Online Business Ideas

Mobile Banking Powerhouse Born From Bus Fare Theft

A microfinance pilot project pioneered in Africa turned into one of the world's most successful mobile banking systems thanks to one woman's bus fare getting stolen. Now the service could make its way to the United Kingdom.

M-PESA, one of the world's most rapidly expanding mobile banking systems, is transforming the banking sector in Africa. And it started, in part, when a thief stole bus fare from a woman who was participating in the M-PESA pilot.

Until then, M-PESA was a microfinance initiative, but the victim's husband used the mobile pay service to transfer funds to her phone--essentially giving his own wife a microloan--so she could use the phone to offer proof of payment for the bus ride. After the theft, the M-PESA team realized what a potent alternative banking tool they had in their hands.
"During the pilot we were supposed to focus on microfinance but we hatched a plot to launch the peer-to-peer money transfer functionality at the same time, without telling anyone," said Paul Makin, one of the initial project leads at Vodafone who now runs mobile money at Consult Hyperion. Vodafone first launched M-PESA after the U.K.'s Department for International Development (DFID) had already piloted it and the service is now run by Vodafone's Kenya subsidiary, Safaricom.
At the heart of the project's success is the idea to expand beyond microfinance into the broader area of transactions. With that more inclusive goal, M-PESA took off in Tanzania, Kenya, and South Africa, allowing users to go about their day without large amounts of cash in their pockets and while saving time on transactions and travel.

"We told the financial regulator we thought we would have a quarter of a million customers after three years," said Makin. "He could see the potential, so he was very supportive. But if he had known it was going to grow as big and as quickly he might have had second thoughts."
Since 2007, the number of users of the service has grown to over 13 million in Africa, Afghanistan, and India.

In Kenya, 90% of the population does not have a bank account, according to some statistics. Plus, Kenyans often work hours away from their villages. The time and expenses saved by instantly making payments via text message with M-PESA are improving the qualify of life for millions of people there.
"People would disappear from their jobs for three or four days having just been paid, to take money to their families," said Makin.
People in Kenya are now using M-PESA to make basic utilities payments, transfer funds to family members far away, and purchase insurance. And mobile banking itself has been so well-received that off-shoot mobile banking services are proliferating.

What does the rapid uptake of mobile money transfer in Kenya really mean for financial inclusion?

The rapid uptake of mobile money transfer in Kenya has ignited enthusiasm globally over the potential to bank poor people via the platform of mobile phone technology. On the basis of research undertaken for Financial Sector Deepening Kenya, I argue that the evidence suggests an alternative explanation which means that formal service provision for poor people needs to be thought through in a very different way. It means going beyond the expectation that mobile technology can adequately lower transactions costs to produce a revolution in inclusion, to recognizing that managing financial resources has important social dimensions.

The research examined the reasons behind use of the whole range of services and so explores how mobile money transfer fits into the financial landscape as a whole. For years the popularity of informal financial groups in the form of ROSCAs and ASCAs has been evident. Indeed, many of those who are banked also use these mechanisms. Mobile money transfer has now overtaken informal financial groups as the most used service. In our survey, based in three more rural towns and chosen to cross-cut poverty levels but particularly focus on the low-income group, some 61% were registered mobile money transfer users, 51% were using informal financial groups and 36% were using banks (higher than the last FinAccess 2009 survey figures of 22%). So how can we explain why banks lag so far behind when from an objective perspective they appear to offer a safe and secure place to save?
The reasons people give for using mobile money transfer have now gone a long way beyond the original “send money home” remittance rationale. Mobile money seamlessly facilitates inter-personal transfers to their close and extended family and friends for school fees, investments, celebrations and funerals, “assistance” and “help”, borrowing and so on – that is, any reason that people might need to send money to each other.

The Allure of a Cashless Society: Is it just distracting us from our goal?

PayPal made news recently by launching a new report, Money: The Digital Tipping Point, which predicts that by 2016 UK consumers won’t need cash or a wallet to go shopping. I’m not sure why the UK market was the focus of this report, but I won’t tell PayPal that KPMG just came out with its own research that showed that “when it comes to mobile banking, consumers in the UK are more resistant than elsewhere. Only 27% of Brits surveyed said they had used some form of mobile banking in the past six months (globally 52%).”

But Carl Scheible, Managing Director of PayPal UK, is persistent and argues,

We’ll see a huge change over the next few years in the way we shop and pay for things. By 2016, you’ll be able to leave your wallet at home and use your mobile as the 21st century digital wallet.

I’ve been intrigued to see several recent new stories spouting off about the grandiose vision of a cashless society. To a certain extent I thought we had moved past this debate. While recognizing it as desirable, this high and mighty goal seems somewhat unattainable, at least in the short to medium term. At CGAP, a former colleague and I wrote about mostly failed attempts to go cashless in developed economies in the late 1990s and early 2000s through various mobile and electronic payment schemes. A few of us also wrote about the attempt in Singapore to dictate a cashless economy about 10 years ago, but to my knowledge I believe there’s still cash floating around Singapore

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EBS Banking Model in demanding and Changing World

Hey did you notice there is one thing that keep changing since last 2 releases ...the bank. We have seen there was once from pre 10.x to 11i when supplier bank separated from suppliers data and now its again in R12 when it become part of TCA.This time , because of changing business need and high demand of global partners working model. Not only your company is operating globally,your partner too operating global,then why not use them. In typical business cost model, if corporate office is using Citibank for payroll for USA operation then why not Citibank Singapore branch is used for payroll for Singapore if they are operating there. Sound bit low...why ..

As we aware the key message of R12 while release was .

Think Globally - using business intelligence and analysis tools
Work Globally - using the global capabilities of the applications
Manage Globally - using the latest system architecture and middle ware

so what , think globally and work globally is factor driving for the changes .This release have witness the great changes ever into the bank model. Now the bank accounts is attached to your legal entity level rather than Operating Unit in which current and existing versions Offers. This makes bank with strong capability to pay across operating units. More over its important to understand banks accounts can be shared by applications and can be designed for use by Payables, Receivables and Payroll.
Integration Existence between Bank Data in Accounts Payable and Bank Data In Payroll ?
As discussed above , you know most of release of 11i family of oracle Application does not have integration between HR and AP for bank account data.
We have notice in 11i there was functionality in which Payables in which we will create an employee type supplier from HR data and it will contain name and address info but not bank information. The reason for this is that HR/Payroll does not store the bank information in a standard way that makes the integration possible.
So now r12 this was well taken care and integration is built. There are plans under way for all bank account data models in the various products to be consolidated in the new TCA architecture. The Cash Management team is working on this project. Payables and HR/Payroll are working so that the eventual idea will be that you can set up bank accounts in one place and then indicate the usage (pay, expense reimbursement, etc).