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eServGlobal Solutions Presentation

eServGlobal Solutions Presentation. Solutions Presentation. Mobile Network Operators’ Mobile Money Objectives.

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eServGlobal Solutions Presentation

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  1. eServGlobal Solutions Presentation Solutions Presentation

  2. Mobile Network Operators’ Mobile Money Objectives Mobile Network Operators want to offer mobile users “mobile financial services” via handsets to increase ARPU from user service charges (SMS, internet access, etc), transaction charges (clip the ticket) and interest on deposits (funds held). To do this they know that they need to simplify, extend, and reduce the cost of their “cash in” channels. So it is firstly about increasing (as cheaply as possible) the held balance (via prepaid funds) on the mobile users’ phone accounts. “History has shown that users with credit balances use it” • In the banked world the funds are generally deposited via the banking system. • In the unbanked world the funds are deposited via cash Secondly the operators want to simplify and extend the number of ways users can reduce the “held balance” on their mobiles • In the banked world via m-commerce, mobile payments, international remittance (send), near field communications …. • In the unbanked world via m-wallets, domestic airtime transfer, international remittance (receive), funds disbursement (salaries, microfinance, aid) ……

  3. Greenwich Consulting’s Mobile Money view

  4. Telecom Software Landscape Unknown Territory Stars Mobile Money M-Advertising Promotions/Loyalty e-Recharge Market Growth Billing Services Number Portability Voucher Management Network Control Low Value Commodities Infrastructure Value of Solution Sources: Gartner, 2009, ,2010; Juniper, 2009, 2010; McKinsey, 2010

  5. eServGlobal Strategy Focused on Mobile Money for the Unbanked while providing Mobile Money, Recharge and Promotion solutions to Mobile Network Operators (MNO’s) 24 years’ experience in Mobile Payments, Value-Added Services, and subscriber Promotions 60+ telecom customers worldwide

  6. eServGlobal Products & Services Any account to any account Mobile Money, recharge, & remittance Value-added services that enable MNO’s to engage their subscribers in a personalised way 24 Years of enabling telcos to… Grow revenue, Gain & retain customers, Enter new markets

  7. Mobile Money

  8. Mobile Money Landscape Unknown Territory Stars eServGlobal m-Wallets m-Int’l Remittance Remote Payments Domestic Money Transfer e-Recharge Market Growth Mobile Banking Local Payments Premium SMS Money Transfer Operators Bank Int’l Remittance Low Value Commodities Value of Solution Sources: Greenwich Consulting, June 2010; Informa, 2009

  9. Mobile Money Mobile money creates loyalty & drives new revenue streams for operators and banks Banking penetration in developing markets1 100% Untapped, high growth market USD $860B market in m-payments and m-banking worldwide2 Total Population Unbanked Banked By 2012, Mobile Money is projected to generate USD $5B in direct revenue and USD $3B in indirect revenue per year McKinsey, February 2010 1. Est. 72% of the adult population in developing countries, and 19% in developed markets are banked. Financial Access, 2009 CGAP. 2. Informa forecasts mobile payments and mobile banking transactions to represent USD $860 B in 2013. Informa, 2009.

  10. Our Mobile Money Strategy Pursuing emerging, high-growth e-recharge and Mobile Money markets Targeting our 23 existing recharge customers to upgrade to m-wallets Estimated PayMobile End Users Based on existing PayMobile customers, pipeline, and operator growth metrics1 Electronic recharge is replacing vouchers M-wallets are accretive. M-Wallets PayMobile End-Users Payments (Recharge + Vouchers) • Increasing footprint with enhanced Nokia Siemens Networks (NSN) partnership • New Reseller agreement for m-wallets with Belgacom International Carrier Service (BICS) • Now targeting Banks, Money Transfer Organizations (MTO’s), and other financial institutions 1. Informa Operator Database (WCIS), 2010; PayMobile pipleline. Subject to regulatory constraints and materialization of pipeline.

  11. Impact on MNO’s due to Mobile Money We enable operators to drive new revenue streams, retain their customers, and decrease their distribution costs Increase in revenues due to mobile money Reduction in customer turnover due to mobile money2 Reduction in distribution costs due to electronic recharge3 -4% 10% increase Total operator cost base ~6x lower Monthly ARPU Monthly churn (%) Before After Normal subs M-money users Before After Mobile money accounted for a 10% increase in Average Revenue Per User at Safaricom1 Aligning high churn (mobile) and low churn (banking) businesses reduces churn2 4% cost reduction in entire cost basis of MNO. Additional revenue stimulation estimated at ~8-10% Safaricom M-Pesa Experience, July 2010. September, 2009 ARPU figures from Informa Telecoms & Media (WCIS). Based on Philippines Case Study, CGAP 2009. Additional proof point comes from MTN Experience, South African and Uganda. Mobile Money for the Unbanked Working Group: Churn reduced from 75% annually to 25% (approx 6.25% monthly vs. 2% monthly) in South Africa. eServGlobal experience, 2008. Cost base is estimated.

  12. eServGlobal Mobile Money Experience • 12 years’ experience in Mobile Money Services • From voucher recharge through to international remittance • A step by step approach to continuously propose customers innovative services • Our solutions are built in partnership with our customers • PayMobile solutions currently deployed at 23 customer sites • A creative and flexible engineering team experienced in the latest technologies who are able to anticipate customers’ specific needs • Solutions that enable MNO’s to grow • We are supporting 500,000 transactions per busy hour for 235,000 retailers and 33,000,000 subscribers at a large Mobile Operator in Pakistan

  13. Mobile Money – PayMobile (m-wallet) • End-to-end, any-account-to-any-account mobile money: bill payments, airtime, P2P transfers, salaries… • Ready to integrate with Banks, Credit cards, Retailers, m-wallets… • Open API’s for maximum interconnectivity • International remittance with HomeSend

  14. The Mobile Money Network The Hub acts as an open and neutral intermediary between the various participants in the ecosystem

  15. International Remittance - Mobile to MobileHomeSend

  16. Mobile Money Services in Emerging Markets 3 billion people currently lack access to financial services There are 6 times more handsets than bank accounts in the world Across developing countries 1 B people have a mobile phone but no bank account. This figure is estimated to grow to 1.7 B by 2012 For formal international remittances of US$500 B, $65 B is expected to be mobile by 2013 Over 12 million microfinance loans are distributed annually worldwide (US$16 B) That there are around 200 million migrant workers worldwide, each sending home between US$2,000 and US$5,000 per year. This gives an estimated market of $400-1000 B. Migrant workers are expected to do weekly transfers, which gives an average amount of $40-100 per transaction In the unbanked world mobile users want their mobile phone to provide “currency” storage with the ability to receive, spend and transfer World Bank & CGAP, 2009 World Bank, GSMA, 2009 World Bank, GSMA, 2009 Juniper Research, 2009 World Bank, IFC Informa 2010

  17. International Money Transfer 2008: US $433B in formal international remittances Mobile Remittance Revenues ($USD) 55% 45% <1% Top-Tier MTO’s1 Banks & other Mobile 2014: Estimated US $500B in formal international remittances Source: Juniper Research, 2009 +$250Bn 40-50% 30-40% 13% Mobile Top-Tier MTO’s1 Banks & Other Informal Sector 1. MTO is a Money Transfer Organization. Top-tier MTOs include Western Union, MoneyGram, Eurogiro, and Vigo Sources: GSMA (MMT Working paper), 2008; World Bank, 2010; Juniper Mobile Money Transfer, 2009.

  18. International Money Transfer Market Any device, any channel Banked Unbanked Traditional banks Informal channels Traditional

  19. HomeSend / Traditional MTO Comparison HomeSend represents the future of international remittances: It uses the pre-existing telco network to address billions of subscribers Cost Base Traditional Money Transfer Org Leverage MNO’s Networks Bricks and Mortar Access to Customers Traditional Money Transfer Org Customers with physical access to an agent or a bank account • All subscribers • Any channel • Any device

  20. What the Industry Experts Are Saying about HomeSend Mobile-centric from sender to receiver – banks welcome, but not required • Mobile-Centric: HomeSend “provides a mobile-centric approach to international remittance. This represents a significant new step in mobile payment, allowing any mobile service provider in any country to access the international remittance market.” • Market lead:HomeSend “provides an alternative to banks' or money transfer agencies' remittance corridors. So far it is the first operator-oriented remittance hub in the market with live operation” • Proven hubbing and financial experience: “BICS provides the connectivity to carriers, as well as the clearing and settlement know-how”

  21. Belgacom International Carrier Service A network of networks, globally connecting 250+ telecoms operators to make international telecommunications in all its forms possible. 3GRX Signalling Video Tel. Business Class VAS Instant Roaming Simbox Detection IPX RoamGuard SMS Transit First Class Mobile MMS Transit VoIP • 4th largest international carrier • Transporting 25 billion minutes/yr • Generated € 1.26 billion in revenues in 2009 • Offices in Brussels, Bern, Dubai, Monaco, NY, Singapore • Belgacom (57.6%), Swisscom (22.4%) and MTN (20%) as shareholders

  22. How HomeSend Works in Practice Telco Agent Cash In: Sender deposits their currency of residence via Telco agent (SMS, Internet, vouchers, etc) into their m-wallet which is credited SMS Telco increases balance in the sender’s m-wallet Sender Internet International Remittance: Sender remits money to receiver using their mobile phone. Money is transferred into the receiver currency. Sender’s m-wallet is debited and receiver’s m-wallet is credited. Country Sender Country Receiver Sender’s Telco m-wallet Sender Receiver’s Telco m-wallet Receiver Cash Out: Receiver withdraws cash (in their currency) from their m-wallet (which is debited) at an agent outlet. Receiver’s telco reduces their m-wallet balance Receiver Receiver’s Agent

  23. How do the Transactions and Clearing Work? Money transfer between the sender and receiver is both instant and available 24X7. The settlement process by the Remittance Service Providers (RSP) is carried out via existing banking networks Sender Sending RSP Receiver Receiving RSP Transaction Processing (real-time) Sending currency Receiving currency FX conversion Local account Local account Settlement Account Prefunding Settlement Account Repatriation Settlement Instructions(daily) Financial Settlement (batch) Daily Debiting Daily Crediting Settlement Account of Receiving RSP Settlement Account of Sending RSP Bank

  24. Hosted m-Wallet Receiver Sender Mobile Network Operator Sender Mobile Network Operator Receiver m-Wallet • The hosted m-wallet is targeted at operators that either do not have or have not yet deployed a Mobile Wallet • The benefits to the MNO’s are that there is no CAPEX or OPEX required, reduced time to market and reduced risk • The benefits to eServGlobal and BICS are an extension of the PayMobile pipeline and an increase in MNO’s ready to deploy HomeSend

  25. HomeSend Steps to Success We are on the path to generating strong returns from HomeSend • GSMA Endorsement • Regulatory Compliance • 1st Mover Advantage Build the Platform Sign up MNO Receivers • 38M subscribers to-date • Strong pipeline Sign up MNO Senders • 14M subscribers able to send funds • Strong pipeline Sign up MTO’s, Banks and PSP’s • Just Starting Get Transaction Volumes Up • BICS & Hub Members: marketing efforts

  26. HomeSend and PayMobile

  27. Promotions, Loyalty and Retention

  28. The Value of Loyalty & Retention We help operators attract, retain, and stimulate subscribers with advanced loyalty & retention solutions PromoMax Impact of loyalty & promotion program on pre-paid churn1 Impact of loyalty program on operator voice revenues1 +32% -20.3% Pre-paid Monthly ARPU Monthly churn (%) Before After Before After Adds $25M/yr in pre-paid revenue for the average European telco2 Added 32% in voice revenue increase in sample emerging market1 eServGlobal experience, Peppers & Rogers benchmarks Average subs, ARPU, churn based on Q3 2009 estimates from Informa Telecoms Operator Database (WCIS)

  29. Loyalty and Retention • MNOs’ marketing departments are driven by loyalty and retention • We are taking a marketing and services-oriented approach by moving loyalty and retention out of the domain of the IT department and back to the user – Marketing • Our promotions focus on true one-on-one interactions based on subscribers’ actions • Geo-localisation applications are becoming popular with consumers PromoMax Use 5 more minutes and get 3 free! Here’s a Domino’s Pizza coupon to go with your movie download!

  30. Niger Loyalty & Retention - PromoMax • Orange: SaaS-based loyalty program: • Provided customers with a tiered loyalty program– more calls, more rewards • Voice revenue  32% • Active customer base  50% • The PromoMax workbench returns the power to the marketing department to create their own promotions • One of our prospects spends US $600,000 in consulting fees to launch each new promotion! PromoMax • Tunisiana uses PromoMax to: • Run 10 simultaneous personalised B2B, B2C, and event-based promotions today • Interacting with 10% of the customer base/day • PayMobile-integrated recharge promotions

  31. Market-Leading Technology • Immediate promotion creation using the PromoMax workbench • Envision, design, and launch promotions in under a day • Empowers marketing department • Any action, any reward, anywhere …and in real time • Based on usage, recharges, spending, browsing… • Enabled by PromoMax’s real time control • Advanced customer intelligence • Customer intelligence ensures effective, personalised rewards • Adapt to customer response to historic promotions • Real time promotions • Immediate campaign response

  32. PromoMax You can • Register your customer then simulate Recharges • Customer may receive a reward depending on the pre-configured promotions on PromoMax Live They say • “I received my award straight away” • “Lottery, I love it” • “This is really flexible”

  33. Value Added Services

  34. Value-Added Services Wide array of complementary and standalone Value-Added Services offerings…

  35. Solutions targeted for our client’s needs and desires In giving our clients the flexibility to grow, we increase our ability to up-sell and cross-sell Customers can Mix and Match Increasing our clients’ ROI by combining solutions Recharge & Promotions m-Wallet w/ loyalty & location-based services

  36. Value-Added Services Strategy • Cross-sell our existing customer base • VAS offerings enhance our e-recharge & mobile money products • Extend our footprint • No clear market leader in this domain: room to grow • Target mature markets with m-couponing and mobile advertising • Pursue SaaS delivery models • Low saturation – high growth potential • Ideal for MVNOs, new MNO’s, and emerging markets • Rapid and cost-efficient for our customers

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