COMMUNITY EMPOWERMENT
Presents:
TagPay Business models: Tools and strategies to structure
your fees and commissions
French Webinar: December 6th, 3:00pm – 4:00pm, Paris time (GMT +1)
English Webinar: December 7th, 3:00pm – 4:00pm, Paris time (GMT +1)
Presented by: Isabelle Berner (Tagattitude Head of Marketing) & Charles Ozanne
(Tagattitude Director of Projects)
TagPay Business models: Tools and strategies to structure your fees and commissions
PA R T N E R W E B I N A R D E C . 2 0 11
TagPay Business models: Tools and strategies to structure your fees and commissions
 Introduction
 Transaction Types
 Value Analysis
 Telecom Costs
 Different fees & commissions structures
 Transaction Revenue Simulator
 Implementing Fees & Commissions
 Q&A and Wrap-up
?
Submit questions or comments via private chat throughout the
presentation and Tagattitude will address questions and
comments submitted during the Q&A session at the end.
TagPay Business models: Tools and strategies to structure your fees and commissions
PA R T N E R W E B I N A R D E C . 2 0 11
TagPay Business models: Tools and strategies to structure your fees and commissions
Introduction
 Transaction Types
 Value Analysis
 Telecom Costs
 Different fees & commissions structures
 Transaction Revenue Simulator
 Implementing Fees & Commissions
 Q&A and Wrap-up
TagPay Business models: Tools and strategies to structure your fees and commissions
 Introduction
• Many different Types of
Transaction
– Information/
administrative
– Financial
• Different parties
involved
– Clients, billing
companies, employers,
agents, merchants, etc.
• Transaction channels:
– Agent/Merchant (POS,
SMS, or e-tagpay)
– Client web interface
– Client IVR
– Client SMS
Building a business model:
What are the transaction costs?
What are users prepared to pay?
• Value of the transaction
• Market status & competition
• Direct Telecom cost of the
transaction
What do other parties expect to be
compensated?
• Indirect transaction value
• Pain: Time, effort, float, etc.
• Market status & competition
• Direct Telecom cost of the
transaction
Haitian Case Example
• Building a business model for a
new mobile money service in Haiti
TagPay Business models: Tools and strategies to structure your fees and commissions
PA R T N E R W E B I N A R D E C . 2 0 11
TagPay Business models: Tools and strategies to structure your fees and commissions
 Introduction
Transaction Types
 Value Analysis
 Telecom Costs
 Different fees & commissions structures
 Transaction Revenue Simulator
 Implementing Fees & Commissions
 Q&A and Wrap-up
TagPay Business models: Tools and strategies to structure your fees and commissions
Types of Transaction
Money transfer
Cash-in
Merchant Payment
Enroll Client
Client calling the IVR
Client web interface
Client sending an SMS
Via Agent web terminal
Via Agent terminal
Via Agent SMS
Client web interface
Via Merchant web terminal
Via Merchant terminal
Via Merchant SMS
E-commerce merchant
Via Agent terminal
Via Agent web terminal
Client calling the IVR
Client web interface
Account-to-Cash transfer
Client calling the IVR
Client web interface
Client sending an SMS
Via Agent web terminal
Via Agent terminal
Cash-out
Via Agent web terminal
Via Agent terminal
Via agent SMS
Cash-out from transfer
Cash-to-Cash Transfer
Via Agent web terminal
Via Agent terminal
Via Agent SMS
Send Gift
Client web interface
Client sending an SMS
Via Agent web terminal
Via Agent terminal
Via agent SMS
Pay Bill
Via Agent terminal
Via Agent web terminal
Client sending an SMS
Client web interface
Top-up Airtime
Via Agent terminal
Via Agent web terminal
Client sending an SMS
Client web interface
Check Client account balance
Client calling the IVR
Client web interface
Client sending an SMS
Change Client PIN
Client calling the IVR
Client web interface
Salary Disbursement
Enterprise web interface
Which of these are Value Creating and for whom are they creating value?
TagPay Business models: Tools and strategies to structure your fees and commissions
PA R T N E R W E B I N A R D E C . 2 0 11
TagPay Business models: Tools and strategies to structure your fees and commissions
 Introduction
 Transaction Types
Value Analysis
 Telecom Costs
 Different fees & commissions structures
 Transaction Revenue Simulator
 Implementing Fees & Commissions
 Q&A and Wrap-up
TagPay Business models: Tools and strategies to structure your fees and commissions
Value Analysis
Cost of Transaction
TagPay Business models: Tools and strategies to structure your fees and commissions
Value Analysis
•
Cash-to-Cash transfer
Client deposits
funds with
Agent
Agent transfers
cash on behalf
of client
•
•
Cash-in
Client deposits
funds with
Agent
Agent or PSP
loads Client’s
account
•
•
Merchant Payment
Client check
Account balance
Client pays the
merchant
Client checks
account
balance
Merchant
accepts mobile
payment
•
•
•
What do other transfer services
cost? In Haiti, Approx. 3%
Client fee also needs to cover the
commission paid to a different
agent on cash-out from transfer
Is the Client willing to pay for this?
NO. This transaction does not bring
any value in and of itself.
How to cover the cost to the
service?
What do merchants pay to accept
credit card payments?
What is the service worth to the
Merchant? Security, new clients,
loyalty of existing clients…
Should the client pay to check his
or her balance?
Different fees for different
channels…
TagPay Business models: Tools and strategies to structure your fees and commissions
PA R T N E R W E B I N A R D E C . 2 0 11
TagPay Business models: Tools and strategies to structure your fees and commissions
 Introduction
 Transaction Types
 Value Analysis
Telecom Costs
 Different fees & commissions structures
 Transaction Revenue Simulator
 Implementing Fees & Commissions
 Q&A and Wrap-up
TagPay Business models: Tools and strategies to structure your fees and commissions
Telecom Costs
•
Costs to users (merchant, client, agent…)
– Calling IVR
– Sending SMS to service
•
Cost to service
– Call to Client(s)
– Sending SMS to Client(s)
– Data used by merchant & agent terminals
Telecom Tariffs
Tariff
One second call cost
One second call from user
10 kb data
SMS from user
Single SMS to user
Cost
HTG
HTG
HTG
HTG
HTG
0.001
0.002
0.005
0.005
0.002
Euros
=
=
=
=
=
€
€
€
€
€
0.00001
0.00004
0.00009
0.00009
0.00004
TagPay Business models: Tools and strategies to structure your fees and commissions
Telecom Costs
TagPay Telecom Cost Structure for different types of transactions and the channels available to make them
Do not modify data or table. This table takes into account your currency and telecom costs as defined in the "settings" page and calculates the costs associated with each transaction accordingly.
Telecom
Transaction Description
Resources used
Cost of telecom resources
Cost distribution
Transaction Type
Service and Channel
Cash-to-Cash Transfer
Cash-to-Cash Transfer
Cash-to-Cash Transfer
Cash-to-Cash Transfer
Cash-to-Cash Transfer
Cash-to-Cash Transfer
Cash-to-Cash Transfer
Cash-to-Cash Transfer
Cash-to-Cash Transfer
Cash-to-Cash Transfer
Cash-to-Cash Transfer
Cash-to-Cash Transfer
Cash-to-Cash Transfer
Via Agent web terminal
Cash-in
Cash-in
Cash-in
Cash-in
Cash-in
Cash-in
Cash-in
Cash-in
Cash-in
Cash-in
Cash-in
Cash-in
Cash-in
Cash-in
Cash-in
Via Agent web terminal
Merchant Payment
Merchant Payment
Merchant Payment
Merchant Payment
Merchant Payment
Merchant Payment
Merchant Payment
Merchant Payment
Merchant Payment
Merchant Payment
Merchant Payment
Merchant Payment
Merchant Payment
Merchant Payment
Merchant Payment
Merchant Payment
Check Client account balance
Check Client account balance
Check Client account balance
Check Client account balance
Check Client account balance
Check Client account balance
Check Client account balance
Check Client account balance
Exchanges
Call
duration
(sec)
10 Kb
data
$ 0.003
0.000
$ 0.003
2
0.000
0.000
$ 0.004
2
$ 0.005
0.000
$ 0.004
0.000
$ 0.010
10
Agent enters transfer information on terminal
0
2
5
5
2
Agent sends transaction request via SMS
0.000
0.000
0.000
$ 0.004
$ 0.003
2
$ 0.003
$ 0.010
$ 0.004
$ 0.005
$ 0.004
$ 0.017
0.000
0.000
$ 0.017
0.000
0.000
$ 0.015
Agent receives a call from service to confirm
30
$ 0.015
0.000
$ 0.015
3
0.000
0.000
$ 0.006
4
$ 0.030
0.000
$ 0.011
60
0
$ 0.005
$ 0.006
$ 0.041
0.000
$ 0.005
$ 0.036
Agent logs in to terminal website using NSDT authentication
5
$ 0.003
0.000
Client receives a call from service & confirms with NSDT
5
$ 0.003
0.000
1
0.000
0.000
$ 0.002
1
$ 0.005
0.000
$ 0.002
0.000
$ 0.005
$ 0.005
$ 0.003
0.000
$ 0.003
10
Agent enters transaction information on terminal
0
1
5
Total:
5
1
Agent sends transaction request via SMS
$ 0.003
$ 0.003
1
0.000
0.000
$ 0.002
1
$ 0.003
$ 0.005
$ 0.002
1
0.000
0.000
$ 0.005
$ 0.002
$ 0.007
0.000
0.000
$ 0.007
$ 0.002
$ 0.010
0.000
0.000
$ 0.010
$ 0.005
Client receives a call from service & confirms with NSDT
30
$ 0.015
0.000
Agent receives a call from service to confirm
30
$ 0.015
0.000
2
0.000
0.000
$ 0.004
3
$ 0.030
0.000
$ 0.009
$ 0.039
0.000
$ 0.005
$ 0.003
0.000
$ 0.003
0.000
0.000
$ 0.003
0.000
0.000
$ 0.003
$ 0.003
0.000
0.000
$ 0.003
Client and Agent receive confirmation SMS
Total:
Client logs in to account website using NSDT authentication
60
0
5
Total:
5
Merchant logs in to terminal website using NSDT authentication
5
Client receives a call from service, enters PIN code & confirms with NSDT
20
0
Client receives confirmation SMS
Total:
25
Merchant enters amount, client phone number, and client enters passcode
0
0
Total:
5
1
Merchant sends transaction request via SMS
30
0.000
0.000
$ 0.002
1
$ 0.013
0.000
$ 0.002
0.000
$ 0.005
0.000
1
0.000
0.000
$ 0.002
1
$ 0.003
$ 0.005
$ 0.002
$ 0.005
Merchant receives a call from service to confirm
15
Client and Merchant receive confirmation SMS
Total:
Client receives a call from service & confirms with NSDT
45
0
Total:
Client calls the IVR
5
0
0.000
0.000
0.000
0.000
$ 0.015
0.000
$ 0.005
$ 0.002
$ 0.010
0.000
0.000
$ 0.005
0.000
0.000
0.000
$ 0.004
$ 0.008
3
$ 0.023
0.000
$ 0.009
$ 0.003
0.000
1
0.000
0.000
$ 0.002
1
$ 0.003
0.000
$ 0.002
$ 0.004
$ 0.032
0.000
$ 0.005
$ 0.027
0.000
$ 0.003
$ 0.002
$ 0.005
0.000
0.000
$ 0.040
0.000
1
0.000
0.000
$ 0.002
1
$ 0.040
0.000
$ 0.002
$ 0.042
$ 0.040
0.000
$ 0.003
0.000
0
$ 0.003
0.000
0.000
$ 0.003
0.000
0.000
Client sends SMS to initiate transaction
1
0.000
0.000
$ 0.005
Client receives SMS with balance
1
0.000
0.000
$ 0.002
2
0.000
0.000
$ 0.007
Client receives confirmation SMS
Total:
Log in to client account using NSDT authentication
20
0
5
Total:
Total:
5
0
0
0
$ 0.010
$ 0.015
$ 0.008
20
$ 0.002
$ 0.015
$ 0.003
2
5
Client receives confirmation SMS
0.000
$ 0.034
$ 0.010
$ 0.003
$ 0.015
$ 0.004
$ 0.003
0.000
1
Client receives a call from service & confirms with NSDT
$ 0.015
$ 0.010
5
Client receives confirmation SMS
$ 0.015
1
1
Client receives a call from service & confirms with NSDT
Client sending an SMS
$ 0.003
0.000
Client receives confirmation SMS
Client web interface
$ 0.009
$ 0.015
Client receives a call from service & confirms with NSDT
Client calling the IVR
0.000
30
Total:
E-commerce merchant
0.000
$ 0.010
2
1
$ 0.004
$ 0.009
Sender receives a call from service & confirms with NSDT
Client receives confirmation SMS
Via Merchant SMS
Service
0.000
Total:
Via Merchant terminal
Agent/merchant
$ 0.003
Agent, sender, & recipient receive confirmation SMS
Via Merchant web terminal
User
$ 0.003
Total:
Client web interface
Total
5
Sender & recipient receive confirmation SMS
Via Agent SMS
SMS
5
Sender receives a call from service & confirms with NSDT
Via Agent terminal
Data
Sender receives a call from service & confirms with NSDT
Total:
Via Agent SMS
Cost of call
Agent logs in to terminal website using NSDT authentication
Sender & recipient receive confirmation SMS
Via Agent terminal
No. of
SMS
$ 0.005
$ 0.040
$ 0.002
$ 0.002
$ 0.003
$ 0.005
$ 0.003
0.000
$ 0.002
$ 0.007
$ 0.005
0.000
$ 0.002
TagPay Business models: Tools and strategies to structure your fees and commissions
Telecom Costs for a Cash-to-Cash Transfer
TagPay Business models: Tools and strategies to structure your fees and commissions
Telecom Costs for a Cash-in
TagPay Business models: Tools and strategies to structure your fees and commissions
Telecom Costs for a Merchant Payment
TagPay Business models: Tools and strategies to structure your fees and commissions
Telecom Costs for a Client Check Account Balance
TagPay Business models: Tools and strategies to structure your fees and commissions
PA R T N E R W E B I N A R D E C . 2 0 11
TagPay Business models: Tools and strategies to structure your fees and commissions
 Introduction
 Transaction Types
 Value Analysis
 Telecom Costs
Different fees & commissions structures
 Transaction Revenue Simulator
 Implementing Fees & Commissions
 Q&A and Wrap-up
TagPay Business models: Tools and strategies to structure your fees and commissions
Different fees & commissions structures
•
•
•
•
•
•
Goals: Maximize value captured accross transaction values, maintain competitive pricing, cover
costs, & keep is simple
Different pricing structures and approaches may be applied to different transaction
types/channels and to the different parties involved
Remember: The revenues generated by the whole service are what count—revenues on a single
type or channel of transaction don’t tell the whole story
Setting transaction minimums can ensure that value captured > cost of transaction
The Fees & Commissions class of service allows for each of these and/or a combination of each
The Fees APIs can be used to design a different model all together
TagPay Business models: Tools and strategies to structure your fees and commissions
PA R T N E R W E B I N A R D E C . 2 0 11
TagPay Business models: Tools and strategies to structure your fees and commissions
 Introduction
 Transaction Types
 Value Analysis
 Telecom Costs
 Different fees & commissions structures
Transaction Revenue Simulator
 Implementing Fees & Commissions
 Q&A and Wrap-up
TagPay Business models: Tools and strategies to structure your fees and commissions
Transaction revenue simulator
•
•
Transaction Revenue Simulator: Excel model available to all members of
the TagPay community
Input:
– Local telecom costs (SMS, IVR, Data)
– Macroeconomic factors (population size & growth rates, mobile penetration &
growth rate, GNI)
– Service usage projections (% of mobile-equipped population using service, % of
service users making each type of transaction, breakdown of channels used for
each transaction type, average number of transactions a user makes per year via
each available channel, average value of a transaction…)
– Fees & commissions A + B(x) for each party involved & for each transaction type
– Period you would like to simulate revenues for (years 0-4, term=year, quarter,
month)
•
Output:
– Telecom costs per transaction type & channel and distribution of these costs
among parties involved
– Service usage projections, numbers of transactions over time
– Revenues simulated acccording to inputs for a defined period and year
TagPay Business models: Tools and strategies to structure your fees and commissions
Transaction revenue simulator
 Using the TRS for our Haitian example…
TagPay Business models: Tools and strategies to structure your fees and commissions
PA R T N E R W E B I N A R D E C . 2 0 11
TagPay Business models: Tools and strategies to structure your fees and commissions
 Introduction
 Transaction Types
 Value Analysis
 Telecom Costs
 Different fees & commissions structures
 Transaction Revenue Simulator
Implementing Fees & Commissions
 Q&A and Wrap-up
TagPay Business models: Tools and strategies to structure your fees and commissions
 Implementing Fees & Commissions
• Fees and commissions are labled according to:
user_channel_transaction. When a second party
is implicated this is indicated with a ":" followed
by the party type (e.g. :agent)
• E.g. in the case of transfers:
– user = Client
– Channel = ivr, SMS, POS(includes e-tagpay), web,
API
– Transaction = gift, transfer, transfertocash,
cashtotransfer, cashfromtransfer
nd
– 2 party = merchant, agent, parent
TagPay Business models: Tools and strategies to structure your fees and commissions
Transaction Fees & Commissions on Example transactions
Cash-to-Cash transfer
Cash-in
Merchant Payment
Client check
Account balance
Client deposits
funds with
Agent
Client deposits
funds with
Agent
Client pays the
merchant
Client checks
account
balance
Agent transfers
cash on behalf
of client
Agent or PSP
loads Client’s
account
Merchant
accepts mobile
payment
client_pos/web_cashtotransfer:
Fee= 45 HTG + 0.5 %
client_pos/web_cashtotransfer: Agent
Commission= 15 HTG + 0.1 %
Client_pos/web_cashin:
Fee= 0 HTG + 0 %
Client_pos/web_cashin: Agent
Commission= 5 HTG + 0.25 %
Client_pos/web/sms_debit:
Fee= 0 HTG + 0 %
Client_pos/web/sms_debit: Merchant
Fee= 0 HTG + 1 %
Client_web_balance:
Fee= 0 HTG + 0 %
Client_IVR/SMS_balance:
Fee= 20 HTG + 0 %
TagPay Business models: Tools and strategies to structure your fees and commissions
 Implementing Fees and Commissions
In the Fees Class of Service of the Admin interface:
Client Fee when doing a cash-to-cash transfer via an Agent’s POS device:
.5
25
HTG
HTG
Agent Commission when doing a cash-to-cash transfer using a POS device:
:Agent
.1
10
HTG
HTG
*Note: You can set a threshold simply by entering one in the threshold box and modifying
the fees COS a new row will be added allowing you to configure a different
fee/commission for transaction amounts below and below the threshold. Multiple
thresholds are also possible.
TagPay Business models: Tools and strategies to structure your fees and commissions
PA R T N E R W E B I N A R D E C . 2 0 11
TagPay Business models: Tools and strategies to structure your fees and commissions
 Introduction
 Transaction Types
 Value Analysis
 Telecom Costs
 Different fees & commissions structures
 Transaction Revenue Simulator
 Implementing Fees & Commissions
Q&A and Wrap-up
TagPay Business models: Tools and strategies to structure your fees and commissions
 Wrap up
•
•
•
•
•
•
The TagPay Platform offers several different types of transactions, each with
multiple channels through which to do them
Every transaction is subject to specific telecom costs which are supported by
the service or directly by other users
Evaluating what users are willing to pay, the transaction costs, and what you as
a service provider might be willing to pay gives an idea of an appropriate range
for fees & commissions
TagPay supports many different fee & commission structures—choosing the
right one allows you to maximize the value captured on each transaction
Using tools like the transaction revenue simulator can help you evaluate an
appropriate fee and commission structure for your service
You can then implement your fee & commission model in the admin interface
as a class of service
TagPay Business models: Tools and strategies to structure your fees and commissions
Relevant Resources
• For further information or for the sources
used in some of these slides see:
– http://mmublog.org/wpcontent/files_mf/pricingandcommissionswebinarv
final_english2_nocomments88.pdf
– Mobile Money in Haiti: A baseline analysis:
http://www.audiencescapes.org/sites/default/file
s/Haiti%20HMMT%20Project%20Baseline%20Surv
ey%20Report.pdf
– http://mmublog.org/profitability/
TagPay Business models: Tools and strategies to structure your fees and commissions
 Q&A
Submit questions or comments
via private chat.
Tagattitude will address as
many questions as possible.
TagPay Business models: Tools and strategies to structure your fees and commissions
 Upcoming Webinar…
Thank you for your participation.
Due to the holidays, no webinar will be held in January
 2011 webinars: (Passwords TCE2011)
DATE
TOPIC
July, 2011
Sept, 2011
Oct, 2011
Nov, 2011
Dec, 2011
V3.2 Release: New functionalities, improvements, and their implications
Agent Focus: Agent management, functioning, and best practices
Client Money Transfer: Managing the channels and types of transfer
V3.3 release: New functionalities, improvements, and their implications
TagPay Business models: Tools and strategies to structure your fees and commissions
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