Please click on the following link to watch the complete interview;
Do Mobile Payments Work in Pakistan?

By: Paul Leishman: April 1st, 2010

If you weren’t at Mobile World Congress, you would have missed a very interesting co-presentation from Qasif Shahid, EVP at MCB Bank and Aletha Ling, Executive Director at Fundamo. Qasif and Aletha provided an overview of MCB Mobile, which launched in June 2009 in Pakistan and have since gained some impressive traction, registering over 70,000 customers to date.

Something particularly interesting about the deployment is their decision to launch using a shared platform. To understand more about their approach, I recently had a conversation with Qasif Shahid and Mazahir Ali Sayeed from MCB, and Hannes van Rensburg from Fundamo.

GSMA: What is the Shared Platform?

Hannes: it’s a mobile banking platform hosted by Access Group, our partner in Pakistan. They’ve deployed the platform, which is provided as a managed service to customers like MCB. Currently, there are banks as well as MNOs sharing this platform, and each party has launched a service using their own model, wisdom and insight.

This isn’t the only shared platform in the world - Fundamo has deployed them in other markets as well. For instance, groups may choose to deploy a platform in one country and then allow OPCOs in other countries to run off it.

But as far as ‘in-country’ shared platforms go, one of the reasons Pakistan has been so successful is that the shared platform serves 60-75% of the mobile banking deployments - so there’s a critical mass of participants on board. If they work together to create interoperability, then you create momentum and incentives for others to join. A shared platform that serves, say, 30% of the market is less likely to be successful from this point of view.

GSMA: What are the benefits of using a shared platform?

Qasif: For MCB, its basically been a way of fast tracking the entire speed of execution because we haven’t had to worry about the platform, its scalability, or connectivity of the platform with other mobile operators and the other things that go along with this area of technology. Instead, we’ve been able to introduce a completely new service in just 6 months. And not just introduce the service - we’ve also grown quickly because we’ve been able to focus on educating customers about the service, creating excitement and so on.

So speed to market and ability to focus on a sound customer proposition have been the benefits from a commercial bank like MCB’s perspective. But as we go down the opportunity pyramid, you see microfinance banks and other financial institutions struggling with a lot of things. And what the shared platform does is allow multiple banks to use one platform to make the business case make a lot more sense for these types of organizations.

We also feel that interoperability is an important element. It all sounds very good that everyone is going to make their own platform and that they’ll connect the platforms in such a way that it will work - but imagine a world where you are all sitting on the same platform, including banks, mobile operators and microfinance banks, and thus interoperability is simply a by-product that comes out of this approach.

Hannes: For us, a bank or MNO’s decision to select a shared platform is to some degree economic, but it’s more a product of go-to-market strategy than anything. It provides for quick speed to market, flexibility around service design, and ensures resources will be available to focus on educating the customer. Of course for this to be possible there needs to be a willingness to participate with others on the platform.

GSMA: How central is interoperability to the essence of a shared platform?

Qasif: Interoperability is at the heart of all this. The consequence of you being on the shared platform is that you’re interoperable. There are 5 MNOs in Pakistan: imagine that you could only make calls to one of them - its just not good enough. So if I have multiple banks and multiple MNOs all residing on the same platform, then the potential take-up of mobile money will enter a new dimension completely. If you look at the internet and mobile telephones, they all had limited transformational impact on the world at first because they were not interoperable, but when this changed they all went big.

GSMA: What have the early experiences been for MCB?

Qasif: We launched the service in June 2009 after a 3 month pre-launch period with our 15,000 employees in which we mandated that they all use the service and provide us with feedback.

MCB has 6 million accounts out of the 30 million in Pakistan, so we’d have a lot to lose by missing out on mobile banking. Today we are registering about 250 to 300 customers per day for the service - these are our existing customers who we’re registering to use the mobile channel. This is a healthy rate of growth. So far we’ve done over 500,000 transactions and feel that a lot of our success to date is because we’ve not been concerned with management of the infrastructure, scalability and connectivity that comes with it. Instead, we’ve been able to start quickly and worry about the ‘packaging and functionality’. It’s our belief that the platform and the network are not sufficient differentiating factors - the real differentiating factor is the organization’s ability to construct processes to which you can convert customers, educate them, and transform their behaviour.

GSMA: So how have you done this at MCB? Particularly, how have you driven adoption?

Qasif: Today, if you wanted to sign up for the service, you can enter through several channels. When you use an ATM, swipe a card at a POS, call the call centre, walk into a branch, or visit the website, each of these channels will contribute to driving you to adopt the service. Organizationally, MCB has put innovation at the middle of all of our channels. Banks sometimes make the mistake of putting innovation as its own team within an organization - it really needs to span all channels.

Hannes: I’d add that MCB is so successful because they’re clear about their channel strategy - why are they doing this? What are the metrics? Mobile banking is not a single strategy - it fits into a bigger strategy and where other banks are concerned with their platform, MCB is doing well because they have a coherent strategy of which mobile banking is one part.

GSMA: Thanks, Qasif and Hannes.

MCB Mobile Win a Mini Laptop Contest

Date of Draw: 15 March 2010

MCB Mobile team will contact the winners directly with details on how to claim their prizes.

MCB Mobile Promotion:

Activate & Login to your MCB Mobile before 10 March 2010 and you could win a Mini Laptop through a lucky draw.

For details on how you could be a part of this contest, please call our call center at 111-000-622

Terms & Conditions:

1. Offer valid for all customers of MCB Mobile who Activate and Login to the service before 10 March 2010.
2. Draw will be held on 15 March 2010
3. Decision of the bank will be final
4. Winners will be announced on the website www.mcb.com.pk/mcbmobile
   

For details please visit the link below

http://www.globalmobileawards.com/awards/nominees.shtml

Rs.  3.3 Million (Source: State Bank)

MCB Mobile average payments:

Rs.  4.5 Million Daily

“MCB Mobile is leading the Mobile Payments space in Pakistan”

Below is an extract from the State Bank of Pakistan’s Quarterly report on retail payment systems in Pakistan….

……3.6 Mobile Banking There are few banks which offer transactions through mobile. These transactions include payment through mobile (excluding utility bills payment), utility bills payment, A/C to A/c funds transfer and 3rd party A/c to A/C funds transfer. The number of transactions reached to 15.46 thousand for the current quarter from 17.58 thousand in the previous quarter. This shows decrease by 12.1 percent in number of mobile transactions compared to 6.8 percent increase in volume recorded in previous quarter. In terms of value, it reached to Rs.3.3 million showing decrease of 15.4 percent compared to 7.2 percent increase recorded in the previous quarter (Fig. 10)

• It is quick - Use it from your GPRS mobile phone of from the internet on your PC - The interface is optimized for quick processing

• It lets you make payments SECURELY - Unlike other mobile banking products from banks, MCB Mobile actually allows you to make payments.  Your account is protected by a double layer of security via a Mobile PIN to login and ATM PIN to transact.

• It is functionally rich - You can:

1. Check your account balance and view a min statement
2. Buy airtime for your mobile and pay your postpaid mobile bills also
3. Utility bill payments to a number of companies is also possible
4. If you have an MCB credit card you can pay that as well
5. Transfer money to anyone with a bank account in MCB
6. Make donations to various charities

• It is free - For a limited time period all transactions on MCB Mobile are free of cost and there is no registration fee either

• It saves you time & money - We all know that “Time is Money”.  With MCB Mobile you don’t need to go out to the bank.  Most of your day to day banking and payments needs are covered.  Save on your transportation costs and avoid making those unnecessary time consuming trips to the bank.

• It gives you control - It lets you control your finacnces by providing real time information.  You can check your balance and view your mini statement 24 / 7 / 365.

Draw was held on 1st September 2009.

1. Mr. Nasir Naseer from Lahore
   
2. Mr. Abdul Aziz Sumroo from Karachi