In this issue: 

Interviews with Three Industry Experts about the Future of MVT 

Hannes van Rensburg, Brian Richardson and Chris Chan shared their insights with us. 

2010 MVT Index Global Scores and Overview Report now available on our website 

We have been previewing the Index in recent weeks and now it is available.  Access more information on our website.  Newsletter subscribers can request an exclusive subscriber promotional code for 10% off.  

Industry Expert Insights:  Three MVT Leaders Interviewed  

Recently we spoke with several industry specialists working in different areas of mobile financial services (MFS) to find out their views of where the industry is, where it is going, and some of their challenges.  Brian Richardson from Wizzit one of the original domestic MFS models; Chris Chan from Celcom Malaysia, a mobile network operator that offers domestic and international MFS; and Hannes van Rensburg from Fundamo, the most widely deployed MFS technical platform. 

Excerpts from the conversation with Chris Chan of Celcom Malaysia, who offer both domestic and international mobile financial services.

Q: Why did you decide to offer MFS? 

A: We are offering the services to create stickiness. In April 2007, the company did a study of MFS in Japan and South Korea, as it is very developed there.  At the time, Japan was seven to eight years ahead of Malaysia.

Q: How did you go about the implementation? 

A:  When we decided to offer MFS, we started talking to technology and MFS platform vendors.  We did a technological and commercial evaluation based on our business requirements.  We selected Sybase because they met our requirements and had several live deployments.

Q:  What trends are you seeing in Malaysia? 

A:  Immigrants in Malaysia are starting to segment remittances – they send money as well as top-up.  Due to cell phone penetration in immigrants’ home countries; demand for top-up has been increasing, especially in Indonesia.  Domestically, people are increasingly using their m-wallet to do their own top-up.

Q:  What are the industry challenges? 

A:  Getting more active users and finding merchants.  In order to keep customers you need to keep them interested and roll out new and useful services.  Currently, we have too many services and a fixed amount of time to roll out new services.  We are also enhancing current services.  All this results in “bottlenecks” where there is not enough time to do what we want.  Customers are very impatient, especially with financial services, as they can decide to go back to their old ways.  The danger of losing momentum is always there.  It also does not help that banks are getting into MFS as well. 

Excerpts from the conversation with Brian Richardson of Wizzit, a South Africa-based mobile financial service provider.

Q: What is going on in the industry, where is it going? 

A: The most sustainable model for MFS is the bank-led one.  Money and the banking industry are highly regulated.  There are all kinds of scams, and when rich people are ripped off, they can survive; however exploiting the poor is wrong.  If MFS is not regulated, the poor will be exploited; hence MFS belongs in the banking space.

There has been an increasing number of mergers and takeovers between banks and MNOs.  The regulated banks own the customers and the MNO does the marketing and acquires customers.  This model is genius as people are not intimidated and trust the MNOs, and at the same time they get the security of a bank. 

There are a few strategic issues to be aware of:  what will be the roles of the card associations such as Visa and MasterCard, the money transfer operators (MTOs) such as Western Union and MoneyGram, and the banks, which five years ago did not believe anyone would use a phone for banking transactions.

Q: What are the industy challenges? 

A: The challenge is about changing behavior, moving people away from cash.  I am not sure how long that would take! 

Q: What is it going to take to stay on top?

A: In order to be successful, at the end of the day one should understand the market, meet and satisfy their needs, and provide an extraordinary service.  Those who will fail, are those relying only on technology.  Technology does not matter, people confuse the market and are burning cash; there are very few successful technology companies.

Q: What is the big game changer? 

A: We will see some standards and interoperability emerge, but not in the next year or two, as the industry is too new.  But as we go towards maturity, standards will emerge.  MFS will be controlled by the banks and will serve the MNOs just to decrease churn.  Supply and demand - retailers/suppliers will become more forceful in what types of payments they are willing to accept.  If they say we accept only this and that, what can the customers do?

Crime is an issue; people rob shops because they want cash.  So businesses eventually will want to accept only e-payments.

Excerpts from the conversation with Hannes van Rensburg of Fundamo, a South Africa-based mobile financial service technology platform provider.

Q: What is going on in the industry? 

A: During the past 10 years we have seen companies come and go and those who survive do so because of perseverance and commitment.  Many will go soon, the problem is that they underestimate the rigor and complexity it takes to provide solutions to work with people’s money and be legal.  The mountain is much higher than people expect and many do not have enough resources.

Q: What is the big game changer? 

A: There is not a magic game changer.  The key is get to critical mass in order to have a sustainable business.  It all comes down to hard work.  I do not know where the notion that you flip a switch and money starts pouring in came from. Hard work and dedication are the keys. 

It is all about distribution and go-to-market strategies.  Banks, telecoms, both – all kinds of combinations can be successful and Fundamo has seen success stories in all forms.  It is not a race, the winner does not take all.

Q: What are the industry challenges? 

A: There istoo much hype – many people are making claims that they are about to deploy, etc.  This is not sustainable; people are issuing press releases for something they are going to do, and at the end we do not know what was actually done.  The industry should be more humble and just get things done and stop trying to outperform each other.  Looking at success stories; there are not many. When Fundamo goes to press they have reached a certain customer number or landmark.

Q: What is it going to take to stay on top?

A: Fundamo is thankful for their clients.  The company has been growing based on client references, which is the best way to select a supplier.  They have many people to vouch for them; even competitors would say that they respect them.  Besides analysts, contractors, etc., they have many friends.

2010 MVT Index Report

You are invited to the launch of the 2010 MVT Index, now available from Mondato for purchase:  http://www.mondato.com/en/articles/new-the-2010-mondato-mvt-index-report.