Mobile Money Wallet Conference

Mobile Wallet Helps Reach Unbanked and Underbanked Customers

Nov 2016

Overview
The Mobile Payment Research & Trends
Current State of Mobile Wallets

Vodacom Trader Model Case Study

Mobile Wallet Insights and Learnings

Take-away Thoughts

Industry under Siege

Incumbents views of the FinTech Thread

Global Mobile Payment Growth

*Nielsen 2016

Mobile Money Transfer by Country

*MEF 2015 Report

Global Mobile Payment Growth

Current State of Affairs

MNO Driven Mobile Money Wallets Fail in SA

Long term Economical Sustainability
Unclear Business Drivers
Access to Financial Services
Business Model
Account Fees vs Transaction Fees

Operating Environment (Critical Mass)

TRUST
Brand is NOT enough
Banks vs MNOs (vs Multi-National Tech Companies)

Mobile Wallet Hurdles

COSTS (Equipment, Account & Transaction Fees)

Wallet Interoperability
Regulatory & Legislative Issues
Ease of Use
Connectivity (Technology & Consistency)
Market Education
Standardisation
Security
Complex and/or Confusing Loyalty Schemes
Single Function Use
TRUST

Vodacom SA Trader Model

Vodacom Emerging Markets Initiative to increase market share in rural areas

Pilot March 2013 in Gauteng
Vodacom Dealers Identify & Recruit Independent Mobile Traders
Both receive incentives for Starter Pack Distribution
Commission on product sales (Airtime, Data, SMS etc)
Issued with Vodacom branded clothing, feature phone & pocket guide

Vodacom Requirements
Automated, Business Rule Driven Platform with:

Role Based User Access & Segregation of Responsibilities

Financial Collection & Settlement Services
Product & Deal Sheet Management
Mobile Wallet, Prepaid Debit Card & Loyalty
Start Pack Management Services
Virtual Product Distribution

Full Distribution Value Chain Management

Automated Billing and Invoice Management
Integrated end-to-end Solution
Easy to Operate
Configurable Business Rules
Bank Grade Security (PCI-DSS)
3-Tier Reconciliation Solution
Reliable, Real-time Management Information

Key Operating Principles

KISS
Easy Onboarding Process
Manage via Web or Mobile Device
Biweekly Incentive Targets
P2P Dealers and Traders money transfer
Prepaid Debit Card for JIT Cash Out
Zero Rated USSD
NO transaction fees (except for Cash Out via Debit Card)
Digital Based Reporting (PDF & SMS)
Instant profit report

TradeSwitch Overview

Vodacom Trader Model

Informal Trader Model

Reporting Services

Vodacom Trader Insights

Cost Sensitivity (Direct and Indirect Costs)
Access to Cash is (still) key
Working through Dealers (Agents) rather
than relying on Web-based or textmessaging-based platforms
Business Model is Key for Sustainability
Clear Goals and Incentives (WIFM?)

Top FinTech Opportunities

Why Cost Matters

#(Transaction)FeesMustFall

Conclusion
Mobile Wallets CAN and WILL Help to Reach Unbanked and
Underbanked Customers provided that:
There exist High TRUST (Customers feel SECURE)
It is Affordable (Direct and Indirect Costs)
Simple and Easy to Use
All Stakeholders can CLEARLY answer WIFM?
It is a long term SUSTAINABLE solution
Customers are continuously Educated
BONUS: The Solution enables Additional Revenues for
Customers (Entrepreneurs)
NB: Pay attention to execution and operations (rather under promise and over
deliver expectation management)

Business Multipliers

Take-away Thoughts
FinTech (and Wallet technology) should aim to:

Reduce Costs
Improve Customer Retention
Simplify and Increase Ease of Use
Create Additional Revenues
Increase Differentiation

Blockchain and bitcoin are going to transform the rails of the financial
services industry
Socialization of finance leveraging the power of communities and
social media to make financial services more relevant and meaningful
Copy and Paste does NOT always work due to Regional and Cultural
differences
FREE Hidden Costs, Cross Subsidized or NOT Sustainable
Its NOT about the Wallet (or the Tech)
Partnerships & Experience
Crossing the river by feeling the stones Deng Xiaoping

THANK
YOU

Vodacom SA
Vodacom SA M-Pesa (May 2016)
Official Reason: High Levels of Financial
Inclusion

MTN Mobile Money

Transaction / Services
Monthly / Yearly
Mobile Money Bank Account
Cash Deposit
At Till Points (using a Mobile Code)*

Fee
Free
Free

Cash Withdrawal
At Till Points (using a Mobile Code)*
At a Mobile Money Agent
Transact using *120*668# USSD***
Send Money
Buy Prepaid Airtime
Buy Prepaid Data & SMS bundles
Buy Prepaid Electricity
Self Service using *120*668# USSD***
Change Mobile PIN
View Mini Statement
View / Get Account Details
Balance Enquiries
By dailling *120*668# USSD***
Using *130*668# USSD (No USSD charges apply)
Buy Prepaid Airtime for yourself
In-Store Purchases
At Till Points (using a Mobile Code)*

R5
R5
R1
Free
Free
Free
Free
Free
Free

Free
Free
Free

In-Store Purchases with Cashback

At Till Points (using a Mobile Code)*
Other
EFT Payments into your Mobile Money Account
Debit Order
Transaction SMS Notifications
Customer Services on 083 123 1045****
Reset Mobile PIN
Change Cellphone Number / Personal Details
Block / Unblock Account
Email Statements

R5
Free
R3
Free
Free
Free
Free
R9

MTN Mobile Money

MTN Mobile Money (Sep 2016)
Official Reason: Lack of Commercial Viability
(High Operating Costs)
In South Africa, however, the operating costs of
providing a mobile money platform have become
prohibitive, Larry Annetts, MTN South Africas
Chief Consumer Officer