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Mobile banking ready to roll in Egypt

CAIRO: Egypt’s central bank is set to finalize the regulatory framework for mobile money transfer within two weeks, officials said. The draft legislation has been finalized by the main stakeholders, Ahmed Faragallah, head of payment systems at the CBE, told Daily News Egypt on the sidelines of the Euromoney conference Wednesday. In a session titled …


CAIRO: Egypt’s central bank is set to finalize the regulatory framework for mobile money transfer within two weeks, officials said.

The draft legislation has been finalized by the main stakeholders, Ahmed Faragallah, head of payment systems at the CBE, told Daily News Egypt on the sidelines of the Euromoney conference Wednesday.

In a session titled “Dial M for Money: Empowering access to finance, Vodafone executives said mobile banking will be available in Egypt by year’s end.

Chief Executive Officer Hatem Dowidar told Reuters that the micro transactions would typically involve transfers of up to LE 5,000 between two mobile users.

The majority of the Egyptian population remains unbanked, leading to a costly cash-based economy. In this context, mobile banking can be utilized to “extend the reach and reduce the cost of services like savings, insurance and credit, said Marina Solin, project director at the GSM Association, a trade organization for GSM mobile operators.

Mohammad Chowdhury, director of external affairs at Vodafone Egypt, discussed the potentials of what is known as “Mobile Money, particularly M-commerce, M-payments and M-banking.

The new services target both the unbanked segment of the population and those who regularly deal with banks, enabling them to access their bank accounts to conduct money transfers as well as make and receive payments, Chowdhury said.

“There are a lot of opportunities in emerging markets, he added.

Solin concurred, saying, “one of the new businesses the GSM Association sees at the moment is mobile money.

A recent survey of mobile operators found that there are already more than 120 mobile money developments in 70 markets. “Our market projections show that 364 million unbanked customers will have [access to] mobile money services by 2012, Solin said.

The GSM Association hopes to provide mobile money services to 30 million customers in Egypt who are currently unbanked.

She presented two successful models of mobile banking in Kenya and the Philippines, where her association played a consultative role in setting up the regulatory framework and appropriate business model.

In two years, Kenya’s mobile money customers reached 7 million, which is as much as all the banks together in the country.

Chowdhury summed up steps that need to be taken to mimic Kenya’s experience into five: creating a regulatory framework, developing the channels needed for cash-in and cash-out processes, developing the needed technology, educating consumers, and assessing the management risks.

CBE’s Faragallah said that customers interested in mobile money services will have an account in a bank where the transactions will happen.

On the channels of cash-in and cash-out processes, Chowdhury said, “In order to achieve the mass-scale that we have seen in the Philippines or Kenya, it is critical to have a distribution mechanism that will help [make the service accessible] to millions of people.

In turn, there will be close cooperation between financial institutions and mobile operators, since the latter, Chowdhury said, has the distribution mechanisms that can reach the mass market.

Mohamed Wahba, mobile payment senior manager at Vodafone, told Daily News Egypt that the mobile banking services will be offered through the retail outlets of telecom operator, not through the banks’ branches.

Therefore, he said, the market share of mobile money services will not necessarily match the market share of mobile services.

Mobinil is the number one mobile operator in Egypt in terms of subscribers followed by Vodafone and Etisalat.

Vodafone Egypt said it expected to add 100,000 mobile broadband customers in 2009, taking its total broadband client base to 160,000, Reuters reported, which refers to wireless internet products for use with personal computers and is separate from access to the internet via the firm’s mobile phone accounts.

Topics: FJP

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