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Paul Leishman, GSMA GSMA Deployment Framework Key Learnings on Successfully Deploying Mobile Money

Deployment Framework Deployment Design Team Agent Network Pricing Structure Abuse Assessment Partnership Development Bank Partnerships Tech Partnerships Market Mapping Opportunity Assessment Regulatory Assessment Marketing Branding Promotion and Timing

Deployment Framework Market Mapping Opportunity Assessment Regulatory Assessment

Don’t assume that P2P transfers will be your silver bullet Available Service Key Criteria for Service Selection Market size: are there more bill payment or money transfers? Competition: how well are customer needs being served? Regulation: what impact will guidelines have on customer experience? Bill Payments Most Popular Service Bill Payments Bill Payments Money Transfer Bill Payments Money Transfer Bill Payments Airtime Top-Up Money Transfer Money Transfer Bill Payments Airtime Top-Up Other Payments Money Transfer Bill Payments Airtime Top-Up Other Payments

Deployment Framework Deployment Design Team Agent Network

Invest in a large, dedicated mobile money team Market Team Deployment Pakistan 31+40 Philippines 40 Uganda 31+14 Tanzania 14 Impact of Using Shared Resources “ Because our core team was so small and we didn’t have budget to outsource, we’ve had to rely on our existing airtime sales staff to recruit, train and manage agents. This approach has failed, since they haven’t had the time and aren’t incentivised properly to do these things.” Anonymous MNO Quote

Create an agent network that is ubiquitous, low-cost, liquid and trustworthy Liquid Trustworthy Customers must trust agents with their money Customers must be able to access their money Low-Cost Cost structure of mobile money agents must be lower than bank Ubiquitous Customers must be able to quickly find a mobile money agent High frequency users 17% more likely to live within 5 mins of agent

Agents networks can be too big as well as too small Three-Phases of Growth Phase-One Recruit an adequate number of agents throughout the market to support launch Phase-Two Redirect resources from agent recruitment to customer acquisition after launch Phase-Three Grow agent and customer numbers in parallel Safaricom Agent Network Evolution 1 2 3

Pay your agents for every activity they perform, even if you don’t charge customers a direct fee for it Key Points Assess transaction profitability on aggregate, not for each individual activity Provide aggressive customer registration commissions to capture channel support Illustrative Revenue Share for a $30 transfer... 1 Cash-in Customer Fee Agent Commission $0 $0.30 2 Transfer $2 $0 2 Cash-out $0.50 $0.50 Registration $1.50 Commission $2.50 $0.80

Choose a liquidity management strategy carefully Option 1 Option 2 Summary Option 1 Simple strategy, often used early in a deployment MNO leverages existing points of presence in market Agent must physically present themselves Option 2 More complex, but gives agents more points of presence to use Opportunity to assign responsibility for agent liquidity management Liquidity Management Options

Deployment Framework Marketing Branding Promotion and Timing

Create a mobile money brand that is clearly linked to, but distinct from the parent MNO brand MNO Brand MM Brand Clarity Where it Matters Attributes of a Good Mobile Money Brand Identity Capitalizes on existing MNO brand equity (similar colours, fonts, etc.) Makes it easy for customers to identify where they can/cannot do mobile money transactions

Mobile money is not intuitive, so market specific uses for the service rather than emotive slogans Use-based Marketing Emotive Marketing

Registering customers is less than half the battle, so spend less than half of your entire marketing budget on it Deployment 1 Deployment 2 Deployment 3 Deployment 4 Deployment 5 60% Active User Rate 30% 25% 15% 10% Drivers SIM Registration “ we’ll use requirement to register SIMs to cross-promote mobile money” Field Registration Agents “ customers will register at this agent, but transact at another agent” Agent Commissions “ you get 100% of your commission for registering a customer”

Deployment Framework Pricing Structure Abuse Assessment

Use tiered pricing to make the service viable for low and high value transactions US$5.15 US$0.32 US$13.50 %Based Peer US$0.15 Insufficient value to provide agents with commissions for low value transactions . High fees that make the service less competitive for high value transactions . % Based Pricing Leads to... 1 2 Implications Use simple tiered pricing to make the service viable for low and high value transactions %Based “ We charge a different fee depending on the size of a transaction” “ We apply the same % to whatever value a transaction may be”

Assess your pricing model from the perspective of a fraudster Problems with Tariff 1. Direct Deposits Loading a recipient’s e-wallet directly 2. Transaction Splitting Dividing one large transaction into two smaller ones Illustrative Tariff Guide 2 1 Transaction Range Fee Registration 0 Deposit 100 10,000 0 Send to Registered User 100 10,000 90 Send to Unregistered User 100 2,500 50 2,501 5,000 150 5,001 7,500 300 7,501 10,000 600 Withdraw by Registered User 100 2,500 25 2,501 5,000 50 5,001 7,500 75 7,501 10,000 100 Withdraw by Unregistered User 0 10,000 0 Other Rules: 1. You can only deposit money into your own account.

Deployment Framework Partnership Development Bank Partnerships Tech Partnerships

Structure your MNO/Bank partnership according to which party is best positioned to deliver each aspect of the deployment Activity Party responsible MNO Bank Regulation Communicate with regulator   Secure a license or other requisite approvals   Issue e-money   Establish and enforce compliance guidelines   Serve as trust account custodian   Back office Reconcile accounts daily   Warehouse KYC documents, agent contracts, etc.   Pay agents   Activity Party responsible MNO Bank Technology Procure a technology platform   Operate the technology platform   Marketing Brand the service   Promote the service   Provide customer care   Distribution Recruit agents   Contract with agents   Manage agents   Serve as superagent  

Choose a commercial model first, a technology vendor second Based on my model, what do we need? - What Service Offering? - What Pricing Structure? - What Liquidity Management Solution? - What Delivery Mechanism? “ Our technology vendor said they support bill payments, but they’re only developing the module now!” “ I’d planned to use masteragents to manage liquidity, but our m-wallet doesn’t support it!” 1 2 What vendor can deliver? Use this approach... ... To avoid these scenarios Anonymous Mobile Network Operator Anonymous Mobile Network Operator

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