Banglalink mWallet powered by Comviva’s MFS platform
Description
In Bangladesh, institutional banking infrastructure is highly underdeveloped. With only 6,000 bank branches in the entire country, 87% of the population has no access to formal banking services. Considering current banking challenges, Banglalink decided to launch mWallet exploiting its pan-national airtime network to address financial institutional supply gaps and cater to the strong latent need for convenient, low-cost, retail financial products among unbanked segments. Banglalink’s mWallet transforms the mobile phone into a convenient cash-free and card-free transaction medium, enabling storage and transfer of money to and from a secure, stored value account. The platform extends a range of formal financial services to low-income unbanked users, including: • international inbound transfer in partnership with Eastern Bank and Dhaka Bank Limited • domestic money transfer in conjunction with Banglaldesh Postal Office • utility bill payments in alliance Bangladesh Power Development Board and Dhaka Electricity Supply Company • mobile ticketing in partnership with Bangladesh Railways The service supports multiple transactional methods, including cash-to-bank, cash-to-cash, cash-to-wallet and wallet-to-wallet to maximize service access .The service fully complies with regulations and benefits from a robust, open ecosystem of multiple banks, money transfer operators, billers and service providers. The use of existing distribution and international payment infrastructure for cash-in and cash-out provides economies of scale and improves services access, whilst controlling financial intermediation costs to bring low-principal, high-frequency transactions into the mainstream.
What we deliver
Banglalink delivers the following services to consumers: § Access Services: Financial transactions entail movement of money over time and distance. In a country with limited financial services infrastructure, a well-developed retail services network is of particular relevance to effectively cater to the demand for financial services. Banglalink’s mWallet has leveraged its extensive airtime network to build significant retail capacity and operates the largest formal services network, comprising 12,000 agents in Bangladesh. For the international money transfer service, in alliance with money transfer operators, Banglalink operates a transnational payment service network in 300 countries, allowing customers to transfer money to beneficiaries in Bangladesh from any accredited merchant outlet. § Transaction Services: Using mWallet as transaction medium, customers have secure, convenient access to a wide range of services § Self Care Services: Using the device, customers can request a change in PIN, receive balance alerts and account statements § Financial Training and Counseling Service: Agents retailing mWallet actively educate consumers on benefits of using mainstream financial channels for conducting transactions
How is the project unique?
Banglalink launched mWallet to extend a mass–oriented, easily accessible financial services network to unbanked segments. With this view Banglalink’s mWallet service is designed along three basic principles to ensure wide service uptake: Simple • Zero Barriers to Entry as users only need to possess a mobile number to transact. • Supports OTC and Wallet-based Transactions: In a predominant cash economy, it will take time for digital systems to establish themselves as an effective, trusted substitute for banknotes and to realize the full market potential of their enabling power. A cash conversion channel must therefore complement a digital transaction platform. mWallet supports wallet-based as well as over-the-counter transactions, enabling Banglalink to address the non Banglalink customers as well there by giving the scale required to make it ubiquitous. • Pay as you go service with zero minimum balance or fee to deposit and encash money Seamless • Interoperable: Transaction volumes on any network are proportional to and driven by the number of interconnections possible between subscribers. mWallet enables any mobile user, regardless of their subscription network, to transact over the counter, using the agent’s wallet account, resulting in rapid services uptake. • Multiple Encashment Modes: mWallet service interfaces with the national switch, enabling registered customers to directly encash funds from ATM networks of 28 banks. Channeling a segment of the withdrawals to the ATM network also eases pressure to maintain optimal liquidity at each agent outlet. • Multi-partner Ecosystem: Open ecosystems are a powerful instrument to build a comprehensive retail service network and enter new territorial markets. Banglalink has forged bilateral as well as multilateral service agreements with multiple banks and to achieve scale and outreach. Banglalink has cemented partnerships with money transfer operators, exchange houses and banks to scale network for international inbound services. • Multi-language Support: Supports Bengali and English over popular mechanisms (SMS and USSD), ensuring mass outreach. IVR is currently being trialed § Multiple transaction modes: Supports multiple transactional methods, including cash-to-bank, cash-to-cash, cash-to-wallet and wallet-to-wallet to maximize service access across demographic segments Scalable § Extensive Product Portfolio: Banglalink is the first operator in South Asia to launch an integrated payment and banking service. Standards-based interfaces support seamless integration with third party service providers and expedite time to market for new services. § Largest Financial Services Distribution Network: Domestically Banglalink operates the largest financial services network with 12,000 agents compared to 6,000 bank branches in the country. The service is available nationwide across 64 districts and 462 of 519 thanas or villages. Secure § Secure: mWallet is compliant with the banking standards of ISO 8583, and can be subjected to PCI certification for the PCI-DSS card standard and also penetration and Operational Risk Assessment (ORA) and Technical Vulnerability Assesment (TVA) of any financial institution.. It has a built-in AML and KYC engine and a robust velocity engine. This can be used for fraud management, which is required by regulatory bodies in many countries. Some of the major elements of security used in the mobile technology is: o USSD with A5/3 encryption o SMS – Encryption supported over STK and J2ME o Pin-protections for all transactions • Liquidity Management: In Bangladesh, a cash-intensive economy, the prerequisite for winning customer confidence is a 100% guarantee of cash out. The practicalities of assuring this, both in terms of estimating potential cash inflows and overcoming physical barriers – such as underdeveloped infrastructure, are critical and challenging. In addition to defining liquidity limits as per agent SLAs and monitoring liquidity compliance, innovative measures to keep agents stocked with cash and alleviate liquidity constraints include: o Extending discretionary emergency liquidity to meet intra-day liquidity needs – agent receives a short lease of cash against available stock in the airtime account o Enabling agents to use excess e-float to pay operator for airtime; purchase goods/ services from distributors, mitigating cash outage problems o Master agents, with ready cash reserves from electronic airtime sales, ensure cash is available at all agents in their jurisdiction o Optimally balancing cash inflow/outflow transactions to maintain Iocal cash circulation o Transferring money into agent’s bank account with ATM networks to alleviate liquidity constraints at payout point o Offering interest on retailer wallets to encourage retailers to maintain higher balances inn wallets and reduce stock out problems for cash-in • Risk Management: Sound, automated risk-management processes ensure risk is managed through a process of ongoing identification, measurement and monitoring, subject to an extensive framework of limits and controls, ensuring minimization of syndicated fraud. All transactions are checked for Exception reports (activity flagged by predefined threshold rules related to velocity, volume and value of transactions)
Roadmap
In recent years, sustained growth of mobile services in Bangladesh has addressed significant gaps in the ICT infrastructure, critical to the country’s overall social and economic development, and created an ongoing cycle of virtuous growth. An approximate 40% of the population enjoys access to basic mobile connectivity. In 2010, the number of mobile subscribers surpassed the 50 million mark and Bangladesh currently ranks among the top 10 mobile markets in the Asia Pacific region. Banglalink has been pivotal in strengthening the country’s telecommunication infrastructure and advancing vital connectivity services to the masses. To realize the extensive economic and social benefits associated with widespread diffusion of mobile telephony in a pre-dominant low-income market, the operator adopted innovative business models focused on three basic principles – access, affordability and availability. For instance, to facilitate equitable access in underserviced rural areas and to meet unmet demand and cater to the income and spending patterns of the populace, the operator embraced viable micro-selling techniques and vended airtime in denominations as low as 5 taka ($0.07) in Bangladesh, effectively lowering barriers to entry. To cement early gains from democratizing connectivity services, Banglalink continues to leverage the multi-functional capabilities of the mobile phone to introduce a variety of relevant productivity and infotainment services. For example, the operator was the first in the market to launch a rural services portal to fulfill business and information needs of customers. Further evidence of the operator’s innovation and commitment to extending valuable services to rural communities is its introduction of Mobile Financial services such as domestic and international money transfer, mobile ticketing, and microloan repayments to serve a large populace of unbanked Bangladeshis. Banglalink has emerged as a premium services brand in Bangladesh, with over 16 million customers and over 30% market share.
Contact
Solaiman Alam/Shikha Bhatia
Banglalink Orascom Telecom Holding and Comviva Technologies Limited
Banglalink Tigers’ den, House 4, Gulshan Avenue Sw Gulshan 1,
Dhaka, Bangladesh 1212
URL/Website – www.banglalink.com
