Warid Telecom launched its mobile financial services on December 31, 2013, under the brand name Mobile Paisa. Partnering with Bank Alfalah, Warid is the last telecom company in Pakistan to add branchless banking services to its portfolio. The first service, Easypaisa, was introduced by Telenor and Tameer Microfinance Bank in 2009.
The branchless banking industry has grown steadily since, with players such as UBL, Mobilink, Zong, HBL and Ufone successively entering the market. Driving the momentum is a regulatory environment conducive to innovative models capable of providing access to banking services to Pakistan’s unbanked segment. The State Bank of Pakistan (SBP) estimates that this segment consists of about 50 to 60 million people, i.e. those who have mobile phones but no bank accounts, also known as the ‘bankable population’.
In June 2011, the SBP made an amendment to the branchless banking regulations and introduced a Level 0 category for branchless banking accounts, making it the most basic type of account with low ‘know your customer’ (KYC) requirements and low transaction limits. Further SBP amendments also provided more flexibility to agents in opening accounts and conducting transactions.
As the last telecom company to enter this competitive market, Warid sees a huge, untapped market. According to Usman Tariq, Senior Manager – Product Marketing Mobile Financial Services, Warid, “Branchless banking has become a very effective means of attracting low-cost deposits and providing banking services post regular office timings to customers.”
In his opinion, branchless banking activity will pick up pace in the coming years, and according to the SBP’s Branchless Banking Newsletter (July-September 2013), there were almost 52 million branchless banking transactions worth Rs 224 billion during that period. Warid is now looking at further penetrating the market by partnering with one of the top commercial banks (sister concern, Bank Alfalah) via a state-of-the-art branchless banking platform, the latest version of Fundamo, powered by Monet.
Mobile Paisa is currently offering OTC services such as money transfer and utility bill payment services to Warid customers across Pakistan. It follows the one-to-one model of branchless banking with Bank Alfalah as the partner financial institution and branchless banking license holder, and Warid as the telecom providing agent network.
For greater financial inclusion, Warid is also using the one-to-many model. The company has recently entered into an agreement with HBL and is in the process of finalising agreements with other banks. Similar to what 1Link did for ATM card users, this system will provide more options and flexibility to customers, while increasing the volume of Mobile Paisa transactions.
According to Tariq, although OTC transactions are the dominant product (accounting for an 81% share in the overall number of branchless banking transactions between July-September 2013), Warid intends to move beyond these services. Mobile Wallet is in the development pipeline and will be launched in April 2014.
Mobile Wallet will be a good step forward for branchless banking in terms of reaching out to the unbanked segment. Tariq explains that Mobile Wallet works like an actual bank account, providing ease in executing financial transactions like bill payment, money transfer and airtime top ups, without depending on an agent network. It is more convenient for customers to use these services through their cell phones instead of looking for an agent’s shop. In addition, Mobile Wallet will be 30% more cost effective due to lower charges on money transfer services (minus agent commission).
Although most other players in the market offer mobile accounts, Tariq says Warid will expand the range of services offered via the Wallet. In addition to money transfer and bill payments, the company will offer services such as salary disbursement, retail payment, ticketing and donations. He says this will link Mobile Paisa to the daily life of customers. For example, as with a credit card, users will be able to make payments at selected outlets with Wallet money. Tariq further adds that companies are eager to take advantage of the salary disbursement option especially for blue collar workers, while white collar workers will be interested in options such as ticketing and retail payments.
Warid employs both shared and exclusive agents, adding to an existing overall network of more than 110,000 agents (SBP Branchless Banking Newsletter, July-September 2013). In addition, an aggressive plan is in place to increase the number of agents by 300% in 2014 in order to be competitive in the market. According to Tariq, taking agents onboard is a challenge as the retail industry is largely undocumented, especially in rural areas where most transactions are made in cash. Keeping this and the market commission structure in mind, Warid is offering higher commissions than the industry average. The company has also launched a campaign offering double commission to agents who achieve their monthly targets as an additional incentive and it is also focusing on creating best practices. On the agent’s side, this means more efficient back end systems and processes; on the customer’s side, this means user friendly interface and technology and quick turnaround times in resolving issues.
Talking about the marketing aspect of Mobile Paisa, Tariq says, “Our communication is emotion-based because we know what it means to support your loved ones in an hour of need. Mobile Paisa liberates people from the restriction of having to pay bills within designated hours only, as well as from the long wait in transferring money over long distances. While everyone else talks only about convenience, we go a step further and talk about the hard work that every Pakistani puts in his daily life so that the wheel of the economy can continue to turn; hence our tagline ‘Chalta rahay Pakistan’.”
The brand name Mobile Paisa was identified three years ago as covering the full ecosystem of branchless banking: all financial services available to users on their mobile, instead of focusing on only one service or benefit such as time saving, Tariq adds.
So far Warid has engaged in BTL marketing only, mainly through in-shop branding and signboards. A 360 degree marketing campaign is to be rolled out simultaneously with the launch of Mobile Wallet, expected in April 2014.
The addition of the Mobile Wallet with its promised range of services and improved customer experience is likely to give Warid a differentiated platform in an expanding branchless banking market, where innovation is essential for survival.
First published in the March-April 2014 issue.