Mobile Financial Services

eBIZ.mobility

Ecommerce Everywhere © 2010 eBIZ.mobility LTD Proprietary and Confidential

Mobile Financial

Services- How Operators

Earn RevenueJeremy Kagan

Founder and CEO

[email protected]

eBIZ.mobility

Infinite Ecommerce. No Borders. No Barriers. June 2010 eBIZ.mobility LTD Proprietary and Confidential

• Primer on Mobile Financial Services

• Examples and Case Studies

– Mobile Money Ecosystems

– International Remittance

– Internet Commerce

– Gambling

– Mobile Banking

• Success Factors and Challenges

• Limiting Risk While Increasing Reward

Agenda

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• P2P Transfers

• Mobile Wallets- Stored value / Prepaid cards

• Payment Ecosystems

• Bill Payment

• Mobile Purchasing NFC and Remote

• Salary Disbursement

• Remittances- cash and airtime

• Mobile Banking (banked, unbanked)

It is not just about Premium SMS anymore!

Mobile Financial Services

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eBIZ.mobility


eBIZ.mobility


High Volume Revenue Share Opportunity• Over 4 billion handsets worldwide, growing to 5.8 billion by 2013 (growth

residing mostly in the emerging markets)

• Mobile Wallet (Domestic)- $4.8B in direct revenues and $2.9B indirect

revenues for telcos in emerging markets (GSMA)

• 85% of world population is unbanked (Gartner)

• International Money Transfer (remittances)- $420B/yr - $600B including black

market (World Bank)

• Fees 2%-15% depending on sending/receiving country (World Bank)

• Mobile Financial Services will yield $7.9 billion in revenues for MNOs by 2012 (GSMA)

• International Airtime Transfer- 5% of Top-Up revenue, $8B transferred

• Alternative payments 7% of online commerce world growing to 15%

• 457M Mobile Banking Users by 2015 (Payments CM Research – Advanced Payments Report 2009)

Confidential & Proprietary 5

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Global Advanced Payment Forecasts- Relative Volumes

Source: PaymentsCM Research – Advanced Payments Report 2009

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Ecosystems are Forming

Why has it taken so long? - Somebody had to take the first step- and it is a BIG one

- Asia- Transportation Authorities mass NFC infrastructure spurred MNOs

- Philippines- prepaid top-ups led to Mobile Payments, remittances, p2p

- Africa- MNO deployments led to Mobile Wallet, remittances, p2p, top-ups

What is different now? Baseline Infrastructure is in Place- Successful deployments give basic learning curve on commercial models

- NFC deployments are starting in Europe

- 90% unbanked rates prevent PayPal from satisfying web payment needs of many

markets

Mobile Money- Now is The Time

eBIZ.mobility


Mobile Wallet

Cash

Identity Card

Credit Card /

Debit Card

Loyalty Card

Check Book Prepaid Airtime

Voucher

• A virtual wallet for subscriber

• May link to:

• Cash- Stored Value

• Credit cards

• Prepaid cards

• Gift and loyalty cards

• Identity cards

• Bank account

• May be based in:

• Server

• Handset App

• Contactless (NFC) Card

Wallet shown courtesy of Trivnet Ltd.

eBIZ.mobility


Case Study- Mobile Money Ecosystems In Service

• M-Pesa Kenya (Vodafone)- 70% of users were previously

banked- this is a disruptive offering, 2 Million transactions/day

(May 2009), 10% of Kenya’s GDP flowed thru in 2009

• Zain- Zap Holdings Subsidiary- 16.5M active customers-

introducing new people to financial services

• SMART Money Philippines- 125,000 cash-in agents, can

support airtime sales of $0.06

• G-Cash Philippines- 18,000 cash-out points

• Oi Paggo Brazil- 250K Users, 70K merchants

eBIZ.mobility


Case Study- International Remittances

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• Average domestic cash deposit $20

• Average mobile remittance transfer $200

• International money transmittance currently costs $5–$87 for a

remittance amount of USD$500 - World Bank

• Mobile is more convenient and lower cost

• Mobile Remittance Corridors are Already in Commercial Service

where mobile wallet ecosystems exist:

– Kenya

– Philippines (An estimated 10 million Filipino migrant and contract workers

remit $17 billion annually via traditional methods)

– Poland & Eastern Europe

– Mexico

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London,

March 2010:

Western

Union

Advertising its

IMT service to

M-Pesa

Kenya

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Web Commerce Today- Limited by Credit Cards

United States Rest of World

40% of U.S. and 90% of Rest of World Internet Users Do Not Have a

Credit Card (Yankee Group)

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• Facebook, MySpace, Bebo Applications

– Mafia Wars

– My Empire

– Guitar Hero

– Spare Change

• App Stores

– iTunes

– Ovi

• i-mode Japan

• Micropayments

– Boku

– Zynga

– Ping.ping

Case Study- Web Payment for Digital Content

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• Mobile payment offers a quick and easy-to-use payment solution for

casino players to instantly deposit funds to their balance on-the-move

• Launched mobile payment method Aug 2008 in a regulated market- UK

• Started with licensed online/mobile casino Wild Jack Casino: Web:

http://www.wildjackcasino.com WAP: http://mobile.wildjackcasino.com

• Initial transaction amount set to £10

• Due to success in Nov 2008 increased transaction amount to £15

• In 2009 increased transaction amount to £30

• Expanded service to All Slots Casino (fully licensed) Web:

www.allslotscasino.com WAP: http://m.allslotscasino.com

• 70% of all payment attempts are carried out by players who subscribed

to a different mobile network operator

• Since the mobile payment system was launched, the operators

experienced zero disputes or claims by players

Case Study- Mobile Payment for Online Gambling

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http://www.wildjackcasino.com/

http://mobile.wildjackcasino.com/

http://www.allslotscasino.com/

http://m.allslotscasino.com/

eBIZ.mobility


• Convenience application for the developed world

• 2009 survey conducted by Palmer Research*

• 2/3 of offline consumers contact their financial institution once a week

or more through traditional bank channels.

• 1/2 use the bank call centre or interactive voice response (IV)

• Each call centre transaction costing an average of US$3.75

• Each IVR transaction costing an average of US$1.25

• Mobile banking estimated US$0.08 per transaction

• Strong operational incentive for Banks to push the mobile channel.

*http://www.onwindows.com/Articles/Mobile-banking-moving-beyond-the-branch/4951/Default.aspx

Case Study- Mobile Banking

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http://www.onwindows.com/Articles/Mobile-banking-moving-beyond-the-branch/4951/Default.aspx













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Goal- Payment Standard Alongside Visa/MC

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• Branding

• SIM Card

• Distribution Network

• VAS Marketing

• Billing Relationships

• Customer care infrastructure

MNOs Have Strong Assets for Mobile Money Services

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Ubiquity

• Wide Merchant Network

• Wide Agent Network

• Consistent User Experience

Regulation

• AML/CFT- Anti-Money Laundering/Combating Funding of Terrorism

• Know Your Customer- KYC

• eMoney rules

Overcoming Challenges and Making Money

• Partner with a MFS Hub Provider and Financial Institution

• Deploy open technology platforms and interfaces

• Partner with Merchant Acquirers

• Follow successful 90/10 rev share models to attract merchants!

Collaboration is Key to Success- “Fuel the Wallet”

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• Wallet provides “Chinese Wall” - No direct relationship between

operator and merchant- operator can monetize consumer’s cash &

payments without direct exposure

• Non-Reputable User Authentication- Operators currently have 2 factor

and even 3 factor user authentication systems available which make

transactions legally non-reputable

• Consumer Trust- Consumers use the trust relationship with their

Operators who maintain their private financial information as their

“online identity keepers”

• Reduces Theft- Cash collection by businesses and consumers in

remote regions are more secure if done electronically

Mobile Money Limits Risk and Liability

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eBIZ.mobility


The Right Hub Facilitates Success

Real-Time ClearingImmediate availability of funds

Guarantee Finality of Transaction

Real-time Identity Management

Merchant/Agent Authentication

Transaction Verification

Payment Authorization

Settlement & Reporting

Mobile Operator

Payment Interfaces

Subscriber Interaction

Content / Service Provider

Delivery Platform

Wholesale Clearing

& Settlement

Reporting & BI

B2B Client Support

Administration &

24/7 Operations

Public

Transit

P2P

Payments &

Transfers

Point of Sale

Payment

Top-Up

Remittance

JAVA apps

for i-gaming

Open Web-

Advertising & Age

Restrictions

$

Bank

Food Mart

Cash-Out

WebPayment

eBIZ.mobility


We provide alternative payment solutions for internet, mobile, and

electronic payments.

Product Suite: Target Markets:

- OneTouch Online Purchasing® Digital Merchants

- OneTouch Cashier™ Online & Mobile Casinos

Underlying Technology (patent pending):

- Federated Payment™ Payment Service Providers

- Applet based payment App Stores

- RMG™ (Roaming Mediation Gateway) MNOs

About eBIZ.mobility

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Copyright © 2007-2010 by eBIZ.mobility LTD. All rights reserved. eBIZ.mobility and the eBIZ.mobility logo, OneTouch Online Purchasing and the OneTouch Online Purchasing logo, Federated Payment, and RMG are trademarks or registered trademarks of eBIZ.mobility LTD. All other trademarks belong to their respective owners. The information contained herein is subject to change without prior notice.

eBIZ.mobility

Ecommerce Everywhere © 2010 eBIZ.mobility LTD Proprietary and Confidential

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Jeremy Kagan

Founder and CEO

+972 2 999 3881

[email protected]

Documents

Mobile Financial Services