Category Archives: Digital Money

Digital Money initiative

RBS – the role for digital banking in establishing the most trusted bank in UK

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As Ross McEwan (Chief Executive of RBS since October 2013) sets out to cut 1 billion pounds of cost this year, this post sheds light on how digital channels are likely to support this plan. The plan involves removal of duplication and complexity by rationalising functions currently duplicated across divisions.

With the backdrop of these plans, and the context of the UK launch of Paym last week, Charmaine Oak (CO) caught up with Terry Cordeiro (TC), Head of Mobile, RBS, to understand how his vision plays out in terms of mobile banking and payments. He shares with us his expert insights into the UK payments market, and how he hopes to create a seamless consumer interface that hides implementation details and simply solves the consumer needs.

But first there is the imperative to sort out the systems behind recent high-profile outages. RBS reportedly plans to reduce technology platforms by over 50%, slashing the number of core banking systems from 50 to 10 and the number of payment systems from 80 to 10.

imageCO: Terry, what services do RBS/NatWest customers currently enjoy with respect to mobile banking and payments services?

TC: Our mobile app supports a range of everyday banking needs including statement history for the last 90 days across all accounts, payments and transfer services. Our award-winning NatWest and RBS GetCash service has evolved from an emergency cash service to much more casual, every-day use, “money for treats without your wallet”.

SMS services have been around for a while, and can sometimes be taken for granted, yet we find increasing numbers of our customers signing up for these. From their use as alerts and notifications regarding payments, they have evolved into ways in which we can help our customers save money, by reminding them about upcoming thresholds beyond which they may incur penalty charges.

CO: How about contactless payments? Do you plan a follow-up on your TouchPay trial of 2012-2013 that allowed consumers to pay for £20 or less from their current accounts?

TC: The TouchPay trial proved to be a useful learning exercise for us. Customers told us they want more than just going from paying with plastic to paying with mobile. We’re currently in the process of designing that “something extra” experience which will incentivise customers to overcome the inertia of changing their habit of paying with a card. This could include location awareness, loyalty points and incentives that come from the new data points such services can provide.

CO: What about domestic transfers? Why is RBS not in the first tranche of banks supporting Paym?

TC: We’ve supported payment to mobile phone number for the last 12 months, via our Pay your contacts service and it has been incredibly successful. This is a P2P service that runs on our internal systems for on-us payments, and leverages Visa Europe Personal Payment services for payments to anyone holding a valid UK to Visa card and UK mobile number. We expect to first manage some of the rationalisation projects, recently announced by Ross McEwan, before we implement Paym later this year.

CO: Talking about rationalisation, it seems UK customers are now spoilt for choice with respect to mobile payment services. Your own bank services have now been joined by those from the schemes, and now interoperable services such as Paym and Zapp, not to mention operator based services from Weve and individual mobile operators. Don’t you think there is a danger of confusing the consumer into an “analysis paralysis” almost?

TC: That is exactly where we come in. Our goal is to simplify the experience for the consumer – just give them increasingly easier ways to pay. As the alternatives become available they just provide more options for the 2.5 million to 3 million UK consumers who currently use our mobile banking services. It’s great that these new services are helping to increase the awareness of new ways to pay.

CO: Terry, thanks so much for sharing your vision and these insights with us. I wish you the very best in taking your strategy forward, and hope to learn more about it as it evolves further.

 

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Swiss Financial Services– preparing for the biggest transformation in 80 years

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Shift Thought studies lead us to believe the Swiss Financial Services industry is on the cusp of the biggest transformation it has seen in 80 years. In this blog we share a bit about what leads us to this conclusion and our upcoming Free Webinar that we hope you will attend.

 

imageOver the years Switzerland has carved out a space for itself as a renowned country that exemplifies a unique system of Direct Democracy, precision and innovation.

A part of Europe, yet apart, it is currently seeking to define it’s relationship as a major trading partner of the EU.  This is now defined through a framework that consists of over 120 agreements. However, a Swiss vote calling for curbs on immigration led to EU restrictions and questions regarding a range of agreements based on Swiss commitment to free movement of people.

Recently found to be the most expensive country in the world, the high cost of living is often associated with the large number of super-rich foreigners who have made Switzerland their home. New rules for the super-rich must walk a tight-line between attracting foreigners and satisfying growing concerns from the locals.

To add to this, in recent times there has been intense pressure on Switzerland from the USA and India, to release information on their citizens who may seek to avoid paying tax back at home, and worse still, conceal assets that represent “black money”.

Finance Minister P Chidambaram this month warned that India would take a position at the upcoming Global Forum, to call for more effective exchange of information. Earlier the US has brought action on some of the largest Swiss banks, relating to allegations regarding tax evasion activities by US citizens.

All this calls into question the well-established Swiss financial services model that has developed and evolved over the years, since the introduction of the legendary numbered bank account in 1934.

 

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However, whilst pressure mounts on Switzerland, there is a simultaneous ground-swell of new payments products and services (NPPS) that we at Shift Thought continually study, as they evolve in each part of the world. I am just back from our market studies in India and Singapore. In the production of our reports on Singapore and Switzerland I have been continually struck by the parallels between the two countries. Emerging countries around the world present an opportunity and a threat for the Swiss Financial Services model.

And then there is Bitcoin. In thinking about Bitcoin, I am reminded of the song How do you solve a problem like Maria? from the evergreen movie The Sound of Music, where the von Trapp family hikes over the Alps into Switzerland and to freedom. Unfortunately the Bitcoin conundrum is not as easy for Switzerland to resolve.

All Digital Money is not Bitcoin, and Bitcoin is more than Digital Money

As innovative start-ups such as Monetas choose to make Switzerland their home, our upcoming Webinar touches on what the development of crypto currencies means for the country. We place this in the context of a wider set of new payments products and services and the opportunities and risks when providers create strategies around these.

 

viewport_switzerland_2014I’d like to invite you to join us for a free webinar I will be conducting for UK Trade and Investment (UKTI) on Tuesday the 27th of May 2014, from 2:00 pm to 3:00 pm BST.

Register here : Digital Money: a new business model for Switzerland

I shall share some of our findings from our recent report on “Digital Money in Switzerland 2014” and our “Guide to Bitcoin and crypto-currencies 2014” . Read more at our previous post.

 

 

Digital Money: A new business model for Switzerland

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Mon, Mar 24, 2014 2:00 PM - 3:00 PM GMT

Shift Thought is working with the UKTI (United Kingdom Trade & Investment) to present some country-level options for balancing risk and innovation, while creating sustainable consumer services for the future.

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In this webinar, Charmaine Oak, the Digital Money Practice Lead at the UK-based management consultancy, Shift Thought, will discuss some of the recent innovations in payments and remittances services. She will provide insights from recent Shift Thought research on Switzerland, UK, Singapore and other markets around the world.

This will focus on opportunities for UK-based companies to prepare for requirements common to countries such as UK and Switzerland that are seeking to innovate for the future.

Shift Thought tracks innovations across a wide range of services they term as Digital Money. Shift Thought believes that balancing innovation within an overall framework of regulation is of paramount importance. This helps to create sustainable long term growth, both of individual organisations as well as for a country as a whole.

Mistakenly some people tend to confuse this with Bitcoin, which is only one form, of one of the many dimensions across which innovation is possible. Bitcoin is a decentralised crypto-currency that represents one kind of disruption. It is positioned as a potential way to do low cost transfers, but governments and central banks have expressed concerns regarding potential risks to consumers, as well as on fundamentals surrounding the operations.

This webinar touches on the much broader possibilities for innovation in payments and remittances. It aims to enhance the level of co-operation between UK Financial Service and Payments providers and the Swiss ecosystem.

It will do this by offering insights into the changes affecting the Swiss market and the ways in which countries such as Switzerland are approaching a range of innovative financial services.

The presenter will cover areas such as:

  • Creating a sustainable context that balances innovation and risk, to create services that build reputation
  • How could Switzerland use its unquestionable strengths to create such innovations that consumers really want?
  • What opportunities might British businesses draw from the transformation in the financial services approach in Switzerland?

This webinar will be of interest to audience in the Swiss financial services sector as well as to UK businesses who wish to cater to the needs of the Swiss financial sector.

However, the innovation and risk balancing theme addressed is likely to be of broader interest to regulators and payment professionals across the world, and in particular in countries such as Switzerland that are also in the process of creating enabling environments for financial services of the future.

 

Further details and registration is available at Digital Money: a new business model for Switzerland.

 

Background reading: See our previous blogs, What is digital money? and   Bitcoin - Fan it or Ban it? , and also browse for more about the different virtual currencies and get an understanding of other such initiatives at Bicoin Search Results.

Financial Inclusion at the Bottom of the Pyramid–Add your voice

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In this interview Carol Realini, co-author of 'Financial Inclusion at the Bottom of the Pyramid’ tells how they use an innovative crowd-sourced solution to provide a deeper understanding of innovative financial services that are emerging to address the needs of unbanked and under-banked people around the world.

Q: Carol, could you let us know a bit about your new book – what’s it about?

fipKarl and I are fortunate to have been involved in financial inclusion projects around the world. We wanted to share how we see things changing, new models emerging and most importantly how this is happening differently in different places.

We thought it important that we provide a global view rather than focusing one market or one aspect – such as just Square or just Mobile POS, or just the USA.

We’re show-casing the best examples of tech-enabled financial inclusion from around the world.

Q: I’m interested in the way you are sourcing material – in a manner that is still pretty unique

Yes, although we have ourselves been in many of the countries where the new services are rapidly growing, we did not want to be limited in our thinking. By throwing the book open to contributions from around the world we expect to cover more ground and discover some of the breaking stories that will help create a good understanding of the state of play.

Q: Carol, how do you and Karl expect to make a difference with this book?

We believe the next 5 years will be a period of unprecedented change. Another 3 billion or more people will have access to the internet via mobile. Financial services will reach 1-2 billion more people in a similar timeframe. We want this book to help inspire people to understand more. We want the book to help people share about what they’ve achieved so we jointly celebrate their success and contemplate potential pitfalls together.

Q: How do people contribute to this initiative?

We have a campaign on for nominations for Global Financial Inclusion Pioneers. We would love to have more Europe and Africa nominations – we have extended the deadline to Dec 31, 2013. Full details are available at the Financial Inclusion at the Bottom of the Pyramid website. We’d like people to visit and nominate as well as submit their stories. This will help us showcase the best examples from across the world.

 

Carol Full AvatarCarol Realini is a successful serial entrepreneur who  dedicates her time to working with global pioneers in mobile banking & payments. Carol was a World Economic Forum 2010 Technology Pioneer.  Carol passionately supports entrepreneurship, banking for all, and women in technology. She is the author of the 5-Star-on-Amazon BankRUPT, a book about banking innovation in the US, and co-author of Financial Inclusion at the Bottom of the Pyramid.

 

Bitcoin – Fan it or Ban it?

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As debates on the regulation of Bitcoin and cyber currencies continue to build up, Karena de Souza, Shift Thought distributor in Canada recently chatted with people involved in the rapidly growing Canadian Bitcoin ecosystem. She shares her thoughts here and we raise key questions to reflect on.

Background

News on Bitcoin alternates from viral growth to free fall. Fuelled by a meteoric rise in value based on announcements and events over November 2013, phrases such as ‘cyber currency’, ‘digital money’ and ‘virtual currency’ have entered the common vernacular. Press releases, announcements and senate hearings have all worked to keep it front and present in the public eye. The word ‘bitcoin’ made its official entry into the Oxford Dictionary in August 2013.

Bitcoin is now getting the visibility it has been struggling for since its inception, as Forbes reported 2013 to be the Year of the Bitcoin. The European Banking Authority has now warned consumers of the risks, as China’s PBOC barred financial institutions from handling Bitcoin transactions last week.

It is important to clarify that at Shift Thought we look at Bitcoin as just one example of a class of virtual currencies, not to be confused with our description of Digital Money, the term we use for describing innovations that move people away from paying with cash.

What is Bitcoin?

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After the recent interest, most major financial news agencies have published an explanation of Bitcoin – how it is created and how it works. The Bitcoin community maintains a comprehensive FAQ. I recommend the Huffington Post: A three part series by Alexandra Berke as an easy introductory read. A Fistful of Bitcoins  is a more in-depth discussion of algorithms and the concept of anonymity.

Value versus Volatility

Key announcements, particularly from China and the USA, have kept the focus on Bitcoin and other virtual currencies, causing a rise and fall in the value and sudden surges in demand. After trading within the $10-$200 USD bracket for most of 2013, the value of a Bitcoin jumped 400% within the month of November.

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The graphs, sourced from OANDA Historical Exchange Rates show more volatility in the price of BTC based on daily announcements, primarily out of China, not so far a total reversal in value. 

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As more consumers get comfortable with the concept of a virtual currency, especially in markets as large as the USA and China, the opportunity for a digital currency with low transaction costs to succeed gets larger. As discussed in the Shift Thought webinar on Digital Money in China 2013, the online purchasing population of that country is bigger than the entire population of the 5th most populous country in the world. Announcements out of China therefore have the ability to create huge swings in a cyber-currency still in its infancy.

Bitcoin operates as a cyber currency that provides users in many countries with a way to transfer value internationally at a nominal rate, without a bank account. The effect on remittance streams could be significant, causing leading global payment providers to consider whether and when to support it. However the potential effect on consumers could be catastrophic. Also of great concern to the regulatory community is the cash-like anonymity this method offers, and the potential for exploitation by money launderers and criminal elements.

To hoard or to trade?

Creating the expectation that there will only ever be 21 million Bitcoins helped its value to rise dramatically and also fuelled an instinct to hoard. Yet hoarding goes against the effectiveness of a means of payment.

imageVirtEx, The Canadian Virtual Exchange  has been building a bitcoin ecosystem by working with merchants and customers.

At the Small Business Forum in Toronto on October 23, 2013 (1BTC=$183.69 CAD) CEO Joseph David encouraged small businesses to consider becoming a part of the Bitcoin network. They are attempting to take Bitcoin beyond cyber commerce, to make it viable tender at an expanding number of brick and mortar sites. They use the appeal of low transaction fees, quick access to money and the cash-like anonymous relationship to the transaction. VirtEx claims to have a rigorous identification process in place before it will establish an account. It supports a range of Bitcoin related activity and has expanded its portfolio of products most recently by launching a Schedule 1 bank-based debit card. This allows Canadians to use the Interac network to spend Bitcoin or withdraw the Canadian Dollar equivalent in cash, within the guidelines established. VirtEx stated aim is to provide the Canadian Bitcoin community with a secure place to trade in Bitcoin.

The increase in awareness amongst the general population, coupled with the growing value of BTC (the Bitcoin currency) has certainly got more merchants considering acceptance of Bitcoin as tender. But could the recent volatility scare smaller merchants who are dependent on a predictable cash flow? Will we start seeing protective hedging in the form of options and futures? Virtex Business Development Manager Reed Holmes hoped that by encouraging a robust and ever-increasing circle of suppliers that are willing to accept Bitcoin internationally, merchants will keep their transactions in BTC, opting to convert to fiat currencies only when necessary. While it is good to see BTC appreciate in value, there is hope that instead of hoarding, sufficient amounts of BTC will stay in regular circulation and like gold, be ‘on display’.

Bitcoin in Canada

imageCanada is a perfect incubator for ideas and innovation – the smaller, concentrated population with a high degree of technical and financial knowledge, is coupled with a conservative yet open-minded, internationally respected regulatory environment. The significant proportion of immigrants helps the osmosis of good ideas back to their countries of origin. This has created conditions for large numbers of Canadians to embrace Bitcoin. The world’s first bitcoin ATM was launched in Vancouver, with more planned. According to Isabell Boese, Executive Assistant at Bitcoiniacs, the second Robocoin ATM is to be installed in Calgary by year-end, and the first of two earmarked for Toronto will be in place by end of January 2014.

clip_image006That should be well in time for the first bitcoin Expo to be hosted in Toronto April 11-13, 2014. At that event, Canada will look to establish itself as an innovator and leader in this space. It aims to attract merchants, start-ups, VCs and investors who are interested in fostering the ‘growth and development of Bitcoin communities worldwide with a focus on collaborative and decentralized models’. It features an international panel of speakers as per the post from Anthony Di Iorio, Executive Director of the organizer, Bitcoin Alliance of Canada.

There have been frequent announcements of Bitcoin related start-ups and ventures. At the Mobile Money Conference 2013 in November, Venture Capital Panelist Alex Baker forecast that the coming months and years would see Bitcoin play a more prominent and disruptive role in retail payment.

The Risks and Rewards

Bitcoin.org lays out the many risks with using this new payment method. Competitive cyber currency offerings, denouncement by sovereign countries and central banks and the fraud and embezzlements uncovered all conspire to affect the day-to-day value of BTC. Yet the international Bitcoin community and its supporters grow, as a new wave of digital payments joins the traditional cash, gold and credit remittance and payment streams.

For some hoping for a Bitcoin in their stockings, it seems they may have to be happy with a few Satoshi! I am taking the long view – I think virtual currency will be to payments what the smart phone was to the telephone and camera … it’s going to make new things possible!

Over to you …

  • What is the innovative and disruptive element of Bitcoin that is likely to change payments?
  • What effect do you see Bitcoin having on international remittances?
  • Will Bitcoin still be the hot topic at the end of 2014?
  • What does it take for a new payments method to go mainstream?
  • Will Bitcoin have an impact on your business or way of doing business?

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Karena de Souza is a forward thinking and entrepreneurial professional with a special interest in payment streams for small business. Karena’s focus on mobile finance blends the challenges and opportunites she faced as a small business owner in Canada with her experience using technology to facilitate financial services while at Morgan Stanley in New York. She graduated from the University of Westminster with a BSc (Hons) Mathematics and Computing.

Governance and Audit Scope of Mobile Banking in Bangladesh

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As the number of registered mobile banking users in Bangladesh approach 10 million, Raihan Alhusain, Head of mCommerce Operations in Airtel Bangladesh offers his expert practitioner insight into how the mobile financial services guidelines issued two years ago support the remarkable growth in the country. He reflects on areas in which regulations could benefit from extension to support new scenarios stemming from this rapid growth.

Views specified are solely Raihan’s personal views as an expert in the mobile banking sector. This interview is part of the research Shift Thought conducted in the release of our “Digital Money in Bangladesh 2014” Viewport.

Background

In September 2011 Bangladesh Bank published the Mobile Financial Services (MFS) Guidelines allowing commercial banks in Bangladesh to start bank-led mobile financial services. The guidelines describes the services that may be offered, including a broad range that are required to promote financial inclusion. Only the bank-led model is permitted. The guidelines prescribe essential governance processes including licensing, agent management, AML/KYC, education of customers and agents, building awareness of customer services, security and controls related to technology, data retention policy and reporting and more.

Q: Why is this a good time to discuss 2-year old regulations?

image_thumb2Today the number of people in Bangladesh using financial services delivered through their mobile phones is fast approaching 10 million. Since the start of these services in 2011 when DBBL started without distributors, the systems have grown more sophisticated and with greater coverage so that now all the usage scenarios and implications are of great importance across the country. The guidelines issued by Bangladesh Bank as Central Bank and main regulator of financial services underpin the delivery of services. However along with the guidelines I thought it important to discuss the practical checks and balances these new systems imply in greater detail at this juncture.

Currently banks and mobile network operators (MNOs) execute agreements to ensure network coverage and agents reach for the service. The audit and governance scope of mobile banking in Bangladesh mainly focus on adherence to the policy established by the guidelines. Additionally as practitioners we continue to learn about governance and audit and determine the best ways for responsibilities to work across partners. By reflecting on these there may be useful points for others in Bangladesh as well as for other bank-based branchless banking developments in India, Nigeria and elsewhere around the world.

Q: What is the concept of a trust account in mobile banking and why is it important?

In the bank-led model adopted in Bangladesh, banks are the custodians of funds deposited against each mobile wallet. Even though the guidelines do not include the trust account mechanism, in order to be aligned with the guidelines, funds kept in the bank must to be treated as a liability and may not be used for operational purposes. This applies to Telco-led models as well. The accounting book should clearly mention the accumulated amount through a specific general ledger code, following IFRS (International Financial reporting standards) principles. The audit scope in this aspect should include a complete checking of the trust account mechanism.

Q: What is the concept of a book balance mechanism and why is it important?

At any point of time, the relevant balance in the bank book shall be equal to the virtual balance of all registered mobile accounts shown in the system. This means at any point in time, reconciliation processes must be in place to allow the following to be checked:

Bank Balance = Channel Balance (Agent Wallet Balance+ Distributor Wallet Balance) + Bank Branch Wallet Balance (If Banks deploy their own Branch to work as channel for Mobile Banking) + ATM Wallet Balance (If Banks deploy their own ATM channel to work as channel for Mobile Banking) + Registered Customer Wallet Balance + Merchant Point Wallet Balance + Commission Wallet Balance.

If a Bank disburses commission related to mobile banking through the mobile banking platform, it must keep an equal amount of funds in the account.

All virtual points created in the economy must be backed by the balance kept in the Bank. This mechanism is very important and should be adhered by so that virtual money is not created in the economy without being backed up by physical cash in the Bank.

The audit scope of this section should involve the matching of general ledger virtual wallet balances against the bank account balances.

Q: What are some of the compliance processes and issues relating to agent and partner management?

The Cash Points/ Agents are to be selected by the bank and a list with their names and addresses must be submitted to the Department of Currency Management and Payment System (DCMPS), Bangladesh Bank. This list must be updated on a monthly basis. Banks may need to develop their own Agent Accreditation Policy for this purpose. This policy should include assessment of competence to implement and support the proposed activity, financial soundness, ability to meet commitments under adverse conditions, business reputation, security and internal control, audit coverage, reporting and monitoring environment.

Banks have to follow the full KYC policy issued by Anti Money Laundering Department (AMLD) of Bangladesh Bank for the cash points/agents/partners. Banks bear all the liabilities that arise from improper action on the part of their subsidiaries/cash points/agents/partners. Banks need to perform periodic audits of the agent locations in order to ensure proper processes are being carried out by them. Strict action should be taken by the banks against the agents for not following the processes.

The audit scope in this section should include a complete checking on the modus operandi between the banks and the agents/ partners.

Q: What are your thoughts on audit relating to transaction management?

Clear guidelines have been issued by Bangladesh Bank relating to the transaction limits as well as overall caps including limits per customer, per agent and per month. Service charges have been fixed for each transaction. Banks need to ensure that these limits and caps are built into the mobile banking platform and service charge rules are set up as per the policy. Periodic audit is needed to ensure that this continues to be properly applied.

Q: What are some of the processes that must be followed regarding KYC management?

Banks have to use the prescribed ‘Know Your Customer (KYC)' format as given in the MFS guidelines. The Bank will be responsible to ensure that KYC processes implement guidelines issued by Anti Money Laundering Department of Bangladesh Bank (AMLD) for all customers and across all agents and partners. Banks need to ensure that the agents are properly trained in KYC management and also ensure that agent KYC has been checked and maintained properly while registering the agent.

The Audit Scope for KYC management should include the modus operandi of registering agents by Banks, checking of the authenticity of the documents provided while registering customers and agents and also record keeping of the documents related to KYC.

Q: How is AML compliance assured for the new branchless banking transactions?

All transactions should be monitored through an IT-based system developed by the banks. Banks shall ensure that suspected transactions can be isolated for subsequent investigation. Banks shall develop an IT based automated system to identify suspicious activity/transactions (STR/SAR) before introducing the services. Banks are expected to immediately report to Anti‐Money Laundering Department of Bangladesh Bank regarding any suspicious, unusual or doubtful transactions likely to be related to money laundering or terrorist financing activities.

A periodic audit is needed to ensure the mechanism of reporting of suspicious transactions. The audit scope in this sector includes checking of rules set in the system based reporting mechanism which should be in in line with the AML act of Bangladesh.

Q: What are some of the processes and issues expected to be followed relating to security?

Banks must follow the Guidelines on ICT Security for Scheduled Banks and Financial Institutions, 2010 issued by the Bangladesh Bank and ICT Act, 2006 to address the security issues of Mobile Financial Services which will address issues of confidentiality, integrity, authorization and non-repudiation for each transaction through the portal. Apart from the PIN, a second factor of authentication should be built‐in for additional security as chosen by the bank. A periodic audit must take place to ensure the implementation of security policy as mentioned in the guidelines.

Q: How is the customer required to be protected by the guidelines?

As per the MFS guidelines banks are held responsible for protecting consumer rights and for dispute resolution. Banks may address dispute resolution with the assistance of selected partners and agents. The Audit scope in this sector may include the checking of bank policy and turn-around time (TAT) for dispute resolution. It may also look into the proactive approach banks have taken to ensure better customer services to the customers and agents.

Q: Please share your final thoughts on governance and audit of processes relating to mobile banking

Bangladesh Mobile Banking has seen a tremendous growth in the last few months and is expected to achieve more than 15 million mobile banking accounts at the end of 2014 by reaching over 110 million cell phone users, where 60% are unbanked out of the population of 160 million.

Considering this success, growth, and expectation, in my opinion some of the gray areas that were not covered by the MFS guidelines need to be revisited. For example, both Banks and MNOs need to work together with the policy makers to set policies in regards to Branding, Platform Management and Marketing. This will set clear guidelines for everyone on the Do’s and Don’ts of each sector. MNOs, who have the greatest reach and expertise on Branding and Marketing need to be able to help banks to reach the expected number of mobile banking accounts through innovative marketing strategies, branding concepts and campaigns.

Apart from this, another area which needs to be taken care of is the modus operandi related to Payment Services. Through separate permissions granted by Bangladesh Bank, most of the MNOs provide various payment services such as BillPay, Railway Ticketing using their own platform. They have also integrated their platforms with those of the banks to offer various financial services. A common guideline needs to be issued and added to the MFS guidelines to clearly mention the modus operandi and policy with regards to these kinds of services.

In conclusion, I must say that for MFS in Bangladesh the sky is the limit. I am sure Bangladesh will be an example for the whole world in the setting up successful mobile financial services and also in establishing our main objective of banking the unbanked through mobile financial services. Just imagine what we can already do today in Bangladesh using mobile banking. We can pay our electricity, gas and water bills, buy railway tickets, send money to loved ones, receive salary, cash-out through ATMs and designated outlets, top up mobiles and more. Kudos to the banks, MNOs and the policy makers, Great achievement indeed!!!!

About the Author

raihan_thumb5Ruhullah Raihan Alhusain is a professional with over 9 years of experience in Mobile Banking. He graduated from the University of Texas at Arlington with an Honors Bachelor in Business Administration. He started his career in mCommerce in Bangladesh with Grameenphone Ltd., a Telenor ASA. As Head of mCommerce Operations at Airtel Bangladesh Raihan continues to passionately build and launch specialised products in co-operation with DBBL. Recent projects include micro credit disbursement through mobile banking, airtime sales proceeds collection, mobile banking through modern trade such as ACI Swapno and mobile top-up with bKash.

What must happen for Branchless Banking in Indonesia to move beyond pilots?

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Rakhi Sahay, Shift Thought distributor in Indonesia shares her thoughts on the payments scene in Indonesia as the regulators seek to encourage financial inclusion through branchless banking. What are some of the sticking points and how can Indonesia join the ranks of other countries where these services have already entered into mainstream use?

Impressions of an Indian in Indonesia

We moved to Indonesia in June 2012 and it’s been wonderful living here since. Yet a few things came as a surprise, for instance the way people pay. Coming from India where people now increasingly use card payments, having to pay with cash took me back a bit. We had heard about the widespread use of cash for transactions in Indonesia but I had not imagined it to be at such a high level. While doing provision shopping even in big departmental stores, I was taken aback when cashiers did not accept local bank debit cards that I was using  – “sorry we only accept X bank debit card or cash”. Generally the small shops and stores that do business along the street only transact in cash in spite of having customers from middle income groups who have bank accounts and can make payment by card.

My interest in branchless banking and payments was further triggered by an informal  cimageonversation I had with my help, Fatimah. Every month she sends money to her mother who lives in a village. For this she goes to the nearby bank to deposit cash into her mother’s account. I got talking to her to learn about how people from her village who work outside send money home or pay their utilities. Do they use mobile technology for purchase and payment? Do they know about some of the new services being launched by banks, mobile operators and other providers in Indonesia?

Fatima knew about mobile banking and in fact had the m-banking application of Indosat on her mobile. However although she knew about the functionality it provides, she does not use it or plan to use it. She does not have a bank account which she believes is needed for mobile payments and transfers and also does not regard transferring through bank as a reliable and secure mode of transfer. Come to think of it, I too have not felt comfortable with using my mobile for payments. My interest was piqued and I chatted with others close to me and both banked and unbanked people tended to have some reason for not yet investigating the new methods available.

20131207_100534This conversation made me wonder - what needs to happen for myself and Fatimah, along with millions of other Indonesians to benefit from innovations to enjoy more convenient payments? If I feel restricted in making transfers and payments, how would people from remote islands and lower economic segments manage their daily needs? Do we need to change the mind-set of people? How can we increase accessibility to gain confidence? Surely branchless banking can add much value for people who have limited access to banking facilities.

 

20131207_100626Regulations play an integral role in providing a favourable ecosystem for any new banking initiative to flourish. Bank Indonesia, the regulator, has been treading the path carefully and its first pilot which ran from April 2013 just ended in November 2013. The regulators are now consolidating results and by early 2014 intend to roll out the full regulations on branchless banking. Many providers await this in order to obtain the certainty required for investing in the new technology and marketing efforts required to successfully launch the services for all sections of society.

The Market

The country is one of the early entrants in offering financial services through microfinance activities. Although there are a range of service providers to cater to different socio-economic groups, only 19.6% of the population has formal accounts (2011 Global Financial Index). It is estimated that around 100 million Indonesians do not or cannot access formal financial services in a population base of 250 million.

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The vast geographical expanse and remote terrain creates hurdles in the provision of financial services. This creates a potential opportunity for alternative channels such as branchless banking and mobile money. Branchless banking is the delivery of financial services outside conventional bank branches through the use of retail agents and information and communications technologies to transmit transaction details (as defined by CGAP).

In 2012 there were 260 million mobile subscribers with 143 million unique subscribers. Only half the numbers of people possess bank accounts as compared to unique subscribers. The opportunity has been spotted, but scope for adoption remains immense. Branchless banking with the use of mobile technology and agent networks is rapidly improving financial inclusion in countries around the world. Mature microfinance markets of Bangladesh, Pakistan and Kenya have been able to achieve rapid adoption rates. Can Indonesia too leverage the penetration of its mobile technology to foster financial service? The large base of mobile users makes it easy for service providers who do not need to educate the masses on mobile usage.

Regulatory Environment

The regulators have been moving cautiously towards creating the regulatory environment required for this. A new regulation of December 2012 allows full encashment for person to person transfers using mobile wallets at agents. Then in April 2013 regulator Bank Indonesia (BI) released guidelines on branchless banking for banks and MNOs. The move caused MNOs to refocus on strengthening agent networks. As a pilot initiative, BI mandated five banks – Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Sinar Harapan Bali, Bank Tabungan Pensiunan Nasional (BTPN) and CIMB Niaga to offer branchless banking across the country, to cover rural and remote areas as well. The initiative is looking at bank-led, telco-led and hybrid models, to be tested under this program. The banks are also mandated to include provision store owners, gas stations and business outlets as agents in order to extend financial services to the excluded.

Progress of Branchless Banking Pilots

Reports on the progress of pilots suggest that the participating banks are able to see positive results in implementing branchless banking. Customers, in particular local business, homemakers and students benefit from more convenient access.

Banks have gained an increase in the number of new customers as well as agents. Bank Sinar Harapan Bali, a subsidiary of Bank Mandiri, reported an increase in new customers and agents and aims to double the number of agents. Similar information is reported by BRI, another state-owned bank, who is has reported around 200 transactions per day which is equivalent to daily work of one teller.

Going beyond pilots

The pilot has got many other banks and MNOs interested in branchless banking. But they are waiting for the regulator to open-up and also look at results from the pilot phase. The regulators are also considering inclusion of BDPs (regional development banks) to increase accessibility at regional levels. Bank Indonesia now plans to review the pilot phase and look at pan-country roll-out of branchless banking.

The power of mobile technology in expanding the reach of financial services is immense. It is encouraging to see regulators in Indonesia taking informed decisions in formulating regulations in this space. Indonesia has the advantage of being able to learn from other countries that now have mature branchless banking markets. Pre and post roll-out, it might be useful to take a closer look at such successful markets in terms of product offerings, agent selection, processes and platforms. Over 2014 much can be achieved through proper training of agents, pricing and commission strategies and marketing and communications.

clip_image002Rakhi Sahay, Shift Thought distributor in Indonesia, is a development professional with a deep interest in innovative channels that drive inclusive development. Rakhi’s interest in branchless banking is a result of long experience of working with institutions and consulting agencies in India.

Mobile Money Canada 2013 – Retail and Payments Experience of the Future

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Karena de Souza, Shift Thought distributor in Canada shares her thoughts on the payments scene in Canada having recently attended Mobile Money Canada 2013. Mobile technology is starting to go mainstream. Learn how Canadian innovations such as Mintchip are developing shoulder-to-shoulder with new offers from global players such as PayPal and MasterCard.

The most recent Mobile Money Canada conference, chaired by Brent Ho-Young took place on November 13, 2013. It brought together thought leaders across commerce, mobile, retail and technology in a discussion on the challenges in accelerating the acceptance of Mobile Commerce into mainstream Canada. A well designed agenda included a number of TedX sized presentations, interspersed with themed panel discussions.

Canada offers technologists and business a unique playground in which to experiment and fast-track consumer acceptance. With Canadians being an unusually tech-savvy population, platforms such as Interac launched and became mainstream ahead of their adoption in other countries. An enabling yet protective regulatory environment provides an umbrella within which local businesses, Telcos, payment processors and banks are free to partner and innovate.

Presentations built on recent announcements:

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Rogers David Robinson presented the next generation of suretap wallet, offering Rogers customers an all-in-one branded Telco-based mobile money experience – from branded NFC enabled handset containing a secure SIM, with payment made from a Rogers’ branded prepaid MasterCard or retail gift card.

imageWe also heard about Ugo’s latest plans. A few days ago Loblaw, Canada’s largest retailer, joined Ugo as their first retail partner. Ugo claims to be Canada’s first open mobile wallet that offers multiple payment and loyalty as a single package. Two major banks are involved: PC Financial and TD Bank Group. Both MasterCard and Visa cards will be loaded.

 

imagePayPal showcased their cloud based app – a first aimed at masking ‘payment’ within the greater transaction ‘experience’. The use of BLE allows a new proposition – customers check-IN instead of checking out.

 

imageMintchip is an innovative offering from the Canadian Mint. We heard about  the MintChip Challenge: MintChip now in R&D stage has developers participating in a challenge to develop what aims to be the evolution of currency.

 

The panel on Mobile Commerce & Payments for Retailers chaired by Pierre Roberge engaged Tanbir Grover from Lowe’s, Nurez Khimji from Urban Barn, PC Financial’s Jimmy Dinh and SecureKey’s Christian Ali. Retail is embracing the reality of a connected customer base and extending ways to offer them a more complete shopping experience. A big challenge in this sector is how to cost-effectively integrate the various existing technologies and legacy infrastructures to present a seamless environment for the customer. Also, in a consumer culture that is getting used to ‘want it now’, virtual stores pose a challenge to physical delivery in a country the size of Canada, given the transportation infrastructure.

An engaging panel that included Blackberry, Visa and MasterCard – and a very entertaining Timothy Grayson from Canada Post – discussed the components necessary to achieve that tipping point in the Canadian market that will encourage consumers to gravitate towards mobile as their main choice for payment.

A number of initiatives appear to be aiming to break the Tap&Go resistance barrier by cajoling the client to park their many loyalty cards conveniently within one mobile wallet.

The evening was packed with presentations filled with interest, intellect and innovation. “3 Ways to Launder Mobile Money” caught my attention. Others were informative – the Kili POS and Vince Kadar’s review of Telepin’s global timeline.

But for me, the most compelling presentation of the evening was by Nicolas Dinh for MasterCard. It spoke to the spirit of innovation present in Canada, in the best traditions of a nation that has given the world technologies such as Interac and Blackberry.

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The N>XT challenge sponsored by MasterCard resulted in many innovative ideas. Watching the presentation of a $10,000 check by Kevin Faragher of CIBC to the  Crescent School Coyotes was inspirational. These five 11th and 12th graders won the CIBC People’s Choice award. They had a waiter use his/her smartphone as a POS to calculate the tab, split it between the customers and then process the split payment from 4 different patrons using NFC technology.

I came away with 3 main impressions:

  • Mobile technology is seeping into the mainstream. Mobile operators and financial services providers have established good building blocks and infrastructure and are ready to partner with retail to extend the mobile experience into many areas of our lives.
  • Retailers are now on board to engage a customer base that is technically connected as they walk into the virtual and bricks & mortar stores. They have to work on joining the older vertical infrastructures behind the scenes so that the customer is presented with an integrated seamless shopping engagement – from the point of browsing, through shopping, payment to final physical delivery.
  • Canadian innovations such as the Mintchip and the Kili POS are well-poised to be potential enablers for a new shopping experience.

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Karena de Souza is a forward thinking and entrepreneurial professional with a special interest in payment streams for small business. Karena’s focus on mobile finance blends the challenges and opportunites she faced as a small business owner in Canada with her experience using technology to facilitate financial services while at Morgan Stanley in New York. She graduated from the University of Westminster with a BSc (Hons) Mathematics and Computing.

Mobile Banking in Bangladesh – striding across regulatory divides through savvy Marketing

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In this guest post Raihan Alhusain, Head of mCommerce Operations, Airtel Bangladesh provides unique insights and practitioner experiences of the tremendous work in progress in Bangladesh. What strikes me from my interview with Raihan and the experiences he has shared is that the consumer is truly placed at the centre when mobile operators and banks come together in an earnest attempt to leverage the best strengths of each partner.

 

The early days of BillPay

imageThe story of Mobile Banking in Bangladesh starts in December 2006 with the launch of BillPay by a Mobile Network Operator (MNO). I was a part of the team that launched the service. We started everything from scratch, designing the financial operation process, the product, reconciliation and payment process. When BillPay became available across the country I felt that I was blessed, I felt that I was doing something good for my country and for the people. Until now, whenever I see the BillPay sign I feel the pride of launching the service in Bangladesh.

In the early days, customer education and customer trust were the biggest challenges for my team. The service was launched in Chittagong and soon started to create interest amongst the customers. Customers were most attracted by the convenience. At one point in time, people in the Chittagong region were able to pay water, electricity and gas bills through the BillPay platform.

imageBillPay used two models, one with 100% validation of data and the other with zero validation of data. The utility company, having automated billing and payment data mainly used the validated system of BillPay. This means whenever customer paid a bill of a specific month, the billing data used to get verified through the utility company billing server and after the payment was made, the payment data was also verified and posted automatically.

What didn’t go well though was the need for manual posting of BillPay data. For some of the utility companies, posting of payment data was totally manual and MNOs had to send paper based payment data to the decentralized offices of the utility company. This process required manual intervention and extensive man-hours to post data.

Then came Railway Ticketing. The same MNO launched the service under a new name. This created another option for BillPay wallet customers. They were able to not only pay electricity, gas and water bills but also to pay for their railway ticketing. This removed the hassle of manual processing of railway ticket payments and added another milestone to the automated payment system in Bangladesh. However, mobile banking through the BillPay platform offered the payment services and fund deposit (Cash in) only. Cash Out was not available.

MFS Guidelines arrive

In 2011 the MFS Guidelines took complete shape and were published by the Bangladesh Bank – a bank-led Branchless Banking model was introduced. One of the major local banks first launched the complete mobile banking facility allowing customers to withdraw cash from the authorized outlets of the bank and also through ATM.

This model was agent initiated. That means most of the revenue generating transactions were initiated through the agent wallet. DBBL signed an agreement with several telcos to ensure the availability of mobile banking at their networks. Since this model was agent initiated, the agreements with telcos also ensured Telco Agent networks could be used for Mobile Banking.

What went well in this model was the Trust Factor. Mobile banking with a bank added more trust in the mind of customers. What did not go well was the channel/ distribution model they used. Initially all the agents belonging to them were directly connected to their Bank Branches. This means an agent had to go all the way to branches for mobile banking (Cash in and Out from agent wallets).

The learning continues

imageShortly after this a subsidiary of another SME based local bank launched their service. Their model was completely customer initiated. All they needed to do, was to sign up with the MNO for access through USSD. They did not depend on the Telco agent to expand their channel reach.

They came up with a distribution channel structure similar to that of the MNO. What went well for them was their expertise in running an effective channel and their strategy towards establishment of their Brand. Their brand achieved more prominence than the other brands in the country. They also signed an agreement with several telcos that ensures the availability of their services across networks.

Both the players ensured the availability of the mobile banking services through the USSD network. The success of this partnership depended on several initiatives taken by both bank and telco partners. Initiatives such as B2B (Channel Payment), P2B (Merchant Solution), B2P (Salary Disbursement, Micro Credit Disbursement), G2P (Government Allowance Payment) brought ease in the life of customers, increased revenue for the Banking Partners as well as ensured stickiness to the MNO SIMs.

Mobile banking goes mainstream

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According to Bangladesh Bank sources, 17 banks now offer mobile financial services (MFS) within just three years. Mainstream PCBs (private commercial banks) now provide services. For instance, we have Brac Bank's bKash, DBBL mobile banking, IBBL MCash, the Prime Bank Easy Cash and more. The number of mobile banking accounts is about 7.21 million with about 0.108 million agents countrywide. The volume of transaction was $1,030 million in the first quarter of 2013. Significant achievements indeed!

Personally this has been an exciting journey for me as I look back and compare what our services could do for customers with just BillPay, and what we can now do for unbanked customers. This makes every experience precious, and justifies all the hard work from our regulators and people across all the different industries.

About the Author

raihanRuhullah Raihan Alhusain is a professional with over 9 years of experience in Mobile Banking. He graduated from the University of Texas at Arlington with an Honors Bachelor in Business Administration. He started his career in mCommerce in Bangladesh with Grameenphone Ltd., a Telenor ASA. Today as Head of mCommerce Operations at Airtel Bangladesh Raihan continues to passionately build and launch specialised products in co-operation with DBBL. Recent projects include micro credit disbursement through mobile banking, airtime sales proceeds collection, mobile banking through modern trade such as ACI Swapno and mobile top-up with bKash.

Q&A from our “Disruptions in Digital Payments in China” webinar

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Thanks very much to all of you who helped us to make this live webinar (our first!) a great success. With representation from over 20 countries, we received a number of questions and were not able to answer all of them in the time available. The post below addresses these and we hope you will find this useful. There is never just one point of view, and we would love to hear your comments and your unique ways of approaching the questions. If you missed it, catch the free replay here.

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Q1: Is it advisable to partner with a Chinese company when seeking to enter this market?

A1: In general you may not have a choice in this. The question is with whom to partner and how to set it up so as to remain in control. An example is Yahoo China and Alipay. In Jack Ma’s speech at Stanford on May 14, 2013 he mentioned that Alipay digested Yahoo – they simply ate Yahoo and would not have been able to do their P-2-P advertisement platform without that.

This is a great question and to do full justice would probably need a session in itself. As a guideline, it depends on your industry, your ambitions and the roadmap you plan. Suffice it to say that I have seen careers made and broken largely due to the manner of handling this issue.

Q2: In your experience what is the biggest threat to successfully entering the Chinese market?

Timing and partnerships. Possibly in no other market could I say more strongly that a 360 degree understanding and a watching brief is critical. You cannot afford to walk into this blindfolded without opening yourself and your company to high risks, neither can you afford to do nothing. Understanding, anticipating and planning is highly important. It is equally important to understand Chinese culture and history as much as you deeply absorbing knowledge on the payments ecosystem and timeline.

Products and services must be made fit for the unique expectation of the market. For instance the clean streamlined experience of Amazon is not what is preferred – online shoppers want a busy, “happening” website. Similarly, there is a very different online-offline-CSR engagement in the consumer journey that one needs to learn.

There is a window of opportunity that must be well understood. We have found that players who act too soon have faced problems. On the other hand due to the need for domestic partners, it is advisable to act before all the “good partners” are taken.

Q3: How stable is the regulatory landscape in China? Is it prone to sudden changes?

In general it has taken many years so far for changes expected and talked about to actually happen. For instance I recall I first studied proposed regulations for licensing third party payment providers way back in 2006. They actually came out in 2010.

Similarly it is not uncommon to have a mass rollout, big commitments and plans in a specific direction only to see it overturned (example RF-SIM). For players who have built these products specifically for the Chinese market this can represent a serious setback.

Q4: Who are the companies to watch in this space?

I touched on the main players in the China payments ecosystem during the webinar, so for those who have not heard it, it could be useful at this point to listen to the free replay here. Of course our 295 page “Digital Money in China 2013” viewport offers you the whole list of players, partnerships and initiatives with our best understanding of their importance and traction. There is so much happening in parallel and there is a high degree of cross-over. What we tend to do is to note how the payments gatekeepers are proceeding – CUP, CM, The big 4, the big 3 large PSPs and more.

Q5: What are the best partners to work with?

This depends on who you are and what is required by the regulatory environment. If you are to apply for a license there is a lead time involved.

A good example is Western Union’s recent thrust into China in partnership with ICBC and CUP.

Q6: How should we interpret Digital Payments in Hong Kong? How does the Chinese government and market incorporate the progress and regulation of that market?

The webinar only dealt with Mainland China. We plan a separate webinar that will address Hong Kong, China as also other countries in the region. In general the approach is One Country- Two Systems. This is why Hong Kong, China has a critical role to play in digital payments relating to Mainland China. More when we tackle this topic. Please register to our website (registration is free, takes seconds, only requires email address and provides you a much greater access to the overall content on our portal) so we can send on an invite to you once plans are in place.

Q7: Would you clarify your definitions for "digital wallet" and "digital money", thanks!

The Digital Money domain has been described by Shift Thought™ as a way to understand the ecosystem, products, services and infrastructure involved in the digitisation and transfer of value. We use this term to refer to a host of financial services that use innovative alternative channels, technologies, providers and payment instruments.

For a full definition and understanding of our approach please see Blog #3: What is digital money?

The Digital Wallet domain has been described by Shift Thought™ as a means of understanding the whole range of stored value products aimed at digitising value and enabling the owner to utilise it in a way that offers a superior experience as compared to traditional payment methods. Services utilise an account and stored value or e-money that may be utilised across various channels and services. This includes prepaid cards, vouchers, mobile wallets, e-wallets and more.

Q8: Is there any real digital money in China (I mean digital money that is not dependent on bank account or credit card)? All mobile payments solution are NOT based on digital money.

This is a good point. Please look at my response to Q7 on what is Digital Money earlier. We track an extended set of initiatives to do justice to our definition. However, specifically to answer yours, there is E-money that has been around for a while now. Prepaid cards, both open and close loop exist as discussed in our Webinar and covered in detail in our Viewport. More importantly, digital wallets and mobile wallets are very much in use.

You are right that all mobile payments are NOT based on e-money and a number of them require a connection to a bank account or card account. In the way we cover each of the 50 key initiatives on our portal, you’ll see our icon and descriptions that exactly show what payment instruments are supported for Senders and Receivers of each kind of service.

I hope this answers your question. Please feel free to reach out for a quick chat to discuss further. Also, this is not set in stone. We found an absence of accurate definitions in the marketplace and in those cases provided our own. Where possible we comply with the way in which CGAP, GSMA, Mobey Forum, NFC Forum and other key bodies and thought leaders already use these terms.

Q9: After utilising your China 2013 viewport, I also obtained your comprehensive Indonesia 2013 report. I noticed how in each country, both APAC members have approached and regulated differently - How would Shift Thought help a potential customer navigate these different markets?

That is a great question and thank you for the compliments on our viewports. Shift Thought is fortunate to have compared 19 different APAC countries in terms of regulatory approach as well as the predictor framework we use to project the growth of each of the 32 services we class as Digital Money.

We maintain a highly comprehensive knowledge base of regulations that impact on all these services, and understand how they may apply from each perspective. This, along with our deep understanding of player competencies puts us in a great place when we consult with large mobile operator, banking and money transfer groups in search of the right partners.

We’ll talk more on this in the Indonesia webinar. If you pop me an email on which countries you want to know about first I’ll consider this as we prioritise the webinars scheduled.

Q10: Charmaine - do you see an opportunity for mobile point-of-sale devices targeting Merchants in China much the same way that Square has addressed small Merchant needs in the United States?

Absolutely, and as is always the case in China, one of these providers currently cutting their teeth in the highest populated country in the world could well become a challenger to the Square, iZettle and huge number of mPOS providers currently starting of from the East. But it’s not just China. We’ve seen very interesting and innovative approaches elsewhere in APAC. This blog is getting too large, maybe a separate post later?

Q11: Sub Saharan Africa population is forecasted to reach China's in 20 years. What similarities if any do you see between these 2 markets and what learnings can Africa derive from China now to foster further successes in the contribution of digital money to more financial inclusion of unbanked populations.

Wow, this is a biggie. Thanks for this great question and sincere apologies that I can’t do justice to all of this today. However, I put it the other way, what can China learn from Africa including sub-Saharan Africa? – That is the real question. As the access that people have differs, I’d like to do fuller justice to this in a later post.

Q12: Hi - how pervasive are contactless payments in PRC? Thank you

For all the years I’ve worked with China there has always been something planned – most were trials, pilots. The real progress is in terms of installation of POS that supports contactless payments and cards. Once that is in place and China has elected to support the NFC standard, the people who currently use smart cards for travel all across China could very quickly change their behaviour to use of a mobile device instead. So to answer your question, contactless payments by card are already surprisingly pervasive!

I hope you have found this post useful. Again, this is just my perspective and I would love to hear from you as that is when the learning process really gets enriched. Thanks for the wonderful outpouring of support to me and thanks for being a valued member of our little fledgling Shift Thought community. Together we can make things better.