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!