LONDON, UK -- Mobile money transfer offers an opportunity to tap into the USD600bn money transfer and remittances opportunity. But how do you make MMT work for your organisation?
In the course of researching MMT 08 - the world's first independent MMT conference, Steven Clarke, Event Director and Chief Payments Researcher for the Clarion Events Payments Division spoke to hundreds of MMT innovators, and is pleased to share his research in a series of papers.
For part one of the series he focuses on the "global hubs" and asks three of the most prominent hub providers; Western Union, Monitise and TATA Communications, to tell us a bit more about what they do…
A new breed of service provider has emerged to link together MNOs and banks in the emerging MMT ecosystem - the global hubs.
Who are the global hubs? What exactly do they do?
"MMT hubs bring the economies of scale and foreign exchange savings provided by an aggregated model. This will help reduce consumer pricing," explained Anna Kuriakose, VP, Futures and Innovation for Monitise.
"Our main focus is to create a global hub for interoperability for all mobile commerce transactions," added Allan Chan, EVP Mobility Services, TATA Communications. We provide a robust, telco-grade infrastructure with the security necessary to 'harden' the information flow for MMT whilst providing connectivity between the MNOs."
"We have unrivalled expertise in complying with the laws and regulations for each of more than 200 countries and territories in which we do business," explained Matt Dill, VP of Digital Ventures at Western Union. "We are committed to compliance, and spent USD40m and dedicated more than 300 staff members globally in 2007 to ensure that each of the more than one million transactions we send each day complies with laws and regulations."
Aggregation and interoperability. A robust infrastructure. Compliance. The key points of the hubs' value proposition.
Monitise, TATA Communications and Western Union contributed to this paper, but other players active or rumoured to be entering this space include SMART Communications, Globe Telecom and Belgacom.
What are the key differentiators between the hubs?
"We have the world's largest agent network, with more than 355,000 locations - more than five times the total worldwide locations for Starbucks, McDonald's, Citibank and Wal-Mart combined," explained Dill. "These locations are in the areas where our consumers live and work - rural towns and urban centres alike."
Chan comments: "We already provide comprehensive telecommunication solutions to over 600+ mobile service providers worldwide and are established players in the interoperable hub infrastructure for roaming. We believe in providing value to MNOs through our new inter-operator hub service - mobile Commerce eXchange (mCX)"
Monitise provide a comprehensive mobile money roadmap which includes money transfers, payments and mCommerce - thus creating a comprehensive suite of mobile money services. "MoniHomeTM, Monitise's gateway solution for International Mobile Money Transfer, provides banks, MNOs and prepaid card issuers with an effortless integration to money transfer hubs," added Kuriakose.
Why should an organisation planning a mobile money launch work with a hub rather than forming their own direct partnerships?
"For a mobile operator to develop a truly global solution, they would have to go out and sign hundreds of agreements. Some companies do offer cross-border transactions, but the send and receive corridors are limited due to the fact that they have to sign individual agreements. With Western Union, once a mobile operator signs an agreement with us, they can take their 'local' service global," suggests Dill.
Kuriakose agrees: "remittance hubs offer the ability to serve multiple remittance corridors. If MMT programme leaders were to create direct partnerships in as many remittance corridors, it would be less economical than working with hubs."
"Don't go to the expense of building your own MMT infrastructure," mentioned TATA's Chan. "Use TATA Communications hub - mCX instead. Let your MMT programme leaders concentrate on marketing to the consumer and leave the rest to us."
When should a mobile money initiative start working with you?
"TATA Communications is currently working with Etisalat, Idea Cellular and HSBC India in the current pilot phase. We will be working with MNOs across the globe to enable global interoperability of MMT transactions" commented Allan Chan.
Similarly Monitise work with mobile money initiatives from the outset. Kuriakose adds: "we provide the technology for the mobile front-end as well as the technical integrations to the remittance hub of choice. In addition, Monitise would be able to work with existing mobile money initiatives in receiving countries, by plugging them in as distribution mechanisms."
"Western Union is open to working with both mobile operators who are just beginning to venture into MMT - Bharti Airtel, for example - and those with established mWallets and MMT services, such as Globe Telecom and Smart Communications in the Philippines," comments Dill.
Build your own MMT partnerships and infrastructure or contract with the hubs?
We hope this article has helped you understand what the global hubs bring to the MMT ecosystem. Banks, MNOs and MFIs launching MMT services need to consider if and when to 'plug in' to the global hubs. The hubs are ready. They have been developed by organisations with trusted brands, tried and tested infrastructures and are staffed by experts in money transfer and compliance. You need to evaluate whether it is cost effective for you to develop these capabilities for yourself, and whether that is scalable as your suite of mobile money services expands.
Part 2 of "Mobile Money Transfer Explained" will focus on mWallets. Visit www.mobile-money-transfer.com and register to the MMT Newsletter to ensure you receive Part 2.
TATA Communications, Monitise and Western Union will all be contributing to a round table debate on "What do the global hubs do and do you need to partner with them?" at MMT 08 on November 10 and 11 at the Crowne Plaza Dubai.
Visit www.mobile-money-transfer.com for more details.