1. This document is offered compliments of
BSP Media Group. www.bspmediagroup.com
All rights reserved.

2. Solving for Personal Commerce:
Interoperability as the Key to Scale
Gavin Krugel
Tuesday, November 12, 2013
Visa Confidential

3. Mobile Money is replacing cash in many countries
Percentage of GDP processed by mobile money
services is significant:
KENYA
BANGLADESH
UGANDA
PAKISTAN
TANZANIA
31%1
3.6%2
20%3
1.5%4
44%5
of Kenya’s
GDP
of Bangladesh’s
GDP
of Uganda’s
GDP
of Pakistan’s
GDP
of Tanzania’s
GDP
Market leader
Market leader
Market leader
Market leader
Market players
Note: All brand names and logos are the property of their respective owners, are used for identification purposes only, and do not imply product endorsement or affiliation with Visa.
Each company logo represents the mobile money market leader by registered wallet value. Amount of value moved over mobile money platforms annually (see references below):
1.
2.
3.
2
GSMA Mobile Money for the Unbanked: The Kenyan Journey to Digital Financial Inclusion (July 2013)
Based on $1.03bn transactions in Q1 2013 (CGAP, June 2013) cf. $115.6bn GDP (World Bank, 2013)
GSMA Mobile Money for the Unbanked: Global Mobile Money Adoption Survey, 2012 (February 2013)
| Digital Solutions, Emerging Markets | November 14, 2013
4.
5.
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Based on $0.88bn transactions in Q4 2012 (CGAP, June 2013) cf. $231.2bn GDP (World Bank, 2013)
Based on $1.06bn per month (Bank of Tanzania, Dec 2012) cf. $28.2bn GDP (World Bank 2013 stats).

4. Transaction types differ significantly from
traditional retail payments
Mobile Money Transactions (2012)
0.90%
0.60%
5.30%
2.70%
0.00%
8.30%
P2P
Micro Payment
Airtime
Bill Payment
International Remittances
Bulk Payments
Merchant Payments
82.20%
Source: GSMA Mobile money for the underbanked, 2012
Global Mobile Money Adoption Survey
3
| Digital Solutions, Emerging Markets | November 14, 2013
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5. Barriers to adoption
34% lack of
interoperability as
the primary barriers to
adoption
Security concerns do
not appear
to be a barrier to
adoption
Source: Visa Mobile Money Survey 2012
4
| Digital Solutions, Emerging Markets | November 14, 2013
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6. Regulators are responding
Kenya proposes National Payment
Systems Regulation
‘Electronic retail payment service
providers shall utilize open systems
capable of becoming interoperable
with other payment systems in the
country and internationally’
‘Electronic retail payment service
providers are encouraged to enter
into interoperable arrangements’
Movements toward
interoperability begin in Nigeria,
Pakistan, Indonesia, Tanzania,
Uganda, Rwanda…
5
| Digital Solutions, Emerging Markets | November 14, 2013
Visa Confidential

7. What does a closed loop mobile
money service look like?
Mobile network operators and banks who have implemented mobile
money platforms have developed closed-loop systems to serve their
consumers, but do not operate beyond their networks as yet
There are over 325 closed-loop mobile payment systems planned or in market1
Mobile Money
Implementation A
C1
C2
A1
Wallet
Platform
C3
Mobile Money
Implementation B
A3
A1
A2
A2
C1
Wallet
Platform
A3
C2
C3
Primary Transactions:
Cash-in, Cash-out, P2P Transfers, Airtime Top-up and Bill Payment
1Source:
C = Consumers
A = Agents
GSMA November 2013 Deployment Tracker
6

8. Mobile Money ecosystem’s are complex
Bank / Financial
Institutions
Government
Remittance
Partners
Bill Payment
Service Provider
VisaNet /
Other
Regional
Switches
Mobile Money
Service
Business
Agent Network
Managers
(ANM)
Other Mobile
Money
Platforms
Merchants
Enterprise
Platforms (CRM)
Mobile Network Operators
Interoperating them more so….
7

9. Defining interoperability
• Ability for consumers to send money to each other irrespective of
Mobile Money service
• Ability for consumers to cash-in or cash-out at competing mobile
money agents
• Ability for consumers to use retail payments at all retailers
irrespective of who signed the retailer up
• Ability for consumers to use existing payment system infrastructure
such as ATM, POS, eCommerce and international remittances
8

10. Considering interoperability
• Technical interoperability – how will the messages flow or be
defined or standardized?
• Consumer awareness – how does the consumer know the
retailer/ATM/agent or mobile money service is interoperable?
• Where does the consumer go to query or dispute an
interoperable transaction?
• What are the rules governing such disputes?
• What are the mechanisms for compensating mobile money
service owners for facilitating your customers transactions?
• What are the entry standards or conditions to be a part of an
interoperable service?
• Can you be sure that you will be settled for the transactions you
process on behalf of other service providers?
9

11. U.S. Credit Card Market Programs
1958-1969
Financial
Accounts
Acceptance
Only
BofA and
10 more
30
closed-loop
programs
added
other closed-loop
programs
launched
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
Sources: Electronic Value Exchange – Origins of the Visa Electronic Payment System
by David L. Stearns; The Power of an Idea by Paul Chutkow
Visa / Telenor Partnership Overview
10

12. U.S. Credit Card Market Programs
1958-1969
1,207
Programs
added
Financial
Accounts
Acceptance
VisaNet
481
Programs
added
Only
BofA and
30
closed-loop
programs
added
other closed-loop
programs
launched
1958
1959
Bof A begins
licensing banks
nationally and
internationally
10 more
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
Sources: Electronic Value Exchange – Origins of the Visa Electronic Payment System
by David L. Stearns; The Power of an Idea by Paul Chutkow
Visa / Telenor Partnership Overview
11

13. Visa’s Solution: Organizing Complexity
Visa eliminated the need for individual acceptance agreements.
Visa’s open-loop alternative connected merchants, banks,
accountholders worldwide through one payments network.
Financial Account
Acceptance
Visa
12

14. Déjà Vu?
2003-2012
Mobile Money
Accounts
Acceptance
208
Over
deployments in
over 35
countries
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Sources: GSMA Mobile Money Tracker, 2013
Visa / Telenor Partnership Overview
13

15. What Visa brings to Mobile Money
Operators
Mobile Money Programs
Predictability and Security
Remote Payment
Remote Payment
Person to
person
Agents
+
Mobile Money
Account
Expanded Payment Ecosystem
Person to
person
Agents
=
ATMs
Mobile Money
Account
Merchants
eCommerce
Traditional Visa Payment Transactions
Visa Personal Payment Transactions
New Transactions based on Agents
14

16. Evolving Mobile Money
Emergence of low-cost,
ubiquitous mobile
technology now allows
mobile network operators
(MNOs) to provide financial
services to subscribers via
mobile money platforms
Visa will connect mobile
money platforms to the
worldwide Visa Network
through Visa Mobile Prepaid,
expanding payment and
purchase offerings to
subscribers and increasing
revenue for MNOs
Visa Mobile Prepaid enables
interoperability between
mobile money platforms
+
15

17. A Simple Question…
“If anything in the world were possible,
what would be an ideal organization
to create the world’s premier system
for the exchange of value?”
- Dee Hock, founder of Visa
With a Visionary Answer
 An open-loop infrastructure and
network that moves money (value)
 Trusted and guaranteed
payment for all parties
 Security, reliability, convenience
 Global reach, multiple markets
In other words,
“what is the best way
to pay and be paid?”
 Scalability to handle sudden
and large variations in volume
The answer to the
original question
became our vision
and Visa was born.
16

18. Gavin Krugel
gkrugel@visa.com