The Japanese and Korean vision for mobile communication differs vastly from any other nation in the world. Operators and regulators in both countries adopted the telecommunication change not merely as a means to ease the communication link between entities, but saw it as the replacement for almost all established networks; be it business or personal.
The concept dates back to when plastic money was introduced; remember the Visa advertisement, where the girl wears tight-fitting jeans and has no means to fit her wallet, so all she takes with her is her Visa card. Twist that to the 21st century, and all you need is your mobile phone now.
Of course, it will be hard to replicate the models adopted in Japan and South Korea. Both exhibit natures of highly coordinated market economies, where the industry giants have developed from family control and are conglomerates with interests in several sectors. With such extensive spread, it is easier to link the telecommunication unit with the financial services unit, and deploy mobile applications to ease customer needs.
Telenor, with its 150 years of international experience, took the first step towards ‘mobile money transfers’ by introducing Easypaisa in 2009. Based on the regulations in financial trading, Telenor could not perform the service in its own right, and acquired Tameer Microfinance Bank to ensure all required criteria was fulfilled.
The simple model adopted was a bid to cross the boundary of mobile users, enabling anyone and everyone to utilize the service. The only thing required is a copy of your computerized national identity card (CNIC).
With international remittances coming online earlier this year, Telenor has reduced the burden from our slow banking networks that operate in far-flung areas.
However, the burden has been placed onto small retailers and outlets, which are unlikely to be as trained or skilled in fiscal matters as general bank staff.
Even then, Telenor has to be commended on enhancing the spread within its focus segment of the rural regions. The service demonstrates steps being taken to bridge the innovation gap that exists across Pakistan’s population topology.
One worrying factor, among others, that may need attention from Telenor is the recent study on migration from rural to urban centers. While numbers remained steady in the past few years, the recent natural calamities have resulted in a massive spike in the movement.
Hence, easypaisa will need to be re-modeled to cater to two very different subsets of the population.
The business model that Telenor has followed is merely the outer layer of payment solutions. Of course, business constraints will always play a role in the planning and implementation of such models. No other operator has managed to match this offering by Telenor, giving it complete control of the market for now. And it is unlikely that any of the 4 competing operators will give Telenor competition on this front.
But a local logistical group may take a follower advantage, having studied Telenor’s model and system, and performed a research study of how to create a deeper connection with the population, urban and rural. The group’s belief is that human interaction is still perceived highly across the country, especially when it comes to money.
The core feature they aim to complete with their model is removal of the requirement for a customer to travel to any market to send/receive funds or make payments.
All services at your doorstep and should get done through a mere keypad!
UBL OMNI is also in market
why not to discuss upayments here…
good piece of writing… but no proper conclusion or suggestions
checkout the last line.
I agree, EP is account-less banking, and not a through a mobile banking solution. Though it a great step forward from conventional banking
Well, my experience has not been very good with EP either. A friend wired me some money form Islamabad and I could not find a single shop in Lahore Cantt that facilitated EP transactions!! I had to go to Saddar, found a franchise in a Computer Shop, with some difficulty, but the guy wasn’t around. So I had to wait a good 10 minutes for him to arrive. I think EP/Telenor isn’t very popular. May be they need to increase the number of franchise shops and locate them at easily approachable locations.
Well I fully agree with Azfal and I also feel that more franchisee shops should come up in and around each city. Come on, we are in 21st century and unable to transfer money to our needy and close relatives easily.
I think EP should give license to all local general stores to make transactions.
i completely agree that the all the new entrants in this branch less banking initiative would have a later mover advantage. with experiences of ubl omni and telenor easy paisa, the new entrant would be able to come up with more appropriate business models for the masses.
beside this increasing number of franchisee is an option but it itself is a tricky part. every franchisee has to sign an agreement with the relevant company and also keep a certain balance in the account in order to offer branch less banking services.
in addition there is a silent player that is working in this discipline and that is e-sahulat by nadra. it has been in the market before even easy paisa and has been doing really good so far.
@ Nauman Afzal and Azfar: You are right, EP has some glitches to fix but it is many times better than conventional banking and less time consuming. As for their retail network, they have 11000 outlets which is more than the total number of bank braches in Paksitan which stands at 8000.
Its not a question of expanding, its more a question of acceptance in this case. If u ever go to old branches of banks u will still see an old uncle with a register for the KAHTAAS or accounts :) and ppl are prone to the muhr and raseed (stamp and receipt) dilemma.
Electronic money has just not been accepted by us as a nation yet……none the less we need to commend telenor and all others who have actually ventured in to this area. Telenor perhaps took the biggest calculated risk with these services….
Education is the key, the more educated ppl become, the larger the acceptance of electronic money service will become in Pakistan!