Page 27 - State-of-the-Industry-2013

Part 1 - mOBile mOney

Unregistered mobile money users

however, not all mobile money services rely on a mobile wallet. Some services are being ofered primar-
ily “over-the-counter” or OtC services. in such cases, a mobile money agent performs the transactions on
behalf of the customer, who does not need to register to use the mobile money service. in some cases,
service providers combine the two approaches and allow users to open a mobile money account and 13%
transact over-the-counter . 13.4% of respondents to our survey ofered services delivered primarily over-
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the-counter. typically providers verify and record the identity of OtC customers to comply with customer
due diligence (Cdd) requirements, nevertheless it is challenging to calculate the number of individual
users of OtC services, particularly when the transactions are recorded manually. however, based on the of mobile money
stored KyC information most respondents were able to estimate the number of unique unregistered services are
delivered primarily
mobile money users they have on a monthly basis. over-the-counter
In June 2013, we identifed 17.3 million unregistered mobile money users and four services had more than 1 million unregistered
users. the number of unregistered mobile money users seems to be growing even faster than the number of active wallets at an an-
nualized growth rate of 102%. Services ofered primarily over-the-counter ofer a compelling value proposition for unbanked customers,
a segment where literacy levels are often very low and where people tend to be more suspicious of new technologies. the OtC model
is particularly popular in South asia, home to 87.6% of the world’s unregistered users. however, in terms of fnancial inclusion, the full
potential of mobile money cannot be realised with the OtC model. mobile wallets remain a key tool in building the fnancial capability of
the underserved (see text box 5 for more information about OtC).

TexT BOx 5
otc or not otc? the examPle of easYPaisa in Pakistan*

Easypaisa, a mobile money service in Pakistan, serves more than 5 million customers a month through 25,000 points of service. By
the end of 2012, it had processed more than 100 million transactions with a throughput of more than US$ 1.4 billion. With a popula-
tion of 180 million and only 15% bank penetration in 2008, Easypaisa seized an attractive market opportunity to deliver mobile
money innovations in Pakistan.

One of the key features of Easypaisa is the fact that it was introduced over-the-counter (OTC). Easypaisa’s success with OTC was due
to its ability to serve all customers in the market, even non-Telenor subscribers, the simplicity of no registration requirements, and
its imitation of consumer behaviour for electronic airtime top-up. Given the cost and obstacles associated with registering for an
eWallet, and that Pakistan MNOs had relatively even market share, the OTC model was an efective way to drive the initial adoption
of mobile money in Pakistan.

However, accepting OTC as the only way forward would be regrettable. The full potential of mobile fnancial services for Pakistan
cannot be realised without a product which ofers stored value, i.e. an eWallet. More can be done in Pakistan to extend the number
of registration points, develop robust product oferings, and invest in raising awareness. Driving adoption of the eWallet is an es-
sential step in building a robust digital fnancial ecosystem that will generate fnancial returns for mobile money service providers
and contribute to fnancial inclusion.

To learn more about the innovative corporate structure underpinning Easypaisa, the levels of investment at launch, the pros and
cons of the OTC model, the tactics used to rapidly build national distribution, and how Easypaisa maintains quality in their channel,
read the full case study: McCarty, Y. and Bjaerum R., (July 2013), “Easypaisa: Mobile Money Innovation in Pakistan”.

* This text box is based on a blog post by Yasmina McCarty (MMU), published on the MMU website on July 5, 2013

14. Services which had more unregistered users transacting in june 2013 than active wallets during this month were considered as services delivered primarily over-the-counter.
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