The following is a partial transcript of a panel discussion held at the Mobile Money Summit in June 2009 featuring Jojo Malolos of SMART Money and Rizza Maniego-Eala from G-Xchange. Jojo and Rizza address timely issues surrounding mobile money, including:

– Their approaches used to understand the customer
– Approaches used to drive adoption
– Perspectives on interoperability

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Seema Desai, GSMA – Looking back, what if anything would you have done differently in commercializing SMART Money?

Jojo Malolos – There have been a lot of new ways that mobile money can be done. We recently got some good new ideas from our MFI institution borrowers. They gave us an idea for converting the phone into a loan collection and payment tool. We developed this and now have around 4,500 borrowers using that tool to receive loans from MFIs. The loans are dispersed (to them) through the phone; they get the cash through money-in-money-out centres and ATMs and they repay the loans weekly also through the phone. The lesson is, there is value in getting back to the consumer and sitting down with them and understanding exactly what types of services they would like to bring to the table. It’s very consistent with the results of the study GSMA conducted, which suggested that it’s very important that the requirements of the consumer are looked at in detail. Mobile money cannot be bank centric, cannot be telco centric, it must be consumer centric because the customer will dictate what they want, what they understand and what’s relevant to them. You do have to appreciate and understand that.

Roberto Rittes, Oi Paggo – Jojo, Your system has a lot of money going through it and I saw that you are putting most of your effort into purchase through your deal with MasterCard. What would be the hurdles of developing your payment system without MasterCard?

Jojo Malolos – This is purely a consumer driven strategy. Paying for goods and services with MasterCard is an option, and we also have an m-payment system where we have partnered with thousands of merchants who will accept mobile payments through the phone. There is a market that finds comfort and convenience in using MasterCard as a tool to pay and from an MNO perspective this approach also increases our ARPU a bit as we get more through merchant discounts. Additionally, sometimes MasterCard comes up with very good promotional activities or programmes for MasterCard users including internet transaction and internet payments. We just launched our internet payment option using MasterCard. On the phone you have to put in a lot of security measures and they have been very supportive of these approaches. It’s about giving the consumer options and so far we have got good mileage for purchases using MasterCard.

Paul Leishman, GSMA – One of the findings from the survey was that just 1 in 10 people learned how to use mobile money on their own. What processes do you have in place with agents to make sure that people not only set up but also become active users of the service?

Jojo Malolos – I’ll approach this from an SMS perspective. The Philippines is a major SMS market. For example, SMART has 38 million subscribers that produce 1.2 billion SMSs a day. So getting Filipinos on the phone to transact, send or type was easy for both agents and subscribers to learn. Further, our system is menu driven, so it’s intuitive and easy to use. To ensure customers remain active, we use the agents to educate the users and we have intensive campaigns to drive consumer understanding. These can be through media campaigns, town hall meetings and when we do KYC blitzes we do education at the same time. In SMART’s case there are going to be many people learning to use SMART Money on their own because the service is quite straight forward.

Gavin Krugel, GSMA -Looking back, if there was one thing that you would have done differently what would that has been? What different approach would you have taken?

Rizza Maniego-Eala – I would say it’s important to view mobile money as a financial service rather than as a Telecom product. Mobile money is different than SMS. If we look at them as being different from the onset then everything else should be much easier rather than trying to expect that it will be similar to SMS, at least at the initial stages of the plan.

Jojo Malolos – I think along the lines that I mentioned earlier, something that I would have done differently is looking at the consumer and understanding them first. So, it’s really about looking at it from the financial service requirement of the consumer.

Gavin Krugel – Looking at other deployments around the world, would you agree that as an industry we are not looking carefully enough at the consumer value proposition, that we are not starting with the need? That we are driving a product and solution without first understanding what the consumer requirement is?

Rizza Maniego-Eala – I’d say that this would be one of the challenges. Everybody thinks there is so much knowledge on the customer base on the mobile side that is easily portable to financial services and mobile money in general so I think the earlier we are able to tell our stakeholders that the database for mobile is valuable but there needs to be deeper and also more tweaks into that database and understanding to be suitable to mobile money, the better.

Jojo Malolos – From our perspective, I think we have learnt a lot from the MMT and MMU initiatives at GSMA. We have done a lot of collaborative workshops and meetings with bank partners. By bringing in the banks and actually understanding the role they play of giving the consumer the confidence that this is not just an MNO service but it is a combination, a service that involves a lot of stakeholders that have an equal share in making the consumer happy is important.

Hannes Van Rensberg, Fundamo – The Philippines is unique from a number of perspectives – one of them is that it has two successful mobile money operators operating and one of the things we often speculate about is interoperability and I would like to know your thoughts on this. Will it happen, at what speed and what are the stumbling blocks etc?

Jojo Malolos – That is quite controversial, but we are for interoperability. We think that the consumer will eventually be looking at a situation that if mobile money is already successful, it doesn’t hurt to be able to move money between a SMART Money account and a Globe account. Before this can happen, I think there are a lot of things that we still need to prove to ourselves and our management – and that is getting the service accepted by a big portion of the population.

Gavin Krugel – Do you think that there are specific market conditions in which interoperability should happen? Do you think that the market as it reaches a certain level of maturity and at this point this should happen? What is the appropriate condition for interoperability?

Rizza Maniego-Eala – That is another tough question, Gavin. For me, implementations will be close-looped for a while and even if interoperability is the end goal it has to happen at the right time. Take roaming as an example. We do not call it interoperability – today roaming is natural so I think over time mobile money will be interoperable just like roaming is today but again given the niche and stage it will take some time to get there.