Archive for the ‘mobile money transfer’ Category

Mobile Money Transfer From Around the World

Thursday, November 13th, 2008

The last day of MMT08 was focused on the true landscape of the mobile money transfer market & offered insight on how to succeed in this emerging market. As conference delegates, we had an opportunity to directly interface with the CEOs of many of the companies who have already deployed MTT solutions. The list of CEOs & their companies included Michael Joseph of Safaricom, Karim Khoja of Roshan, Brian Richardson of Wizzit, & Carol Realini of Obopay who have all had their own unique experiences developing & deploying MMT solutions.

Of the four CEOs that offered their insights, Carol Realini of Obopay is the only one whose company is experienced with deploying a MMT solution in the States. I understood Realini’s description of the MMT market in the U.S. very well which today is primarily made up of unbanked & underbanked immigrant workers & teenagers. For those teenagers that are adopting Obopay’s MMT solution it is more about convenience than anything else & since teenagers trust almost any application available on their phone it’s no wonder that this market is one of the first to adopt Obopay’s solution. In the States the MMT market is also being utilized by working immigrants because MMT offers them both a convenient & more importantly a cost saving option compared to traditional means of transferring money such as Western Union & MoneyGram.

Banks, Point of Sale (POS), eCommerce solutions, etc. are readily available in the States. In other countries, these solutions are practically nonexistent. What is readily available in these other countries with undeveloped baking & payment solutions are cell phones & because of this reason MMT is taking off!

Brian Richardson, CEO of Wizzit, did a beautiful job of describing the undeveloped market his company is working hard to serve in Africa where less than 4% of the population is banked. Richardson gave an uplifting & passionate presentation about the opportunity that exists in Africa & why his company is taking an innovative approach of bringing the banks to the unbanked; not the other way around. Richardson asked the audience of the conference to consider giving up all bank accounts, credit cards, debit cards, Internet banking, etc. The question was followed by an uncomfortable silence while we all pondered the difficulties that this would present in our lives & what the unbanked population deals with on a daily basis.

The current situation in Africa does not nurture a system for banking. Banking fees are high, the banks are open for short periods of time (9am - 3:30pm), banking services are poor, & the banks are an average of 30 kilometers (18 miles) from where most Africans live. Cash is an expensive, dangerous, & an inconvenient option, but despite the inconvenience & danger cash presents it is still a better option than banking at a conventional bank in Africa.

It was evident from beginning to end that Richardson possess real passion & excitement for this industry & to succeed in any business passion & excitement are key. Just as we at NetworkIP through our own passion & excitement have brought affordable & quality telecommunication services to the unbanked & underbanked here in the States, I hope that Wizzit will succeed in empowering those in Africa with a banking solution using MMT.

Brian Kirk
VP Business Development
NetworkIP & Jaduka

Mobile Money Transfer Regulatory Hurdles

Monday, November 10th, 2008

First to present this morning at the Mobile Money Transfer Conference (MMT08) here in Dubai was Ryan Gilbert of 1688 Inc. Gilbert excited the crowd when he described the size & potential of the Mobile Money Transfer (MMT) market. The money transfer market is currently estimated to be a $700 billion annual industry, of which $350 billion is reported through traditional means of money transfer through services such as Western Union & MoneyGram. The other $350 billion goes unreported because of non-traditional money transfers such as sending cash via snail mail & cash delivered during travel. The mobile phone, a now ubiquitous device across the globe, is the key to capturing a piece of the existing reported $350 billion market, & more importantly capturing an even larger percentage of the $350 billion which is currently untapped.

The mobile phone offers not only a more convenient way of transferring money, but is also a less expensive method for the consumer. Sending money via Western Union for example is quickly becoming a dated solution & as consumers realize the simplicity & the many advantages of money transfer via mobile the likes of Western Union will need to adapt their services to the  mobile phone or their business will suffer significantly.

Like all great opportunities there tend to be hurdles that we must work together to overcome. In a post 9-11 environment we a forced to deal with many new strict laws & regulations that will unintentionally impede the growth of the mobile money transfer market. The larger regulatory hurdles which are causing the most concern include the global patchwork of laws, the fact that current legal frameworks do not fully cover cross-border remittances, compliance is expensive, & most importantly the pace of regulation has not kept up with pace of technology innovation.

Within the United States, we are burden with even more regulations. U.S. regulations include property law, consumer protection law, AML/CFT/KYC/OFAC (also known as the alphabet soup of regulation), privacy law, telecommunications law, the Federal Money Service Business registration, & lastly the State Money Transmitter License all plaguing the industry.

Since inaction is not a viable option, the following actions for moving forward with MMT were recommended by Gilbert: 1) we must close the gap between that exists between innovations of the mobile network operator (MNO) & the regulatory goals, 2) we need inclusive planning processes, 3) we need to address consumer demand, & 4) we need to balance regulations with service-based trust & safety.

If we work together inside this mobile payment ecosystem these hurdles in comparison to the opportunity that exists are insignificant. The goal is to move quickly in order to meet consumer demand while keeping true to the regulatory compliances before us.

Brian Kirk
VP Business Development
NetworkIP & Jaduka

Mobile Money Transfer

Sunday, November 9th, 2008

Earlier this week I departed from Austin & boarded one of three flights that would eventually land me in Dubai, which is serving as this year’s host city for the Mobile Money Transfer (MMT) conference that I will participate in. As noted by the conference organizers, there are significant profits to be made out of MMT. Only a finite group of market leaders such as Safaricom who developed M-PESA & Globe’s G-Cash have proven it, & now mobile network operators, banks, micro-finance institutions, money transfer networks & technology providers (like NetworkIP & Jaduka), are mobilizing in an attempt to grab a share of the market.

According to a study by Juniper Research, mobile remittances & contactless Near Field Communications (NFC) will account for 50% of the overall mobile payment market globally by 2013. The mobile payments market, currently dominated by purchases of digital goods such as ringtones, music & games, is expected to be led by mobile money transfers & NFC for purchases in the future. This will boost the overall m-payments market by a factor of ten until 2013.

At NetworkIP & Jaduka we are constantly looking at new services & products that can easily be powered on our ever growing network & platform. For the next four days at MMT08 I will meet with many of the thought leaders in the mobile payment industry & will participate in a variety of conference sessions in an effort to build NetworkIP’s knowledge of this evolving space as we continue to seek new ways to leverage the power of our platform to bring success to our customers & partners.

Brian Kirk
VP Business Development
NetworkIP & Jaduka

Mobile Payments Market Forecast for 2013

Monday, September 8th, 2008

Last week Juniper Research released a new report forecasting the growth of the Mobile Payments Market through 2013. The study projects that purchases using Near Field Communications (NFC) enabled phones coupled with money transfers are likely to total $600 billion globally by 2013. Howard Wilcox, the author of this report, points to the continued growth in mobile subscriber penetration & the availability of exciting & easy to use services as the driving forces to this type of growth.

Wilcox concluded that today’s mobile market is mostly dominated by the purchase of digital good such as games, ringtones, & music. The new opportunities in this space will include the future of NFC, mobile money transfer (MMT), & the purchase of physical goods via the mobile device. The report suggested that the Far East & China, western Europe, & North America will represent more than 70% of global MMT gross transaction value by 2013.

In order for this market to mature at the rate suggested by Juniper we’ll need to see a number of things fall into place. The good news is that the mobile operators can now support the bandwidth & speeds that these mobile payment applications will require. Also, mobile operating systems such as Symbian, Apple, & Windows Mobile are now open for us to develop these new mobile payment applications.

So what pieces to this puzzle are we still missing?

The mobile device manufacturers such as Nokia, Samsung, RIM, & Apple need to begin releasing new phones with NFC technologies built in. Without these devices in the market, retailers will not begin updating their existing Point of Sale (POS) infrastructure to accept contactless payments. Once released, the device manufacturers will need to make these new mobile NFC enabled devices affordable. Unless people are purchasing these new mobile devices, the retailers will still be reluctant to update their existing POS solutions.

Beyond the mobile devices & the POS infrastructure consumers need to be educated. Consumers must understand how these new mobile payment solutions will work, the value in using these solutions, & most importantly the consumer needs to be convinced that these solutions are safe & secure. There have been far too many reports of identity theft for consumers not to wonder how this solution is safer than what they are using today.

For those of us partaking in this new market the sky is the limit. Of course we still have some obstacles to navigate & it’s going to require platform providers like NetworkIP, mobile device manufacturers, mobile service providers, retailers, application developers, & the banking & credit card companies to all work together.