This case study is one of three released by MMU this week featuring GSMA Mobile Money Sprinters.
Easypaisa, a mobile money service in Pakistan, serves more than five million customers a month through 25,000 points of service. By end 2012, it had processed more than 100 million transactions with a throughput of more than US$ 1.4 billion. With a population of 180 million and only 15% bank penetration in 2008, Easypaisa seized an attractive market opportunity to deliver mobile money innovations in Pakistan.
Three important innovations emerge from the Easypaisa story. First, Easypaisa was launched from a unique corporate structure. Telenor Pakistan, a mobile network operator (MNO) acquired a 51% ownership stake in Tameer Bank, a microfinance bank, and then established Easypaisa as a common organization across the two companies. Second, Telenor Pakistan and Tameer Bank introduced over-the-counter (OTC) mobile money services – an entirely new model that did not require registration or use of an eWallet. And third, Easypaisa achieved rapid national expansion by relying exclusively on its existing GSM distribution structure. While others have struggled with this approach, Easypaisa Franchisees recognised the opportunity to generate new revenues and invested in mobile money.
Easypaisa’s success with OTC was due to its ability to serve all customers in the market, even non-Telenor subscribers, the simplicity of no registration requirements, and its imitation of the consumer behaviour for electronic airtime top up. Given the cost and obstacles associated with registering for an eWallet, and that Pakistan MNOs had relatively even market share, the OTC model was an effective way to drive the initial adoption of mobile money in Pakistan.
However, accepting OTC as the only way forward would be regrettable. The full potential of mobile financial services for Pakistan cannot be realised without a product which offers stored value i.e. an eWallet. More can be done in Pakistan to extend the number of registration points, develop robust product offerings, and to invest in raising awareness. Driving adoption of the eWallet is an essential step in building a robust digital financial ecosystem that will generate financial returns for mobile money service providers and contribute to financial inclusion.
To learn more about the innovative corporate structure underpinning Easypaisa, the levels of investment at launch, the pros and cons of the OTC model, the tactics utilised for rapidly building a national distribution and how Easypaisa maintains quality in their channel, please read the full case study.