Sramana Mitra: Can you walk me through the workflow of that?
Diarmuid Mallon: What we have is the person who sends the money has a mobile wallet that has cash loaded into it. Now, I say the person sending the money, but it could be cash loaded by an agent, or the person could have transferred the money to the wallet from a bank account. The customer then uses the mobile phone to send the money to a particular universal ID and then inform the recipient that the money has been sent. It could be that the recipient receives a call from the person sending the money, or the recipient knows that x amount of money will be sent every week.
SM: But there’s no branch network or ATM network in these remote parts of the world. Where can recipients collect their money?
DM: To collect the money, what you would have, which is the standard setup, is an agent network. Perhaps you have, in the village, a convenience store or the person who sells air time for phones. In Africa, that’s a standard model. The people who do the air time also do the wallets. They just need the fingerprint scanner devices … like a credit card point-of-sale device. It’s got a printer, a keypad, a screen and a fingerprint scanner. Rather than putting my credit card into it, when I want to withdraw cash, I go to the agent and explain that I want to withdraw cash. The device scans my fingerprint. It goes off to the mobile commerce platform and sees if there’s a mobile wallet matching that universal ID number and if there are funds in it. If there is, then I can withdraw money from that wallet account.
After the fact, we do a reconciliation with the agent. That’s a whole topic in itself. Managing agent networks is non-trivial. Sometimes these agents have their own wallets and pre-draw cash against them. They can, potentially, reconcile at the end of the day or the end of the week. All of those capabilities are within the platform as well.
SM: Just to get a ballpark figure, can you describe for any region, whether it’s Bangladesh or South Africa or any other African nation, what the agent to customer ratio? What size agent network is needed to cater to a particular region, for instance?
DM: They tend to be more based in villages or towns, rather than a strict ratio to people. In South Africa, with small shops, it’s the general agent network for the general cash in/cash out. For the initial signup, they have staff who go out for that initial signup process. That’s extra staff on top, but in the day-to-day, it’s just running out of the same convenience store network that’s doing the top-up network. It’s that similar ratio that works very well. In Bangladesh, we’re still in very early days. It’s been rolled out in a couple of districts, but the signup rate is huge there – the same in South Africa – we’re seeing thousands of people join every day. In Bangladesh, I think, by the end of 2012, they’ll have overtaken the number of people who’ve joined through branches. The entire bank will shift, becoming a mobile-centric bank rather than a branch-centric bank.
SM: That’s very cool, isn’t it?
DM: Yes. That’s where commerce is now starting to pay off. What’s interesting is that these are operator agnostic.
SM: What role do carriers or operators play? Is there any role, or do they just act as infrastructures?
DM: It varies by country. There is a role for the operators. Some places have gone it alone, but in others it’s a real tight partnership. In Malaysia, there’s a scheme called MyClear, which is among four of the operators and three of the banks. It’s a cross-operator scheme. It’s nothing to do with us, but in Iraq, they’ve gone exactly the same route as well. It’s cross-operator. In Germany, we have a solution that is between Telefonica and Vodafone. There, the operators are not just partners of the scheme – in fact, they’re running the scheme – but what they also do is act as acquirers for merchants. In Malaysia, they use a store network for cash-in and cash-out. They have the store infrastructure and the trained staff and the IT systems that act as cash-in and cash-out.
In Austria, they do things around helping authenticate customers. If you’re a post-paid customer, you have verified address and a verified billing mechanism. You can pull all of that data out of the operators’ systems. But when you’re joining the scheme, you don’t need to fill out lots and lots of forms because we have most of the information we need. We just need, basically, your acceptance of the terms and conditions.