CAIRO: Tarek Elhousseiny, general manager of Visa North and West Africa, discusses how innovation in global payment technology, namely mobile payments, is impacting the developing world. In Egypt, he proposes studying the models applied in Kenya and India to provide mobile payment capabilities to the large unbanked population here. “One can only see the great opportunity of a new way to pay and be paid,” he said about the local market. Q: What impact can mobile payments have on the developing world? Tarek Elhousseiny: The evolution of the global payments industry is the most dynamic and innovative it has ever been. As a major stakeholder in the electronic payments and technology industry, we're seeing greater focus on areas of the world where the majority of the population have never set foot in a bank, yet are the primary potential customers for the financial sector. Stakeholders are also focused on tapping into markets whose citizens may not have the spending power of their Western counterparts but who are also connected to wireless networks through their mobile phones. The test markets for mobile payments are not only found in the United States, but also in Africa and India, where new users are also considered new to the world of financial inclusion. Traditionally, it has taken longer for new technologies to reach this side of the world, but in the case of mobile payments, industry leaders are realizing that less developed markets have the potential to see more groundbreaking and valuable results. Recently, payment card and processing companies began teaming up with mobile and technology providers as well as further developing their expertise in these areas in order to deliver innovative mobile payment solutions. Instead of focusing solely on economically advanced test markets for this new technology, companies have been testing them in select emerging markets with significant mobile penetration like India and Kenya. India boasts a fast-growing mobile market and an equally burgeoning retail market which seems like the right fit for such an advance in mobile payments, where 90 percent of transactions are still done in cash and 41 percent of the population has access to a bank account. In Kenya, where 10 million out of the 38 million people living there have bank accounts and is “considered the Silicon Valley of Banking,” mobile payments have seen fast paced advances and as of December 2010, only three and a half years after launching a mobile banking initiative called M-PESA, now has 13.3 million users (57 percent of the adult population). Q: What are mobile payments and what will be the effect of mobile tools on our everyday lives? The term ‘mobile payment system' refers to a number of different technologies and implementations for initiating and accepting monetary transactions using a mobile device and can be separated into two broad categories. The first is a payment system that utilizes a mobile network to initiate or authorize a transaction and the second is a contactless system which uses a mobile phone in lieu of traditional cards. This means that people will be able to use their mobile phones to make purchases the same way they would with their electronic payment card, directly accessing their personal funds and bank accounts with their mobiles. Another use for mobile payments is the ability to transfer funds from one mobile user to the next. This is a method being tested in developing markets where the majority is unbanked and located in remote areas. Q: How can Egypt successfully provide mobile payment capabilities to the large unbanked population here? Looking at the challenges faced in India and Kenya and comparing the demographic and population spread between rural and urban in Egypt, one can only see the great opportunity of a new way to pay and be paid. Based on recent data published by the Egyptian Ministry of Communications and Information Technology (MCIT), internet penetration in Egypt was over 30 percent of the total population as of January 2011 and is expected to grow by 39.61 percent annually. As of September 2011, Egypt reached 76.4 million mobile phone users; the infrastructure for mobile payments exists and has the potential to be the main method of payment throughout the country. Q: What role has Visa played in the recent innovations in mobile payments? Over the past few years, Visa has been developing relationships with leading experts from the eCommerce, security and mobile industries in order to provide the next generation of global payments solutions. Just recently, Visa announced a new investment which has accelerated the execution of our new global strategy, enabling consumers to transact wherever and whenever they choose, using a card, computer or mobile device. In August, Visa acquired Fundamo, a leading provider of mobile financial services with a platform supported in more than 40 countries, including 27 countries in Africa, Asia and the Middle East which was integrated with Visa's own global network, VisaNet. The combined Visa Fundamo platform adds enhanced functionality and new services to existing users as well as expands financial services, making them available to more consumers and offers merchants access to new customers, having the potential to connect billions of unbanked and under-banked consumers to each other and to the global economy. We recently announced Visa's first product enabled by Fundamo which is a Visa prepaid account that can be accessed through a mobile phone and offers consumers in developing countries a secure, reliable, globally interoperable electronic payment account. MTN Group, Africa's leading telecommunications provider, and its partner financial institutions will be the first to offer the new Visa mobile-based product to consumers in Nigeria and Uganda. The account will offer customers the benefits of a closed-loop payment service, including cash-in and out, person to person transfers as well as bill payment all through an account with Visa's high standard of security and reliability. This Q&A was provided exclusively to Daily News Egypt.
