Wireless Federation

Smart Communications & Rural Bankers’ Association of the Philippines (RBAP) are in an agreement, aiming to liberalize access to the Smart Money Platform, allowing financial transactions at the speed of a text message. This enables rural bank depositors and borrowers to use their Smart SIM cards for payments and loan disbursement, among others. Smart head for services hub Reynante Banico, said, “By sealing this partnership, RBAP member rural banks now join the ranks of our esteemed Smart Money partners, allowing them to reach over 34 million Smart subscribers; to connect to the country’s more than 7,000 automated teller machines; and to access more than 100 Smart Wireless Centers and thousands of MasterCard and Smart Money fulfilment partners across the country and all over the world.” RBAP-member banks all over the country will be accredited as Smart Money Centers, allowing them to convert electronic cash from their Smart Money wallet into physical cash, or the other way round.
“By liberalizing access to Smart’s tried and tested mobile commerce innovations and solutions, we are optimistic that our partnership will enable us to reach out to more unbanked and underbanked Filipinos in the countryside, and even around the world,” Smart Chief Wireless Advisor Orlando Vea said.
“The RBAP welcomes this partnership with Smart as it will provide RBAP and our member rural banks with more and better opportunities to enhance our services to our clientele. Smart’s advanced mobile commerce technology combined with RBAP’s strong countryside network, will provide our customers with a fast, secure, and efficient way of transmitting funds anytime, anywhere,” RBAP President Tomas Gomez IV said.

Wireless Mobile Telecom Wireless News

MasterCard proclaimed a service through which its users can pay for products with their cell phones. The company’s over-the-air provisioning service lets the card issuers transfer a PayPass application onto handsets that are equipped with Near Field Communication technology. After that customer can use this service as their payement account over a mobile network, and then buy products by swiping the phone near specially-equipped terminals.

The NFC technology facilitates contactless payements and it’s already in many mobile phones around the world. It is forecasted that up to one-third of all cell phones will be NFC-equipped in five years.

“At MasterCard, we are dedicated to the development of a sustainable mobile payments eco-system in which all of our customers and every major mobile player can participate,” said Art Kranzley, MasterCard’s chief emerging technology officer. “By managing the device personalization process for our customers from beginning to end, we are offering a service that is consistent with both customer demand for ease of implementation and consumer demand for ease of use,” Kranzley added.

However, Visa, the contender of MasterCard is also heading towards mobile market and it has been piloting mobile banking and payment services. Additionally, Visa partnered with Nokia to roll out a handset with NFC technology. The comapny said, it would develop applications for Google’s Android platform.

Wireless Mobile Telecom Wireless News

Expectations for a rapid roll-out of mobile banking (or m-banking) services have been revived by the extraordinary success of Kenyan cellphone operator Safaricom’s M-Pesa money transfer facility, leading to renewed predictions that the cellphone and banking sectors are in the process of convergence.

M-Pesa was introduced by Safaricom in Kenya in March 2007. The service provides an SMS-based, low cost, person-to-person, money transfer facility, which also allows the user to purchase prepaid goods and services (e.g., mobile top-up time and utilities). It has seen subscribers increase from around 100,000 at its launch to more than 3.6 million by July 2008. During that time, M-Pesa has moved some 21 billion Kenyan shillings ($288 million) around the country.

M-Pesa is still only a mobile money-transfer facility. However, Safaricom, which is 40% owned by U.K.-based Vodafone (nyse: VOD - news - people ), is now seeking to expand M-Pesa to embrace remittances, mortgage payments and other services. While such ambitions fall far short of the deposit-taking and transactional roles carried out by retail banks, they are still a challenge to them.

Predictions have existed since the 1990s that cellphones’ ability to transmit data could help bring rudimentary financial services to the vast reservoir of unbanked or underbanked individuals in Africa, signaling the next phase of the continent’s economic transformation.

Challenges. The experience of MobileMoney, which has now been in operation for about three years, illustrates the problems of the m-banking sector across Africa to date:

–Take-up. Far from reaching the unbanked, m-banking services have largely been targeted at existing customers, and even in this case takeup rates have been low. Moreover, active use of accounts has tended to drop off and most customers limit their usage to airtime top-ups and person-to-person payments.

–Complex transactions. Despite the considerable technological advances in the past decade, using a mobile handset to conduct transactional banking remains considerably more complex than using an ATM. Easier technology and more customer education would be required for m-banking to develop mass appeal.

–Regulatory compliance. In developing new financial payments systems, cellphone operators have escaped the regulatory burden faced by banks because they do not, strictly speaking, take deposits. Any attempt by cellphone operators to move beyond cash transfers or purchases of prepaid products into providing a wider range of financial services would encounter this regulatory burden.

In addition to meeting liquidity reserves to protect depositors, cellphone operators would also have to comply with a bewildering and costly array of secondary legislation, including:

–know your customer (KYC) rules

–anti-money laundering regulations

–countering the finance of terrorism legislation

In South Africa and elsewhere in Africa, the cost of KYC compliance has been a key factor in slowing the uptake of m-banking services. Both Vodafone and Nokia (nyse: NOK - news - people ) have been lobbying African governments for a reform of the regulatory framework, but they are unlikely to escape it entirely. As a result, the business model deemed most likely to deliver the much vaunted m-banking breakthrough will be a cellphone-bank joint venture.

Established players. Visa and MasterCard, the world’s two largest payment systems, have been watching m-banking developments in Africa closely, recognizing that handsets are likely to emerge as a distinct payment channel. That competition could arrive earlier than anticipated from a number of African firms hoping to ‘leapfrog’ credit cards where no payment infrastructure exists.

For Best Practices/ Case Studies on Mobile Money - Banking, Remittances, Commerce & Payments. Please contact Christina@WirelessFederation.com

Wireless Mobile Telecom Wireless News

The GSM Association has proclaimed to launch a pilot programme in association with Master Card aimed at “tapping the ubiquity and ease-of-use of mobile communications to enable the world’s 200 million international migrant workers to easily and securely send remittances to their dependents, many of whom don’t have bank accounts. By exploiting the extensive reach of the mobile networks, the programme will complement existing local remittances channels and make transferring money internationally significantly more affordable.”

MasterCard also brings a Unbanked and Underbanked Backgrounder, saying that “Under the agreement with GSMA, MasterCard intends to provide various payment card products as well as the international transaction switching, clearing and settlement for the MasterCard® Money Send™ transfer service via its single, globally integrated network.”

The GSM Association states that this programme could double the number of recipients of international remittances to more than 1.5 billion, while helping to quadruple the size of the international remittances market to more than US$1 trillion by 2012. The programme is lead by a special group of 19 mobile operators with networks in over 100 countries and representing over 600 million customers.

Various Mobile operators are partnering with local and regional banks to combine the strengths of the mobile and financial ecosystems. GSMA is setting up a pilot with MasterCard Worldwide, a global payments leader whose cards and network provide international authorization, clearing and settlement.

The GSMA and MasterCard, which has a 25,000 member-bank network are planning to pilot a global hub that will link together national markets and the local payment systems run by mobile operators in partnership with those local banks. The hub will enable migrant workers to trigger international money transfers using their mobile phone and their families to be notified via their mobile phones.