Archive for: Technology

Our very own Kabir Kumar made his public radio debut today to talk about the mobile banking work we’re doing:

All Things Considered, June 30, 2007 - In developing nations, many people still do not have bank accounts but they do have cell phones.

Now, a group with the World Bank is trying to develop a way to allow poor people to use their cell phones to save and transfer money.

Kabir Kumar of the Consultative Group to Assist the Poor talks to Debbie Elliott about the project.

NPR

“Slow down the future.”

This is how a former head of strategy for Vodafone Europe described to me what mobile operators try to do. Theirs is essentially a fixed-asset business, in which networks have been built and the aim is to maximize the return from customers. In that sense operators are not about innovation around new technologies, because they’re trying to recoup their investments in technologies they’ve already deployed. 

Does this mean operators aren’t interested in mobile banking?  So far, quite the opposite.

Mobile banking and payments are two potential revenue sources from existing customers.  They may be particularly useful in increasing average revenue per user or ARPU of low-income customers who generate low revenue and low margins.  Payment and banking products that are fee-based and reduce customer turnover might be just what’s needed to make these customers more profitable.

Where do handset makers like Nokia and Motorola come out on m-banking?  They make money when they sell phones, so adding new features and functions is essential. Building new payment capabilities into phones is just the kind of differentiator that will make the next generation of models sell.

Will handset makers build in this capability even if there are few places where you can tap your phone and make a payment? Which standard will they use, if any? And how can combining the motivations of operators and handset makers increase mobile banking services for poor people? A few questions we’ll continue to explore.

The technology program of the Consultative Group to Assist the Poor (CGAP), co-funded by the Bill and Melinda Gates Foundation, will support Credibanco in a unique project that aims to increase the reach of financial services to poor people. The key aspect of the project is the use of banking “agents” – enabling retailers outside of traditional bank branches to extend financial services. Credibanco will receive technical assistance and funding to offset risks, as well as capture lessons learned for the benefit of increasing access to finance.

press release

There is m-banking with phones, approaches to banking the poor with point-of-sale terminals, and business models that use phones and cards together. But Russia is pioneering an altogether different approach to opening access to payment services.

More than 120,000 automated payment terminals have been deployed in Russia, mostly in the last two years. Located in public spaces, unmanned terminals like this one below provide 24/7 ability to buy prepaid airtime and other telecom services, pay municipal utilities, rent or taxes, or make a repayment on one of the estimated 20 million consumer loans outstanding.

No bank account is required. You can’t make a deposit or a remittance yet, but the boom in payment terminals should be good news for the 60 million adult Russians who are unbanked but need an affordable, convenient and reliable way to make retail payments. Read the rest of this page »

As part of its recent entrance into the US mobile payments space, Citibank recently began advertising via SMS. When USA Today readers receive stock quotes on their mobile phone, they now find an accompanying advertisement asking if they’d like to check their Citibank account balance or even find the nearest ATM. Uptake of these offers is around 15 to 20 percent, several times higher than traditional advertising.

SMS advertising is a frequent topic of discussion around CGAP. As many mobile banking services in developing countries have had difficulty maintaining adequate volumes of usage, we often wonder if users would respond to SMS messages reminding them of this service and encouraging use of e-money. What if we could use SMS to provide financial management tips? Could we use SMS to encourage clients to save a small amount after each transaction? The potential of SMS advertising is indeed exciting, but in thinking of how I would respond to a pesky advertisement on my own phone, I feel less confident. Is SMS advertising the new telemarketer?

Exploring and testing innovative ideas is the cornerstone of CGAP’s Technology Program and SMS advertising is likely to play a role in at least one of our projects. Perhaps users will find the service more helpful than annoying and the skeptic in me will be proven wrong…?

BBC reports on how villagers in India can request web content — from cricket scores to photos of Britney Spears — as part of

The business was dreamed up by MITians a few years ago. The underlying technology is called DakNet — a wifi “village area network” created when vans and motorbikes fitted with short-range wifi devices are driven through villages giving people access to the internet for a short period of time. Kiosks, schools, and other common locations are equipped with PCs and wifi devices.

DakNet may have borrowed its name from Dakiya which is what bicylce riding postmen were called in India and for many still symbolize a remote village’s only connection to the world.

Not sure if the business is sustainable but villagers subscribe (Rs. 50 for a lifetime membership) for a range of services from email to SMS. You can also shop online. Delivering web content on-demand might be a new service.Villagers submit a request for specific content which is available hours later as the van or bike drives through the village broadcasting it over a wifi network.

This paper explores the extent to which formal, regulated financial institutions such as banks have been able to partner with correspondents, commercial entities whose primary objective and business is other than the provision of financial services. The paper illustrates the case of Brazil, where banks have recently developed extensive networks of such correspondents. It shows that such arrangements result in lower costs and shared risks for participating financial institutions, making these arrangements an attractive vehicle for outreach to the underserved especially for certain financial services such as payments and transactions. Correspondent banking required a supporting enabling environment to emerge, and poses some regulatory challenges and some increase in risk. The example from Brazil may be replicable elsewhere if appropriate regulatory adjustments are undertaken.

pdf

CGAP Brief, April 2006
Using Technology to Build Inclusive Financial Systems (pdf)
Innovative use of information and communications technologies to inexpensively process a large
volume of small transactions and deliver a wide range of financial services may help to make
microfinance institutions (MFIs) more efficient and commercial banks more interested in serving
poor people.