Visa Inc. a global payments technology company – is soon going to launch its own mobile financial services (MFS) platform in Pakistan reports Express Tribune. The product will use VisaNet technology and function on ‘interoperability’ model – a first in Pakistan’s mobile banking market.
VisaNet is the world’s largest retail electronic payments processing network, handling an average of 150 million transactions every day, according to the company’s website.
Fundamo, a wholly-owned subsidiary of Visa based in Cape Town, South Africa and a leading platform provider of mobile financial services, will launch this solution, the source said.Visa’s country head refused to share the product’s details, but an official close to the development said its operational model would be similar to 1Link – Pakistan’s largest interbank payment network service provider.
“It is different from 1Link in the sense that one doesn’t need to go to an Automated Teller Machine or a Point of Sale for a transaction,” Express Tribune Quotes the Source. “It’s not specific to a particular bank or a cellular service provider, all you need is a Visa card,” he said.
“One can use the information on his Visa card – the security code for example – and complete the transaction from his mobile phone,” he added.In the beginning, Visa will offer all mobile banking transactions currently in place. Later on, it will introduce more features, he said.The product may be launched any time. “Visa is ready to market the product, it has the full backing of the central bank as well,” the source said.
“Once the banks and telecom operators integrate their infrastructure to support the platform, the product will hit the market,” he said. Warid Telecom and Telenor have recently had a network upgrade.
Visa entered the mobile banking segment earlier this year after Fundamo partnered with Monet to provide MFS platform for Warid Telecom and Bank Alfalah’s mobile banking solution. The company’s interest for further expansion comes on the back of a strong growth mobile banking has recorded recently.
Mobile banking has managed more than 31 million transactions worth $1.5 billion in the last quarter of 2012, according to the State Bank of Pakistan.“The Pakistani mobile financial services market is one of the most successful in the world,” Fundamo CEO Hannes van Rensburg said.
Rensburg attributed this success to two key contributors – “the vast number of people with mobile phone subscription but without access to financial services and the visionary approach to regulation by the State Bank of Pakistan.”
In March 2008, Rensburg said, the SBP was one of the first in the world to introduce guidelines on branchless banking designed to encourage banks to roll out mobile financial services. Less than 10% of the population of 180 million had access to financial services back then. “However, in direct contrast to this, there were more than 94.7 million mobile subscribers,” he said.
Fundamo CEO said Telenor’s easypaisa is a great example of the rapid growth of mobile financial services. “In December 2010, 16 months after launch, easypaisa had handled 9.9 million mobile money transactions. Last year alone, easypaisa handled 60 million transactions,” he said.
While several new players from telecommunications and banking sectors have joined the mobile banking bandwagon in the past six months, Visa still sees room for growth.
“Despite increased adoption and use, the majority of Pakistanis remain unbanked,” Rensburg said. Only 12% of the population has access to formal financial services today, he said, whereas mobile penetration is nearing 70%.
“This means that there is still enormous scope for growth in the market,” he said.
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