The introduction of third party payment networks also known as MPSP (Mobile Payment Service Providers) would be of immense advantage since these third party payment handing agents can work with many providers, rather than the closed networks, Dr Muhammad Yaseen, Chairman Pakistan Telecommunication Authority (PTA) said in its authored article on his blog “Mobile Banking – Market Dynamics for Pakistan.”

The primary approach is to encourage multiple mobile banking services to MPSP as opposed to One-to-One payment system or one bank one operator. Therefore, there will be opportunities to design multiple money transfer saving and financing services to customers.

We could foresee opportunities for service providers from banks and mobile sectors alike who move quickly to create new products, especially if they can establish shared networks of third party agents, he wrote.

Dr Yaseen explained that the customers belonging to any bank and mobile operator would have the freedom of managing their finances when and where they want. This means that all banks and mobile operators would be able to connect with each other resulting in a situation where any bank customer can access their accounts, transfer funds, and interact with all other bank customer using mobile connection.

“This also provides an extra freedom to all service providers to start mobile banking offers to their consumers. Under this model, all banks and all operators could join hands to offer services to virtually all bankable customers, he said and added “this model offers the maximum connectivity and hence maximum outreach but requires a central transaction processing system that could be handled by a MPSP. Relying on third party service providers would also “liberate” banks from location constraints, allowing them to compete for customers anywhere based on product design, marketing, and branding.”

Block Diagram of the TPS Model

PTA has join hands with State Bank of Pakistan for drafting banking while offering state-of-the-art security to mobile users and financial. This aim to introduce a unified regulatory regime catering the requirements of operators, financial institutes and the consumer by providing a many-to-many relationship.

The present regulatory framework available under Electronic Transfer Act (2005) and Branchless Banking Regulations (2008) promulgated by State Bank of Pakistan is based on 1-to-1 relationship. This offers a close system between a single bank and a single mobile operator required to develop their own payment

Pakistan has region’s best performing sector, the financial sector assets have risen to over $185 billion, its profitability is exceptional and at an all- time high, non-performing loans (NPLs) are at an all-time low, credit is fairly diversified and bank-wide system risks are well-contained. Almost 81% of banking assets are in private hands. Similarly mobile sector in Pakistan has observed an enormous growth with a subscriber’s base reaching

Source: http://www.dryaseen.pk

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Mobilink, Pakistan’s market leader in cellular services and a part of Orascom Telecom Holding (OTH) has formally collaborated with NADRA Technologies Ltd to facilitate payment of Utility Bills. This service will be available Free-of-Charge and around the clock. Deputy Chairman NADRA, Tariq Malik and Vice President Marketing Mobilink, Bilal Munir Sheikh inked the agreement to this effect.

NADRA Technologies Ltd (NTL) has undertaken this innovative approach to develop an e-Sahulat billing switch to provide an integrated system response to clients for payment of utility bills through alternate channels like mobiles phones, internet, ATM, bank branches and telcos outlets. The facility will empower Mobilink retailers to accept and deposit utility bills from all Mobilink and Non Mobilink customers, even people who do not own a mobile phone can avail this service by walking into a Mobilink retailer’s outlet and depositing their utility bills round the clock, within the due dates.

At the signing, Tariq Malik, Deputy Chairman NADRA said, “We are pleased to partner with the Mobilink which is the country’s largest cellular family with the most widespread retail and distribution network. Through this service, we are taking the bill payment facility to places where banks haven’t.” He further emphasized that “e-Sahulat platform is a tip of the iceberg and NTL is in process of transforming this platform into National Smart Service Platform for e-commerce. Through this Smart Service Platform organizations can utilize e-Sahulat touch points for cash in and cash out transactions under branchless regulations issued by State Bank of Pakistan. This arrangement will help commercial banks and Telecom operators to extend branchless banking concept through e-Sahulat without raising any infrastructure thereby saving capital and operational cost.”

Bilal Munir Sheikh, Vice President Marketing, Mobilink commented, “We commend NTL’s efforts to reach out to the common people of Pakistan, a vision we are pleased to share with them. As there is no charge or fee associated nor any condition to own a mobile phone, all segments of the society can avail this convenient facility”

e-Sahulat is a truly enabling service that cuts across infrastructural barriers in line with the spirit of branchless banking. This arrangement once put in place will facilitate general public especially in rural areas with solutions housed in congenial environments, while exposing the public to state-of-the-art-technology.

Both electronic and paper-based deals in Pakistan’s banking sector decline during July-September 2010, reflecting limited business activity amid higher interest rates, said a report issued by State Bank of Pakistan.

The value of paper-based retail payments during the quarter under review fell by over 12 percent to Rs35.60 trillion against the previous quarter, the central bank said on Tuesday. Similarly the value of eBanking transactions went down by around 4 percent.

The volume and value of eBanking transactions in the country during the quarter remained 52.58 million and Rs. 4.7 trillion, respectively, showing a decline of 1.89 percent in volume and 3.56 percent in value. This is contrary to the previous quarter when 6.2 and 7.7 percent growth were recorded in volume and value.

The contribution of ebanking payments in total retail payment transactions was 39.8 percent in terms of volume and 12.65 percent in terms of value.

The value of ATM transactions increased by around five percent, while maintaining the number of transactions at the level of the previous quarter, thus, increasing the average value per transaction to Rs8,486 against Rs8,037 during the previous quarter. The contribution of other modes of eBanking is also on the rise despite comparatively insignificant numbers and aggregates value of transactions.

The utility bills payments through available modes (ATMs, internet, mobiles, etc) of eBanking transactions are also growing.

The total value of credit cards transaction has, however, decreased by one percent against the previous quarter.

Via The News

President Asif Ali Zardari inaugurated a mobile banking service named Benazir Bhutto.

Solution is aimed at providing mobile-banking solutions to far-flung areas of the country with less developed banking infrastructure.

Addressing a ceremony the President said that the value of one card of Benazir Mobile Banking is equivalent to Rs. 3,000.

The President said the facility of Women Protection and Rescue will also be incorporated in this Card which will enable the user to register a complaint against any police personnel or any one committing excess.

This mobile phone will provide every kind of product, he added.

Before I begin, allow me to speak of the success of Telenor Easy Paisa’s Utility Bill payment service. Listing down some quick facts about the bill payment service:

» More than 47000 bills paid across Pakistan
» Total amount of bills paid exceeds Rs. 58.8 million

It can be safely said that the Easy Paisa method of bill payment has been received well by consumers and people have started to rely on it. The usage stats are more than the bills paid at ATMs in Pakistan.

Now like it was expected, Telenor has started expanding the set of transactions offered over its ‘Easy Paisa’ service. After the success of utility bill payments, Telenor has launched its ‘money transfer’ transaction that makes it possible for absolutely ANY customer to send and receive money as the receiving and sending of money does not necessarily require a cell phone.

Telenor’s target market appears to be ‘Domestic Remittance’ users in Pakistan i.e. People residing in urban areas for work and sending money from one city to the other or to their native villages. It also aims to work as a replacement of ‘traveller cheques’.

The process is relatively simple, let me list how sending and receiving money works one by one:

Sending Money:

» Sender visits any one of more than 4000 Telenor Easy Paisa retail outlets, Telenor customer service centers or any branch of Tameer Microfinance bank
» Sender fills in a form/receipt (as shown in the image below) providing name, CNIC and mobile number of receiver and the amount to be transferred
» Easy Paisa retailer hands over phone to customer to enter secret 5 digit PIN (this PIN has to be delivered to the recipient)
» Sender needs to provide a photocopy of CNIC and present his original CNIC for verification

Receiving Money:

» Receiver visits any one of more than 4000 Telenor Easy Paisa retail outlets, Telenor customer service centers or any branch of Tameer Micro-finance bank
» Receiver presents to retailer/branch/service center the ‘Transaction ID’ as received via SMS or directly by the sender
» Easy Paisa retailer hands over phone to customer to enter secret 5 digit PIN (this PIN was delivered/told to the recipient by the Sender)
» Receiver needs to provide a photocopy of CNIC and present his original CNIC for verification
» Receiver receives the amount transferred by Sender
The service, however, is not free and comes at a cost. The cost is divided into slabs depending on the amount transferred:

Fee for the transaction (including taxes) will be charged on top of the Money Transfer amount and it will only be charged to the Sender and not the Receiver.

Example:
A person who wants to transfer Rs. 1000 to another person would end up paying Rs. 1000 + 58 to the Merchant (where Rs. 50 = Money Transfer fee& Rs. 8 = taxes).

Receiver does not need to pay anything and will be able to pick up Rs. 1000 from any easypaisa Merchant.

There is, however, a limit of Rs. 10,000 as the maximum amount that can be transferred imposed by the State Bank of Pakistan. Providing cell phone numbers for both sender and receiver are optional but recommended as they provide automated transaction confirmation in real time.

As an e-Banking enthusiast, I am anxiously waiting for what is next in line in the Easy Paisa service offering! I can make guesses, and very focused ones too, but I’ll leave that for now and may be go out and try a transaction for myself.

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In this post I review the efforts by US banks and financial institutions such as credit card companies to push mobile commerce as another channel for their clients. This post is based on a study and report by Information Week. As you go through this, compare this with the experiment in Japan, especially how applications are loaded on the phone … it will be interesting to revisit this after a few months.

Citibank has unveiled Citi Mobile, the first downloadable mobile banking application from a major financial services provider. After enrolling online and downloading the app to a cell phone or smartphone, customers can view balances, pay bills, transfer money, locate ATMs, and click to call customer service.

Citi Mobile can be downloaded to 100 cell phone and smartphone models. It’s initially available in California, but Citibank says it will be out in other states by midyear. The app has been more than a year in development, and Citibank execs think U.S. cell phone users are ready to do more than talk and text on their phones. “They can manage their accounts while sitting at a red light in their car,” says Steven Kietz, Citi’s business manager for enhancement services and e-commerce.

Information Week is not so sure. As they say: There will be a growing market for mobile banking when there’s a need for immediacy, like emergency fund transfers and balance checks, predicts James Van Dyke, president of payment consulting firm Javelin Strategy and Research. But his take on a mass market for mobile bill paying: “It’s ridiculous.” The banks beg to differ, though. Wachovia, which has a mobile offering, says mobile bill paying is one of the top customer requests.

Since the Citi Mobile app resides on the phone, it’s faster and offers a graphics-intensive interface that’s closer to online banking than text-heavy Web-based apps. Customers select the Citi icon on their phones to access accounts instead of navigating through multiple Web pages on a tiny screen. They’ll also receive new features automatically whenever Citibank makes an upgrade available.

Bank of America took a different approach, launching its WAP-enabled Web-based mobile banking service in February. Most mobile browsers can access the service, which lets Bank of America customers check account balances, pay bills, and transfer funds. “We chose to go with a WAP application, so that everyone can access it,” says Sanjay Gupta, an e-commerce executive for Bank of America. The downside: WAP displays information mostly in text form without rich graphics.

More from the report:

Wachovia also went with a Web-based app, launching its Wachovia Mobile service in December. It works only with Web browsers that come on smartphones running Microsoft’s Windows Mobile 5.0, Research In Motion’s BlackBerry, and the Palm OS. More than 50,000 people access Wachovia Mobile each week, says Ilieva Ageenko, the bank’s director of emerging applications.
But Wachovia has another option in the works. It has teamed with AT&T, which will offer later this year mobile devices preloaded with a mobile application for accessing Wachovia’s and other bank’s services. Preloading the app makes it easier to use on the phone. By getting together with AT&T, Wachovia has “enough footing to reach out to this huge base of customers,” says Ageenko.

But preloaded apps have their downside since the number of customers a bank can reach is limited to the number of phones its app is loaded on. But even with downloaded and Web-based apps, banks may have to work hard to convince customers to sign on. “Instead of banks giving away toasters, maybe they’ll give away phones,” says Richard Crone, of Crone Consulting. Also, putting an app on a mobile device could increase calls to the support center as people struggle to get an app to work on a particular device, thus increasing a bank’s costs, he says.

Besides usability and access issues, security looms as a potential problem. Mobile applications preloaded on cell phones mean personal information will be stored on phones, posing a huge risk. The good news is that the banks are putting a lot of effort into securing their mobile offerings. With Citibank’s Citi Mobile service, the phones don’t store any personal information and transactions are secured with 128-bit encryption, the same technology that’s used at Citibank.com.

Customers accessing Bank of America’s online banking service from their cell phones are protected by the bank’s SiteKey security technology. Data also remains encrypted when it’s sent between the phone and the bank. Once AT&T rolls out mobile devices with Firethorn’s preloaded banking application, it will have the ability to remotely wipe devices clean of personal data if they’re lost or stolen.

MORE THAN JUST MOBILE BANKING
Credit card companies MasterCard and Visa have their own agenda. They want to convince users to use cell phones as credit cards for quick purchases. The report presents a few updates on this:

MasterCard and Visa have tested cell phones with embedded Near Field Communication technology that enables short-range wireless communications between devices. The next step is to team with wireless carriers and financial services providers on actual products. MasterCard says it’s in discussions with several carriers and financial services companies.

Visa is testing a mobile application that will let consumers use their cell phones for payments and online purchases. Customers will have access to their credit card account information and will receive account alerts and mobile coupons when they use the service. Visa also is partnering with chipmaker Qualcomm and phone maker Kyocera on contactless payment-enabled phones.

With everything that credit card companies, banks, and wireless carriers are doing, people’s cell phones should soon turn into more than communications devices. “It truly is disruptive technology,” says consultant Crone. The question is whether consumers also will be as excited about mobile banking and contactless payment apps.