Money thro' Mobile

2. MTM as an effective tool to realize Financial Inclusion of people in the lower strata.

There is a need to urgently implement non-banking and non- internet dependant solutions to realize financial inclusion of people in the lower social and economic strata.

The banks, both nationalized and private are white elephants always with an eye on profit rather than service. Whatever said and done, banks will not be able to effectively serve people in the lower economic strata in urban as well as rural areas. Even with Banking correspondents, formal banking procedures are not user friendly for illiterate and poor customers especially for the women and aged.  Similarly, services of most of the Micro Finance Institutions are also unaffordable to people in the lower economic strata. MTM system will make micro money payment facility available, accessible and affordable to everyone; including people in the lower economic strata at an individual level who is able and eligible to have phone in urban and rural areas.

3. MTM is a means to effectively disperse Governments welfare payments to real beneficiaries.

Money through Mobile (MTM) can be effectively used for sending various government welfare payments and money related programs of right to employment, right to food, right to education, right to health care, pension payments to retired employees, old aged and widow pension, relief payments to mentally / physically handicapped etc., to the MTM account of the beneficiaries across the country so that the they can get the money received in their MTM account by  the real beneficiaries without pilferage and third party intervention and can be transacted using their mobile phones sitting at their homes.

4. MTM can enable effective usage of ADHAR. Adhar as it become ready can be used for identification and information needed for KYC of the MTM users which be linked with MTM account number to enable personalized secure transactions to realize Financial Inclusion and Micro Finance services available, accessible by everyone and especially the people in the lower economic strata. both in urban and rural across the country at affordable cost.

5. MTM system and Network.

MTM system can be a common, centrally place, stand-alone third party system that can be accessed by to all phone users of different service providers over mobile phone in the PLMN and as well as from land line network in the PLMN. Phone users can become a registered MTM client at any MTM franchisee outlet or at local Post office or banks. MTM user can also link their MTM account with their Post office Savings bank account.

Crediting money into users MTM account can be done using pre-paid coupons available from franchisee outlets or by transferring money from Post office or bank accounts to MTM account or through any other MTM user from their account. For example money can be transferred from MTM account of spouse or parent to children or between friends.

6. MTM Set Top Box. The killer application exclusive for MTM system that will make MTM system universal  is the Set top Box at the user end at various vendor and utility and other service provider premises as an interface between their Local Area Network (LAN) and MTM through Mobile Net work.  This special purpose Set Top Box (STB) shall have facility to equip SIMs of various mobile service providers, if necessary to provide multiple accesses to mobile network to take care of the call traffic and the MTM system through the signal transfer points (STP) of Mobile gateways. The STB will interface a local computer with MTM application in it to interact with MTM system via mobile network. MTM applications required in the user devices can be download from the system.

Alternately, a USB plug in dongle device can be developed provide network access to MTM system by local computer or vending machines in small shops. 

7. Solar powered energy to support MTM.  To make available the required eco system to power Mobile phones and STB’s at user premises  where regular electric supply is not available or cannot be afforded by villagers in rural areas, solar powered mobile phone chargers etc., at subsidized cost. Facility for free charging mobile phones could be provided at public places, post offices, panchayat officer, bus stations / Rly stns.   etc.   

8. Features of MTM :

• Initial subscription to become MTM user and recharging / refilling of users MTM account through Post Offices, Banks and MTM franchisee outlets.
• Recharging / refilling of the MTM account in the MTM system could be done by buying and using MTM prepaid recharge coupons marketed by the MTM system provider as being done now for prepaid mobile phone service. 
• Every MTM user can pay-in money into own MTM account and any other MTM user account. Withdrawal and e-transfer of money can be done only from own account.
• Capability of e-transfer of money using the MTM prepaid coupons, by any Mobile phone or by Land line phone from anywhere to any MTM client account is another powerful feature envisaged of the proposed MTM system. 
• MTM cash vending machines (MTM-ATM), identical to bank ATMs, provided by MTM system provider at MTM franchisee points and other secure places shall be  used to deliver real cash to MTM users.
• MTM-Cards. MTM users can use MTM-VISA Cards identical to credit cards; issued by MTM service provider that can be used to receive or credit in real cash from MTM-ATM or any of banks ATMs.

1. ·         At locations where people need quick cash at malls,  and other locations, licensed Money changers can dispense real cash at a discount in lieu of e-transfer of money to their MTM account.   

• Government agencies can send welfare payments like NREGA etc to MTM system through banks to get credited into beneficiary’s MTM accounts.
• As the transactions are recorded, it will be possible prevent avoidance of Tax collections and the Govt. can access / collect statistics to cross check it. 
• MTM system and network use UUSD based real time transactions that is more secure and faster than web based services.
• CLI and TPIN cross check, UUS authentication and encryption will enable enough security.
• IVRS incorporated with MTM system can take care of the transactions between Land Phone and MTM system.

9. Technology involved.  Technology involved in MTM is identical to pre-paid system and it uses Mobile network and switching systems for access to MTM system and service. However, the MTM system shall reside outside the Telecom network and its shall be transparent to any particular Telecom network or Service provider.  

9.1. USSD based technology.  The message transactions between MTM mobile and MTM server will be USSD based as in pre-paid system. Unlike web based mobile banking services through INTERNET access, USSD is a highly secure CC7 signaling with additional security with Calling Line Identification (CLI), personal password and encryption making the MTM operation safe and secure.  User-to- User (UUS) feature can be incorporated for additional authentication for secure money transactions.

Unlike the store and forward feature in SMS, USSD is capable to support real time transactions. It is fast, easy and convenient to users.  Everyone familiar with making normal phone calls can use MTM facility without any difficulty as the transactions between the phone and MTM system is by keying in few numerals in the key pad like *123# etc in case of prepaid service.

USSD can work in basic 2G environment and no need of GPRS and 3G. MTM system and can be directly implemented in the areas where already mobile networks are available and can be spread to other areas along with provision of mobile access.

9.2. Connectivity between MTM-ATM kiosks and MTM system can be through Internet where available or through Mobile network using STB at MTM Kiosk end. Withdrawal of cash can be done using MTM Card (identical to ATM VISA / MASTER cards) provided by the MTM service provider or by accessing the MTM-ATM by mobile phone over mobile network and interacting with it with the Mobile.  

Hard cash can be obtained at MTM franchisee outlets or from MTM cash vendors on nominal discount. By transferring money into their MTM account.

9.3. IP connectivity directly or via Web based service over INTERNET can be also options  can be deployed for inter working of MTM system with Banks, Post Offices, major malls, utility service provider’s premises, franchisee outlets,  between MTM system and MTM-ATMs.

9.4. MTM Service can be extended to Land Line phone users. MTM service such as payments of Utility bills, Service charges etc and transfer of money to any MTM user account can be extended to Land Phones also as the numerals, * and # keys used in USSD messaging are available in land line phones.  IVRS incorporated with MTM system can take care of the transactions between Land Phone and MTM system.

10. The business part:  MTM deals being virtual e-transactions, and therefore, most of the real money remains within the MTM system. This opens out enormous business potential for various stake holders associated with MTM business.

There will be above billion phones in India soon.  With a modest assumption of a monthly average of Rs.10000/- transaction per phone, the annual turn around of the business will be a mind bogging sum of Rs.120 Trillion ($ 25 Trillions)

The huge excess liquidity available with MTM Service provider can be profitably deployed in various instruments of money management products within regulatory norms.  

11. MTM service can be provided free of charge to users.  With above business logic, it is possible to provide MTM service free of cost to users which will make the system popular with all types of phone users that will enhance MTM usage.

12. With the enhanced money business from this un-banked value added service, there will be enough profit share for various stake holders, the Telecom service providers and others, involved in MTM business.  

13. Why Telecom industry should encourage MTM business?

• With 3G and NGN, Transition from Voice call business to direct and IP based Data and Multimedia, substantial amount of business revenue will also move out of Telecom Industry to external industries such as banks, content providers, and other multimedia service providers. These industries use the use access through Telecom systems and networks that are set up and run with heavy CAPEX and OPEX.
• Since entire customer base, technology involved, systems and network involved in the business belong to various telecom service providers, the industry has all the right to get adequate share of revenue from MTM business.
• It is suicidal for Telecom service providers to remain as mere onlookers while their, system and network and their customer base are used by other industries and hijack their revenue potentials. It is necessary for telecom Industry to ensure adequate share of this revenue from these external users, to survive.
• There is limitation in Telephony related usage and revenue. MTM offer an excellent non-Telephony related VAS that can enhance Telephone usage and revenue.
  

14. Success of MTM service depends on the following aspects:

a)      MTM system shall provide service to all Service providers across the country.

b)      MTM shall be a common centralized system that shall be available, accessible and affordable to all users.  

c)      Since the system involves high volume of very low value money transactions, the service shall be without any additional charge. Any cost involved on service shall be compensated by profitably deploying the liquidity available to them in the operation process.

d)      It is necessary that MTM subscribers, utility providers, vendors, shops, banks, Post offices etc involved in MTM service are able to deal with a common MTM service provider, to make the service simple, user friendly and efficient, and to become profitable and effective.

e)      Therefore, to make the system and service succeed, the money management system should be able to offer universal service anytime, anywhere, for every form of payment. To realize this, the MTM system shall be ideally a common, centralized, stand-alone,  third party system that is set up by the consortium of Telecom service providers or by a third party on revenue  / profit share basis with the stake holders involved. 

15.   Un-banked Mobile money management is a must but need to be regulated. Setting up of disparate Money management systems, product and services by

various parties without any regulatory arrangement will not deliver desirable results especially for financial inclusion and empowerment of people in the lower strata across the country. Therefore, government should take immediate steps to bring un-banked money management service under regulatory controls through National Payments Corporation of India (NPCI) under the ambit of RBI.

16.  Scope of excusive GSM network and MTM system by BSNL in tie up with Postal Department.

It is even worthwhile for the government to set up the MTM system by BSNL tied up with Postal department. It is also necessary for the government to have an  exclusive GSM network that can be used for Disaster /  crisis management, security, terrorism prevention, Adhar implementation and servicing, administration and dispersal of welfare payments, pensions,, payments for disabled and old aged, money for rozgar  money for food, health and education, using the network and MTM system.  --------------------------------------------------------------------------------------

Author.  P.. Abraham Paul. Prasanth, 69 kakanad Lane, Kesavadasapuram, Pattom P.O, Trivandrum, Kerala. India. 695004.

1. Ex: Vice President (TS) SPCNL, SIEMENS ICN / G.M & SMT TBG BPL Mobile, TES (I) DOT India. Ph: +91471-2446644                    M:+91- 9446322644.   E-mail papaul@hotmail.com