Examining Country: Specific Regulations Related to Money Transfer

International Remittance and Mobile Banking: Examining Country Specific Regulations Related to Money Transfer Singapore May 26 th – 27 th , 2009 Arief Hamdani Gunawan

Outline ,[object Object],[object Object],[object Object]

Regulatory Concepts Bearer Agents Remittances Payment Services E-Money Banking MNO Role Not involved in the provision of financial services Involved in cash in/out Becomes financial institution Regulatory Role No regulatory compliance AML/ CFT Prudential regulation

Russian Framework for Agency Models ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: PROMOTING FINANCIAL INCLUSION THROUGH INNOVATIVE POLICIES, March 31 st 2009 Bearer Agents Remittances Payment Services E-Money Banking

Russian E-payment System Example (P2B): how it works: bank - led and nonbank - led agent - payments system operator Bank mobile phone operator Sub-agent 1 Sub-agent 2 Sub-agent 3 Source: PROMOTING FINANCIAL INCLUSION THROUGH INNOVATIVE POLICIES, March 31 st 2009 Bearer Agents Remittances Payment Services E-Money Banking

Moldova National Strategy for Support and Development of SMEs for 2008-2011 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: Seminar Remittance flows from the Czech Republic and their development impact Prague, February 24 th , 2009 Bearer Agents Remittances Payment Services E-Money Banking

Moldova National Strategy for Support and Development of SMEs for 2008-2011 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: Seminar Remittance flows from the Czech Republic and their development impact Prague, February 24 th , 2009 Bearer Agents Remittances Payment Services E-Money Banking

Mobile money transfer growth in Kenya ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: Electronic/Mobile Government in Africa: Progress Made and Challenges Ahead Addis Ababa, Ethiopia; February 17 th – 19 th , 2009 Bearer Agents Remittances Payment Services E-Money Banking

Kenya Case Study Source: Electronic/Mobile Government in Africa: Progress Made and Challenges Ahead Addis Ababa, Ethiopia; February 17 th – 19 th , 2009 Bearer Agents Remittances Payment Services E-Money Banking Sector Case study name Financial sector (Banking) Equity Bank and Commercial Bank of Africa cases Financial sector (microfinance) Jamii Bora Mobile sector (alternative M-PESA money transfer Retail Nakumatt supermarket Information and News Media Nation Media group SMS-based news services

The General Principles for International Remittance Services (CPSS/World Bank - General principles for remittances - January 2007) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Committee on Payment and Settlement Systems / The World Bank

The General Principles for International Remittance Services (CPSS/World Bank - General principles for remittances - January 2007) ,[object Object],[object Object],[object Object],[object Object],[object Object],Committee on Payment and Settlement Systems / The World Bank

The most and least costly "country corridors": (Country Corridors & Average cost in US$) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Cost includes the transaction fee and exchange rate margin. Only those corridors where all the necessary information was provided are featured. Corridor averages are unweighted and do not reflect the market shares of the different firms that compose the average.

Remitting from Singapore to Indonesia 12.00 Total Average 10.00 Post office Average 10.88 MTO Average 17.50 Bank Average Apr 08, 2008 Next day. However, money can only be sent to branches of Mandiri Bank 25.00 Bank Bank Mandiri Apr 08, 2008 1-2 working days 15.00 MTO GPL Remittance Apr 08, 2008 15 minutes 12.00 MTO Western Union Apr 08, 2008 1-5 days 10.00 MTO Brunphil Express Apr 08, 2008 Same day to branches of BNI in Indonesia; 5 days to all other banks 10.00 Bank BNI (Bank Negara Indonesia) Apr 08, 2008 1-3 working days 10.00 MTO One Stop Remittance Apr 08, 2008 Next day 10.00 Post office Singapore Post (Cashome) Apr 08, 2008 Next day 10.00 MTO BTI Money Transfer Apr 08, 2008 10 minutes 10.00 MTO Ameer Tech (MG) - cash Apr 08, 2008 10 minutes 10.00 MTO Ameer Tech (MG) - account Apr 08, 2008 Next day 10.00 MTO MoneyWorld Date Transfer speed Fee (SGD) Firm type Firm name

1/3 rd + of the unaware in Bangladesh, Sri Lanka and Philippines willing to use money transfer services & govt services via mobile Among BOP teleusers who are not aware Source: SA Connect Public Seminar, Cape Town April 14 th , 2009

Bangladesh Model ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: Remittances and Payments Challenge Fund August 23 rd ,, 2008 Bearer Agents Remittances Payment Services E-Money Banking

Philippines Model ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Bearer Agents Remittances Payment Services E-Money Banking

Mobile Money Transfer and Benefits To Financial Institutions ,[object Object],[object Object],[object Object],[object Object],[object Object]

How Can Mobile Money Transfer Help Reduce Poverty ,[object Object],[object Object],[object Object],[object Object],[object Object]

Examples ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Mobile Money – Goes Beyond Banking High Complexity Low Complexity High Customer Value Low Customer Value Payments, Transfers and Transactions Account Management Investment Services Information Services ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],High Value to Unbank and Underbank

Mobile Opportunities Payments, Transfers and Transactions Types Representative examples Remittances / Transfers Payments / Commerce Agents / Point of Sales ,[object Object],[object Object],[object Object],Main Issues ,[object Object],[object Object],[object Object],Payment at Point of Sales by tapping a mobile device on a terminal • NFC (Near Field Communication)

Mobile Payment for m-Commerce ,[object Object],[object Object],[object Object],[object Object]

Mobile Payment ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

India Model MOBILE PHONE CASH SBI Core banking SBI Gateway Different people : diversity in tech: front, back and interface to accommodate Source: ICT SOLUTIONS FOR FINANCIAL INCLUSION – EXPERIENCE SHARING BY STATE BANK OF INDIA February 17 th , 2009 Bearer Agents Remittances Payment Services E-Money Banking Online in future Offline file now Application Host- Vendor’s WIRELESS - USSD BC’s mobile phone BC CUSTOMER ,[object Object],[object Object],[object Object],[object Object],[object Object],CURRENT STATUS

Mobile Banking Subscriber Forecast 2007 – 2010 (Millions) 2007 2008 2009 2010 33.6 1.7 9.5 38.0 42.2 21.1 46.5 34.9 Mobile Internet Users Mobile Banking Users Source: Aite Group

Mobile Banking Work Group ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: National Automated Clearing House Association. October 2008

The Benefits of Mobile Banking ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Operators Banks Users

Mobile Banking & Couponing ,[object Object],[object Object],[object Object]

Business Models ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

D2C Joint Venture NTT Docomo and DentsuInc. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

China Mobile, Create Whole Thing! ,[object Object],[object Object],[object Object],Monternet service

Verizon ‘Any Apps Any Device’

Challenge ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Example: Main AML obligations ,[object Object],[object Object],[object Object]

MNO Perspective High Risk Low Risk Light Prudential Issue Heavy Prudential Issue Remittances Payment Services Bearer Agents Banking E-Money

Mobile Operator Checklist for Business Model Choice Mobile operators can offer whole range of services: savings, loans, payments, deposit taking Bank Fully fledged banking license requirements Mobile operators can get a banking license Mobile retail stores can be used to accept/disburse cash, store cash to make payment to third parties Bearer, agent, payment service providers, e-money ,[object Object],[object Object],Mobile operators can do payments and e-money Mobile retail store can be used to accept/disburse cash Bearer, agent AML/CFT Mobile operators are allowed to be the agents The bearer business model is possible without major regulatory compliance problems for mobile operators Bearer None Banks are the only entities who process any sort of payments Comments Business Model Relevant Regulation Regulation Situation

Examining Country: Specific Regulations Related to Money Transfer

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Examining Country: Specific Regulations Related to Money Transfer