Show Me the e-Money! Using Payroll to Support Your Mobile Money Liquidity Strategy
Date Posted: Tuesday, May 29, 2012
is the second blog in a series of posts where the contributors, all involved in
the creation of WING Cambodia, share their thoughts on the importance and
challenges of e-money and liquidity management
A core component to any mobile wallet
business is how easy it is for a customer to fund their account to do
transactions. A lot of the focus needs to be given on building the capability
in the ‘cash-in & cash-out’ network to enables the unbanked to convert
physical cash into electronic-money, however an important channel of electronic
funds will come through the integration to existing banking infrastructure. This makes sense as the majority of the
money in the economy resides in bank accounts, and more importantly can be
transferred electronically. Integrating to the banking infrastructure will
allow the flow of money from the banked (corporations and people) to the
as a Source of Liquidity for Mobile Money Accounts
When you think about how most ‘banked’
customers fund their bank accounts, it’s through their wages or salaries being
deposited by their employer. Why should it be different for mobile money
Money Infrastructure is Valuable to Corporates & Governments
A mobile money service provides significant
reach to disperse electronic money for payroll services or G2P payments. Managing
physical cash payments to the unbanked creates a large overhead for
Governments, Manufacturing and Agricultural business. Mobile Money payroll
solutions that leverage their accounts and cash-out network are able to remove
the physical cash payment overhead from corporate and governments, creating the
ability charge a fee for payroll services. However more importantly it assists
the flow of liquidity into the mobile money system.
Key to Corporate Payroll Services are Banks’ Transactional Banking Divisions
Banks have strong and deep service
relationships with their corporate clients. Many large employee companies have
complex needs when it comes to cash management and their bank play an important
role. Among other products and services banks will support a company’s payroll,
comprising of (a) disperse-to-bank-account
& (b) cash-based payroll service.
Integrating into a bank’s payroll service can allow a third option: (c) disperse-to-mobile-money-account.
What is important here is to understand
that the corporate client relationship is held by the Transactional Banking
division of a bank. Larger banks are divisional organisations. Consumer Banking
and Transactional Banking divisions operate as two separate business with
separate service models and most likely different technology platforms to run
client accounts. If a mobile money business wants to understand the payroll
needs of its target customer base, it’s the Transactional Banking divisions who
have deep relationships with large employee companies and are looking for
solutions to help their clients.
Payroll Services Will Take Time to Develop
Bank-client relationships have been built
over many years of trusted service delivery. Banks will not risk their
relationships until it can be proven that the service is dependable and meets
the needs of both the client and their employees.
Yes it will take time to build the
relationships & understand the stakeholder needs, however like the banked
population have adopted e-banking through access to their salaries dispersed to
their bank accounts, payroll services will increasingly play a large role in
the success of mobile money.
Paul Reynolds currently works for a leading mobile banking and payments company in Indonesia. He has worked in mobile money for 4+ years and banking for 14+ years.