ISLAMABAD: The Virtual Remittance Gateway (VRG) Pakistan is all set for the commercial launch of 'Asaan Mobile Account (AMA)' scheme, after getting due clearance from the State Bank of Pakistan (SBP) and Pakistan Telecommunication Authority (PTA), which would play a vital role in financial inclusion, digital payment and documenting the informal economy.
This was stated by Muhammad Salman Ali, Chief Operating Officer (COO) at VRG in an exclusive talk with Business Recorder here on Monday. "After the pilot project, VRG operated AMA scheme for four months and completed its successful soft launch under the monitoring of Regulators (SBP, PTA)", said Ali, adding that VRG has obtained required clearance for commercial launch of the scheme which is expected soon.
Replying to a question, the COO said that as per the SBP data around 23 percent population is financially included, which is lowest in the region and one of the hurdles in economic growth. However, scheme like AMA is envisaged transferring millions of un-banked to financial inclusion by providing digital payment at around 100 times lower rate compared to the current schemes run by telecom operators. He further added that after reaching an apex deploying new ATMs could be counterintuitive for financial inclusion as it serves banked customers at locations with access to bank branches. Remote areas still suffer from the last mile problem, which can only be solved by giving the population access to financial services at their fingertips. Ali said Pakistan has one of the highest mobile penetration rates globally, and USSD (Unstructured Supplementary Service Data) is abundant. Even the cheapest $10 phone is capable of accessing USSD which virtually removes all barriers to access the financial services.
Financial inclusion is always a challenge due to many reasons including lack of technological infrastructure, limited digital channels, awareness of financial services and its benefits and absence of interoperability among payment schemes and services. After the introduction of TPSP (Third Party Service Provider) regulation in 2016 jointly by SBP & PTA, a massive opportunity to promote financial services to masses has arrived. Using the unified USSD and interoperable payment platform, would enhance the reach to remote un-banked and the last mile access to financial services has been addressed making financial inclusion much easier.
Introduction of AMA scheme will play a vital role for financial inclusion where the digital finance service providers will join a unified USSD platform, allowing any person with a feature or smart mobile phone to open a digital transaction account swiftly through a USSD code "2262" from anywhere at any time. The telecom subscribers base of 165.4 million have the choice to open a digital payment account in any branchless bank and become a part of digital economy, he added.
COO further said that the objective of the scheme is to improve accessibility of new customers for account opening, drive usage of digital financial services through increased number of account-to-account transactions across various mobile networks and provide digital access to a range of quality financial services. This will facilitate the poor and marginalized sections of the society towards adopting digital payments and also transform banks to shift their focus from 'Over-the-Counter' (OTC) services to branchless banking (BB) accounts.
"USSD is a technology we use every day, without even knowing what it is called or how it works. Every time we dial a *0000# short code on our phone to check balance or to subscribe a service, we are using USSD. As it works on every phone; this makes it an ideal candidate to be used as a delivery channel for financial services", said Ali, adding that 5G is the future, the cost of adopting the technology and its viability may pose the same challenge as why banks today hesitate to operate branches in remote areas where majority of the un-banked population resides.
He said that in such a scenario, USSD would be an enabler for AMA scheme and easy access channel for many other financial and specialized services which will provide new opportunities to bring the next 50 million Pakistanis under the banking ambit.
There are different models of branchless banking industry which are prevalent globally. In Pakistan, the One-to-One model, i.e. One Bank to One Telecom Operator is well-known. The major mobile financial services (MFS) players have strong telecom partnerships and investments which enables an already extensive franchisee network to operate as an agent network. Through this oligopoly they have covered significant ground in financial inclusion, but prevented other banks to enter the marketplace. This is the reason why the big five resorted to a Telco-agnostic model, he added.
Ali said that AMA scheme is an ANY-to-ANY model, it opens new avenues for existing MFS players to compete and offer services to subscribers of other telecom operators through their banks, and provides all branchless banking players with a level playing field to enter the space while existing players will have the opportunity to gain customer base from other mobile networks and banks. Subsequently, the consumer would be the one benefiting the most, as it would introduce a plethora of financial and non-financial services to choose from.
He said the AMA scheme platform is an amalgamation of two industries and is a 3-step process. "First, we interconnected with the USSD Gateway of all Telecom operators to route all AMA traffic towards VRG.
Copyright Business Recorder, 2020
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