Challenges Faced in the African market and

Solutions from Obopay

Challenges

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Lack of Technological Sophistication Among Customers• A large segment of the population in the MEA is not comfortable with the use of

technology.• Service providers will need to invest in simplifying the technology and interface and in

educating customers.

Regulatory Barriers• A wide distribution network of agents is critical to success in this market, but setting up and

maintaining such a network can be difficult and costly in a number of MEA countries.• Low start-up costs and an attractive commission structure for their network of agents will

be critical for service providers as they look to develop and maintain distribution networks.

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Challenges

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Distribution• The regulatory framework for financial transactions via mobile phones is currently not well

developed.• As regulations evolve, M-Payment service providers may have to comply with stricter

controls. • ‘Know Your Customer’ requirements (to prevent money laundering, terrorism funding,

etc.), which may add costs and slow adoption.

Mandatory Requirement of Bank Accounts (by Some M-Payment Networks)• Some M-Payment service providers require customers to have a bank account, which limits

the potential for services within the unbanked population, an important customer segment for growth.

• In addition, some service providers concentrate on existing bank customers rather than going after the unbanked population ,who are most in need of services like M-Remittance and M-Money for retail purchases.

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Challenges

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New Know-Your-Customer (KYC) norms • Balance between convenience of use and security concerns.• Convenience /lowering barriers to adoption VS Security and anti-fraud controls.

Model of high tax charges in East Africa• Usage and the sale of mobile phones.

Low income group: • Minimum subscriber base required to make VAS services viable.• Operators may not invest in network upgrades thus holding back market development.• SMS growth - SMS traffic falls dramatically when operators close free-trial periods .

Adequate backbone infrastructure • To support the growing subscriber base.

Widespread illiteracy• Difficult to use even basic data services, such as SMS.

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Solutions from Obopay

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Value for Banks

Cost Savings• Costs vis-à-vis branch / ATM • Support calls from offline customers reduces by 30-40%* (saves call cost of $3.75* in the US)• SMS balance & transaction alerts convert to large savings on support costs• Mobile has lowest support channel cost at $0.08*

Retention & personalization• Reach offline customer base – segment with largest cost-saving potential

Increase in CASA deposits – low-cost fundsRevenue from new services such as bill due alerts

Mobile browser

Text messaging

Native applications

Match budgetto choice of

channels:

Have stronger loyalty

and engagement

Make higher spends, more frequent spends

Demonstrate spending

confidence arising from

control

Opt for more products

ROI is both tangible & intangible Consumers are interested in bank-offered mobile financial services

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Obopay for Banks

• Person to Person transactions including domestic and cross border• Micro-merchants• Web merchants

Market Opportunity

• Send money anytime/anywhere instantly• Load/unload funds instantly from existing accounts, cards or with cash• Ability to request payments from peers, clients• Provide small merchants a convenient way to get paid instantly• Cash replacement, convenience for top up & bill pay• Support all phone types• Agent distribution and cash in/out, to address limited reach of banks

networks• Regulatory Compliance

Need

• Obopay is the Managed Service Provider for channel partners• Distributed by the banks and their channel partners

Deployment

Enabling banks to offer a multi-carrier mobile payment ecosystem that is capable of digitizing cash.

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Value for Banks

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Solution

• Fully exploit P2P• Expand to un-acquired merchants acceptance• Person to merchant transaction through the convergence of mobile and internet• New segments of consumers, ability to use the mobile wallet across all types of commerce

opportunities (physical proximity / remote /on-line)• Mobile payments also opens up the opportunities in b2b payments replacing cash and checks• Significantly expands the volume and value of transactions through the formal banking system

and thus making them financially viable

Future growth

• Integration with online banking, MasterCard MoneySend• “Get Paid” tools for small merchants• Prepaid accounts and cards• Transitional/spending accounts for banked• Differentiated products as per customer needs and KYC norms• Agent management platform• Multi-bank, multi-carrier, multi-currency• Interoperability with ATM networks• Prepaid platform with customized program support• Card or no card (virtual card) options• Debit network integration e.g. Star / NYCE Network• Service access within online banking

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Obopay for Carriers

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Offer a wallet in a multi-bank environment

• Cash replacement, convenience for small & essential payments (top up, bill pay)• Cost and time effective P2P solution• Support for all phone types• Agent distribution and cash in/out, to address limited reach of banks networks• Compliance with requisite regulations

Need

• Direct service to consumers with carrier branding• Distributed through multiple multi-tier distribution agencies• Can be partnered with multiple banks and associations

Deployment

Market Opportunity

• Offer a wallet to existing customers and new unbanked customers • International remittance.

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Obopay for Carriers

Solution

• Acquire smaller un-acquired merchants• Convert existing retailers as agents• Interoperability for consumers and merchants• Customer retention & churn reduction• Higher ARPU from existing customers• Future m-commerce possibilities and payment needs arising out of location

based services• Payment to carriers for value added services using cash rather than prepaid will

improve third party VAS products cooperation through a more equitable revenue share

Future growth

• Semi-closed prepaid instrument (bill payment, top-up)• Open-loop prepaid instrument including P2P, cash-in and

cash-out as well as bank account based offerings• Agent management platform• Multi-bank solution• Interoperability with ATM networks• Merchant aggregation platform• Billpay aggregation platform• Mobile and web checkout for carrier app-store

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Obopay for Associations

Be the key stakeholder in enabling mobile payments

• Send money anytime/anywhere instantly• Load/unload funds instantly from existing accounts, cards or with cash• Ability to request payments from peers, clients• Provide small merchants a convenient way to get paid instantly• Cash replacement, convenience for top up & bill pay• Support all phone types• Agent distribution and cash in/out, to address limited reach of banks networks (In

certain geographies)• Regulatory Compliance

• Obopay is a Managed service provider for channel partners• Service distributed by the banks and channel partners

• Person to Person domestic and cross border transactions• Enable Micro-merchants• Enable base of users that can pay web-merchants• Enable every card holder to be a merchant with very light enrolment• Two factor authentication to reduce fraud risk

Market Opportunity

Need

Deployment

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Obopay for Associations

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Solution

• Fully exploit P2P by creating a network effect• Expand to un-acquired merchants acceptance• Person to Merchant transaction through the convergence of mobile & Internet• Enables every mobile money user to withdraw money from an ATM (even without a

card)• Enables every POS to become a cash-in and cash-out point

Future growth

• Instant money transfer to anyone• “Get Paid” tools for small merchants• Prepaid accounts and cards• Transitional/spending accounts for banked• Differentiated products as per customer needs and KYC norms• Agent management platform• Multi-bank solution• Interoperability with ATM networks• Bill Pay, Top Up solution• International remittance

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Obopay for Handset Manufacturers

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• Cash replacement, convenience for top up & bill pay• Cost and Time effective P2P solution• Support for all phone types• Agent distribution and cash in/out, to address limited reach of banks

networks• Compliance with regulations

• Offer a direct service through multiple banks and leverage carriers as distribution partners

• Distributed through handset manufacturers distribution network• Partnered with wholesale or retail banks• Can be carrier agnostic

• Leveraging customer relationships• Increased ARPU, new revenue channel• Win new customers, reach new segment, market differentiator• Multi bank – Link to bank Accounts• Deep Association Support – VISA/MC

Market Opportunity

Need

Deployment

Monetize Mobile Money with Easy Discoverability

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Obopay for Merchant, Gateways, Acquirers

Solution

• Acquire smaller un-acquired merchants• Convert existing retailers as agents• Interoperability for consumers and merchants• Ability to support resume payments• Payment to carriers for value added services using cash rather than

prepaid will improve third party VAS products cooperation through a more equitable revenue share

Future growth

• Mobile merchant “Client” for small merchants• Back-end API for large merchants to integrate e-pos, web checkout• Informal merchant (Person to merchant's phone number)• Formal merchant setup with settlement to prepaid account or bank account• Merchant category codes• Merchant segmentation with differential pricing• Mobile and Web Checkout for Carrier App-store• Agent management platform• Multiple acquirer bank solution• Support for multiple processors• Allows merchants to serve walk-in customers for bill-pay, top-up and on-line ticketing (cash paying)• “Get-Paid” widgets that the merchants can deploy on web-sites and social networking sites.• Mobile and Web based merchant console for transaction inquiry, reconciliation and reporting• Merchant Account Management, MDR setup

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Thank You

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