“Asaan Mobile Account Scheme”
Transforming the destinies of millions & millions of unbanked
Salman is a passionate technologist specialized on Digital Payments, Products and Transformation. Having worked in leading technology companies & banks for over 19+ years, he has developed his expertise on interoperable payment platforms for financial inclusion and enablement of payment channels for banked and unbanked population.
Salman’s interview focusing around the importance of unified payment scheme, interoperable payments and its importance in building a transparent digital economy.
Q: How the current landscape of Pakistan’s financial inclusion can be improved? Is it a challenge or an opportunity?
Pakistan, the 5th largest population of the world with Population size of 218.6 million having 60% adult population but unfortunately have only 23% population financially included. State Bank of Pakistan & Pakistan Telecommunication Authority have done commendable efforts in developing a conducive payment ecosystem, from ATM sharing, to Interbank Transfers, Mobile Banking, Branchless Banking etc., to foster greater financial inclusion. However, after reaching an apex deploying new ATMs could be counterintuitive for financial inclusion as it serves banked customers at locations with access to bank branches. Remote areas still suffer from the last mile problem. To an extent the last mile problem has been solved with an extensive franchisee network.
The last mile problem can only be solved by giving the population access to financial services at their fingertips. Pakistan has one of the highest mobile penetration rates globally, and USSD (Unstructured Supplementary Service Data) is abundant. Even the cheapest $10 phone is capable of accessing USSD which virtually removes all barriers to access the financial services.
Financial Inclusion is always be a challenge due to many reason like lack of technological infrastructure, limited digital channels, awareness of financial services and its benefits and absence of interoperability among payment schemes and services. After the introduction of TPSP (Third Party Service Provider) regulation in 2016 jointly by SBP & PTA, a massive opportunity to promote financial services to masses has arrived. Using the unified USSD and interoperable payment platform, reach to remote unbanked and the last mile access to financial services has been addressed making Financial Inclusion much easier.
Introduction of Asaan Mobile Account (AMA) scheme will play a vital role for financial inclusion where the digital finance service providers will join a Unified USSD platform, allowing any person with a feature or smart mobile phone to open a digital transaction account swiftly through a USSD code “2262” from anywhere at any time. The Telecom subscriber base of 165.4 million have the choice to open a digital payment account in any branchless banking bank and become a part of digital economy.
The objective of the scheme is to improve accessibility of new customers for account opening, drive usage of digital financial services through increased number of account-to-account transactions across various mobile networks and provide digital access to a range of quality financial services. This will facilitate the poor and marginalized sections of the society towards adopting digital payments and also transform banks to shift their focus from ‘Over-the-Counter’ (OTC) services to branchless banking (BB) accounts.
Q: Is USSD an obsolete technology? At this time when we’re discussing 5G, AMA has been built to leverage USSD?
USSD is a technology we use every day, without even knowing what it is called or how it works. Every time we dial a *0000# short code on our phone to check balance or to subscribe a service, we are using USSD. As it works on every phone; this makes it an ideal candidate to be used as a delivery channel for financial services.
While I strongly believe 5G is the future, the cost of adopting the technology and its viability may pose the same challenge why banks today hesitate to operate branches in remote areas where majority of the unbanked population resides. That is why USSD would be an enabler for AMA Scheme and easy access channel for many other financial and specialized services which will provide new opportunities to bring the next 50 million Pakistanis under the banking ambit.
Q: Mobile Financial Services were already provided by all Telecom Operators with their Bank partnerships, how is AMA platform any different?
Correct! The existing players have done a phenomenal job in molding the branchless banking industry. However, there are different models which are prevalent globally. In Pakistan, we have what’s known as the One-to-One model, i.e. One Bank to One Telecom Operator. The major MFS players have strong telecom partnerships and investments which enables an already extensive franchisee network to operate as an agent network. Through this oligopoly they have covered significant ground in financial inclusion, but prevented other banks to enter the marketplace. This is the reason why the Big 5 resorted to a Telco-Agnostic model.
AMA Scheme is an ANY-to-ANY model, it opens new avenue for existing MFS players to compete and offer services to subscribers of other telecom operators through their banks, and provides all branchless banking players with a level playing field to enter the space while existing players will have the opportunity to gain customer base from other mobile networks and banks. Subsequently, the consumer would be the one benefitting the most, as it would introduce a plethora of financial and non-financial services to choose from.
Q: How AMA Scheme platform works with both Banks and Telecom Operators?
The AMA Scheme platform is an amalgamation of two industries. Think of it as on one end you have all Telecom Operators and on the other you have all Branchless Banking Banks and in between both of them are connections which go through a box. That’s us, Virtual Remittance Gateway (VRG)! To make the clockwork palatable it can be simply explained as a 3-step process. First, we interconnected with the USSD Gateway of all Telecom operators to route all AMA traffic towards VRG. Our platform connects this with our Core system, which hosts banking menus and services offered by Banks. The USSD app processes all incoming requests from telecom subscriber handsets into an interactive session where the customer can navigate menus to use services and provide necessary details, such as entering a beneficiary account number during a funds transfer. For the third and final step, we have integrated with all branchless banking banks, to which we route all such subscriber’s request to be processed into financial transactions.
Q: How AMA Scheme provides Interoperability and Interoperable Payments play an important role for unbanked and banked population of Pakistan?
Interoperability among Banks is in place via PSO/PSPs (Payment Service Operator / Payment Service Provider) however interoperability amongst m-Wallets platforms is still non-existent; agents are required to maintain separate m-Wallet accounts with each of the providers and, in some cases, must have separate mobile phones for different service providers. Interoperability among Telecom Operator through TPSP has been recently implemented giving a unique opportunity to Banks and MFS providers to leverage the financial services to the unbanked population.
VRG has also addressed the need of interoperable payments via agents or bank branches by introducing an Interoperable Cash-In & Cash-Out services. By virtue of this service, any customer of any bank can visit any banks branch or agent and perform Cash-In & Cash-Out service using biometric verification. Qualifying beneficiaries can be cross-checked with the Asaan Mobile Account platform and funds can be digitally distributed into their bank accounts. Using the platform, a beneficiary can transfer funds, pay bills, purchase goods as well as withdraw cash from Bank’s Agent after biometric verification. Not only can this make the entire process efficient, transparent and secure, but also safe by completely eliminating the need for cash or card. This service will not only encourage banks and agent for better customer service but also make them think for competitive service charges due to increase in volume.
Interoperable Cash-In & Cash-Out service is not an option now, it’s mandatory! Government to Public payments like EHSAS Program where a beneficiary will open Asaan Mobile Account remotely within a minute and perform Cash-out from any agent or branch of any bank. Subsidized Raashan payments via UTILITY STORES using AMA account with complete transparency and enablement of Government entities for Cash-In & Cash-Out services for general public like PAKISTAN POST and NADRA eSAHULAT Centers, are the some of the unique use cases which works as a catalyst for financial inclusion and digital economy.
Q: In light of recent initiatives taken by the regulators on Digital Payments, How AMA scheme will compliment such initiatives? Are there any regulatory or operational challenges in rolling out AMA Scheme?
National Payment System Strategy and Faster Payments initiatives from SBP is indeed a remarkable step towards digitization. NPSS addresses key areas (Payment Infrastructure, Policy & Regulations, Remittance Market, Oversight, Government & Retail Payments). Faster payments are electronic payment solution that process payments in real time, 24 hours a day, 365 days a year, where the funds are made available immediately for use by the recipient.
AMA scheme is a unified payment scheme where umbrella of financial services are available. Having an outreach to the massive telecom subscribers and branchless banking services, AMA scheme becomes one of the key driver towards digital payment and financial inclusion.
Although, the State Bank of Pakistan and Pakistan Telecommunication Authority have workday and night for the roll out of AMA scheme specially after joining of new Governor SBP however we are still facing challenges from some individuals who have vested interest in don’t want AMA scheme become a success case for Pakistanis. The AMA scheme committee is routinely finalize new services for roll out on the AMA scheme platform twice a month and ensuring the implementation and addressing the issues of AMA scheme.
Q: In the next 3 years, what will be the impact of AMA scheme on Pakistan’s emerging digital landscape?
AMA will bring hope and welfare to millions and millions of Pakistanis. It will make banking palatable to the common man, provide them with the means to perform financial activities and ease of access to finance which is crucial to drive the digital economy with prosperity.
At a macro level it will assist authorities in documenting the economy or the so-called informal economy, which currently makes it difficult for economic planning for development. It will enable digitization and seamless disbursement of existing G2P initiatives, promotion of Remittance in flows, digitization of Loans, issuance of micro Insurance and Mutual Funds and would be effective in emergency funds disbursement at the time of need.
I foresee P2P (Peer-to-Peer) payments will thrive. Every day payments for buying goods at mom and pop stores to services at local business and commerce will become more efficient with AMA. Merchants, will be able to receive payments for goods digitally and also pay for supplies using the same channel. Thereafter, AMA will also make the current COD (Cash on Delivery) process cash-lite which will reduce the cost of cash handling, security and fraud issues.
One thing Financial Institutions need to understand now, “Be a service provider for your customers, not just an account provider”.
