Leveraging APIs to drive Money Innovation
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The document discusses how mobile money service providers can leverage APIs to drive innovation and expand services. It notes that current mobile money systems are limiting service expansion and that APIs can help accelerate growth by allowing developers to build applications and services using existing platform functionality. The document provides examples of how APIs could enable online purchases and credit disbursements using mobile money. It also discusses how API usage is growing rapidly and shifting control from financial institutions to consumers. Mobile money providers are encouraged to establish API strategies and programs to gain benefits like increased transactions, financial inclusion, and merchant acceptance.
Leveraging APIs to drive Money Innovation
- 1. This document is offered compliments of BSP Media Group. www.bspmediagroup.com All rights reserved.
- 2. Leveraging APIs to drive mMoney innovation -- Expanding services beyond P2P -- Africacom, November 2013 Copyright © 2013 mahindra mahindra comviva Technologies Limited. All rights reserved. 1
- 3. Contents Growth profile - Mobile money services Problems with current systems Accelerating growth with money APIs Tips for take-off Source: Operator, Mahindra Comviva 2
- 4. Growth Profile – Mobile Money Services 400 310 Million 300 254 254 200 74 100 0 2011 2012 2013 (JAN-MAY) Transaction Volume (million) Transaction volume Cash-in 0.1% 7.9% 15.0% 0.4% 0.3% 14.4% 0.7% Cash-out 0.2% 21.4% 0.3% 19.0% Utility Payments 24.8% Airtime top-up 50.8% 41.5% 19.2% 41.9% 21.0% Merchant Payments 14.1% 2% 2.5% 2.7% P2P Transfers Bulk Payments Recharge and P2P are dominating 3
- 5. Service expansion limited by current systems --- Need to move away from a do everything mobile money system Accept mobile money as a payment instrument Accept mobile money as a payment instrument Accept EMI for payments >USD 1,000 mMoney platform needs to interface with merchant’s till and billing infrastructure for processing payments Allow customers to post credit requests and receive funds from social network towards payment Directly debit customer’s mobile money account Merchants have custom business requirements creating significant IT overheads and escalations in costs and complexity Average industry merchant on-boarding time - 4-6 weeks depending on complexity of integration Multiply time to market with the number of partnerships needed to embed digital payment instruments into consumers’ lives 4
- 6. Levers to displace cash More Transactions Financial Inclusion Acceptance Growth More Merchants Product Penetration More Consumers Small Ticket Transactions More Volume • The cost of cash is high • Approximate 1.5% of the country’s GDP 5
- 7. Transaction volumes dependent on number of acceptance points Direct correlation between transaction volumes and acceptance points Comparative analysis of transaction volumes and acceptance points Number of merchants (Oct 2013) M-Pesa, Kenya (Jul 2013) Zaad, Somaliland (Apr 2013) Airtel Money, India (Feb 2012) 90 85,000 80 Tigo Pesa, Tanzania 70 60,000 (Plan to reach 100,000 by Apr 2014) 8,600 7,000 Merchants (‘000) Tigo Pesa, Tanzania 60 M-Pesa, Kenya 50 40 30 Airtel Money, India 20 10 Orange Money, Madagascar (Nov 2012) 3,000 Zaad, Somaliland Orange Money, Madagascar - 20 40 60 80 Monthly transactions (million) 6
- 8. Levers to displace cash More Transactions Financial Inclusion Acceptance Growth More Merchants Product Penetration More Consumers Small Ticket Transactions More Volume • The cost of cash is high • Approximate 1.5% of the country’s GDP 7
- 9. Expanding services using APIs — APIs are application programmable interface that allows outside systems to interface with existing platform Provides more time to innovators and entrepreneurs Developers can drive transactions Provides opportunity to sell more by bringing purchase into the app itself Makes products part of customer conversations API wealth Helps to reach the long tail Citizen developers Professional developers Hobbyists App stores Helps to get into the app store so more people can find us! 8
- 10. APIs - path to new business opportunities — Provide customers with the ability to innovate based on the functionality they want to use Business models are evolving... ...and growth is accelerating dramatically Stores Number of banking apps (worldwide) (800)### 100000 75000 50000 25000 0 2013 2014 2015 By 2015, 25% of banks in the Global 1,000 will have launched their own app store Source: Gartner 2013 2016 Websites Web APIs Number on new Financial Services APIs launched (worldwide) 200 180 160 140 120 100 80 60 40 20 0 2005 2006 2007 2008 2009 2010 2011 2012 By 2015, 50% of banks in the Global 1,000 will have launched an API platform 9
- 11. APIs - path to new business opportunities — Provide customers with the ability to innovate based on the functionality they want to use 13 billion API calls / day (May 2011) 1.4 billion API calls / day (May 2012) 5 billion API calls / day (April 2010) You Tweet? You Facebook? You Check-in? 1 billion API calls / day (May 2012) 1 billion API calls / day (Q1 2012) Consumption of APIs is growing — FAST! You Post? 5 billion API calls / day (October 2009) You “Candy Crush”? 1.1 billion API calls / day (April 2011) 1 billion API calls / day (January 2012) Source: Gartner 2013 Consumption of APIs is growing fast 10
- 12. Use case 1: Online purchase using mobile money API used Account debit Illustrative Customer 1 Browses an ecommerce portal Selects item(s) to purchase Portal displays options to purchase Selects mMoney to pay Merchant e-commerce portal 2 4 Portal redirects to mMoney system to authenticate customer Displays payment confirmation post successful authentication mMoney system 3 Customer authentication is done Debits customer’s wallet and credits merchants’ wallet Redirects to portal 11
- 13. Use Case 2: Credit Disburse to customers API used Account credit Illustrative Micro-credit organization 1 SACCO* agent (disbursement officer) logs into the portal mMoney system 2 Receives instruction with customer details Customer 3 Receives credit in the wallet Identifies the respective customer’s mMoney wallet to be credited Selects loan disbursement option Credits customer’s wallet 4 *SACCO - Savings and Credit Cooperative Organization Sends confirmation to admin’s portal 12
- 14. Use Case 3: Online purchase using merchant app API used Account debit Illustrative Customer mMoney system IVR 1 Logs into the shopping mobile app of a merchant Selects merchant and item(s) to purchase Selects mMoney to pay App sends request to mMoney system for customer authentication 3 App displays confirmation of purchase post successful authentication 2 Authenticates customer using IVR (this is required because app is from 3rd party) mMoney system debits customer’s wallet and credits merchant’s wallet Sends payment confirmation response to the app 13
- 15. The evolution of APIs Public APIs The Power of Many • PayPal • Google Wallet • UIDAI India Partner APIs Personalization, Acceptance • Merchants • Agent Network • Value Added Services Internal APIs Platform Extensions • Administration • Reporting • Service flexibility 14
- 16. Executing Public API Strategy What It Takes Governance Monetization Risk, Security, Fraud Control Certification Developer Portal 15
- 17. Open APIs shift control from financial service providers to consumers 2014 and beyond: User control Present: Financial institute control Value network enablement Product Manufacturing New Services Technology Distribution Financial institutions Distribution Risk and regulation Branding Branding Pricing 16
- 18. Mahindra Comviva has a 38% share of the MNO-led financial services market in Africa mobiquityTM mMoney footprint Powers financial services for 31 MNOs in 26 African countries Morocco Egypt Mauritania Addresses131 million customers or 12% of Africa’s population Processed 310 million transactions in 2012 Senegal Guinea B Guinea C Sierra Leone Cote d'Ivoire Mali Niger Nigeria Ghana Cameroon Burkina Gabon Faso Central African Republic Somalia Chad Uganda Kenya Rwanda DRC Tanzania Congo B Seychelles Malawi Zambia Zimbabwe Madagascar Handled transactions worth US$ 4.8 billion in 2012 Source: GSMA, Mahindra Comviva research, Wireless Intelligence Q1 2013, Africa’s population (Q1 2013): 1,090 million Botswana Lesotho Live deployments: Airtel France Telecom Maroc Telecom Planned deployments: Airtel France Telecom Maroc Telecom Tigo Vodafone Econet Telecel NationLink Somtel 17
- 19. Thank you Visit us at Stand C08 Disclaimer Copyright © 2013: mahindra mahindra comviva Technologies Ltd, Registered Office at A-26, Info City, Sector 34, Gurgaon-122001, Haryana, India. All rights about this document are reserved and shall not be , in whole or in part, copied, photocopied, reproduced, translated, or reduced to any manner including but not limited to electronic, mechanical, machine readable ,photographic, optic recording or otherwise without prior consent, in writing, of mahindra mahindra comviva Technologies Ltd (the Company). The information in this document is subject to changes without notice. This describes only the product defined in the introduction of this documentation. This document is intended for the use of prospective customers of the Company Products Solutions and or Services for the sole purpose of the transaction for which the document is submitted. No part of it may be reproduced or transmitted in any form or manner whatsoever without the prior written permission of the company. The Customer, who/which assumes full responsibility for using the document appropriately. The Company welcomes customer comments as part of the process of continuous development and improvement. The Company, has made all reasonable efforts to ensure that the information contained in the document are adequate, sufficient and free of material errors and omissions. The Company will, if necessary, explain issues, which may not be covered by the document. However, the Company does not assume any liability of whatsoever nature , for any errors in the document except the responsibility to provide correct information when any such error is brought to company’s knowledge. The Company will not be responsible, in any event, for errors in this document or for any damages, incidental or consequential, including monetary losses that might arise from the use of this document or of the information contained in it. This document and the Products, Solutions and Services it describes are intellectual property of the Company and/or of the respective owners thereof, whether such IPR is registered, registrable, pending for registration, applied for registration or not. The only warranties for the Company Products, Solutions and Services are set forth in the express warranty statements accompanying its products and services. Nothing herein should be construed as constituting an additional warranty. The Company shall not be liable for technical or editorial errors or omissions contained herein. The Company logo is a trademark of the Company. Other products, names, logos mentioned in this document , if any , may be trademarks of their respective owners. Copyright © 2013 mahindra mahindra comviva Technologies Limited. All rights reserved. 18
- 20. Ensure “ease of use" Best practices Don't build the wrong kind of supply Elegance Simple High Not too much system focus Flexibility Business value Design not restricted to programmer only Managed Services Security/support Marketing Software Modules Awareness Value Breadth of use UX Ease of use Low Low System complexity High 20
- 21. Action plan for service providers Treat your public Web API program as a key component of your organization's business and go-to-market strategies. Minimize risk by starting with inwardly focused Web APIs for mobile enablement and internal innovation, and then expand the strategic role of Web APIs incrementally as you gain experience. Establish a cross-functional team appropriate for the maturity level of your Web API program. Establish clear program goals with quantifiable metrics that can be tied back to business value. Consider and address the governance and resource requirements before releasing your Web API outside your company Don't assume "if we build it, they will come." Support is just as important as design principles. To get started building great open APIs, start by using some great open APIs, like those of Twilio, Amazon, and Facebook 21