Session VI: the Role of New Technologies In
Enhancing Access to the Payments Infrastructure
Global Remittances: New Initiatives in M-banking
The Citigroup-Vodafone Partnership
May 31, 2007
Nancy Todor, Director
Global Payments
Global Transaction Services
Markets: Various Mechanisms for Remittances
Some origination and distribution channels are more “consumer friendly” than others!
• Origination
– Banks
•
•
Branches
Internet
– Money Service Businesses
•
•
Branded storefronts and agent locations
Internet
– Mobile telcos
•
•
Mobile phones
Stores
• Distribution
– Banks
•
•
•
Account credit, check
Cash
Credit or stored value card
– Money Service Businesses
•
Cash
– Mobile telcos
•
May 31, 2007
Virtual wallet
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Trends: New Mechanisms & Market Participants
• Retail channels expanding for origination, distribution of
payments
– Banks, non-banks, mobile telcos as financial interface to consumers
• Results
– Increased access by consumers to financial services
– “Take the service to the consumer”
– Supports “General Principle 4”: Competitive Market Conditions*
• “foster competitive market conditions, including appropriate access to
domestic payments infrastructures”
Committee on Payment and Settlement Systems and World Bank: Task Force on International Remittance Services
5 General Principles
May 31, 2007
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Trends Support Customer Needs
Sender
Developed country
Away from home and family
Receiver
Emerging market
Living at home with
other family
members
Needs
 Dependability / trust
 Convenience
 Minimal paperwork
 Low cost
 Confirmation payment has reached
 Customer service on transaction
initiation and funding
Needs
 Quick funds availability
 Convenience on receiving
 No hassles or paperwork
 No fees
 Customer service on funds
arrival and access
May 31, 2007
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4
Mobile Telecoms, Banks
& the Remittances Value Chain
Play roles in registration/origination and disbursement
Consumer Banking Services Environment
Accounts, Local Payments, Financing and Credit Cards
Remittances Value Chain
REGISTRATION
AND
ORIGINATION for ease
Traditional
• In person
• Call center
FUNDING
for convenience
Traditional
• Manual withdrawal
• Cash over counter
Innovative
• Web
• IVR
• Mobile phone
• POS terminal
• ATM
Innovative
• Debit / Credit Card
• Direct debit
• Stored value cards
• Mobile account
FOREIGN
EXCHANGE
AND
FUNDS TRANSFER
DISBURSEMENT
for convenience
Core Processing
Global Network
• Convert funds to
destination
currency
• Account credit
• Report foreign
currency rate and
amount (indicative
or guaranteed)
• Check/demand
draft
• Transfer funds
• Mobile account
• Cash
• Card
END-TO-END CUSTOMER SERVICE
Information Service, Exception Handling, Process Tracking for Transparency
May 31, 2007
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5
Case Study: UK Remittances to Kenya
1.
Sender registers
on a Web portal
3.
Instruction
to Citi
Citi
6.
Convert and send funds to Kenya
7.
Citi /
Vodafone
Processing
Hub
4.
Mobile
account
credit
Citi Kenya
Card Settlement
5.
2.
Debit card
clearing
cheque to
receiver
Debit
sender
account
account
credits
Sender inputs
transaction at
Website, mobile
phone* or in person
cheque
encashed
at Post
Bank
Sender’s bank
May 31, 2007
Payment to
receiver in local
currency
8.
Confirm to sender
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Steps for Cash Receipt by Receiver
1. receiver goes to
registered airtime
reseller at
destination end
2. identifies himself
with National ID
3. provides PIN
received from MPESA
4. reseller validates the
PIN with M-PESA
via mobile
5. after validation,
reseller pays
receiver
6. reseller is
reimbursed with
principal and
commission
May 31, 2007
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Benefits: Telcos, Banks Working Together
Commitment to develop market leading flexible, convenient, secure
& cost effective mobile delivered remittance services
Complementary Strengths
Synergistic Objectives
Citigroup Profile:
Vodafone Profile:
 Leading brand name in mobile phone services
 In 58 countries with 200 million subscribers
 History of innovative mobile solutions
 Leading capabilities in cross-border payments and FX
 Global presence
 History of innovative payment solutions
Motivation:
Motivation:
 Diversify into non-voice businesses
 Leverage customer acquisition and service
infrastructure for new revenue sources
 New products to attract migrant communities, retain
existing customers
 Greater access to remittance flows via new channels
 Interface with recognized brand for customer
acquisition to promote rapid volume growth
 Invest once and deploy in multiple markets through
global partner
Consumers gain increased access to financial
services through convenient channels
May 31, 2007
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In Conclusion
• Opportunity space for remittances is large and continues to grow
• Trend toward taking services to the senders and receivers, seen
across all regions
• Driving innovation is key to improving competition and overall service
at reduced cost
• Banks and non-banks can play many integrated roles in the value
chain
–
–
–
–
customer acquisition
relationship builder
core processor
sending or receiving agent
• Core competencies can be leveraged by banks and non-banks
through a spirit of cooperation and competition: co-opetition
– Benefits all parties by working together
May 31, 2007
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