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Banglalink mWallet. Delivering Mobile Financial Services in Bangladesh . May 2011. Market Overview . Bangladesh Market Overview Major KPIs impacting the formulation of the remittance business . Socio/Economic Country. Population . 158 M. GDP per capita . $1,600.

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banglalink mwallet

Banglalink mWallet

Delivering Mobile Financial Services in Bangladesh

May 2011

bangladesh market overview major kpis impacting the formulation of the remittance business
Bangladesh Market Overview Major KPIs impacting the formulation of the remittance business

Socio/Economic Country

  • Population

158 M

  • GDP per capita

$1,600

  • Literacy rate

47.9%

  • Rural population

33.5%

Mobile market Country

  • Mobile penetration 38%
  • ARPU $ 2.25
  • Data revenue share 5%
  • SMS rate per user BDT 0.25 ~ 2.00

Banking market Country

  • Unbanked population

87%

49

  • Number of banks

3

  • Number of mobile banking operators

Source: AAA

slide4

Bangladesh International Remittance Outlook

Send markets

Developed economies

Receive markets

Bangladesh

$10

billion

$20

billion

9

mn

6.1

mn

2015

2010

2010

2015

Global Remittances

(estimates dollars)*

Global Migration

(estimates people)**

slide5

Migration & Employment Overview

  • 6.1 million expatriate workers
  • 63% workers migrate to UAE and KSA in 2009
slide6

Migrant Demographic Profile

  • Unskilled and semi-skilled workers comprise 67% of migrant population
  • 63% workers migrate to UAE and KSA in 2009
  • Average migrant earnings range between USD 500 and USD 2,000 monthly
  • Average remittals by emigrants range between 30% and 40% of total salary
slide7

Remittance Channel Usage

- Factor of Many Conditions

  • Remittance channels in Bangladesh are regulated and monitored by Bank of Bangladesh
  • Banks have 43% share of total remittance market
  • Factors increasing remitter’s affinity towards formal remittance channel include:
    • High level of education
    • Large transaction
    • High salary
    • Average age of migrant workers holding a bank account is 36 years
    • Bank account ownership increases in older age groups of migrant worker

* IOM, 2009 Survey

slide8

Beneficiary Profile

  • 61% of total household income of beneficiary families is generated by remittance
  • Average annual income of respondents receiving remittance amounted to US$ 2,455 as compared to US$ 1,459 of non-recipients

* IOM, 2009 Survey

service drivers
Service Drivers
  • High cost of access to banking
  • services/High transaction costs
  • Presence of banks mainly in big
  • cities leading to difficulty of access

Presence of rural

Community

8% Banked

  • Presence of large migrant population
  • Difficult
  • geographical
  • terrain
  • Limited
  • transport
  • services

Migrant

Population

20%

Poor transport

infrastructure

60%

Popularity of

Mobile phone

  • Domination of mobile phones
  • Very low fixed line penetration
  • Geography more conductive to
  • development of mobile networks
slide11

Objective

Banglalink Mobile Wallet leverages the mobile to build a far-reaching

convenient , reliable and secure payment services network

Purchasing Power Parity

USD 1000 – USD 2000

Purchasing Power Parity USD < 500

Banks

Purchasing Power Parity USD < 1000

slide12

Serving Low-income Customers

- Different customer, different product

“Regular” Bank Customer

BOP segments

  • Stable income
  • Purchases multiple products ($$ for bank)
  • Basic literacy –rational decisions
  • “Close” relationship (speak same language)
  • Unstable income
  • Limited “spare” cash –bank has to compete for share of pocket
  • Low literacy –rational and irrational decisions (only numeric literacy presumable)
  • Relationship through third party
  • Frequent interaction with telecom retailers (usually prepaid)
  • “Regular” Bank Customer BOP segments
banglalink mwallet1
Banglalink mWallet
  • Cash In/Cash Out
  • Domestic Transfer
  • International Money Transfer
  • Utility bill payment
  • Mobile Ticketing
  • Payroll services
  • Disbursement and repayment of micro loans using mobile money for Micro -finance Institutions
  • Services
  • Services in Pipeline
slide14

mWalletStrategic Priorities

Agent Network

Ecosystem & Open Services Approach

Mobile

Financial Service

Marketing

Pricing

slide15

Agent Networks – Optimize Supply

  • Backbone of the remittance services network
  • Last-mile for service delivery to customer
  • Responsible for maintaining cash/liquidity in the ecosystem
  • Responsible for customer marketing and support
  • Interface between customer and telco

Note: Number of OTC transactions have been reduced to scale by 90%; Reflect cumulative mobile financial services transaction trends in Banglalink

slide16

Critical Success Factors for Agent Networks

Availability & Accessibility

Liquidity

Agent Incentives

Agent Education

Customer Support

Size of agent network

Volume of transactions conducted by the agent network

Right incentive structure key to promote service at point of sale

Relationship with agent network supervisor

Relationship with agent network supervisor

Spread of agent network

Cash Cycle and Incentive

slide17

Agent Network

  • Agents in the domestic market are selected from a pool of 100,000 retail agents
  • Current 5,000 Mobile Cash points
      • Rural to Urban ratio is 40: 60
  • Agent Selection
        • Financial Credentials
          • Agent track record: 5 year record of airtime stock sales per agent
          • Regional sales officer assessment
          • Idle cash (35,000 taka per transaction)
          • Ability to balance payables and receivables
          • Ability to handle 10 remittance transactions per day
      • Valid trade license
      • Location and proximity to customer
      • Agent literacy and education levels
      • Agent reputation

Banglalink

Regional Sales Officer (12)

Distributor

(115)

Dealers

2,000

SIM Selling Outlets

35,000

Airtime Retailers

100,000

50 million mobile users

Mobile Cash Points 5,000

agent liquidity
Agent Liquidity
  • Optimal Services Mix: Maintains optimal ratio between cash inflow and outflow transactions
    • Seed Capital: Make upfront investment of 150,000 BDT (2238 USD)to enter the business which serves as a form of guarantee in a solvency crisis
  • Cash Reserve Ratio: Maintain a minimum fixed cash reserve ratio equivalent to meet on-demand obligations for cash
  • Transaction Thresholds: Caps daily wallet-based withdrawals (5,000 taka) in order to maintain system-wide liquidity.
  • Encourage-B2B Transactions: Enables agents to use e-float to purchase airtime, and pay distributors
  • Lender of Last Resort: Extend discretionary emergency liquidity assistance’ against airtime as collateral
  • Doorstep Delivery: Deliver cash at the agent doorstep, saving time and opportunity cost of rebalancing liquidity holdings

Note: Numbers are indicative

slide19

B

Agent Incentives

Agent Commission Structure

  • 5,000+ retailers offer remittance services
  • 95% transactions are done using the OTC channel
  • Incentive schemes based on combination of fixed commission on registration and percentage of value per transaction
slide20

Mobile Financial Services

Agent Network

Ecosystem & Open Services Approach

Mobile

Financial Service

Marketing

Pricing

mobile wallet ecosystem
Mobile Wallet Ecosystem
  • Utilize players’ key area of strengths and expertise opportunities in the m-commerce space  

Mobile Wallet Ecosystem

slide22

Open Services Approach

  • Open Services Approach
  • Open Services: Forge bilateral and multilateral partnerships with MTOs and banks to expand services network
  • Open Business Models: Facilitate service interoperability by
    • Allowing customers to send remittances to mobile users on any network
    • Support for OTC Transactions
  • Open Technology : Work with technology partners who share the vision of financial inclusion via interoperability
slide23

Mobile Financial ServicesBuilding blocks

Agent Network

Ecosystem & Open Services Approach

Mobile

Financial Service

Marketing

Pricing

slide24

Service Pricing

  • No monthly fees
  • Zero minimum balance
  • Low transaction fees
  • Zero fee on encashment
slide25

Mobile Financial Services -Building blocks

Agent Network

Ecosystem & Open Services Approach

Mobile

Financial Service

Marketing

Pricing

marketing
Marketing

Indicative

Growth in Mobile Money Transactions

  • Press ads
  • TVCs
  • Billboards
  • RDCs
  • Leaflets
  • POS branding
  • PR
  • SMS Blasts
  • Retail outlets

Successful marketing mix

creates buzz

Awareness to Usage

No. daily of transactions

(in 000)

Time (over period of 6 months)

slide28

Transactions Growth

  • Between April and October 2010, the MFS platform witnessed:
    • 38% month-over-month growth in total transactions
    • 443% month-over-month growth in total transaction value
    • Out of total transactions in the seven month period:
    • 47% accounted for money transfers
    • 53% accounted for utility and mobile ticket services
slide30

Registration

2

1

5

6

4

3

5a

Registration

Customer visits the BL Retailer and submits Account (Mobile Remittance) Opening Form and KYC documents

BL Mobile

Cash Point

Retailer takes registration fee from the customer,

Registration complete

Bank

Subscriber

Retailer initiates registration from their handset using USSD Menu

Based on the bank reply, BL notifies the retailer

The customer information

Is passed to the bank

Creates customer wallet account and generates PIN which is mapped on to the customer’s MSISDN

Sends a SMS alert that account has been generated and PIN through SMS

Bank System registers the customer and notifies (Positive/negative)

mobiquity

slide31

Cash-In

4

7

3

5

6

1

2

Sends intimation to

subscriber

Retailer’s BL MFS PIN

Bank Code (e.g. DBL)

Transaction Amount

Customer deposits cash

with a retailer

mobiquity

Customer can now use the money in the stored wallet account to transact

BL Mobile

Cash Point

Debit Retailer Wallet with

Transaction Amount + Total Fees

Subscriber

Verifies the Retailer PIN,

Wallet balance

Credit Bank Wallet with

Transaction Amount

Forwards the transaction

to bank system after

blocking the retailer wallet

balance equal To

Transaction Amount +

Total Fees

Verifies the customer

Wallet and

approves the transaction

Performs the necessary

transaction operation

before sending

confirmation to BL

system

Bank

slide32

Cash-Out

4

7

6

5

3

1

Retailer’s BL MFS PIN

Sends confirmation to

customer

2

Transaction Amount

Customer visits Retailer

for Cash Out

mobiquity

BL Mobile

Cash Point

Subscriber

Customer receives the cash

from the retailer. Cash Out

Process completed

Credit retailer wallet

with transaction amount

Verifies the Retailer PIN, Wallet balance

Debit bank wallet with

transaction amount

Forwards the transaction

to Bank\System after

blocking the retailer wallet

balance equal to

transaction Amount

Verifies the Customer

Wallet and

approves the transaction

Performs the necessary

transaction operation

before sending

confirmation to BL

system

Bank

slide33

Cash-Out at ATM

ATM sends request to

their bank

Customer goes to any

ATM

Switch sends

verification request

to BL MFS

Bank sends request to

switch

2

7

8

1

3

4

6

4

5

Customer

Bank

mobiquity

Cash dispensed, customer

Receives the cash

Switch connected

to ATM interface

BL Verifies the

transaction

Sends verification to

bank

Bank gives instruction to

the ATM

slide34

International Remittance

First Mile (UAE)

Validates the customer and sends notification to bank

2

1

Deposits Cash

Bank sends Beneficiary MSISDN , Coupon ID, Amount, and Beneficiary Name

Bank

3

Sender (UAE)

Agent (UAE)

mobiquity

  • Verifies transaction
  • mMoney credited to master pool account if cash to cash transaction or to customer wallet if cash to wallet transaction

Sender receives transaction PIN, exact amount in BDT, and sending bank name through SMS

4a

Sender notifies the transaction PIN, exact amount in BDT, and sending bank name to the beneficiary

4b

Beneficiary receives notification with coupon id

4

Cash to Wallet Channel

Benefeciary (BL)

Cash to Cash Channel

Common Channel

slide35

International Remittance

Last Mile ( Bangladesh) – Cash to Wallet

Beneficiary sends confirmation (“YES <PIN>”) through SMS

11

Platform requests transaction confirmation

10

Platform sends conformation SMS with transaction ID

12

Retailer confirms the beneficiary identity through SMS

9

4

  • Verifies Retailer on receiving request
  • Verifies customer on receiving Transaction PIN
  • Money debited from pool account and credited to agent account

Beneficiary fills encashment form and produces ID proof

Receives SMS notification with coupon ID and visits retailer

Retailer enters beneficiary

transaction PIN through SMS

5

6

Retailer verifies ID of the beneficiary

Platform sends beneficiary details

8

7

Beneficiary

(Bangladesh)

Agent

(Bangladesh)

13

Receives cash

Platform sends conformation SMS with transaction ID

mobiquity

12

14

Sends reconciliation report

Bank

slide36

International Remittance

Last Mile ( Bangladesh) – Cash to Cash

4b

Beneficiary fills encashment form with transaction PIN, exact amount in BDT, sending bank name and produces ID proof

Retailer confirms the beneficiary identity through SMS

Receives transaction PIN, exact amount in BDT, and sending bank name from the sender

9

  • Verifies Retailer on receiving request
  • Verifies customer on receiving Transaction PIN
  • Money debited from pool account and credited to agent account

5

Retailer enters beneficiary information through SMS

6

Retailer verifies ID of the beneficiary

Platform sends beneficiary details

8

7

Beneficiary

(Bangladesh)

Agent

(Bangladesh)

Platform sends conformation SMS with transaction ID

11

Receives cash

mobiquity

10

Sends reconciliation report

12

Bank

slide37

"MO TO <<Sender Name>> PIN<16 digit Unique Transaction PIN> > TK <Money Order Amount> COMM<Fees>IDT<< Issue Time:Date>> IPN <<Issuing Post Office Name>>”

Domestic Money Transfer Issue

2

1

3

BPO Officer issues the money order either from the web or through mobile phone

BPO Branch

Electronic Money order sender comes to the BPO Office and hands over the Cash and Money Order issue Form

Sender immediately receives the confirmation SMS with Unique Transaction PIN

EMO Issuer

Sender Mobile

slide38

""PAYMENT SUCESSFULLY.PIN<PIN NUMBER>AMT<4000>BN<Beneficiary Name> BA<Beneficiary Address>RPC<receiving post office code>”

Electronic Money Order Disbursement

3

2

5

4

1

BPO Officer verifies the PIN and other information from web or through mobile phone

BPO Branch

Beneficiary goes to the Post Office and submit the form with the Unique Transaction PIN and Amount

Beneficiary receives cash from the BPO Official

Automatic system generated “EMO Paid” SMS is sent to the sender mobile number

Sender sends the Amount and 16 Digit TPIN to beneficiary through own means e.g. Phone/Fax/Letter etc.

EMO Sender

Sender Mobile

EMO Receiver/Beneficiary

slide39

Mobile Ticketing

  • Transaction can be initiated by registered customer or agent
  • Customers can book tickets for any destination in Bangladesh
  • mTickets can be printed at any 500 Banglalink Service points or the railway station
  • Tickets can be bought from the Dhaka and the Chittagong stations to any destination in Bangladesh

welcome to

Banglalink

mobile train

ticketing service

enter your pin

mobile ticket

1. buy ticket

enter journey

date (only dd)

1

*131#

****

type *131#

press answer to enter the PIN

Enter your PIN

Press answer to enter your choice

Enter the option no. of your choice

Press answer to enter journey date

destination station

1. chittagong

2. chitosi_road

enter first 3

characters of

destination

station

source station

1. dhaka

kamalapur

2. dhaka airport

3. chittagong

15

chi

1

Press answer to enter Your choice

Enter the first 3 chars of destination station

Press answer to enter the 3 chars of destination

Enter the option no. of your choice

Press answer to enter your choice

Enter journey date

Continued

slide40

Mobile Ticketing

Continued

select passengers

1. one male

2. one female

3. two adults

4. three adults

5. four adults

6. 2 adults 1 child

7. 2 adults 2 child

8. 3 adults 1 child

select class

1. ac_berth

2. ac_seat

3. fc_berth

4. fc_chair

5. snigdha

6. shovan chair

7. shovan

select train

1. Subarna express

2. Mohanagarprov

3. Mohanagargod

4. turna_express

1

1

2

enter the option no. of your choice

press answer to select the train

train selected

press answer to enter your choice

enter the option no. of your choice

press answer to select the passenger option

the cost of the

requested

ticket is bdt 2,000

(including

service charge).

please select

1. confirm

2. reject 0

ticket booked

successfully

txn id: xxxxxxxxxxxx

enter your pin

1

xxxx

1

response message

enter your pin

press answer to enter the pin

enter option

enter the choice to confirm the transaction

select passenger option

slide41

Mobile Bill Pay

  • Customers can pay bill for the BPDB Mymensingh and Rangpur zone
  • Bills can paid through individual’s own mobile phone or at Banglalink bill-pay points
  • Bill amount is deducted from customer’s mWallet balance

welcome to

Banglalink

mobile train

ticketing service

enter your pin

Services

Bill pay

Mobile Ticket

Money Transfer

Location

Mymensingh,

Tangail,

Sherpur

1

*131#

****

type *131#

press answer to enter the pin

Enter your pin

press answer to enter your choice

enter the option no. of your choice

press answer to enter your choice

Bill amount 256

Bill no. 476391929

Bill paid

successfully

txn id: xxxxxxxxxxxx

Consumer no. 22989712

1

xxxx

Response message

Enter Pin

Enter bill amount to be paid

Enter consumer number

Enter bill number

Enter the location of your choice

slide43

Banking the Unbanked

  • Large population of financially hungry users
  • 75% - 80% households have no access to bank accounts

Fraction of households with an account in a financial institution

Source World Bank

the unbanked
The Unbanked
  • Significant segment of the unbanked belong to the base of pyramid segment
  • Direct correlation between income and banking access

*Source: World Bank

slide45

Potential Impact of Mobiles

  • Exponential growth in mobile telephony services penetration
  • Emerging markets (characterized by poor banking infrastructure) contributing over 50% of new subscriber adds
  • Mobile offers the potential to accelerate delivery of formal financial services to the BOP segment at a lower cost than traditional banking and payment methods

1.6 billion bank accounts

6.5 billion world population

4 billion mobile users & growing

Source CGAP

slide46

Solution - mobiquity™

Comviva has developed the award-winning mobiquity™ platform and applications running on this platform to address market requirements.

  • mobiquity™ mMoney
    • Stored Wallet functionality for providing access to financial services for unbanked segment with MFI applications for Microfinance Institutions
  • mobiquity™ mBanking
    • Banking services via the handset to make banking services Mobile
  • mobiquity™ mPayments
    • Range of merchant payment and different bill payments options over the mobile
mobiquity mmoney architecture
mobiquity™ mMoney Architecture

Multi Bearer

Access

Modular Architecture

Enhanced Security

Open

API

Network Independent

  • Scalable platform with open APIs to third parties
  • Open-to-all - network agnostic and handset independent
  • Secure
entity management
Entity Management

Entity Management involves registering & profiling of various entities which are part of and interact with mobiquity™ MFS system

business management
Business Management

Business Management Module of mobiquity™ platform allows the system operators to create & assign the different business profiles to different entities in the system.

wallet management
Wallet Management
  • A wallet is a virtual account identity created and hosted in the mobiquity™ system. Each wallet type clubs together similar type of Payment modes/Business scenarios.
  • (mobiquity™ also has the ability to create and maintain stored wallets and handle stock as well as payments/transactions via the same.)
report reconciliation

Acquisition/Sales Reporting

    • Agent/Region/Weekly/Monthly
    • Customer Support Reporting
    • Account Registration
  • Portfolio Reporting
    • Account Usage
    • Number of Transaction
    • Transaction Type
    • Financial Reports
  • System Reporting
    • Account Maintenance Reports
    • User Activity Logs
    • Information Reports
    • Transaction Reports
    • Fraud Reporting
      • Abnormal Account Behavior
      • Suspicious Transactions
      • Exception Reports
Report & Reconciliation

mobiquity™ platform provides web based reporting module for generation & distribution of various system & transactional reports

mobile payment ecosystem
Mobile Payment Ecosystem

Integrate

with banks

  • Provide security and real time money transfer

Payment Interface

  • Integrate with mobile operators
slide53

Benefits

Subscriber

Operator

  • Global Remittance Network: Enables operators to extend remittance network and connect to any mobile phone user in the world at zero cost
  • Expands Revenue Streams: Diversified VAS portfolio enables operators earn revenue from:
    • Transaction fees
    • Share of Forex Spread
    • Finders/consumer sign-up fee
    • Future mBanking revenues
  • Enhance Commercial Opportunities: Operators can up-sell and cross-sell a variety of financial and other related services
  • Secure: Multiple security mechanisms and audit trails provide secure remittance corridor
  • Speed : Real time transfer directly to the mobile phone lower transaction costs
  • Affordable: Transparent and low-cost pricing lowers entry barriers and provides cost efficient channel for any denomination transfer
  • Convenient” Hhassle free transactions as no paper work is required. Ability to transfer funds from the phone and at nearby locations reduces travel time and expenses
  • Improved Quality of Life: Virtual wallet account ensures participation in formal economy and improves quality of life
contact details

Asia

Europe

General

Middle East

Americas

Africa

sales_westafrica@comviva.com

sales_eastafrica@comviva.com

sales_southafrica@comviva.com

sales_northafrica@comviva.com

sales_india@comviva.com

sales_asiapacific@comviva.com

sales_saarc@comviva.com

sales_northamerica@comviva.com

sales_cala@comviva.com

sales_europe@comviva.com

info@comviva.com

sales_middleeast@comviva.com

Contact Details