1. 8/14/2015 SMS Exchange: Mobile credits as an electronic payment channel. Case of RWANDA Jean Pierre NSHIMIYIMANA Rwanda Utilities Regulatory Agency & Independent Researcher piero425@gmail.com ITU Workshop on “ICT Innovations for Developing Countries” (Tunis, Tunisia, 20 June 2012)

2. OUTLINE Overview on Rwanda Mobile Transaction status and Statistics Challenges for these systems SMS Exchange System Conclusion and Recommendations 8/14/2015

3. RWANDA 8/14/2015 CapitalKigali Area26,338 km 2 Population10,718,379 Number of Households2,187,500 Mobile Penetration42% (April 2012) GDP502 USD Rural Population (2009)(2009)81.4% Urban Population (2009)(2009)18.6% Electricity16% (2012) and 70% (2017) TerrainUplands and hills

4. 8/14/2015 Photo: Internet

5. Mobile Transaction Systems Status Eg. To buy electricity Prerequisites: To be a Bank customer To be registered for this system To have deposit The money is deducted from user’s bank account directly. 8/14/2015 1. Mobile Banking (for Banks)

6. Mobile Banking (Cont.) Statistics 8/14/2015

7. Mobile Transaction Systems Status (Cont.) Prerequisites: To be a Telecom customer To be registered and to have a mobile money account To have deposit The money is deducted from user’s Mobile Money account directly. 8/14/2015 2. Mobile Money (for Telecom)

8. 8/14/2015 Mobile Money (Cont.) Statistics

9. These systems are very FLEXIBLE & AVAILABLE and technically working well, But… 8/14/2015 ?

10. CHALLENGES The GDP is 502 USD per year The little revenue becomes “First Aid”! There is no need to go for deposit because tomorrow it shall be needed! The effort to go for deposit = the effort to buy this utility! 8/14/2015 1. Low Revenue

11. CHALLENGE (Cont.) 8/14/2015 2.Geography

12. Because people are scattered in the village far from the cities, it becomes difficulty and costly to make a registration and deposit (as prerequisites for these systems). (For Many) The use of these systems cannot justify the cost to be done 8/14/2015

13. With this situation, the purchasing of some services becomes more DIFFICULT and involves a lot of THIRD PARTY COST like transport and time consuming (especially in remote areas). 8/14/2015

14. SMS EXCHANGE!! Introduction Status Functionality Comparison Advantageous Challenges 8/14/2015

15. INTRODUCTION Through a question asked in ICT Forum in Kigali last year, How can people in the village can have access to the Mobile systems, A commitment came to make a research for a solution, hence the SMS Exchange System. As these people are having cash, the key prayer was to find an exchange object, which should so popular to that be accessed by every mobile user. 8/14/2015

16. That exchange point is mobile Credits: the mobile penetration is 42% (4,508,666) of the whole population, ie each household has almost two mobile phones. This penetration also has a great impact of Credits availability (almost at each door) 8/14/2015 INTRODUCTION (CONT.)

17. 8/14/2015

18. SMS EXCHANGE STATUS The system is in the process of being patented It also being implemented in one of Mobile Operators in Rwanda (MTN Rwanda) 8/14/2015

19. FUNCTIONALITY The system is a USSD Application and Value- Added Service (VAS) to Mobile Network; It is connected directly to the Intelligence Network (Billing system); It uses the credits a mobile user has in his phone to buy/pay some services. 8/14/2015

20. FUNCTIONALITY (Cont.) USE CASE DIAGRAM 8/14/2015

21. FUNCTIONALITY (Cont.) DATA FLOW DIAGRAM 8/14/2015

22. COMPARISON 8/14/2015 Mobile Banking (Banks) Mobile Money (Telecom) SMS Exchange UsersOnly bank customers re glistered for it Only Mobile subscribers registered for it. All Mobile users PrerequisitesTo be registered and activated for this service To have deposit To be registered for this service To have Deposit To have units on the mobile number Sources of Funds Deposits The units on mobile phone

23. COMPARISON (CONT.) 8/14/2015 Mobile Banking (Banks) Mobile Money (Telecom) SMS Exchange Observati ons Limited to specific bank customers registered for this service The Activation period takes time Registration may be tiresome for some users Deposit takes time (queue) and may involve third party costs (like transport) Limited to specific mobile subscribers registered for this service Registration may be tiresome for some subscribers Deposit may take time (queue) and may times involve third party costs (like transport) Easy to get airtime vouchers ( they are available almost in whole country as well as the mobile network coverage) Only services charge (for USSD session)

24. ADVANTAGEOUS Environmental impact Economic hardship applicable Social Impact The system is economically and environmentally successful because it is paperless. The system is very cost effective because the mobile communication sector is very competitive and it will save all the third party costs (like transport) The fact that the system is environmental and economical efficient, automatically, its social impact is remarkable. 8/14/2015

25. CHALLENGES The system requires many interconnections of different players' System (Operators, Utility Providers), It requires also an important budget (for financial reconciliation at a period) It has not been easy to convince: It’s new (always this question: Show where else it has been implemented??) A big WORRY: It is touching the “HEART” (billing system). 8/14/2015

26. CONCLUSIONS & RECOMMENDATIONS To Telecom (especially in developing country): To promote such systems as they can help a lot of people (especially in remote areas) To Government & ICT Regulators: To promote the spirit of research so that many innovations should come up and ICT continue to go beyond core communication (Voice, SMS and Internet) but also impact the whole life even to people in the heart of villages 8/14/2015

27. To ITU: to continue such workshops to help an innovation in one place to spread an to every one as the globe has become one home. 8/14/2015 CONCLUSIONS & RECOMMENDATIONS (Cont.)

28. Merci! Thank You! 8/14/2015