graduates from low-income communities - to promote the product and help unbanked customers open accounts.

CGAP, a microfinance group based at the World Bank, recently supported WIZZIT Bank to deliver banking services to poor people in South Africa’s small towns and rural areas. WIZZIT is a division of the South African Bank of Athens Limited.

Mobile Banking: CBN Issues Operations License to MoneyBoxAfrica

Central Bank of Nigeria (CBN) has issued a mobile banking operating
license to MoneyBoxAfrica to deplore a branchless banking services
across the country. The operating license is the first of its kind to
be issued to a non-banking financial institution in Nigeria.
Source at the Abuja corporate headquarters of the apex bank says that
CBN issued the mobile banking license in line with its vision for an
all inclusive financial system for all Nigerians irrespective of
economic, age or social status.
MoneyBoxAfrica is a mobile saving and payment platform that enabled
the under-banked, un-banked and the banked population to perform basic
banking transactions such as saving, money transfer, and remittances
in a convenient, reliable and secured manner in line with CBN’s
Payment System Vision 20-20-20.
Unlike the existing mobile banking initiatives across Africa,
MoneyBoxAfrica model is bank, mobile operators’ agnostic. As such
MoneyBoxAfrica is building an ecosystem complete with all commercial
and microfinance banks, all mobile telephony operators, all switching
platforms as well as Nigeria Interbank Settlement System (NIBBS).
MoneyBoxAfrica rides on tested technology developed by PayBox AG of
Germany, one of the world’s largest mobile payment platform providers.
MoneyBoxAfrica ecosystem includes transactions switching and
settlement firms like InterSwitch, eTranzact and NIBBS.
MoneyBoxAfrica has established a link with all the Mobile Network
Operators (MNOs) in Nigeria on GSM and CDMA platform through a
Wireless Application Service Provider (WASPS). MoneyBoxAfrica will be
rolling out in Nigeria, as a pilot, West Africa as a base territory
and Africa as expansion focus.

MTN Applies for M-Banking Licence in Nigeria

MTN Nigeria has submitted application to Central Bank of Nigeria (CBN)
for the issuance of f MobileBanking (M-Banking) license in the
country, financialtechnology has learnt. MTN Banking, a division of
the mobile operator's business is piloting a new domestic money
transfer system in all it countries of operations across Africa. The
M-Banking solution called MobileMoney is currently being piloted in
South Africa and Uganda.
It would be recalled that CBN recently issued M-Banking operating
license to MoneyBoxAfrica to deplore a branchless banking services
across the country. The operating license is the first of its kind to
be issued to a non-banking financial institution in Nigeria. Source at
the Abuja corporate headquarters of the apex bank says that CBN issued
the mobile banking license in line with its vision for an all
inclusive financial system for all Nigerians irrespective of economic,
age or social status.
MoneyBoxAfrica is a mobile saving and payment platform that enabled
the under-banked, un-banked and the banked population to perform basic
banking transactions such as saving, money transfer, and remittances
in a convenient, reliable and secured manner in line with CBN’s
Payment System Vision 20-20-20.
MTN Banking's business development executive, Dave Parratt, in
December 2008 told financialtechnology that the mobile
telecommunications giant will provide M-Banking services across all
its operation in Africa. According to him, the solution from MTN will
differ from those already available, because it will not require any
physical infrastructure, but rather a network of rural distributors
which already exists.

Indications have equally emerged that Zain, MTN Nigeria arch rival
will soon apply for M-Banking license in Nigeria, following the
successful launch of Zap, its Mobile Money Transfer (MMT) operations
in Kenya and Tanzania. The service is immediately available to Zain
customers in Kenya and Tanzania. Zap will be rolled across Africa and
the Middle East throughout 2009.

Zain, Citi Bank Push for M-Banking Services in Nigeria

Lagos, Nigeria: Zain Nigeria has entered a deal with Citi Bank Nigeria
to launch mobile banking services in the country. A similar deal
involving the duo and Standard Chartered Bank culminated into the
launch of M-Banking services in Kenya and Tanzania recently under the
name Zap.

The collaboration of Zain with Citi bank would enable Zap to process
its M-Banking license in time with the Central Bank of Nigeria, the
regulatory body for financial transactions in the country. Zap
M-Banking services is riding on Zain's One Network service, which
allows people across its networks in Africa and the Middle East to
make and receive calls free of roaming charges.

Eventually, Zain’s customers across its operations in Africa and
Middle East will be able to use their phones to pay for goods and
services, receive and send money to friends and family, maintain bank
accounts and withdraw cash. They will also be able to top up their own
airtime or other people's.

At the launch of the Zap in East Africa recently, Saad Al Barrak, Zain
CEO, says the launch "represents the latest chapter in our work to
push the boundaries of mobile communications". In Kenya 80% of people
have no bank accounts and in Tanzania and Uganda the number is 95%,
says Zain. "For any market in the world, the combination of services
we are providing would be exciting; but when set in an African
context, the implications are especially profound."

Meanwhile, CBN recently awarded the first M-Banking license to
MoneyBoxAfrica, a non-bank and non-MNO operator. MoneyBoxAfrica
promises to build M-Banking services that are banks’ bank and MNOs
agnostic.

MTN Nigeria has also applied for MobileMoney operations license from
CBN. MTN has launch similar services in Uganda, South Africa while the
mobile giant is conducting pilots in all its operations across Africa.

Tagattitude Opens Nigeria Office

Tagattitude , the French mobile applications innovator has opened an
operational office in Lagos, the commercial nerve centre of Nigeria.
Nigeria is reputed to be the next target for several mobile banking
initiatives across the world.

TagPay is being positioned as the first turnkey mobile payment
platform that works on any of the 4 billion mobiles around the world.
TagPay uses Tagattitude's Near Sound Data Transfer technology (NSDT),
to allow any mobile to function as a payment means. NSDT has received
multiple GSMA innovation awards and is now proven to be secure,
reliable, and efficient.
Tagattitude's Nigeria Ltd has signed partnership deal with Eartholeum
Ltd and a major bank of Africa to launch a complete mobile payment
system in the country in April 2009. With TagPay, secure cashless
payment solutions and financial services are finally available to
un-banked populations. TagPay can be used for retail transactions at
the point of sale, money transfer, ATM cash withdrawal, and
microfinance operations and budget or savings management. In 2008
TagPay has developed into a complete mobile payment platform that is
flexible and easily adaptable to the specificities of each targeted
market.
In West Africa, Tagattitude has signed agreement with companies in
Mali, Ghana and Nigeria to offer TagPay services. In Mali, the company
partners Telemedia Group and LAM services to offer Malians residing in
France a smart, secure, and efficient way of supporting their families
back home. Malians in France can pre-pay purchases at specified stores
in Mali, which are retrieved and paid for using the mobile phone of
the intended recipient.
In Ghana, the company is partnering InterMedia Communications Ltd and
together they plan to launch a new service called CiKash Mobile Pay to
extend the use of CiKash stored-value loyalty discount card to the
mobile phone of every card member. In addition to providing a
complementary payment tool for CiKash’s 3 Million plus users, TagPay
will rapidly increase the number of merchants accepting CiKash by
enabling the use of standard mobile phones as secured payment
terminals.
 

MMU Supports 20 M-Banking Projects in Africa, Asia

The Mobile Money for the Unbanked (MMU) programme, an initiative of
The GSMA and funded by Bill & Melinda Gates Foundation with US$12.5
million will support approximately 20 mobile banking projects in
developing countries, focusing on Africa, Asia and Latin America, with
the goal of reaching 20 million previously unbanked people with mobile
financial services by 2012.
MMU will work with mobile operators, banks, microfinance institutions,
government and development organisations to encourage the expansion of
reliable, affordable mobile financial services to the unbanked."There
are over 1 billion people in emerging markets today who don't have a
bank account but do have a mobile phone," said Rob Conway, CEO and
Member of the Board of the GSMA.
"This represents a huge opportunity and mobile operators are perfectly
placed to bring mobile financial services to this largely untapped
consumer base. Based on the initial findings of research conducted
with the microfinance centre CGAP and McKinsey & Company, we believe
that mobile money for the unbanked has the potential to become a US$5
billion market opportunity over the next three years."
The MMU programme will fund regulatory and market research to help
overcome some of the barriers of providing these services and
demonstrate the business case for serving this market. The programme
includes a US$5 million fund to catalyse a new wave of mobile money
innovation, encouraging mobile network operators to create new
services for previously unbanked people in emerging markets.

Mobile Banking Numbers to hit 150m by 2011 - Report

Over 150 million people in developed markets will be using their
mobile phones as an additional banking channel by 2011, according to a
study from Juniper Research.

Juniper says the Far East is still home to the most developed
m-banking market but North America and Western Europe are seeing
growing numbers of services and customers. By 2011 these three regions
will account for over 70% of the m-banking user base.
The report says mobile banking will gain in popularity because people,
especially the young, always carry their handset with them, making the
service convenient. Mobile banking is just one of numerous
applications and services people can access through their handsets to
make life easier.
Juniper also suggests an imminent sea-change in functionality, as the
raft of SMS messaging services for balance and simple information
enquiries are joined by more powerful transactional banking services
available via downloadable applications or the mobile Web.
Howard Wilcox, Juniper Research, says: "Mobile banking is a key
element in banks' distribution channel strategies as they compete to
attract and retain customers."
However the report identifies several factors that will need
addressing to foster market development, including financial
regulations which vary from country to country, application slickness,
and security.


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