What is Tech@State Mobile Money?

The US State Department‘s mission is to “Create a more secure, democratic, and prosperous world for the benefit of the American people and the international community”. It reports to Secretary of State Hillary Clinton, as does the Foreign Service. It is the arm of the government focused on foreign affairs.

Tech@state are conferences to give state department staff an opportunity to learn about important technology trends. On August 2, 2010, the State Department will host a Tech@State focused on Mobile Money. They will address the following key questions,

• How do we scale the mobile frontier, leveraging technology and partnership for sustainable development and financial inclusion?

• What do case studies reveal about success and failure?

• What are the applications of mobile money and its implications for U.S. foreign policy?

They expect around 250 people to attend in Washington DC and then more through remote participation (embassies around the world). The sessions will also be web broadcasted.

I am co-presenting the opening talk entitled “Scaling the Mobile Frontier: How do we leverage technology and partnerships for sustainable development and financial inclusion?” My co-presenter is Jan Chipchase, Director, Frog Design. Obopay’s perspective is unique since we are delivering mobile money on three continents, in four countries, and our service operates in diverse banking and payment market conditions from the US to India.

Why is US State Department interested in mobile money?

People and organizations working on foreign policy are keenly interested in anything that has the potential to create a more secure and more prosperous world. Although it is a very new area, we already know that mobile money has been shown to contribute to increased economic opportunity, improved quality of life, and enhanced security.

Most of the world still is heavily dependent on cash for personal, business, and government use of money. In India, for example, 91% of all payments are in cash. Cash can be lost or stolen; is expensive to handle; is difficult to trace activity and detect illegal usage; and can dramatically increase the time and resources needed to make a business or personal payment. Mobile money changes people’s lives by bringing mobile banking and electronic payment to people and small businesses who have traditionally had limited or no access to these services.

The State Department sees the potential of mobile money from many angles: economic growth; political security; the empowerment of women; health care payments; enabling commerce, especially for rural markets for supplier payments; and ,of course, the big goal of financial inclusion (bringing full range of banking services to underserved people). There are five billion mobile users but only 1.5 billion people with good access to banking. Mobile money has the potential to bring banking to everyone with a mobile phone.

What is the social and economic impact of Mobile Money?

Mobile phone adoption is unprecedented – reaching over 80% of people in a fifth of the time it took for landlines to reach similar penetration. The initial successes with mobile money are demonstrating the same unprecedented growth. Early indicators are showing that the same breakthrough in adoption will happen with Mobile Money.

In two years in Kenya – two years since the start of mobile money – over 38% of households have at least one mobile money account according to William Jack of Georgetown University and Tavneet Suri at MIT. In contrast, after five decades of traditional banking, only 22% of adults have bank accounts.

Financial Inclusion

In Africa, only 5% of the population of most countries in banked. There are now approximately 18 million mobile money users in Africa. It is climbing by approximately 35 thousand per day. In India, 41% of people are unbanked and traditional banking is struggling just to reach 500 million people. Yet India now has over 600 million mobile phone subscribers and a strong retail network to service those users. The potential for mobile money in these markets is huge – and the impact it will have on the people, the businesses and the economies will be significant. India has been slower to rollout mobile money for two reasons; first it is a bigger country and more complex implementation by the nature of the market; and second, regulators have been slow to establish the necessary guidelines--although that has recently changed.

At Obopay we are working with Nokia in India. We have started our rollout after a successful pilot in Pune. We believe that in India, although it will take longer to get started than in Kenya, once established we will see the same rapid adoption that was experienced in Kenya. Because we also have an implementation with the fastest growing mobile operator in Kenya (YU), we see firsthand the similarities between the two markets.

Scale this around the world, and you can understand the full potential. GSMA estimates that around 2 billion people who have no access to bank accounts already have mobile phones. That number is expected to rise as mobile phones continue to grow in emerging markets.

Tell us more about what is happening around the world?

We are seeing tangible savings for mobile money users around the world. This comes from reducing transaction fees, and lowering transport and time to transactions– sometimes dramatically. In Senegal, paying the water bill took three days (two for travel and one standing in a Queue). Now the rural people can load money in their village and pay electronically. In India, rural businesses can now send payments to suppliers in the city. This reduces travel time, speeds deliver of supplies, and increases safety because they don’t have to carry cash when they are traveling. And in the US, we are helping families and small businesses to save time and money with a better way to pay and get paid.

We are also seeing it start with one use – money transfer in Kenya, remote top up in India, pay your water bill in Senegal. But once it starts, consumers begin to expand their use, and the benefits they receive. GSMA calls this moving to more sophisticated payments, creating stronger financial literacy that empowers life and work. We encourage this by adding more uses for the service – although we always focus on driving adoption with a simple value proposition.

Ironically, the number of unbanked consumers taking traditional bank accounts increases after exposure to mobile money. Therefore, this promises to be a good standalone business but also will drive people to other traditional bank products.

For many, Mobile Money is the first time they have created any tangible financial history. This allows a user to build up a documented history of good behavior. That financial identity will be useful in assessing their qualifications to receive microcredit and other financial products.

Is mobile money important in the US or just emerging markets like India?

Mobile money clearly will bring better affordable access to financial services for people who need it. But it also provides benefits to banked people, providing more convenience, ways to connect better to family members and young people And for small businesses, it gives them a better way to get paid. It also allows for the elimination of checks and cash – which helps the environment by using less paper and gas for transport. In the US most people have bank accounts, but there is a growing number of families considered underserved by traditional banking. Both groups can benefit

What else are you doing in Washington DC this week?

I am meeting with Congressional staff members “on the Hill”. I have requested introductory meetings with people involved in the following committees. My goal is to make sure they understand the full potential of Mobile Money.

House Committee on Financial Services

Subcommittee on Domestic Monetary Policy and Technology

House Committee On Foreign Affairs

Subcommittee on Africa and Global Health
Subcommittee on the Middle East and South Asia

House Committee on Financial Services

Subcommittee on International Monetary Policy and Trade

Senate Committee on Financial Services

Banking and Financial Issues

State Department
International Communications and Information Policy

World Economic Forum Africa

Dar es Salaam. Jakaya M. Kikwete, President of Tanzania with Klaus Schwab

WEF is a unique organization because it brings together high level heads of state, business leaders, non profits, and innovators. This event was a regional event focused on Africa. Although Africa was a topic at Davos, it couldn't get much airtime when all the global issues are under discussion.

One of the themes this year was

A New Vision for African Agriculture. There are many sessions on various interesting topics. But experienced WEF attenders know that the sessions are truly optional. The key to WEF is the networking - who you meet and what you talk about. These can be chance meetings on a bus, in the hall, during a session, at a party, or at a meal. You also have online access to everyone who is registered and you can reach out electronically to be sure to connect. Almost everyone you connect with is doing incredibly interesting work as well as has a fantastic background.

This WEF I met quite a few African bank CEO's from various countries. I also connected with technology providers operating in the region. Got to spend time with the head of Vodacom (Vodaphone) Tanzania - we were on a panel together discussing the mobile multiplier effect.

Our panel had great speakers including Ajai Chowdhry, Founder, HCL; Chairman and Chief Executive Officer, HCL Infosystems, India. I was taken aback by the lack of attendance at all two of the technology sessions I attended. During the mobile multiplier effect panel, the President of Zimbabwe decided to make a surprise visit.

But I suspect most of the leadership in Africa is focused on fundamental issues - like stable open government, basic infrastructure - therefore it is hard for them to focus on the big wins like job creation, education, and innovation.

That being said I believe there is so much potential as the continent gets wired and universal internet access via mobile. In a session on social networking I notice there are a few young innovators using social networking for really innovative business and social applications. In our session, we talked about Africa's leadership in mobile banking and it is no accident since it is also the place where traditional banking had the poorest reach. Africa has a real opportunity to show the world what the next generation of banking is all about. The bankers understand that and are all excited about it. Still the governments need to get engaged to help create the regulatory structures to make it happen.

Not really discussed openly in the sessions, but definitely talk about in the halls was the issue of "cronie" government leadership. There are "families" that run the government for generations - and it is nearly impossible to break in. One Kenyan told me over the past years there have been exciting young leaders entering the scene - only to be murdered before they were able to make it into top government leadership roles. Let me say, I am not at all an expert on Africa. So I am not trying to pretend I understand all the dynamics of the continent.

I did notice a sense of hope in the air. The World Cup being held in South Africa inspires all African countries. South Africa being seen as a player similar to Brazil on the global scene is uplifting. India and China leaders attended the conference and were clearly engaged in how they participate in Africa's future.

For those of you that haven't been to Africa, it is a beautiful country. I stopped in Zanzibar for 20 minutes on the flight in - what an amazing place - I must go back. The people are gentle, the landscape is breathtaking. My hotel was next to the water and a church. At 6am every morning I awoke to the sunrise on the water and song coming from the church. A highlight of the trip was when the president of Tanzania invited all 1200 of us into his home for a dinner and cultural celebration.

I love Africa.

My thoughts on Carol Realini and Judy O'Brien being named as Top Silicon Valley Women of Influence by the Silicon Valley/San Jose Business Journal.....

Q: What does it mean to you personally to be named one of the Most Influential Women in Silicon Valley?

Receiving this recognition is such an honor. There are a growing number of influential women based here and those of us being recognized with this award are the tip of the iceberg. I am flattered at being recognized and expect the recognition is really more about Obopay and less about me. Obopay is such a big idea - using the global ubiquity of mobile to bring banking to billions of people who have been unserved by traditional banking business models. Oh, I almost forgot...Obopay is also committed to bringing a new level of convenience to the rest of us - so we all have banking services that empower our life and work.

Q: What do you think the potential is for women in business to lead and make a difference today?

For a while now when asked this question, I have been giving the same answer - the potential is broad and deep. When I started in technology in the 70's, the industry wasn't used to women engineers or women leaders. That has all changed now. Plus, we have many new high growth companies - like Obopay, Facebook, Twitter, and many more - that represent great opportunities. If you have the talent and leadership, companies want their employees to step into the role of maximum contribution. So they don't care what sex, religion, race, or relationships you have. Instead they care about results and market leadership. And they are always asking who among us can take on this new challenge. These are great environments for women to contribute, grow and lead.

In addition, there are also great opportunities in more establish companies and in start up companies. Everyone is more comfortable with women leaders including VC's, board of directors, peers, even husbands are more comfortable and supportive than ever.

Q: What challenges do you think still exist for women to excel in the workforce today?

In many ways, the challenges are the same for women and men. You have to be good at your job so you need to develop strong competencies. In most situations women don't have to be better than men to succeed or be recognized. But they do need to learn things that may not come naturally to them. Like fighting a good fight, recognizing organizational obstacles and eliminating them. Most of all, they need to stop worrying about people liking them and worry about doing the right thing.

Q: Having both the CEO and General Counsel from Obopay named Women of Influence in Silicon Valley is quite an accomplishment. What do you think this says about Obopay’s leadership?

It says we have a great leadership team - and that two of those people are women. I am really proud of the strength of our executive team. They are top leaders with extensive mobile and financial services experience. If there was a list of top men or list of top leaders in India - I would expect that we would get on those lists also.

Q: How has Obopay General Counsel, Executive Vice President and Secretary Judy O’Brien made a difference at Obopay?

Judy was a top lawyer - led a large practice at Wilson Sonsini. Then, she became a VC for a few years. She could be general counsel for a large public company or run a large law practice. We are so lucky to have her at Obopay. She is at Obopay, like the rest of the executives, because of the big idea - next generation banking and electronic payments that brings a whole new level of convenience and extends banking to billions.

Judy is also totally committed to building a global company from the start. On her first week at Obopay, we traveled to India to set up the operation there. We knew we wanted to be global, sowhile we are building our business in the US we are also building (on the same platform) our business in India. Now we are also in Africa and talking about expanding in Asia, Europe and Latin America.

Q: What are you most proud of in your career as a female leader?

I am proud of many things. I have been involved with building 3 companies before Obopay. All of them successful. I am proud of raising capital - which is very tough. And most of all, I am proud of Obopay. Before Obopay I thought my career was behind me. When I was traveling in Africa and saw mobile phones in places where infrastructure was weak, I realized my career was in front of me.

Q: If you had one nugget of advice to give young women leaders today, what would that be?

Don't listen to anyone that tells you "you're not good enough". And (just one more)....surround yourself with great advisers and team members. And (just one more please)...dream big.

Obopay CEO Shares Strategy to Transform Mobile Payments - pymnts.com

PYMNTS.com asked industry expert and author of Paying with Plastic, David S. Evans to profile industry thought leaders and executives to find out what's next in the world of payments.

In this edition of the CEO Series, David interviewed the CEO of Obopay, Carol Realini -- the entrepreneur behind Obopay which has allowed customers to send and receive money through mobile phone SMS since 2005. Carol came out of retirement to pursue this opportunity in payments after traveling around the world and realizing the shift toward mobile.

Obopay was born out of an opportunity to use mobile phones to exchange money and extend beyond the traditional bank branch model. This has brought Carol and Obopay to the forefront of innovation in payments. With a continued focus on technology, Obopay is also drawing attention to building relationships to take their services to a larger number of consumers and prove to be what's next in payments.

Nokia Money Initiative in India

What is Nokia and Obopay announcing today?

We just launched the first commercial version of the Nokia Money in India. Read about it here.

The launch is starting with a commercial pilot in Pune, which is one of the country’s largest metropolitan areas in the region. It is being offered in partnership with Yes Bank and is being called Mobile Money Service by Yes Bank powered by Nokia. It’s the comprehensive service which allows you to transfer money to another person just by using the person’s mobile phone number, pay bills, as well as recharge your prepaid SIM cards.

We’re also working to enable consumers to pay merchants for goods and services in the next few months.

What is so special about your service offering?

In many ways our offering with Nokia and Yes Bank are taking mobile payments and banking to the next level. This new service is one of the most comprehensive services available in the market. It’s going to change the game for mobile payments. Obopay brings operating experience with mobile payments from around the world. The offering combines Nokia’s retail reach, brand awareness, and handset expertise to provide unparalleled access and ease of use for these services. Additionally, the service offers a comprehensive feature set that enables people to use it to meet all of their daily payment needs including utility bill pay, top-up minutes, send money using P2Pand pay merchants using P2M features. It’s also the only service that is designed to convert physical cash to e-money, which is being delivered in a way that provides unprecedented access to financial services through Nokia’s retail reach. It’s also the only mobile payment service with a user-friendly application that can be accessed by the masses. Our application uses secure SMS, rather than requiring the user to have a mobile data plan.

Why did you select India as the first emerging market to launch Nokia Money initiative?

We chose India because of its enormous scale and potential as the home to a population of 1.5 billion people. It’s also got the fastest growing cellular market in the world. Right now there are 500 million mobile phones in India, but it’s expected to be more than 900 million by the end of 2013. 41% of India’s population does not even have a bank account. Combined, the market potential here is huge in India.

Nokia and Obopay also bring significant experience and resources to the Indian market. Nokia is among the leading brands in India in market share with over 200,000 retail stores throughout.

We also have a lot of operating experience in India. We have been live in India with YES BANK since 2008. We have a deep understanding of the complex marketplace, the regulations, and ecosystem.

With our combined experience and market potential we felt there was no better place than India for a service offering like this.

What are your expansion plans in India?

We plan to extend the launch over the upcoming months and aggressively roll out the service to all major cities in India within a year.

What does Nokia and YES BANK add to the service offering?

Nokia brings the strength, trust, and the vast distribution of their brand. They’ve got 200,000 retailers across India who could serve as authorized Nokia Money agents. They also bring enormous handset expertise and uniquely developed mobile elements.

YES BANK, who is a long-time partner of Obopay, is the fastest growing bank in India. In fact, it was awarded the “Most Innovative Bank in India.”

We’re a strong company and have strong partners for this service and will continue to grow the ecosystem of partners including mobile operators, banks, distributors and merchants to bring Nokia Money to the market successfully.

How will this impact the lives of Indians?

This service has enormous potential to empower the lives of its users. It has the potential to bring finical services to the hundreds of thousands of Indian Citizens who have previously not had access to them, improving their lives in the process. It’s safer, convenient, and more efficient than cash. It gives consumers and merchants the ability to manage their finances in ways that were not available to them before. It’ll enable business to get paid faster, which will increase productivity.

Last Day at Davos

“I know first-hand in Kenya, where farmers have seen their income grow by as much as 30% since they started using mobile banking technology and one World Bank study found that a typical developing country, a 10% increase in the penetration rate for mobile phones led to an almost 1% increase in per capita GDP. Put this into context, that would for India translate into almost $10Billion a year.”

Hillary Clinton, Sec of State

The last day has been good. Wrap up with the technology pioneer WEF team. We gave them feedback on how they could improve the program. Mostly about communications and preparation before the event. They have a buddy system but some buddy's were more helpful than others. It is essential that you prepare for the event ahead of time since once you are here there is too much going on to set up all the meetings you want on the spot.

We also recommended trying to get the technology pioneers a little more involved in the larger events. We discussed the value of that to WEF and to the pioneers. It was clear that making that happen was non-trivial. They coached us on how to get ourselves more engaged with WEF and an indirect result could be more involvement with sessions.

I went to two sessions - one was a CNBC live broadcast on Gender equality in the workforce. The picture above is the CEO of Coke talking about how Coke is aggressively pursuing more women at all levels. He seemed genuine and committed. That being said there are many complex issues with workplace, culture, and home. Others on the panel were COO of Facebook, CEO of Booz. Good job for traditional global inc. issues, not as great on international issues or SME issues. Nothing about access to capital.

The other was the Global Economic Outlook. What follows are my notes. Very brief and may be of interest. I am sure you can go online and get more comments from WEF. Larry Summers was articulate but talk about unemployment of MEN in the US. They should get someone to media train this guy. It was embarrassing that someone that high up in the US government was so politically incorrect.

A good day. I am very tired from a long week but this was the best conference I have ever been to. All the technology pioneers felt the same.

----------------------------

Notes from Global Economic Outlook session.

India. Growth is strong. need policies to bring down deficite - slowly. Complex. Investment needs to be increased. Financial reform.

Japan. Change structure of economy. Lehman shock gives us the opportunity. More focus on local consumer. Capitalism needs reform to prevent these speculation drivers of growth (subprime crisis). International regulation.

China. 8.7 percent. Consumption growth is strong. Regional disparity getting better. Structure change and deal with over capacity. 33 percent investment growth. 15 percent consumption growth - need this to get larger - closer to 33. Overcapacity big issue. Pure export driven has to change. Structural issue. Need international cooperation.

DB CEO - legacy assets - still may be an issue. Regulatory issues - have to deal with these. Regulators part of the solution.

US - Summers. Statistical recovery, human recession. Moderate gdp growth rate expected. Unemployment is a Big issue. 1 in 5 not working. Recovery will mean 1 in 7 or 8. Job creation and credit access esp for med size business is key. Optimistic about US commitment to global economy (immigrants implied here)

Strauss - Kahn. Improving re-balancing. Growth - now looking at india and china to fuel growth. US will not. Corporate cross border banking.

More From Davos

"Obopay, founded by Carol Realini, particularly struck my imagination, and was enthusiastically explained by Tom Standage ...the opportunity was clear enough, without Standage's endorsement. Obopay offered people who had never had a credit or cheque card the means to send money to relatives, or pay for utilities or food using their phones.

"Half of the world's adults [or 2.5 billion people] have no access to banking," Realini said. Obopay, and companies like it, could empower those people, making them more economically productive, and overturn banking. That's the kind of thing I look to technology to achieve." - Jason Pontin, Editor in Chief and Publisher of Technology Review

---------------------------

This has been a great event for mobile banking and Obopay. Mobile Banking is discussed in many sessions and conversations. Yesterday I attended a private workgroup on Mobile Banking. Since it is private I am not allowed to discuss it but I believe the WEF will write a report that I will hopefully be able to share with all of you.

The Technology Pioneers program is a dream come true for a entrepreneur; recognition and a chance to build a very broad and deep network around the world.

It is hard to get into a rhythm at Davos. The day starts early and ends when participant just can't stay awake any longer. I have not yet made it past 11PM - but the evening activities go way later - until around 2 PM. On the first few days I wanted to do everything. Then I realized that was impossible so I have now settled into an approach that is 1/3 sessions, 1/3 preset 1-1 meetings, 1/3 general networking.

I can't say enough how full every day has been. And how amazing. Almost all of the corporate attendees are CEO's. I have had an opportunity to talk to CEO's of 3 major Mobile Operators, 2 of the world's biggest banks, and many others. Not only do you meet them, you connect with them. We are all here as "equals" so the normal barriers between people breakdown. It is a unique gathering.

I am not sure what I was thinking but at one technical pioneer event there was an "incident". There was a journalist - who will go unnamed - who was berating a technical pioneer. This journalist didn't understand or appreciate the value of the tech pioneers business. So I got up and told the journalist that he was out of line and to back off. He really was out of line and also I think he didn't understand the business because he couldn't even imaging the environment of an emerging market. His context was so stuck in Silicon Valley. Time for Silicon Valley to open up its view of the world and understand the emerging markets and the next 3 B consumers.

(If someone from Obopay's PR agency was at this meeting they would have wanted to put duck tape over my mouth. This is not the kind of thing a entrepreneur and CEO should be doing with a major journalist. I just couldn't sit by and let this go on without speaking up.)

At that same meeting there was a process where the attendees selected those tech pioneers whose companies were the "best". The criteria was subjective - but I think the most important factors were - was this going to be a large global successful business and was this business going to change the world. I'll am happy to report the results - Obopay was selected as one of the top pioneers.

Jason Pontin, Editor in Chief and Publisher of Technology Review, wrote an article about this - check it out.

Davos Day 2: OboPay Is One of the Fairest

The attendees of the World Economic Forum chose the startups they like most.

http://www.technologyreview.com/blog/pontin/24732/?ref=rss