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ICT for development

This Paper summarises the first phase of an ongoing investigation into the application of mobile-enabled commerce (m-Commerce) in developing markets, through examining cases from the Philippines and South Africa. It aims to identify the opportunities provided to mobile networks in offering an m-Commerce service, as well as establishing the drivers of a successful implementation.


Key observations:

• Benefits of m-commerce include capturing unofficial cash float in community, enabling micro-loans, easy loan repayment and minimising threats of robbery and money-laundering
• These benefits impact at a national level, but there are added benefits for the industry participants too, like banks, retailers, micro-finance institutions and the networks. 
• While these benefits may be of significance, there is little of obvious benefit to the target market. Unless extra features are added having a high perceived value, penetration of the market will be low
•  The Philippines experience suggests that by including facilities of perceived value to the lower segments of the market, significant uptake can be achieved. In this case, those added features are the ability to top up prepaid accounts by as little as US47¢ and the ability to transfer airtime credits from one user to another at values as low as US4¢.
• The Philippines operators have also recognized that transaction charges must be kept at an affordable level, preferring high volume at low margin. 
• The issues to be addressed before launching a service include identifying the market opportunity and suitable partners, setting up a Project Management group, deciding on an implementation model and plan and clearing the proposal with regulators. Identifying the responsibilities of each partner is also important.

Minimum attributes to meet consumer expectations:

• Airtime transfers between customers with a low minimum. 
• Prepaid account top-ups from the cash account also at a low level equivalent to about four to fiveminutes of normal calls. This will appeal to the lower market segments.
• Provision for cash deposits, withdrawals and transfers with a nominal transaction fee.
• Provision for cash deposits by parties other than the account holder. This allows employer-direct credits as well as international remittances and micro-finance loans.
• Provision for retail purchases both with and without a debit card, recognizing that many small retailers in the emerging markets will have no facilities for handling debit cards.
• Provision of a debit card at a nominal charge.
  
  

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