New Regulations enable Digital Financial Services in Indonesia


There has been a remarkable achievement in Indonesia over 2014, as the national poverty level reduced to 11.25% from 13.33% in 2010 and the Unified Database (BDT) launched as a single source for targeting social assistance programs. TNP2K is the Indonesian National Team for the Acceleration of Poverty Reduction (TNP2K) and co-ordinates this work, as part of their duties relating to poverty reduction.


I recently caught up with Michael Joyce, Mobile Money Policy Advisor at TNP2K as part of our research work for our soon to be published viewport “Digital Money in Indonesia 2015”. In this blog I am pleased to share highlights from our discussions, to reflect on important regulatory changes from 2014 and consider how they are likely to impact the adoption of digital money service in Indonesia.



Michael, could you please give us an introduction to TNP2K and your role there?

TNP2K is the Indonesian Government initiative to improve delivery of poverty related programs. It operates to promote financial inclusion with the support of Australian Government through Australian Aid (DFAT) and USAID. It maintains a key database that targets poverty reduction through work promoting electronic payments to improve financial inclusion for poor households.

I’ve been here for two and a half years, and work on regulatory and implementation advice for different parts of the Indonesian Government, to try to improve the financial inclusion benefits.


Could you provide some background on the Indonesian context and developments over 2014?

In terms of a review of 2014, there has been a lot happening with OJK work, payments for some subsidy relief programs and in summary, a significant drive towards e-payments.

Indonesia is an interesting market, with officially only 20% financially included, though anecdotal evidence points to around 50% included. There is a strong savings culture and willingness to save. However the tools and price points are not geared towards reaching the large informal sector. Until 2014, digital finance initiatives were slowed down by regulations.

Although E-money licenses were issued there were restrictions on how these could be used in terms of cash-out services at agents. So banks had not been able to use agents up to now. There is a highly fragmented market, with over 17 e-money licenses, but none gaining traction or able to offer a full suite of services.

We started to see a change in 2013, with pilots geared towards reaching the unbanked. In 2014 the results of the pilots were enacted through a law on electronic money and the concept of LKD or “Digital Financial Services”.


Can you tell me why a new regulator was needed and how this has panned out?

Otoritas Jasa Keuangan (OJK) was created as a new Financial Services Authority in December 2013, and this is similar to the UK and Australia model. This separates monetary policy from prudential regulation. Prior to this, Bank Indonesia (BI) was the single authority that combined roles of a central bank (such as monetary and interest rates) with responsibilities with regards to Payments.

OJK is now the prudential authority. It has proved to be a good thing, as the role has expanded a lot. While Bank Indonesia had more of a bank-related focus, OJK is now better focused on additional areas such as the non-bank financial industry. OJK looks at microfinance (MFI), rural requirements and non-bank providers and this opened up a new potential to bring lots of areas under one roof.

It always takes time for dust to settle, and establishment of the new regulator and transition to them did slow things down in terms of financial inclusion – for instance the pilots had to be terminated in terms of better transition to OJK.


How have the new regulations changed things?

The e-money regulations issued by BI tend to favour the four big banks against smaller banks and telcos. Larger banks can offer a wider range of services through agents. However smaller banks and telcos are restricted to using formal entities as their agents. This proved to be a real restriction as it limits small banks and telcos to formal retail chains, co-operatives and pawn shops, but excludes the mom-and-pop stores that are more commonly found in Indonesia.

The new regulations recently released by OJK provide for a much broader set of services and allow a variety of banks to offer services through agents. OJK was able to obtain and act on industry feedback since the first draft in August, and the final release addressed concerns from a range of stakeholders.

This will let a variety of banks offer effective basic banking account services. There can be a nil minimum balance and they can charge transaction fees lower than normal. At the same time KYC provisions are strong and it properly lays down mechanics of a financial inclusive bank account. There are provisions for microcredit and a whole suite of products for the poor, and interest can be paid and charged.


So what does this mean in terms of the agent network? How many stores and outlets could potentially be utilised?

I could not give a figure for this but certainly big banks are looking to have combined agent networks of over 100,000 locations. This is required to cater to the needs of a population of 250 million. Although Indonesia has banking infrastructure in terms of ATMs/POS this does not reach the areas where it is needed. Also it is based on bank accounts rather than E-money, so as to work with existing systems. Now additional over-the-counter (OTC) services at banks and ATM services could also be available. Certainly the potential is huge!


But where does it leave the telcos?

Telcos are an important part of this but they cannot participate directly in government payment schemes, which are only to be managed by banks and post offices.


In that case would the same problem faced in India not be encountered? In remote areas typically there are airtime top-up networks that banks find hard to control, as compared to telcos

They do, but banks are now learning to manage agent networks. In any case telcos don’t necessarily control their own networks. In Indonesia top-up is now managed electronically and not by scratch cards. This is complex and margins are smaller, but the potential is there.


Are there any further plans for regulations over 2015?

Bank Indonesia (BI) and OJK now want to harmonise regulations. It can tend to be confusing with two similar schemes when there are differences. This will take time some time to be achieved.

By far the biggest activity will be the launch of branchless banking and G2P payments (government-to-person). The most important so far is the recently launched KKS (Family prosperity card).

In Indonesia since the new president came into power, one of his big challenges has been to more effectively manage subsidies. The fuel subsidy previously took up almost 20% of the national budget, and this does not benefit the poor. Consequently there is a focus on reallocating funds to cash transfers to the poor.

The database that TNP2K maintains has data for over 15.4 million households. Today the majority of these are paid through OTC. As of the end of 2014, 1 million are paid electronically. This is paid in E-money from Bank Mandiri using the Post Office as an agent and through SIM cards of the three largest telcos. This now delivers funds smoothly and is really a huge achievement. In less than 2 months Bank Mandiri created so many accounts; mobile operators manufactured and distributed so many SIM cards.


What is the total volume of G2P?

Well, I can’t share a total amount, but it is on an average 200,000 rupiah per family per month. This year payments will be significantly more, with the offset gained by the reduction of petrol subsidy.


How does the model work operationally with SIMs?

It has been really useful to test this out 1800 households. We firstly found one major problem – when surveyed, every family of beneficiaries had a mobile phone. However, often the lady of the house did not have one. In order to ensure control of the subsidy goes to mothers, we gave them SIM cards.

However, to achieve this we ran into two further obstacles. Firstly, obtaining a photo id for them and registering new SIM cards proved to be a major logistics effort. Secondly, the SIM expires very soon in Indonesia. If you don’t talk or add credit, the SIM could expire in as little as a week. With a top-up of 5$-10$ it lasts but then people put in just cents and that expires in days. That is a major problem for distribution of money. When it’s time for the second payment, the SIM may have expired already.

With this learning from the 1800 household pilot, all the telcos co-operated and gave SIMs with a 5 year expiry period. Although top-up would continue to expire, the SIM card won’t.


Could you please share a bit about the business model?

Bank Mandiri is the contracting agency. They use the Post Office as their agent, for which they give them a fee. The whole business model is yet to be finalized.

Telcos earn through SMS charges to Bank Mandiri, but again this needs further refinement for a sustainable long term business model.


How many have formal identity in Indonesia?

It is difficult to get this information. We find that a majority have Id - Over 90-95% had formal id in our studies. The problems are more that this may have expired when they moved house and have not updated the Id. This is not a big obstacle. Indonesia does have a national ID project, but it is still underway and the supporting infrastructure for reading and using the cards isn’t fully in place.


What distinctive changes do you see in developments in Indonesia as compared to the rest of world?

Firstly there is a strong banking sector as compared to Sub-Saharan Africa. So the Telco model is not appropriate. With 50% urban population there is strong role for banks in urban areas and it’s not just a rural problem. We will see more channel infrastructure develop, with POS, ATM and mobile phones.

When I first arrived here we felt that the appropriate regulations were around the corner. However this took time to improve but the industry learnt and readied itself while waiting, so now providers are ready to roll out the services quickly. The E-money program proved that when the country wants to do something quickly they can. So this is an interesting place to watch.


Yes, we saw a similar pattern with Prime Minister Modi in India. How about retail payments?

Yes, there is a lot of activity planned in this area. The first step is to encourage more consumer payments through formal instruments. There will be a wider use of the debit card as BI rolls out a national non-cash initiative.

Banks that issue debit cards are committed to working together. There are a phenomenal number of POS terminals, yet they are not used as the market is highly fragmented. In one case we noted a record number of 12 POS in one place – this was at the airport so not really representative, but it’s not unusual to see 4 POS at a single location. There is far too much use of cash, and this is now set to reduce.


Thanks so much Michael, this is an incredibly interesting time in the development of Digital Money in Indonesia. I wish you all the best for your projects in 2015 and beyond!



Michael Joyce is Mobile Money Policy Advisor at TNP2K where he supports the Vice President’s National Team for the Acceleration of Poverty Reduction with advice on policy and implementation of mobile money initiatives to assist in poverty reduction and alleviation across Indonesia. Michael has a background of working within mobile money and financial inclusion for over six years, previously at WING in Cambodia and with ShoreBank International at Bangladesh.

Charmaine Oak is Author of The Digital Money Game, co-author Virtual Currencies – From Secrecy to Safety

Contact Shift Thought for details of our recently published unique “Digital Money in Indonesia 2014” Viewport.


A deep dive into China’s innovations in Mobile Payments, Internet Finance and Banking

It is easy to write-off what is happening in a market far away from you, and to believe that somehow your services are not affected. After working on our latest in-depth study of the People’s Republic of China (PRC), I believe this would be a fallacy. If you are offering or intend to offer digital money services of any kind, you really need to be aware of what’s happening in the most populous country in the world, and now the largest online retail market. Here’s Why ..

chinaimageOn a trip to Beijing a few years ago I found myself on a main road trying to hail a cab in the evening at rush hour. After moving to several different locations and not succeeding I finally walked the long distance to my hotel and put this down to one of the most difficult travel experiences ever. Now, though, you can simply order and pay for a cab from your mobile phone, and this is just one of a set of highly convenient mobile payment services now available.

An immense change has taken place in mainland China over the last 5 years over which we have carried out in-depth studies of this market. This has positioned China as the largest online retail market in the world, and a leader in the use of Digital Money. Services started strongly on the Internet and have now gone mobile and offline, in contrast to a number of African countries that grew on the M-Pesa Kenya model.

A strong focus on innovation

Over 2014, the downturn in traditional sectors such as real estate and slower growth in exports resulted in Q3 2014 economic growth sliding to 7.3%, the lowest growth level since the global financial crisis. This prompted the China State Council to promote innovation especially in the MSME sector, with a new 40 billion yuan ($6.5 billion) venture capital (VC) investment announced in January 20154. To place this figure in context, since first launch of the VC program in 2009, just 9.1 billion yuan was allocated.

Shift Thought sees this as one more indicator of how China is reinventing it’s positioning in the global business value chain, and digital money services are an integral part of this plan. Several large IPOs are expected as the large Chinese banks continue to restructure and go public, with a reported 5 banks doing so since Oct 2013.

Over the past 4 months Shift Thought has completed an immersive study and analysis of the highly complex China financial services market, leading to the publication of our 380 page in-depth report on every aspect of money going digital in China, including details on regulation and sizing of the various different sub-markets. I share a few highlights in this blog, as the first in our “Focus on China Series”.

Historic changes in regulations

As the market has demonstrated a voracious appetite for the new services, regulators have struggled to stay in control and also safeguard the existing licensed players in the market. In rapid succession we’ve seen regulations that brought in new third party providers, online banks and agent banking. New regulations are imminent that will have wide ramifications for start-ups and existing players alike.

First online private banks

Last month we saw the launch of the first private online bank WeBank, and there are a number of other newly licensed banks about to launch. What is interesting is the strategic potential this creates for the category Shift Thought terms as the ’Internet Tech Giants (ITG)’ of China: including groups such as Alibaba, Tencent, Baidu and others. We see huge M&A activity and rebranding activities that are readying these groups for the next level of strategic expansion over 2015.

Internet Finance

With the rapid increase in the use of the Internet, especially through smart devices, the most important trend we saw in 2014 was the meteoric rise of Internet Finance including a range of online financial services such as online payment, crowd funding, P2P Lending and others. This prompted the banks to jointly issue limits on the amount that could be transferred to investment funds such as Alibaba’s Yuebao, with P2P regulations expected shortly.

Third party providers deepen services

In 2010 the PBC released regulations to allow third party non-bank providers of payment services. Since then over 264 licenses or extensions were granted to third party payment institutions, of which over 97 supported online payment and over 30 (including the 3 mobile network operators) have permission for mobile payment services. Favourable tax treatment for online transactions has further ignited this market.

Online Payment market slows down after meteoric rise

Over the last 4 years along with massive growth, there has been stiff competition in the online payments market, with some of the providers already forced to close down. However the achievements have been phenomenal, leading to the creation of the largest online retail market in the world, and digital wallets transforming into mobile wallets.

The rise of O2O services

Both online payment and mobile payment grew strongly over 2014, with mobile payment substituting offline payment and new O2O services emerging that connect online and offline services in a manner that has been uniquely innovated in China. These O2O services allow consumers to find and use products online and offline in new ways that support their lifestyles and completely shake up the existing retail market, with strategic partnerships being formed to reposition and link retailers and online providers.

Financial inclusion

A key concern of senior Chinese Government, working with development groups this year has been for the 400 million unbanked/under-banked in China, and the 100 million under the poverty line residing largely in rural areas. Other underserved segments include migrant workers, MSMEs and unemployed workers, with recent lay-offs from state-owned enterprises (SEOs). We explore each of these segments at length, to look at the services now available to them and how these are changing – including domestic remittances, inward remittances, lending and branchless banking services.

Focus on rural areas

Some of the most interesting innovations we saw were those that are now going into rural areas, with the rapid spread of the mobile internet. In a manner that creates rich scenarios for The Digital Money Game as described in my recent book, providers are targeting multiple services over multiple channels in a bid to cement their market shares and create and grow new markets through their innovations. Our report details these innovations, such as a unique green telephone that has been adapted to support Point-of-Sale and banking transactions and was distributed free to rural households.

So why is this important to you?

This is not just important from the perspective of making an entry into the largest digital money market in the world – a feat not for the faint-hearted, I’m afraid.

As we saw Chinese goods flooding Western markets in the past, the new digital channels are enabled a new Chapter in Chinese export capabilities. We see a number of services already extending across South-East Asia. With the benefit of massive IPOs (such as Alibaba’s  $25 billion, the largest IPO of it’s kind ever), providers are readying themselves to travel further afield, and you may need to compete against these new services in the US and European markets and not just in Asia Pacific.

Digital Money in China 2015


We are proud to announce the release of our globally unique report “Digital Money in China 2015”. This is essential reading for anyone who offers, or plans to offer any one the 32 key services we cover under Digital Money: including Online Payments, Mobile Payments, P2P Lending, Digital Banking, Remittances and more. Contact us today to look inside this report and learn more. Our team is ready to support you in your plans for China and elsewhere in the world. Drop us a line at to arrange for a call to discuss your unique requirements.

Mobile Money in Zimbabwe– freely transfer money, in minutes not weeks!


As mobile penetration reached 106% , and effectively 60% of people in Zimbabwe now have access to mobile services, mobile operators have gone a step further. They now offer people safe and convenient ways to transfer money, pay for electricity and basic services and last but not least, add much needed top-up to their own mobile phones, or those of friends and family. Having helped people communicate, they’re now helping them transact and receive money from abroad, helping the country recover from the hyper inflation of 2008 and the loss of their currency.




When the Zimbabwe dollar failed to recover in spite of multiple rebirths: ZWD in 1980, ZWN in 2006, ZWR in 2008, and it’s fourth incarnation of ZWL in 2009, foreign currency finally got legalised in January 2009 and the Zimbabwean dollar was abandoned by April 2009. It is difficult to imagine how a country of 14 million people quietly went about with “business as usual”, as less than 2 million had access to any kind of formal banking services.

In a country where every individual is an entrepreneur there was a gap for how they pay and get paid locally, regionally and internationally. Now new services are starting to fill the needs, but success for all the entrants can by no means be taken for granted.


Mobile money brings new hope

Now though, a transformation is under way as over 5 million people have found new ways to carry out daily transactions through a 10,000+ agent and merchant network of small stores that function as points for people to open accounts, deposit and withdraw cash and pay bills.


ecocashThe largest operator in the country, Econet Wireless, now has 3.5 million of their subscriber base using their EcoCash Mobile Money service, since it launched in September 2011. At the time, the other two operators had already launched similar services that failed to capture the market, so it was not clear whether they would succeed. Today though, they already handle over $4.5 billion worth of transactions, and a vibrant ecosystem of merchants and services has built up in a remarkably short time.


telecashThe second largest operator, Telecel (Orascom) had entered the market in December 2011 without much success, but just as Telecel closed down their service Skwama, Econet made a break through with their Ecocash service. So while it may have seemed like Telecel had an option, the reality is that mobile money is now a part of the core package subscribers expect in Zimbabwe. Early this year Telecel launched Telecash, and four months ago they launched a mobile money Android app for Telecash. This time with a promise of free transfers, free cash in and cash out have had the desired effect, with 600,000 users taking up the service and reported transaction levels of $17 million.


imageThe third operator Netone is also seeing better traction with their mobile money service One Wallet now supported through a 1,100 strong network, though active subscribers are still nearer to 200,000 than to their 750,000 target.



nettcashMobile operators are not the only active players. In May 2014 a service call NettCash launched with a unique contactless technology called Near Sound Data Transfer (NSDT), an additional API and promise of online payment. As of today it claims to have over 200,000 customers supported by 1052+ agents and merchants. Our Shift Thought knowledge base registers over 18 services from a variety of players, as the market grows to meet the needs of the people.


The banks awaken

Now that the people have voted with their feet and regularly visit conveniently located agents, banks are anxious to get a slice of the newly established market. Econet owned Steward Bank supports Telecash, but a few days back launched their own new AllSave Bank Account that is supported at some of the Telecash agents. This low cost account is expected to help to deepen the customer relationship, with loans and other services. As seen in Pakistan, I expect this could result in the other mobile operators looking around for a suitable bank to acquire, to match the business models that Econet can now aspire to.


Agent networks: To share or not to share?

The new battleground is the agent network. As the pressure mounts to enrol customers, there has been a reluctance to share agents. This recently resulted in a directive from the Reserve Bank of Zimbabwe to discourage exclusivity of agents. However an interoperable agent network may raise as many questions as it solves and I see a need for new processes and compliance structures that are likely to gain focus in 2015.


Remittances made easy

Now that domestic money transfer has been conquered, the providers are turning their attention to the $1.9 billion formal remittances (equal amount of informal?) that are sent into the country. There has been concern as this declined markedly by 15% from $2.1 billion in 2012 to $1.8 billion in 2013. The main send countries include South Africa, UK, Canada, Australia and the United States.

If these transfers can be used to fund mobile money wallets and use digital money for daily transactions, that would help the fledgling services to thrive and grow. UK-based WorldRemit  offers an internet-based money transfer service from UK, from where an estimated 600,000 diaspora send money home to Zimbabwe. Telecel has partnered with UK based for remittances from South Africa, from where an estimated 2 million migrants send money home. And certainly, Econet is well placed to address the opportunity for regional remittances, thanks to their presence across neighbouring countries in Africa.


Online payments – at last!

The vibrant mobile money market is injecting life into other parts of the economy.  In June 2014 card based transactions increased in value by a whopping 21% over the previous month, to reach $361 million. MasterCard recently announced a partnership with EcoNet to offer debit cards for EcoCash Accounts. Mobile and Internet transactions together have risen to $388 million, with electronic payments bringing in a new era of accountability and hope for the country.


The future of mobile money in Zimbabwe – will it mature into digital money in 2015?

What happens next depends on whether the Zimbabwe ecosystem is able to make that difficult transition to non-cash payments, merchant payments and retail payments. As the agent network grows, the small stores must fully embrace the services and find their businesses succeeding due to this. The country must go a long way to strengthen the building blocks and weaken the real enemy, cash and this means that all will need to pull in the same direction.

But underlying all this progress is one building block that must not be forgotten. Zimswitch provides the rails that allow for instant funds transfer and also supports mobile and online payment services. These underlying enablers need to be strengthened and connected into the vast developing digital economy – regional and global.

Though this is hard at first, Shift Thought research in markets around the world show that if everyone in the ecosystem starts to believe from their hearts that the success of one money service does not mean the failure of another, more people start to embrace the services and the whole market grows. I believe we have much to look forward to with the march of digital money in Zimbabwe, not just for Zimbabweans or even Africans, but for the future of payments around the world.


Charmaine Oak

Practice Lead, Digital Money

Email   :


Author of The Digital Money Game, co-author Virtual Currencies – From Secrecy to Safety

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Join me on Twitter @ShiftThoughtDM and The Digital Money Group on LinkedIn


Easypaisa Pakistan: A 5-year journey from OTC to digital money

Easypaisa from Telenor Pakistan and Tameer Microfinance Bank has now woven 50,000 small stores into a brand new fabric of financial services that help move Pakistan from a cash based economy towards a position where the mainstream population can avail of a range of financial services that better their lives.


easypaisa1Easypaisa, a pioneer of branchless banking (BB) in Pakistan, today plays a key role in offering services through which customers can make payments in an assisted model as well as from digital wallets linked to their mobile phones.

Today I have the privilege to speak to Omar Moeen Malik, Head of Strategy & Projects at Easypaisa. Omar shares about his 5-year journey, some of the key strategic decisions Easypaisa took along the way and what excites him about the future.


Omar, thanks very much for your time today. Could you start by telling us a bit about yourself and your role

As Head of Strategy and Projects for Easypaisa, I am responsible for developing and driving the strategy for Easypaisa. I head the key strategic projects as well as the product development for Easypaisa and I am responsible for developing our mobile money financial ecosystem in Pakistan through strategic partnerships. I was part of the core team that first conceived and implemented the project in 2008.

I designed and deployed the OTC and e-Wallet businesses back in 2009, launching the first mobile money service in Pakistan, and was involved in multiple functional areas over the years. I’ve played an important role in developing and managing the distribution channels for Easypaisa and have a key responsibility of interacting with the Telco and Banking Regulators on the Regulations for Branchless Banking (BB).


Congratulations on celebrating 5 years of Easypaisa last month. Could you please share a bit about the early days of the service

Back in 2008 we were captivated by the possibilities of bringing financial services to over 100 million adults in Pakistan, of which just 15 million were banked, but an estimated 70 million were mobile phone users. Inspired by success stories from Kenya and the Philippines we knew that as telcos we had the dual advantage of accessible technology and a vast distribution network across the country. The last 5 years has been a journey to leverage this to offer a full range of services, while working with our partner Tameer Microfinance Bank and our regulators to create enabling regulations to make this possible.

Once Branchless Banking Regulations were issued by the State Bank of Pakistan (SBP) in March 2008, we were the first in the market, with Easypaisa launched in October 2009. We achieved this through our strategic partnership and investment in Tameer Microfinance Bank Ltd (TMFB), the first recipient of the Branchless Banking license, so as to offer services under the bank-led model.

Today as the leader in BB with 57% of the volume of transactions, we serve 7 million customers across Pakistan on a monthly basis – they walk in to a shop to pay bills, and send money or receive money. These services are not limited to Telenor subscribers, but any person in the country can avail these OTC services. However, this is still a small number compared to the potential - there is a lot of work ahead of us still!


What kind of work do you see ahead of you?

The big piece is our on-going struggle with our largest competitor – Cash. Moving toward non-cash payments requires the development of entire ecosystems, and while we have a key role to play some of the work we’re doing is opening up big potential for our partners.

Then there is the OTC/ mobile wallet issue. How do we move from transactions to customers, and how do we get customers to keep money digital?


So why did you choose to go with OTC first, and how has that worked out?


We launched Easypaisa as an over-the-counter (OTC) service, whereby all transactions were agent-assisted and no registration was required.

We did this for 3 main reasons:

Firstly, this model made it possible to serve all mobile phone subscribers instead of only Telenor Pakistan customers, moving the needle on potential market size from 21 million to 110 million adults.

Secondly, for the agents, the cash in-cash out (CICO) business could just not be enough to establish branchless banking as a serious investment. OTC services, with their pricing model allowed for generous commissions to agents, compelling them to invest in Branchless Banking. Even if we had a wallet model we would need a CICO system anyway, and had to set up agents for this all over the country.

Thirdly, we believed in laddering the services for our customers. We started with OTC because OTC services entail the least behavior change. Customers were already used to walking into a Bank branch to pay their Utility Bills. All we asked them to do was to walk into an agent location. Customers would never have been able to do all these services on their own from a wallet. The low levels of literacy and use of technology meant customers prefer to have someone else carry out the operation for them.


I believe we were probably one of the first in the world to launch this assisted-model method for branchless banking. Although we only proposed to start this way and expected to soon move customers to the use of a mobile wallet, this shift has proved harder than we expected.


Please describe how you leverage your top-up network of a quarter of a million to build your agent network that grew from 2,500 to 50,000 agents today

clip_image006The key thing was to give the agents sufficient business and provide our customers with an incentive to use the money from their mobile wallets rather than withdrawing and spending in cash.

Over the last 5 years we’ve worked on many levels – to improve the customer experience and make it easy to use services from their mobile phones, but also to create the assisted model for bill payment, utility payment and services that people need to use for their daily lives.


As Easypaisa celebrates 5 years of touching the lives of millions of people in Pakistan, could you please give us some background on the services such as this, offered by Easypaisa today?

Today in addition to our walk-in customers, we have more than 3 million customers subscribed to Easypaisa Mobile Accounts. Nearly 400,000 transactions take place on Easypaisa each day and in 2013, Easypaisa moved 1% of Pakistan’s GDP.

This new network supplements the 11,000 bank branches and 6,000 existing ATMs that were all that customers had to serve them across the whole of Pakistan at the time of our launch. From walking in to stores just to top-up their phones, anyone in Pakistan with a valid Nadra CNIC can now send and receive money and enjoy a lot more services as well.




We chose services that would help customers easily move away from cash. In addition to a range of payments and insurance services we’ve added some unique new products.

So for instance, there is a lot of interest in holding savings in gold. We recently launched two unique products with ARY Digital, a popular Pakistani television network available in Pakistan, the Middle East, North America and Europe and a subsidiary of Dubai-based ARY Group. Now customers can deposit an amount of their choice into an ARY gold account.

Life insurance, government benefit disbursement and other key services are helping to make the lives of people more secure while also helping the government address concerns relating to money laundering and terrorist financing.


Omar, like millions of others around the world, I am deeply inspired by Malala, the youngest Nobel Laureate winner in the world. How do you see Digital Money initiatives furthering the cause of education?


This year Easypaisa worked with Sindh Education Reform Program (SERP) unit for educational stipend disbursements and we have a number of projects such as disbursements to 400k students and social payments to 1 million women through government social cash disbursement programs. We are also enabling about 50,000 retired Government pensioners collect their monthly pensions


Easypaisa is one of the few mobile money services that support international remittances into wallets. What’s your experience with this? Does this drive the take up of wallets? Do people like it?

International remittances for Pakistan are considered the backbone of the economy. Yearly an estimated $20b comes in from large diaspora in Middle East, Europe and America. SBP estimates an equal amount could be moving informally that would mean a total market of $40 billion per year.

Initially we enabled our agent network to cash out remittances. However the value cashed out tended to be almost as much as their investment in provisions in their entire shop. We now find it a better model to ask customers to open a mobile wallet first. Today customers can withdraw this money directly to their wallets, making it safer and more convenient.

However in order to make this service really useful we need to have regulations appropriate to branchless banking, as these are not yet in place.


Omar, what do you find most exciting in terms of new services going forward into 2015?

With the platforms and network we now have in place, as well as the entire ecosystem getting established across Pakistan, I see literally billions of services that could take off. I am most excited about the immediate potential from online payments, retail Payments and merchant payments.

Paying for goods and services online has huge potential as more customers start to expect this service. Similarly we’re introducing ways to pay at the store through a customer experience that is actually the simplest of all services and we expect this to vastly help in the uptake and use of our mobile wallets.


Could you please share a bit about the huge potential of merchant payments in Pakistan and the project you recently launched for supply chain management?

We’ve recently launched a very successful initiative to streamline the supply chain for FMCGs and their distributors, leveraging our Easypaisa merchant network. This has worked out very well and is one of the transformational services that will further develop over 2015.

Starting with a paper-based system for order management, inventory and payments we’ve been able to create ways for our agents, who are also small stores, to order from and pay their distributors. This reduces wastage and risk for distributors while also helping our agents – a clear Win Win that we hope we can now replicate with our merchants in Pakistan.


Omar, speaking to you today has sent tingles down my spine. I am captivated by the vast transformational potential of what you have done and what you plan to do going forward. Thanks for so generously sharing your experiences and I wish you and the entire Easypaisa team the very best for achieving your ambitious goals.



Omar Moeen Malik, Head of Strategy & Projects, Easypaisa

Prior to his 5 years of experience in Mobile Financial Services, Omar headed the GSM Value Added Services Products unit at Telenor. He has also worked with Teradata and has experience in Advanced Analytics with Data Warehouses for mobile operators and banks in the MEA region.

A graduate of the University of Texas at Austin, Omar also has 3 years of experience in working as a Software Engineer with different organizations in the States including IBM. He also holds a MBA degree from the LUMS, Pakistan.


Email for details

Part of the Global Interview Series by Charmaine Oak

Author of The Digital Money Game, co-author Virtual Currencies – From Secrecy to Safety

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Join me on Twitter @ShiftThoughtDM and The Digital Money Group on LinkedIn

Insights on how to succeed in Mobile Money from Gemalto, a world leader in digital security


Today I have great pleasure in speaking with Naomi Lurie, Director of Marketing for Mobile Financial Services (MFS) at Gemalto. From this key position at the world’s leader in digital security, Naomi is very well placed to share with us about GMPP (Gemalto’s mobile payments platform) and the work Gemalto is doing around the world in the extremely fast moving payments arena, both in developed and developing countries. Naomi shares with us some of the key initiatives in which Gemalto has been involved, and explains the importance of perseverance in achieving mobile money adoption goals.


Naomi could you kindly set the context for us, with a bit background on Gemalto and your leadership position in mobile financial services?

Gemalto OfficeGemalto is a leader in digital security, and a technology enabler for mobile network operators, banks, governments, enterprises and retailers. We work behind the scenes to ensure that each time their customers, employees and citizens want to transact, connect or identify themselves, they can do it safely and easily. You may not realise it, but if you put your hand in your pocket and take out your wallet or mobile phone, chances are it has a Gemalto security component – in your SIM card, your bank card, your driver’s license or your government ID.

One of our important growth areas is mobile payment services, and I look after Marketing for these solutions. Specifically I’m responsible for our Mobile Money and Cloud Based Payments offers. In our Mobile Financial Services marketing team we also offer Trusted Services solutions, including TSM and a Trusted Services Hub business service, and we are NFC experts. It’s exciting work in exciting times, especially as we are a global player with 44 sites and customers in 190 countries.

And with the coming of tokenisation there is yet more work for you?

Yes, certainly. As the leading TSM provider, we’ve been provisioning credit cards onto the mobile device for the largest mobile payments initiatives in the world. Emerging standards for cloud-based payments and tokenization require secure provisioning services for cards, tokens and keys. So, our assets and expertise in provisioning, mobile security, and authentication all come into play.

We’ve recently announced our Trusted Services Hub, a turnkey business service that enables issuers, enterprises, transport operators and digital service providers to easily deploy their value-added and mobile payment services across smartphones and mobile networks around the world. So with one connection to the Hub they gain access to over 1.5 billion mobile users worldwide already covered by our solutions.

Please give us some background on the Gemalto Mobile Payment Platform (GMPP)

GMPP is our comprehensive, field-proven, secure, flexible platform for issuers, mobile operators, retailers and banks that wish to launch mobile payment services. It supports emerging market use cases including stored value accounts, agent networks, P2P transfers, bill payment, airtime top-up, merchant payments, government payments and more. GMPP also powers developed and semi-developed market use cases relating to payments, usually from smartphone devices, such as in-store and online payments, loyalty and couponing.

We work across many different channels: USSD, STK, mobile apps, web and more, and we offer strong security across all these. We authenticate customers and manage risks relating to repudiation, fraud and more. We integrate into mobile operator, issuer and retailer environments and manage diverse requirements based on the nature of the ecosystem, which ranges from simple to very complex.

How has GMPP been used around the world?

Our platform is deployed around the globe. In Europe we work with Telefonica Spain and Telecom Italia.

India Post

India PostThe Gemalto Mobile Payment Platform is running in India with India Post for domestic remittance, since November 2012. India Post’s domestic money transfer service was a traditional paper-based service that took around 5 days to arrive at the destination. India Post wanted to modernise the service, to compete with the new mobile money systems coming from new entrants such as mobile operators. Since India Post has close to 90% of their branches in rural areas, they decided to modernize their money transfer service using mobile. It’s an interesting over-the-counter service. The agents at the post office are equipped with a mobile device that runs an app that collects information about the sender and recipient, amount and pickup location. Immediately both sender and receiver get SMS notifications about the transfer and how to pick it up. And the transfer happens in minutes!


Transfer in Mexico

Transfer1In Mexico, the GMPP is at the heart of the Transfer Service, which is brought to market by Banamex (Citi’s Mexican subsidiary), Telcel (America Movil’s Mexican mobile phone subsidiary) and Banco Inbursa. Telcel provides the channels: SMS, USSD and CRM. The banks hold the accounts and create the use cases, as well as manage network integration with Point of Sale and ATM networks. In Transfer users can get a companion card as well, to access the balance in the prepaid stored value account for POS payments. GMPP hosts all transactions and the customer wallet. The service went live in April 2012.

GMPP is also installed with NetOne in Zimbabwe, for their OneWallet mobile money service. This is your classic service, with P2P, cash in, cash out, airtime top-up and bill payment.

Gemalto provides the SIM Toolkit (STK) and Secure Access Gateway for MTN Group in Africa, Vodafone Qatar and elsewhere.

GMPP obviously solves some key needs for the unbanked. Could you please tell us what makes your implementation uniquely compelling?

I think what’s unique is the way we can address a very broad spectrum of use cases in a highly secure manner.

If we rewind to 5 years ago we thought we knew the recipe for mobile money. Just provide the standard set of expected services, follow the formula and deploy. However services have gotten more diverse. There are specific needs and requirements when we deploy in semi-developed markets. And emerging markets also have diverse customers – some with smartphones and others with very basic phones. Take Mexico for instance, the aspiration is to bank the unbanked and offer a new kind of account to the masses, but they must also appeal to urban users. There is a need for a combination of scenarios. We therefore feel well placed as we can offer the limitless combinations, while maintaining security across all the channels. That’s the strength Gemalto has.

Also we build our platforms to scale. We see mobile money as mission-critical services and can affordably scale up and ramp up as the usage grows.

What do you see as some of the challenges faced in bringing services to market?

There is no magic. You can’t just deploy technology and expect the service to be a success. It has to have all the right elements – in go-to-market, organization, and budget. You really must do your homework and take care of buyer personas, marketing strategy and back office support. You need a lot of CXO attention and need to continuously attract investment and management attention.

I think it is really important to be able to correct yourself. Of the over two hundred mobile money deployments, only a few have reached scale. If you give up and just let the offer die down, that is a waste. As in case of any product launch, it’s important to be able to correct yourself.

Another challenge can be regulation, meaning what type of services the regulator allows and what kind of limiting factors will the regulator impose. Often you need a strong lobby on both aspects.

When you look at mobile driven and bank driven initiatives which of these have a better chance of succeeding?

It seems that mobile operators (MNOs) have been more successful, but this is quite dependant on the region. MNOs seem to have the lion’s share of deployments quantitatively, but we do observe a trend for more issuer-led services.

MNOs seem to have an advantage on the marketing side; they know how to market to the unbanked masses, while banks are more comfortable marketing to their traditional clients. To launch a service for the unbanked requires a real transformation for the banks. However, in semi-developed and developed markets where most of the population is banked, the banks are at an advantage.

What are the major changes you’ve seen in the last year?

One change in the emerging market space is the launch of more consortium-led initiatives, and also Central Bank led initiatives. There are some new models coming up along these lines, with an attempt to put the entire set of domestic transactions on a single platform. Within that setup, individual service providers can offer branded services and compete with each other. These types of initiatives aim to address the question of interoperability from day one.

We also observe a much higher interest in enabling payments – in-store and POS payments in addition to mobile P2P between buyer and seller.

What major goals do you look forward to in terms of 2015?

Our goal is to continue to be the trusted partner of our clients and to help them operate successful mobile payment services. We aim to help our clients bring their mobile business strategy to life, while providing all parties confidence in the robustness and security of the service. It promises to be quite an exciting year with the advent of emerging tokenization standards, the new Gemalto Trusted Services Hub, the launch of major new initiatives, and the evolution of existing services.

Naomi thanks for sharing the very interesting work you do around the world and I wish you and Gemalto the very best of success for the future!



Naomi has a proven record of driving product and market excellence for products in the mobile, financial, retail and enterprise sectors.

Naomi joined Gemalto in 2010, where she drives marketing and strategy for the company’s mobile payment and mobile wallet solutions. She is an expert on the mobile money use cases emerging across the globe and is involved in some of the most ambitious and large-scale mCommerce services in both developed and developing markets.

Previously, Naomi was a product manager at Verint, which specializes in enterprise and security intelligence. Naomi was responsible for the global introduction of analytic software solutions for workforce-enterprise optimization, as well as the execution of product launch and rollout plans to sales, support and professional services.

A refreshing innovation–The Sinar Sip from Bank Sinar, part of the largest banking group in Indonesia

Bank Sinar is a part of Bank Mandiri Group and as part of Indonesia’s move towards financial inclusion Bank Sinar worked with IFC and other partners to carry out a branchless banking pilot. Today we are joined from beautiful Bali by Pak Alit Asmara Jaya who shares his expert thoughts on banking the unbanked using mobile phones: where the challenges lie and what his hopes are for mobile banking in Indonesia in 2015 and beyond.


Pak Alit, thanks for your time today. We are greatly interested in understanding the branchless banking experience in Indonesia, and your experience in launching the branchless banking pilot. For context, could you please give us a bit of background about Bank Sinar?


Bank Sinar is currently majority owned by Bank Mandiri, a state owned enterprise. It has been in operation since 1970, having originated as a peoples’ credit bank. In 2004 we obtained a licence as a conventional bank and then in May 2008 the bank became a subsidiary of Bank Mandiri, the largest banking group in Indonesia. 

The bank focuses on financing micro and small businesses and entrepreneurs. As of August 2014, our portfolio consists of over 80% of micro and small loans, with the rest being loans to medium enterprises.

The bank only operates in Bali for now, with 86 branches and 7 cash outlets. In terms of size, we have nearly USD 110 million in total assets and USD 78 million in total loans.

Our vision is to become the main challenger in financing micro and small business in Bali. Our mission is threefold: Firstly to develop the product and services as per market and customer needs, secondly to grow and develop Bank Sinar in a healthy and sustained manner and thirdly to support the professional growth of our employees.


Please could you describe the needs of the market and why you embarked on a mobile money/branchless banking pilot?


Indonesia has a population of 250 million, being the fifth most populous country in the world. However at present only 60 million people have bank accounts. The rest must depend on informal financial services. In Bali, an estimated 49% of working adults do not have bank accounts. 

We embarked on the pilot with the following main purposes:

  • To renew our commitment to the micro segment and add to our customer base by tapping the unbanked  segment
  • To  differentiate our services in a highly competitive market
  • To serve our existing customers, as the additional services keep  them loyal to Bank Sinar 
  • Over the long term to increase our loan portfolio as savings accounts increase

As a bank, our core business is credit and the main goal of our Branchless Banking service is to provide basic savings and credit products.




Please describe the pilot itself. How many people were involved? What services were offered and how?




We started the project in March 2010 and launched in November 2012, but still without agents because the central bank was still in the process of formulating regulations for Branchless Banking.

At the beginning of June 2013, we started the pilot with agents based on the guidance from our Central Bank. We had 10 agents in 3 districts. Their core business is to run grocery stores and sell mobile phones and airtime top-up. The pilot ended in November 2013 as per guidance. Our project was in partnership with IFC and Axis was our Telco partner.

Our core team consisted of 10 people and was supported by other departments including branch, accounting, finance, operations, legal and compliance teams.

spanduk uplk


The services were of three major kinds:

  1. Saving accounts, including opening accounts at the agents, deposits, withdrawals, balance inquiry and P2P money transfer
  2. Payments, including payment of bills, mobile top up and merchant payment
  3. Other services included linking the account to conventional savings accounts




We used USSD technology with the phone number as the account number. A PIN is required for accessing stored funds and carrying out transactions. Once an account is opened at an agent, it is directly active but with limited transactions until full KYC and verification has been completed by Bank Sinar. Transactions are completed in less than 45 seconds. Completion of every transaction is notified by SMS.  

How did the pilot help, and what feedback did you receive?


We had a list of things to be tested and studied during our pilot. These included product positioning, speed of transaction, pricing/charging, fees paid to agents, agent incentives, customer education by agent, agent training and programs to register and activate customers.


8 Launching UPLK Sri Asih 28 Juni 2013


Of the lessons learnt from the pilot, some key ones include the following:

  • Consumers do have  a need to save after working hours and on holidays
  • The majority of customers who opened accounts at the agents were previously unbanked
  • We need more Telcos to join the service
  • Pricing was not an issue, in fact it was considered affordable
  • The majority of the transactions consisted of deposits
  • Agents who managed phone shops were able to more proactively sell products and they registered many more customers
  • There was a strong demand for more billers to join the service
  • Incentives for agents and customer worked well to increase transactions and accounts opened. 



What are some of the challenges you faced in making such a service successful?


Getting this service to be successful requires attention to a number of different aspects. Some of the areas we have been looking at include the following:

  • Telco coverage is still a challenge. Even the biggest Telco has some problems to cover the whole of Bali
  • A lot of consumer education is required to convince people that use of the service will benefit them. Cash is still very much king
  • We need to work with many more billers
  • We require the ecosystem to include many more merchants
  • It is hard to get agent commitment. Half of our registered agents were not able to make much progress in terms of registering accounts and encouraging transactions
  • So far regulation only allowed Banks with category book IV to have the service and the product is only for e-money, not saving as Bank Sinar requires to do
  • We would benefit from the involvement of the Central Bank and Government to help our campaign
  • The Government must support through their policy to distribute subsidiary payments through mobile money
  • Renewed long term commitment and budget from management

What are your hopes for 2015?

Our partnership with Bank Mandiri with the co-branding model using the e-money product of Mandiri will continue. We are in the process of preparing for it. The model will be the same with the name Sinar Sip but powered by Bank Mandiri. The service will be e-money phone-based service with the use of agents. Bank Mandiri has a licence to go for branchless banking based on e-money. So far this is allowed by regulation.

At present OJK (The new Financial Service Authority of Indonesia) is drafting branchless banking regulations based on basic savings account product and hopefully will release it this December. Bank Sinar looks forward to having our own branchless banking service. We can then reposition the Sinar Sip e-money into the Sinar Sip savings product. This would allow us to pursue our initial plan of outreach to the unbanked for increasing our savings customer base and micro loan portfolio.


I GN Alit Asmara Jaya is currently Managing Director of Bank Sinar, which is the micro-banking institution in Bali and a part of Bank Mandiri Group, the biggest banking group in Indonesia. Having worked in the industry for over 30 years, his wide experience includes operations, risk management, credit, export import, accounting and finance and branchless banking for the last 3 years. He is in charge of the Branchless Banking project of Bank Sinar.


Why don’t we let our youth manage bank accounts?

In my recent interview of Brian Richardson, co-founder of WIZZIT in South Africa, he asked a question: Why should a 16 year old be expected to look after a family, but not have access to a bank account?

I have been unable to forget that question – hence this post. I thought I should check with you – is it that we are underestimating both the capabilities and the needs of our youth, who must cope with the tremendous fallout of the world financial crisis (not of their making, I should add), and who are the architects of the world’s future.


Take what is happening in India, Indonesia, Vietnam and elsewhere in Asia. I was recently in some Asian countries to conduct research on the way people pay and was pretty amazed at what I saw. It is the youth who are leading trends in paying online. Who orders on Flipkart in India, to cover the needs of the whole family – for their grandparents and parents alike? Who buys pizzas from Domino Pizzas using their iPads? In fact, I found it was often the teenager in the household who was actually in charge of the families new payments card and trusted to buy on behalf of everyone. As they also manage the families Wi-Fi and are the most computer literate, little wonder this is the case.


This got me thinking. Was this just an emerging country phenomenon? Is it confined to urban areas? I’m concluding it is not. I see similar behaviour in households here in the UK. Across the world, and across income groups, there is a section of trusted young people who need access to financial services of all kinds, indeed it is fairly critical to consider their needs, not as exceptions but as well-designed, mainstream services.

Remember, a 50 year-old saw the Internet invented in their lifetime, as also mobile phones. Our kids on the other hand grow up taking these things for granted. As money goes digital, digital wallets and mobile phones offer new capabilities to design in checks and balances, while more effectively supporting what young people need.

So what would happen if we ignore this issue? Could we be driving the youth into the fast growing informal digital economy and could this create problems for the future? Unregulated digital financial services have little or no restrictions – surely using these would be worse, not better.


Business-savvy youngsters are not a new phenomenon, but the technology revolution of the past years has greatly empowered their ambitions. The recent BBC show Million Dollar Intern, which I much enjoyed, had Rich Martell, Gary Martin, Ross Bailey, Juliette Brindak, Suleman Sacranie and Fraser Doherty who run million dollar enterprises to go in and give some pointers to established, struggling businesses. Fraser Doherty started age 14 and made a million before the age of 20. Each of the others has a similarly inspiring story. Do we really feel that at age 16 these entrepreneurs were incapable of managing their own bank account?


You might argue that the million dollar interns are the exception and not the norm. Left to themselves youth may have less control over themselves than adults do. Or they may earn small amounts that are unprofitable for banks to support. Or they are not accountable for their actions. However many trends are creating valuable market segments: international students studying abroad, music and gaming users and more.


Today however, in the new branchless banking and mobile money scenarios there are ways to address each one of these concerns. Yet the new services invariably continue to have the same restrictions: You must be 18 and over to be entitled to use them.


In the absence of mainstream financial services a variety of prepaid cards are offered. However the cost and inconvenience (limits, difficulty of topping up), restrict their use as a way to manage business or household needs.

I believe this may be an idea whose time has come. Why don’t we investigate the great new features digital money services offer - Double sign off to protect youth from using illegal substances or falling for scams (though I may add, some adults may need to have a similar sign-off from a youngster as well!).


Similarly the retail industry needs to consider some changes. Secure certification systems and better universal and global standards for classification for products online can restrict purchase of certain products rather than remove capability to buy.


Just as there is a fortune at the bottom of the pyramid, there is a goldmine of the architects of tomorrow, waiting to climb the banking ladder – or a non-banking ladder. Our decisions and actions will determine which it will be.

Why should a 16-year old be expected to support a family in Africa, but not open a bank account?


As part of Shift Thought research into the progress of branchless banking around the world, it was my privilege to speak to Brian Richardson, a pioneer of mobile-based branchless banking, who co-founded WIZZIT in South Africa back in 2004.


WIZZIT BANK 104Through our discussion, we uncover how Mr. Richardson and team opened new doors to banking services for the unbanked of the world.

In pursuit of his vision of making economic citizens of all, he embarked on a 10 year journey, innovating in the commercial use of USSD and building models similar to those being implemented around the world, in places like Pakistan, Bangladesh, India, Indonesia, Nigeria, Mexico and Brazil, with varying degrees of success.

We learn how WIZZIT International now deploys through leading banks in emerging markets, building on a blueprint tried and tested in the South African market.

With operations in over 9 countries, WIZZIT International offers services to over 6 million people and lays down a challenge to banks around the world: If you really want to succeed in moving people away from cash, partner with WIZZIT and have something up and running in 12 weeks.

State of financial services in South Africa

As a pioneer who has driven financial inclusion initiatives since 2004, please paint for us a picture of the state of financial services in South Africa. What are the achievements since 2004 – what still needs to change? If you had a chance to do it over again, knowing what you know today, what would you have done differently?

WIZZIT BANK 095We started in 2004 in South Africa. FinMark Trust, with whom we work closely, loved the idea of what we proposed - no one in the world was talking about such a service. In fact, they warned us against attempting to launch in the highly challenging South African market.

However, we wanted to prove the concept in our home market first. From the start we had a strong focus on financial inclusion and empowerment and saw an urgent to get banks to think differently and see that there was a business case.

The South African landscape is dominated by 4 major banks. We had the task to firstly convince banks on the idea of partnership and once they were convinced of the need, we then had to convince them why they needed us rather than going it alone.

We could not afford our own bank license, nor did the South African Reserve Bank (SARB) offer such licenses at the time. A new level of banks was proposed to be created to cater to the then 70% of the market that was unbanked. We were advised to wait for this Dedicated Banks Bill that was expected, to lower the entry requirements in the Banks Act (94 of 1990). Ten years down the line people are still waiting for the bill to be promulgated, fortunately we launched through an Alliance Banking relationship with one of the smaller banks.

GE1O7885Such a relationship was essential to gain access to the bank-owned Payments Association of South Africa (PASA) for being able to directly deposit into Wizzit accounts. We are grateful to the bank, but in hindsight we would have got to scale much quicker if we had the opportunity to have partnered with a big household name bank, as trust and credibility is important, and establishing this needs a big above-the-line marketing budget that we just did not have. We had to do things differently. We created a win-win through employing WizzKids who were largely unemployed people who could be opinion leaders and advise their friends and communities in soccer clubs and church and savings groups.

Banking and deposit-banking is the responsibility of banks, but regulation is geared for the high-end, especially things like know-you-customer regulations. Lower income consumers did not have what was needed. With some effort and lobbying we got Exemption 17 promulgated to make it easier.

We were the first to launch services under this exemption and although this was made available to the whole industry, not one of the banks offers an Exemption 17 account – a lot more needs to be done. Interestingly, six months after our launch, two of the big banks launched mobile banking but that was additive, rather than transformational in nature.

Being one of the early pioneers, we were one of the first to commercialise USSD that was critical for dealing across all segments of the market. To get new handset, SIM card or change network would be an additional barrier – does not seem fair to bank on the basis of network.

Uncertainties and how to overcome them

What are some uncertainties regarding financial services in Africa?  What should the industry do more of? What should we stop doing?

WIZZIT BANK 052Today there seems to be a lot of confusion between mobile banking and mobile payments. M-Pesa, successful in Kenya is about mobile payments, ours is about mobile banking. For mobile operators the service is strongly geared towards reducing churn. Many new entrants are entering, each with a different perspective: there are the retailers, the tech companies Google, Amazon, Apple and more.

With all of this, there is scope for enormous confusion, not just for consumers, but for would-be providers too. Often I encounter banks who believe they too need to apply for licenses for certain mobile money services for which, being a bank, this is not needed.

So the big uncertainties are regulations, interpreting these and building sound business case around mobile and provision of services to the under-banked segment, while making these interoperable.

Africa versus other regions

With your transition from WIZZIT Payments (Pty) Ltd to WIZZIT International and now that you are working outside of Africa as well, how do you compare developments in other regions against progress in Africa?


Having recently entered into South America we see tremendous untapped potential – in Mexico, Brazil and elsewhere. We are working with banks in many parts of the world, including:

  • WIZZIT and Sure Bank(South Africa)
  • Zanaco (Zambia)
  • NMB (Tanzania)
  • BCR-Erste Bank (Romania)
  • BPR (Rwanda)
  • Bank Windhoek (Namibia)
  • Bank Gaborone (Botswana)
  • Bancode Occidente (Honduras)
  • Stanbic IBTC (Nigeria)

We find technology is easy, and what we have translates well across countries. It is the regulations, the business models and processes that need expert understanding, and where we add value.

A blueprint for success in emerging markets

Please tell us about your change of focus to WIZZIT International, and how you plan to deploy your model with leading banks in emerging markets. What do banks need to do and how do you propose to help?

We believe that banks must act. What options are open to them? Firstly, they could build their own platform, which could take a good 24 months or more. Secondly, they could partner with a mobile operator, but this involves separate partnership agreements before they can cover the entire market as they should. Thirdly, they always have an option to ‘do nothing’, but that’s probably the worst and most expensive. Saving the best for last, I’d like to think, is the fourth option – partnering with WIZZIT.

In 12 weeks we could have something up, and offer not just technology, but a whole set of services around business case, and including strategic advice at CEO level. We deploy our platform that can be linked in to core banking platforms, making it easier to implement.

Expectations for changes in 2015

What is the biggest change you hope to see in financial services over 2015?

WIZZIT BANK 041As far as retail payments go, only around 0.2% of mobile payments in Africa represents purchase – it is largely for purchasing airtime of transferring money. People withdraw cash and then immediately use it around the corner to buy something.

But cash is costly, and it is also bad. I welcome a broad spectrum of innovations that help to move people from use of cash – initiatives by the governments to stop accepting cash payments in many parts of the world. This involves a change in behaviour though – this means incentives and punishment.

I look forward to a world where when at 16 years of age an individual must fend for an entire family, support structures exist to provide that individual every care and assistance. Not a world that cordons off financial services from such disadvantaged people with pressing needs, who need these services the most.