Page 46 - State-of-the-Industry-2013

State OF the induStry 2013

the case of of-network transfers

there are two types of of- network transfers: transfers that are initiated by registered mobile money users to unregistered users, and
transfers between two accounts of diferent but interconnected mobile money schemes. Currently, of-net transfers are very marginal in
the global product mix (<1%); most transactions take place within the “closed loop” of mobile money service. However, as operators’
interest in interoperability is rising, this proportion of of-net transfers is expected to grow in the future (read text box 11 to fnd out
more about interoperability in indonesia). Growing of-net transactions will be an important step for mobile money to become a true
replacement for cash. more of-net transactions would also decrease the number of immediate cash-outs and allow the digital money in
the system to fow through longer.

TexT BOx 11
a closer look at interoPerable mobile moneY
schemes in inDonesia*

Interoperability in mobile money is an important topic, and as deployments grow in popularity, the question of what role they will
play in the payments landscape and how best to ft into the fnancial infrastructure becomes more relevant. The route taken in In-
donesia was to jointly develop a protocol to allow transactions to happen directly between the three deployments. This was chosen
for its simplicity, neutrality, and cost-efciency. Connecting and integrating with ATM networks and banks are up to each operator to
pursue, and already over 8,000 ATMs can enable transactions from mobile money deployment.

The solution was implemented in 6 months, including a 2 month pilot phase. One of the reasons behind the rapid implementation
was that they assigned working groups in all areas afected by interoperability.

KEy FACTORS THAT HELPED THE INDONESIAN OPERATORS TO DELIVER THIS SOLUTION:

1. Having a clear roadmap backed by senior leadership that defnes what is within and what is outside the scope of the collaboration.
2. Enlist a task force responsible for delivering the service.
3. Have the task force engage each department afected by interoperability for specialised collaboration across the organisations (e.g.
customer care, fnance, legal, and technical teams).
4. Establish common procedures for newly introduced use cases, such as reversals and disputes across schemes.

However, it’s still early days for mobile money in Indonesia. The operators have shown technical and organisational skills in deliver-
ing an interoperable solution, but this will not be enough to drive mobile money in the market. An attractive customer value propo-
sition for mobile money and a robust agent network need to be established. Additionally, the regulatory environment is still unclear
as the three MNOs operate under diferent licences.

* This article was adapted from a blog post by Gunnar Camner (MMU) that was published on the MMU website on October 14, 2013

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