'easypaisa' the brand name of branchless banking services

easypaisa is often described as 'revolutionary'. What is easypaisa and how is it revolutionary? easypaisa is the brand name of a portfolio of branchless banking services being offered jointly by Telenor Pakistan and Tameer Micro Finance Bank in Pakistan.
The brand slogan 'Badlay Zindagi Aasani Say' (Changes Life Through Convenience) promises empowerment and convenience to the common man in carrying out financial transactions, whether he lives in the urban area or rural communities of Pakistan and whether he is already banked or unbanked.
In an environment where only 12% of the adult population is formally served, and the rest are subject to insecure and inefficient modes of money transfer, unregulated and excessive charges, and no proper saving mechanisms, easypaisa is a game changer. easypaisa is very much a revolutionary service because of the security, convenience and ease of use that it offers. Everyone can use it. In addition to the mobile accounts, there are services such as Utility Bill Payments and Money Transfer where customers do not even have to own mobile phones. They simply walk into any of the easypaisa shops and pay their bills, or send and receive money.
By offering inclusion into the standard financial economy, it is helping to create opportunities for customers to save for investment or tough times, to pay for services more efficiently and without loss of productivity, and to utilise more advanced financial instruments in the future.
What is the role Telenor Pakistan and Tameer Microfinance Bank each play? easypaisa services are based on a bank-led model for branchless banking approved by the State Bank of Pakistan with the objective of providing financial services beyond the formal bank branches.
Tameer Microfinance Bank has the license to offer branchless banking and Telenor Pakistan serves as an agent to Tameer Microfinance Bank and offers these services from the authorised retail merchants in its distribution network and through mobile phones for Telenor subscribers. To strengthen the integration, Telenor Pakistan is also a majority shareholder of Tameer Microfinance Bank.
What products are on offer under the easypaisa brand? Our current product portfolio comprises Over-The-Counter (OTC) products like Utility Bill Payments, Domestic Money Transfer, International Home Transfer and Donations. For these products, customers are assisted by trained easypaisa agents; these products can be used by any person in Pakistan from any of our easypaisa shops.
Also, easypaisa offers Mobile Accounts, a Mobile Wallet for Telenor Pakistan subscribers accessible through their mobile phones. Customers can dial a simple short-code and carry out financial transactions from their mobile accounts anytime, anywhere. The mobile account has all the services being offered OTC as well as Airtime purchase.
How are they different from what competitors are offering? easypaisa customers can send and receive money, top-up their mobile balance and donate to well-reputed charities either from an easypaisa merchant or from their own mobile handsets.
For our Money Transfer service, money is transferred instantly - something that is not possible with traditional transfer services. With Over-The-Counter products, there are no restrictions of mobile operator or specific bank accounts. Anyone and everyone can undertake formal financial transactions.
With over 11,500 easypaisa shops all over Pakistan, easypaisa is the largest network of financial services at the moment. Agent outlets are often conveniently located at the corner of your street, not constrained by short banking hours, and without long queues. easypaisa shops can also be used for deposits and withdrawals into mobile accounts, in addition to bill payments and domestic and international remittances.
How is it contributing to the economy of Pakistan? Domestic remittances through the formal channel currently stand at around $7 billion. It is estimated that around $2 billion to $4 billion is transacted through informal channels ('Bringing Finance to Pakistan's Poor' - World Bank, May 2009). This informal sector includes hawala/hundi as well as hand-carry transactions. Remittance flow is widely believed to be a strong contributor to economy. It offers significant potential to support low income and vulnerable groups in the country. Remittances also have a big role to play in balancing economic activity in various regions by contributing to availability of resources in lesser developed areas.
Usually, there are multiple entry barriers which push people towards informal channels: this includes the absence of an infrastructure close to home and cumbersome documentation process. By overcoming these barriers, one of easypaisa's objectives is to bring the bulk of the informal remittances into the formal sector, thereby contributing to the country's economy.
I can quote you an example of branchless banking launched by an operator called Safaricom in Kenya by the name of M-PESA. The service has more than 7 million users -- not bad for a country of 38m people, more than 18m of whom have mobile phones. M-PESA first became popular as a way for young, male urban migrants to send money back to their families in the countryside. It is now used to pay for everything from school fees (no need to queue up at the bank every month to hand over a wad of bills) to taxis (drivers like it because they are carrying around less cash). Similar schemes are popular in the Philippines and South Africa.
Extending mobile financial services to the poor in Pakistan has a huge impact. We offer a faster, legal and safer way to transfer money than the existing alternatives, such as slow, costly transfers via banks and post offices, or handing an envelope of cash to a bus driver. Rather than spend an entire day travelling by bus to the nearest bank, recipients in rural areas can spend their time doing more productive things. If you look at the numbers in Kenya, the incomes of Kenyan households using M-PESA have increased by 5% to 30% since they started mobile banking, according to a study. But this is just the start, the real value will be brought to the people of Pakistan by offering access to more complex financial products such as saving, insurance and loans.
easypaisa seems to be a success. How would you quantify that with numbers? Let me share some stats with you. In the last six months, easypaisa has shown a strong growth and has more than doubled its monthly transaction volume. With increasing numbers on brand awareness and huge market potential, we believe that this growth rate will continue through the rest of 2011 as well. In February 2011, the total volume transferred through easypaisa was about PKR 3 billion.
Also, easypaisa shops have grown remarkably. From 2,200 easypaisa outlets in 2009 we have expanded to more than 11,500 outlets in over 500 cities across Pakistan today. This means that easypaisa is now available at more locations than the total number of bank branches (which are 8,000) in Pakistan.
easypaisa has also been recognised internationally. Tell us something about that. easypaisa won the Best Mobile Money Transfer Entrant of the Year Award at the world's first Mobile Money Awards, held in Dubai. This was in October 2010, just one year after easypaisa was launched.
Even earlier, in June 2010, Telenor Pakistan became one of the few mobile operators in the world to receive a grant from the Bill & Melinda Gates Foundation's Mobile Money for the Unbanked (MMU) Fund Jun 2010, also for easypaisa. Both awards prove the promise and the potential that easypaisa holds as a mobile banking service for the masses. Other industry players are also offering financial services. How is the industry as a whole faring in offering financial inclusion opportunities to the people of Pakistan?
The mobile industry collectively is offering several services to their respective customers in a bid to facilitate financial inclusion. This is encouraging and whatever product or service that is being introduced to this end, the ultimate beneficiary will be the people of Pakistan. In Pakistan, there are examples when earthquakes and floods have wiped out entire villages, homes and savings of thousands of families. These unforeseen calamities have a massive impact on people, especially the poor. Mobile banking initiatives by the industry can help safeguard much needed funds of those who are more vulnerable.
What's next for easypaisa? We've managed to establish a strong brand name and our Over-The-Counter services like Money Transfer are a great success. In the coming months, we will be building upon easypaisa Mobile Accounts and establishing services through this product. Mobile Accounts offer the ultimate convenience to our customers, and this product is the foundation to the introduction of more advanced financial services like Insurance, Savings and Loans which will materialize the objective of improving financial inclusion for the people of Pakistan.
(The writer is Vice President Financial Services, Telenor Pakistan talks about easypaisa and how it is providing ease and convenience to users.)