Remittance through Mobile Phones and the Internet:

Searching for the Viable Business Model

Lee Eng Sia
Founder, Managing Director, Mobile Money International
Malaysia

E money Remittance

Version 14 May 2014

Mobile Money Background

Started in year 2005, operates e money and real time
information platform.
We are the pioneer of next generation money (specific
purpose money, including specific targeted subsidy)
Operates in Malaysia, Indonesia, Kenya, Uganda,
Tanzania, Zimbabwe, and getting started in 6 other
countries.
Plan to expand to entire African continent, providing real
time visibility to businesses, and building e money
infrastructure in parallel.

Concept of MM e Money Remittance Service

User registers as member of Mobile Money with a RFID
card.
Members can top up various types of e money for
various services. Eg. Remittance, paying bill, buy
prepaid, pay TV vouchers, etc.

E money Remittance Process

User phone to register, with name, IC, and recipient bank account,
moving towards MM community service centres using android app
to take a photo of the IC or passports for registration. (almost done)
User given a member card, which is a RFID card, tied to user and
recipient bank account.
User goes to MM community service centres to purchase e
money for remittance.
MM shall send a SMS for confirmation, to ask for confirmation on
the amount user wants to send with the recipient name for them to
call to confirm.
Upon confirmation ,money in bank account instantly, and
sender shall receive a sms confirming the transaction once it is
successful (close loop confirmation)

Real Time Controls via CRM

Maximum amount one can send is USD900 at any one
time.

Total cumulative amount one can send in a month (9k

USD)
Bank account that receives from multiple senders. (call
to verify, usually is village head)
Maximum number of bank account one can send. (5)
Red Flag, call to further verify on those who send more
than certain amount. (3k usd)
Real time checking against black list.

Risk?
Small amount. Average USD220.

Real time monitoring, Real time checking. Real time

control.
KYCN (Know Your Customer Network) available if
needed, phone and bank account of recipient.
Photos taken with time stamp. Better than a clerk who
tries to remember faces of foreigners that looks alike or
using fake documents.

Way Forward for e Money Remittance?

KYCN enforce the requirement of 20 phone number call history from

Telco.

KYC via app using android apps to register, by taking and keeping a copy
of the photo and document.

Customer Due diligence via app android app to take real time photo for
Customer Due Diligence. Time stamp on photo taken.

Education of service centres -- Using Android apps to conduct test on

service centres to improve their awareness and education on AML and ATF.

Central data base -- Centralised real time tracking and checking for all
transactions to detect any dubious transactions.(against UN blacklist and
local black list).

Provide Mobile to Mobile, Mobile to Person cross border transfer with

KYCN

Challenges for Regulators in Developing Countries

KYC mind-set. This seems to be the only thing regulators understand. Its outdated in
view of new technologies available.

How to think KYCN instead of KYC?

How to adopt regulations that make use of innovation and technology, that are
a lot more effective? Central data base, promote e money, KYCN, android apps. All
this are available NOW

How to fight illegal channel. Developing countries need more channel to fight
illegals. This is only possible if we have sensible, simple and effective regulations that
keep up with technology.

How not to promote illegal channel? Remove non sensible KYC requirements,
adopt KYCN, promote e money. Separate elephants from ants. Reduce illegal
activities. Illegals look for illegal channel. It spawns the growth of illegal channel.

How to separate elephants and ants? Different regulations for different segments.
Small amount, workers, single transaction a month, with phone and sent to bank
account, with real time monitoring and control versus big amount, repeated
transaction, with no real time monitoring and control.eg. Banks.

Questions?
Cash versus e money, Mobile E money establishes its own KYCN.
We know a persons network and traceability. A thug keeps or
carries million cash , no traceability. When a person with a phone
carries 200 USD in e money, it has KYCN and traceability . Why do
we need stringent KYC that strangles e money, promotes cash
and thus illegal activities, WHY?

Why would a poor country in Africa, with people worrying about

food, no proper water supply or electricity, no ID cards , keeping or
sending on average of USD20, why do we need paper KYC even
with sufficient KYCN, and real time e money visibility, WHY?
If KYCN is so simple, so obvious and so effective, why cant
regulators adopt it? WHY?