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September 2015


    Zouhair runs a tea stall in the busy street market in Hargeisa, Somaliland. What he shares with thousands of other merchants/small vendors in Somaliland is his ability and more importantly willingness to accept mobile money. Anyone buying tea/snacks from Zouhair can easily pay using his mobile no matter how small the payment is. Zouhair enjoys the convenience it offers; avoid managing small change, quick transaction and happy customers.

    Somtel and Zaad telecom has achieved this enviable feat in Somaliland, where ecosystem payment (merchant and retail payments) has a huge share in all mobile money transactions. Mobile money in Somaliland has gone beyond the widely accepted ‘core’ mobile money use-cases globally viz. airtime top-ups, p2p transfers, cash-in and cash-out. Here are the few statistics to fathom the widespread adoption of mobile money in Somaliland leading to near cashless economy.

    • 40% of the GSM subscribers are the active users of mobile money
    • Active users perform 30 transactions a month on average (global average is 8.5)
    • 26% of the population reported using mobile money to pay bills
    • 43 registered customers per merchant indicating huge merchant base.

    In this article, I have highlighted the enabling conditions and success factors which have led to this near ideal epitome of a MNO lead mobile money deployment. There are two major telecom players in Somaliland, Telesom and Somtel and both of them has their mobile money offerings. Telesom is the leading MNO in Somaliland with close to 1 million mobile connections (about 85% market share). Since the beginning of its launch, Telesom’s strategy has been to develop the mobile money ecosystem around Telesom GSM offering. It focused on two critical aspects of mobile money: getting the money into the MM accounts and keeping it there. It has succeeded in convincing the users to keep money in their mobile accounts by building an ecosystem of salary payers and merchants. The idea is to eliminate the frequent need to cash-in and cash-out. Users have regular incoming money in their mobile accounts which they will use to pay for daily goods and services and also maintain a balance. It is worthwhile to mention here that Telecom is one of the most recognizable and trusted brands in Somaliland and is one of the biggest employers.

    The legal tender in Somaliland is the shilling, but mobile money deals in US dollars. It has helped the telecom companies to on-board private companies, NGOs, development workers, who get paid in dollars to accept direct salary transfers in their mobile money account. To make the mobile money all encompassing which is critical to sustain the ecosystem, Telesom also launched Salaam, an Islamic financial institution offering services – including savings accounts, current accounts and small loans – accessible through mobile money.

    Further, there are three distinct aspects which are unique to mobile money offering by Telesom. These are:

    1. Mobile money services are launched free. Mobile money was introduced in Somaliland as a retention tool for GSM subscribers. It also helped in popularizing the service leading to quick adoption. Within 2 years, 40% of GSM subscribers were actively using Zaad.
    2. Leveraging in-house agents: This was the major departure from the traditional way of doing things. Telesom worked with owned retail network with salaried employees and thus saved huge costs in channel commissions which partly helped it to reduce the cost to customers.
    3. Merchant acquisition from the start: Instead of investing on Agent recruitment, Telesom focused on building the merchant network from the beginning. This has resulted in Merchants being the face of mobile money in Somaliland providing regular connect with customers. This is significant as normally an active customer faces agents 3-4 times a month while it is very high in case of merchant-customer connect where daily goods and services are being transacted.

    Telesom’s decision to make the services free was a strategic decision taken to achieve twin objectives of educating the customer and to retain its GSM subscriber base. Somaliland has four telecom operators fiercely competing for the business resulting in some of the world’s cheapest mobile rates. Telesom recovered its initial investments into Zaad through indirect revenues.

    • Over 70% of the airtime was sold over mobile money resulting in huge airtime distribution savings.
    • Telesom registered an increase of airtime sales of 20% over 3 years on average
    • It managed to reduce customer churn from 5% to 2% since launch of Zaad

    This article would be incomplete without highlighting the importance of commitment from Organization’s top management towards mobile money. It was quite evident in Zaad’s case where an open book approach to investment was adopted to take the services off the ground. It was treated as a separate business unit and significant investments were committed. Telesom intentions were manifested again when it decided to pay salaries to its employees exclusively in their mobile account two months before the services were launched commercially. This helped Telesom to convince other companies to start paying their employees on mobile money accounts. This has solved the problem of cashing-in to mobile money account and simultaneously it provided avenues where one can spend the money without cashing-out.


    September 30, 2015 0 comment
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    Mobile karaoke offers customers an audio-visual module that allows them to share content with their contacts. An all-new feature also allows the users to sell or promote their own creations alongside creating a fan network. The users can also sing along with an original soundtrack, inter-mixing their voice with that of the artist and that too with all studio effects like reverb, echo etc.

    Almost two decades ago, the cassettes reigned supreme in the global music space. Back then, we used to play cassettes containing a total of 12 songs on its both sides through our tape recorders. Also, the music experience was not personalized and neither skipping a track was easy; nor was the discoverability.


    The Digitization of Music

    When CDs came, they were considered as a revolution in this space but they soon gave way to pen drives which were able to store hundreds of songs. Accessing songs of different genres, moods and occasions became simpler.

    Music is very versatile and thus there stays a rich repository of trillion songs. Today, we are in an era of 3G and 4G, where having a catalogue of a billion songs in a common occurrence- the availability of a track has become as instant as its desire. Now, data connectivity and speed is available on the go. People love to stream their favorite songs rather than downloading or storing them. With the digitization of music, the availability of tracks everywhere all the time has changed things significantly.

    The rise of digital music along with multiple digital technologies, the internet and mobile applications has become a very strong medium of accessing music. Together we are entering into the fourth phase of digital music. The different phases may be defined as:

    • The rise of piracy in late nineties
    • Rise of download stores in the early 2000s
    • Rise of streaming services in the late 2000s
    • Rise of curated service in 2013-14

    The discoverability of music has become really easy today. Services like Mobile Karaoke allow users to search and access music anywhere. The audio-visual module has again created a never before experience for customers looking to remain updated with the latest music access trends. Moreover, the Karaoke app has been designed to bring in change the way people see to music, creating an impact on them and transforming how content and technology can be used.

    There has been a sea change in and around music and a lot still needs to be done around it. In this context, karaoke is a step taken towards creating that impact by its latest features- selling or promoting one’s own creation, creating a fan network, singing along an original sound track along with inter-mixing one’s voice with that of the artist.

    September 25, 2015 0 comment
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    Scientist are yet to figure out what kind of data structure does our brain uses but trust me it’s highly scalable, accurate , flexible , deletes the least recently used data automatically , can operate on multiple threads , processing is quiet fast …I am thinking it’s not sequentially mapped unlike our computer memory (remember big endian or little endian) , and probably  doesn’t even operates on binary numbers .

    Lets discuss different programming paradigms our brain follows and what happens if we GDB the Algorithm of Life.

    Dynamic Programming ::

    “I have not failed , I have found 10000 ways that wont work”. Edison

    we tend to learn from our mistakes and our past experiences , Hence Dynamic programming. Next time when you are onto something and suddenly you realise i have done something similar already ,  you actually used dynamic programming approach knowingly or unknowingly . Other than that you probably found patterns from your past experience , hence the term pattern matching. So you dint even knew and your brain did pattern matching with dynamic programming.

    Greedy :::

    “Earth provides enough to satisfy every man’s needs, but not every man’s greed” , Gandhi. We often go to  a party , fill our complete plates no mater we eat all of it or not , hence Greedy strategy. we try to maximize our profits in order to satisfy our needs . knowingly or knowingly if a bowl of chocolates is placed in front of a kid he will always grab maximum out of it. Frankly speaking its not wrong, until our greed does not hampers someone else’s need.

    Backtracking :::

    “and a step backward after making a wrong turn is a step in right direction” , Kurt Vonnegut. We often drive to unknown locations and make a wrong turn , ultimately when we realize it we go back to where we made a wrong turn and try other paths thereafter, hence the term backtracking. we do it no matter what. backtracking would help us unless we reach “Point of no return”. you cannot come back if you fall off from a cliff , it would be too late by then.

    Divide & Conquer :::

    “Pit race against race, religion against religion, prejudice against prejudice . divide and conquer and we must not let that happen here”, Eleanor Roosevelt. So you owe 30,000 to a Bank and every month it’s getting worse and this gives you sleepless nights. Stop wasting your time.

    Just divide and conquer. Instead of trying to take on the 30,000 all at once, take a step back and break it down into a manageable situation. Find a way to make an extra 2500 a month. Cut your monthly expenses by a few thousand a month. Whichever you choose, use that extra money to start chipping away at your debt. Before you know it, your 30,000 debt will no longer be an issue. Not to mention, you will not be stressed out on a month to month basis when you have your strategy firmly in place.


    Verdict :::

    Almost everything we do can be turned into a programming paradigm.

    Enough explanation of what paradigms look like in real life , now the real issue .

    Earthquake, Global warming , Poverty , Hunger , Cyclones  , Tsunami and the list goes on ….why do they even occur ????

    algorithmically speaking we are recklessly disturbing the stack , we are buffer overflowing it. We have less members in our families and more cars , contributing to more and more pollution everyday , leading to global warming.

    we eat less and prepare more dishes , we feed our dog with a 1000 rupee nutrient but wont even spare a hundred rupee to the one truly in need. we are filling our plates and not looking at the person who sleeps on an empty stomach.

    we are ready to take loans for cars, homes and everything but we are not ready to give back what we have already taken from nature.

    we are ready to build a thousand apartments, but cant plant a tree thereby following greedy strategy again.

    Rich are becoming more rich and poor are becoming poorer . half of our population is below poverty line and we still need more.

    one single person is not responsible for an earthquake but we all are, we have hacked the algorithm of life so bad that we might not be able to backtrack in  near future. CO2 (carbon di oxide) levels are increasing everyday , its buffers are already overflowing , we already have a memory leak in the form of ozone hole over Antarctica.

    worst of all we have yet not implemented dynamic programming. when are we going to learn from our mistakes and past failures.

    try and debug the various aspects of life and you will find a wonderful algorithm crafted by the almighty . we need to sincerely stop playing with it. our world would soon crash like  a program giving a segmentation fault unless we act.

    We might not see the consequences, but our children will !!

    September 24, 2015 0 comment
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    SVN Commits – Critical Link in the Developer Daily Habits

    When the whole engine of an organization orchestrates to deliver delightful and working solutions to our customers, there is one link in the entire chain of SDLC from the “Idea” to “Working Product” – which is very critical and happens almost every hour in the organization.

    This event is “Developer commits to source code repository”. At Mahindra Comviva, we use SVN as source code repository and teams (sizes of 2 to 13 developers) working on the same project get to collaborate and work on the “Source Code” – the DNA of the product.

    Some of our field issues/defects reported by customers have been due to sheer mistakes of “Code Merge” or “Missing class file” or “Missing configuration Parameter” into the SVN repository. The cost of minor mistake at times results in an executive travelling all the while to site and holding the fort to pacify the customer. This can be termed as “Suicidal commit” and team works to rollback or make “right” commit to get changes working.

    Each of us as developers have below choices in our daily commits of code to repository.

    1. Do not check-in/commit the code unless followed up or asked to

    2. Just check-in/commit irrespective of the software state

    3. Check-in/Commit only post testing the new code added/bug fixed

    4. Check-in as in above (3) but with mandatory meaningful log message

    A team that has health habit to commit the code with practice of (4) is far healthier team both in terms of quality and productivity than the rest.

    While doing commits, the developers need to follow convention that can help rest of the team and the developer himself. Below case demonstrates the way one should commit the code.

    $ svn add SendBulkMessage.java
    $svn commit -m “Added: Support for sending messages to recipients in bulk” SendBulkMessage.java

    …post adding additional feature to sending bulk messages say storing notifications…

    $svn commit -m “Updated: Support for storing notifications for bulk messages sent” SendBulkMessage.java

    …post fixing the bug in the same file if any…

    $svn commit -m “Fixed: Memory leak while sending bulk messages” SendBulkMessage.java

    …post modification of existing functionality for performance…

    $svn commit -m “Updated: For loop and Query optimized for performance” SendBulkMessage.java

    … post deleting stale code/comments …

    $svn commit -m “Removed: Unused functions” SendBulkMessage.java

    As demonstrated above, it would be really helpful if developers follow the convention (daily habit) of committing with prefix pattern as below:

    • Added: (when adding new features/functionality)
    • Updated: (when enhancing the current feature/functionality)
    • Fixed: (when a bug is fixed)
    • Removed: (when a functionality is removed or code is cleaned up)
    • Modified: (when existing function is altered)

    Once this is done, a simple command of SVN log with filtering would be able to display the entire history of commits being done by the team for a given release.

    And if the team does it consistently, CHANGELOG can be auto-generated using this simple habit and team can trace easily the “snippet changes”.

    So simple habit of each developer committing the code with meaningful message as in the format above will make difference the way Software Releases can be tracked and made more useful.

    Parting thought – should a technical lead always commit code on behalf of newbie’s in the team? No!! Let the technical leads review the code and let each developer of the team commit his/her code. It is healthier learning to work in collaborative mode than a technical leader or project owner committing the code on behalf of the rest of the team

    September 24, 2015 0 comment
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    Past decade has seen India rising the charts in world GDP rankings. As of April 2015, India is ranked No. 3 in GDP based on Purchase Power parity (PPP) valuation (Source: knoema.com). It has been a reflection of our sheer populace, consumerism trends, rise in disposable incomes, opening economy. However, in recent 2 years, rise of mobile consumer applications has brought in a multiplier effect for the whole economy, akin to the icing on the cake. An 8 years old FlipKart is nearing a valuation of ~30 Bn US$ after the proposed $5Bn IPO at NYSE, very comparable to valuation of 20 years old Infosys Technologies ( 42 Bn US$)(Source:Wiki), and even Tata Consultancy at 80 Bn US$ (Source: Wiki).

    This blog is discussing the wealth effect and future promise that consumer mobile applications have brought to the entire economy.

    The consumer applications, attract venture capitals (mostly VCs based outside India) like Jasper, Alibaba, SoftBank and scores of others to invest in their operations. Look at the funding some of the leading consumer applications have received.

    Brand Funding
     Flipkart $2.5 Billion in 11 Rounds from 16 Investors; 9 acquisitions.
     SnapDeal $1.1 Billion in 8 Rounds from 16 Investors; 8 acquisitions.
     OLA $676.8 Million in 6 Rounds from 16 Investors; 1 acquisition.
     PayTM $200 Million in 2 Rounds from 2 Investors
     JustDial $67 Million in 2 Rounds from 2 Investors + IPO in 2013
    … to count a few.

    Source: CrunchBase

    As the billions of dollars flow into the operations, it creates a ripple effect of wealth to web cos, print cos, ad companys, besides, job opportunities, taxes to govt. Inflow of foreign capital improves the Balance of Payment (BoP) deficit, improves situation of high dollar demand, in turn easing the cost of oil import and bringing relief to whole nation.

    Adam Smith phrased ‘The Invisible Hand’ theory in his book ‘The Wealth of Nations’. The mobility is adding strength to that Invisible hand. Alvin Toffler mentioned IT as the 3rd wave after Agriculture and Industrialization. I am sure he would be watching, the 4th Wave is the mobility.

    Traditionally India has been known to be a strong & lucrative market. The consumer applications are turning country into a strong industry.

    Expansion of these brands outside India will be the new turning point for the whole country.

    Mahindra Comviva, itself strongly believes in creating D2C brand value, while leveraging mobile payments or entertainment content opportunity to name a few, and I could see a light at the tunnel-end and a huge possibility.

    September 24, 2015 0 comment
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    Technology in modern times have picked up pace in both evolution and adaptation. May be it’s because of the users acceptance towards new technologies which was much less in olden times. People have become more open to trying out new gadgets/equipments without being judgmental. Back in 2000s public rejected the very idea about self driving cars but the same is not true after a decade, companies have realize the importance of this technology in the future and are investing heavily in this.


    When radio was first introduced in 1900s it was new and innovative way of mass communication for that period of time but it still took more than 50 years for full and widespread adaptation. The next major innovation was the television which happened in the late 1920s, by that time people were familiar with radio thus making the adaptation faster than the radio but still painfully slow almost 25 years. This same pattern repeats for all new technology products, but always has faster adaptation rate than the previous. The current trend in adaptation has not changed a great deal, but the adaptation period has significantly reduced in time span from years to months now. If we look at mobile phones which was first introduced by Motorola in 1970s, it took around a decade to get acceptance but when it came the turn of smart phone it took less than 5 years to get widespread acceptance while the tablet computers took even less.

    The acceptance and adaptation may have increased due to the usefulness of the technology in itself or to the fact that people are getting accustomed to technology. It also helps that tech companies are packaging the new products as user friendly to target wider audience. Technology is evolving at a rapid pace in all aspects, but the most noticeable changes are in size, power and cost of products. When computer was first introduced it was a big bulky box which could do very basic tasks and usually costs an arm and leg to buy. But when companies package it in a beautiful well crafted design with eye candy colors it is a must have device for everyone. That’s what the iMac did to PC.    

    Companies have realized that there is no money to be made by sitting idle. So they are pouring money into Research and Development hoping to find the “next big thing”. Consumer Product companies in recent times are greatly profitable and are the largest public companies in the world beating out the oil companies. They are determined in finding the next big product and everyone wants it to be from their company. When a new product gets widespread acceptance from the users, it moves from indulgent usage to necessity and subsequently gets displaced by a better product based on newer technology.

    This is an exciting time for consumer as innovative products are being created at an unprecedented pace; technology has enabled us to create new products and categories. It’s exciting as a consumer to get countless products based on the latest technologies.  The faster the consumer embraces products based on latest technology the faster companies try to come out with newer technologies to create better products and the cycle continuous. The mobile phone replaced the landline; smart phone replaced the basic mobile phone and the cycle continuous on.

    September 24, 2015 0 comment
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    Did you know that 4 billion people on the planet use mobile phones but only 3.5 million use a toothbrush.

    The world today is experiencing a technological push ,with which the number of smart phone users by 2016 will be around 2 billion. Don’t believe me? here is the data.  Emarketer, a leading research and analysis firm in their research have revealed that more than a quarter of global population will use smart phones by 2015 end with India witnessing fastest growth of smart phone users.


                                                                    Image Source : here

    Following the trend it won’t be long when the desktop PC will be needed only for typing long emails or only to work in office. It might come to a situation where it will be used to create more smart phones applications. But what about in a business environment? Are they going down this path too?

    A big event that signifies this mark is e-tailer giant myntra to go ‘mobile-only’ starting from 15th of May. Myntra which draws 80% of its traffic and 60% of its sales from its mobile application, is expecting to take that number to 90% by year’s end. In addition to the booming ecommerce sector in India, this is further proof that the m-commerce industry is on the rise too. Not only Myntra but its rival Snapdeal states that 45% of the transactions from mobile were made via the app, while the remaining 55% were made from the mobile site. The company also revealed that 20% of all app users open it every day. While another e-tailer champ Jabong stating it to be 50-50 for both mobile app and the website.

    Pay through mobile (abbreviated as Paytm) has appended itself to the list by launching Paytm wallet in 2014 which has become the preferred mode of payment for other mobile app leviathans like Uber, Bookmyshow, Makemytrip. Paytm assures money in the wallet is 100% safe. They are RBI licensed wallet and the money is protected in Escrow account with a national bank.

    Not only customers usage and the increase in number of smart phones but several other factors contribute to this shift to m-commerce and eventually ‘mobile-only’. Reasons why mobile apps will become  important for companies are –

    < ![if !supportLists]>1.       < ![endif]>Increase in number of smart phone users and usage– From dropped prices of smart phones to setting a trend. From the only source to access internet in few developing countries, smart phone users as well as the usage of smart phones is on a constant rise.


                                   Image Source :http://searchenginewatch.com/

    < ![if !supportLists]>2.       < ![endif]>Manifoldness of possibilities –  Whether your day-to-day focus is business management, marketing, sales, SEO, social media, advertising, software development, or customer relationship management, the mobile device has increasingly become the preferred tool for work and communication. How quickly and effectively an organization plans, develops, and adapts to deliver quality mobile experiences will likely become a competitive advantage.

    < ![if !supportLists]>3.       < ![endif]>Ease of development  &  Enhanced user experience on the goApps offer an unmatched user-experience which mobile Websites or widgets are unable to provide. The new design trend “Mobile first and desktop second” will enable businesses to start using responsive web design to continue with the mobile view of website and ultimately converting to a mobile app.


    < ![if !supportLists]>4.       < ![endif]>Proximity to the customer– Whether you are commuting or sitting ideal, one thing definitely comes handy and that is your smart phone. It will be easier for the m-commerce to send push up notification as an alternative to the advertisement and also to keep user aware of the updates , new deals and the exiting opportunity a business has to offer.

    < ![if !supportLists]>5.       < ![endif]>Connectivity with 3g and 4g – Going by the fact that most websites are accessed using desktops or laptops , Wi-Fi and LAN are the most used source of internet. With blooming 3g and the new 4g comings enabled smart phones will enable users to stay connected.

    < ![if !supportLists]>6.       < ![endif]>Discoverability of apps – There might be questions on visibility of a certain apps on different application stores but if we compare apps available to the number of website, it would be a comparison of drop with the ocean.

    < ![if !supportLists]>7.       < ![endif]>Tremendous opportunity for Entrepreneurs We are bombarded with new ideas almost daily for which we need a platform to turn them into reality. Figuring out wireframe will be sufficient to launch the application enriched in innovations.

    Although there is still a long way to go before many companies learn how to benefit from and how to engage in this exciting new market, but it won’t take long before it becomes standard business practice, especially for media, consumer goods, fashion e-tailers, automotive, and food companies to communicate with their customers via an app.

    And most probably only app. Thus ‘mobile-only’.

    September 24, 2015 0 comment
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    Mobile money is a technological revolution which many emerging countries are proud of. Why? Because for once there is an area of mobility where they have lead by example and compelled the developed world to look up to them and learn for them. In many countries in Africa, Asia and Latin America mobile money is transforming the way people pay, save, borrow and transfer money. A person transferring money, recharging his mobile at any time of day or night, and paying bills instantly using mobile is a common site in countries such Kenya, Tanzania, Cote’d Ivoire and Zimbabwe. To put it in quantitative terms I am sharing some stats for GSMA – today there are 259 mobile money services globally, used by 299 million customers who are served by 2.3 million agents1.

    While the success of mobile money is globally acclaimed there is another truth to it – Airtime top-up, P2P transfer and bill payments dominates mobile money transaction (statistically speaking they form 96% of all transaction2). So the question arises, will mobile money be limited to these three services? Where we will take mobile money next, or, may I say, where will mobile money take us next? The answer is ‘Merchant Payments’. Why? Because the opportunity is big – merchant payments are 10 times bigger than P2P payments (as per CGAP). To achieve the aim of truly cashless economies (the vision which mobile money services started with) we have to evolve form ‘once/twice a month’ P2P transfers or bill payments to ‘daily’ merchant payments. Currently many mobile money providers offer mobile money services, however the number of merchant payment transactions as a proportion of total mobile money transactions is very small. Only 1.3% of total mobile money transactions are merchant payments3. There are multiple reasons for slow-adoption of merchant payments which are discussed in following paragraphs.

    The speed breakers

    First and foremost is the acceptance network challenge. The most general complain is that, there are few merchant who accept mobile money. Growing the merchant network requires multiple bilateral agreements and integrations. Additionally, there are overheads related to clearance, settlement and dispute management.

    Second is the user experience. Currently to perform a merchant payment a customer has to access the mobile money menu, enter his secret PIN, select the merchant payment option, enter the merchant ID and finally enter the payment amount to make a complete payment. All this is usually done through USSD (the most common interface to access mobile money due to ubiquity of feature phones in emerging markets). If you have ever used USSD, you will agree with me that the above process to make merchant payment is cumbersome. If I am in a hurry, I will use cash rather than following the above process!

    Next is the business model. Currently customers have to pay a service charge to mobile money service providers for using mobile based merchant payment. Most customers would not be happy to pay a service charge on their daily purchase (this is over and above all the VAT’s and other taxes we pay). We can follow a business model where merchants pay the service charge (as in credit card). Here again merchant will raise the question – Why should I take a cut on my margins. There is a need to give tangible benefits that will make service charges for merchant payments justifiable.

    Lastly, mobile money for merchant today is one sided. Current mobile money services only solve the demand side challenges and not the supply side. What I mean is that merchants are able to take payments from their customers via mobile money, but are not able to make payments to their suppliers using mobile money. They have to cash-out the money and then pay to suppliers. This defeats the purpose of creating cash-less economy and merchant looses interest in mobile payments.

    The way ahead

    As we say ‘if there is a will, there is a way’, similarly, ‘if there is a challenge, there is an innovation’. Mobile money service providers and platform vendors are developing solutions which address the challenges that are limiting the growth of mobile merchant payments. Let us look at some prominent ones:

    Open the close: MasterCard/Visa do not directly communicate with consumers like us, but today they are part of most of the card transactions we do. Thanks to their open approach, today we can swipe a credit/debit card from Bank A on POS machine provided by Bank B. MasterCard and Visa are payment processors that acts as the mediator between various Bank A and B. Mobile money services have learned from this approach and are partnering with MasterCard/Visa to make the current closed loop service into open-loop. Mobile money service providers are working with MasterCard/Visa to provide companion cards (debit card) linked to mobile money accounts. These cards can be used to make payments at any of the MasterCard/Visa licensed POS machines both nationally and internationally. The companion cards can also be used at ATMs to withdraw cash. What’s the advantage of such open-loop payments systems? Mobile money providers in one go acquire all MasterCard/Visa licensed merchants both nationally and internationally. The merchant acceptance base for mobile money service providers increases from thousands to millions in very short span of time. MasterCard /Visa handles payments processing, clearance and settlement leaving mobile money service providers to focus on the service marketing. Open-loop merchant payment is a solution that is being embraced by a number of mobile money service providers (such as EcoCash Zimbabwe and Orange Money Botswana) to overcome the acceptance network challenge.

    Bringing NFC into the play: As soon as I mentioned the word NFC, you would have thought about the well-known mobile payment services like Apple Pay, Samsung Pay, Android Pay and AliPay. The second though which comes is that NFC is a developed marketing concept and it is not relevant to emerging countries of Africa or South Asia. But operator like Airtel Tanzania is changing this misconception. Airtel Tanzania has introduced NFC merchant payment solution for Airtel Money customers to improve the merchant payment user experience. This innovative NFC payment service simplifies mobile merchant payments and addresses customer and merchant related adoption challenges. Airtel has equipped merchants with a portable NFC POS (which is one-third the cost of NFC POS currently available in the market). The NFC POS is a mini-calculator sized GSM (wireless) device linked to merchant’s mobile money account. To customers Airtel provides NFC card. NFC cards are linked to customer’s mobile money accounts and can work with all phones whether it’s a feature phone or a smartphone. To initiate a payment merchant enters the payment amount. Customer taps the NFC card over the POS and voila! the transaction is done. In case of a small value transaction (micropayment), customer does not need to enter the PIN. Removing the PIN entry step for micro-payments makes the process faster and simpler. Large value payments are PIN protected. At end customer receive transaction completion message. NFC solutions customized for emerging market will make adoption of merchant payments more feasible.

    Making merchant payments lucrative: Merchants and customers will adopt merchant payment only if they see mobile money providing some compelling value-add over cash payment. Where will the value-add come from? Telcos are sitting on a gold mine – mobile money customer and transaction data. They need to dig this data to provide value to customers. For example, telcos should enable merchants to generate reports/dashboards of hourly, daily, weekly, monthly transactions happening via mobile money. This will help them in account keeping and analyze sales trend. Based on transaction data, merchants should be able to profile customers and send them promotions. Sample this, ‘Get 10% cash back when you shop for more than $50 and pay by mobile money’. Such promotions are win-win for customers and merchants, as customers get the cash-back and merchant gets more customers. In such cases customers or merchants would be happy to pay service charge as they are getting some value.

    Extending mobile money to B2B payments: Mobile money providers need to add businesses to the mobile money ecosystem. Think of a system where a general merchant is directly able to pay suppliers such as Coco Cola, P&G, Uniliver directly from mobile money. For such transactions the threshold limits will be much higher compared to the P2P transactions. Adding businesses to the ecosystem completes the chain, will make mobile money case more stronger for merchants and will help our economies move closer towards achieving the aim of truly cashless economies.

    These above points are just a glimpse of steps which various mobile money providers are taking to accelerate the adoption of mobile money based merchant payments. I believe many more such steps are on cards, which will entrench the use of mobile money payments in daily life of consumers.

    1 GSMA Intelligence https://gsmaintelligence.com/topics/3363/dashboard/

    2 GSMA 2014 State of Industry Mobile Financial Services for the Unbanked

    3 GSMA 2014 State of Industry Mobile Financial Services for the Unbanked

    September 24, 2015 0 comment
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