BFM - L'Atelier numérique: eServGlobal interview on emerging countries
Goulven Bescond, solution line manager on Payment at eServGlobal, was invited in December 2009 in L'Atelier numérique, a radio broadcast about high tech on BFM, a French business radio station, in association with L'Atelier BNP-Paribas, a consulting company focusing on new technologies.
To listen to this interview (French, 11 min) click on the player icon below:
You can access the full podcast from BFM and L'Atelier BNP Paribas Websites.
An English transcript is available for non-French speakers.
Emerging countries: Are they new markets for high-tech players?
Journalist
We have already spoken a lot about workshop solutions, which are designed to connect and provide services to people in emerging countries, rural areas and / or have low incomes.
I'll give you some examples we had talked about:
- SMS Media Rwanda where subscribers can pay their bills by SMS
- TradeNet, a platform that provides access to commodity prices by phone
So a few weeks ago, I was in Cape Town, South Africa, for the AfricaCom Event and one thing we can really realize is that this trend is real. The so-called less fortunate are becoming a real market.
We'll explore a few issues of this market with our guests:
- Julien Faure, PSITEK, a South African company that develops a portable device that is connected to the GPRS network and allows subscribers to buy prepaid services such as electricity or airtime
- Goulven Bescond, product manager at eServGlobal, telephone service company
Journalist Julien, what's interested PSITEK in this market? Why target the less fortunate or those with little or no connections?
Julien Faure In fact these new market opportunities for PSITEK appeared relatively late, about 2 or 3 years ago, while PSITEK already had a fairly strong presence in the popular South African market, where we had developed a Community telephony solution in 1994, widely deployed by all operators here, and even some small investors.
It is now clear that all revenues that can be generated from voice and SMS are relatively saturated, so we looked for other solutions with new technology, such as GPRS, which enables new services and further improves the lives of the disadvantaged population of South Africa, where 50 to 60% of the population can be regarded as disadvantaged.
Journalist Okay, so you say the rest of the market is saturated. They could no longer benefit from new services. Is this new market profitable?
Julien Faure This market is quite profitable. Everything depends on the services we provide to our customers. We offer a technological perspective that can be opened to multiple operators. We can provide services such as the resale of electronic, multi-operator air-time. Already, revenues vary on the resale of air time for retailers, which are the cornerstone of the business model that we implemented. They are also profitable on other prepaid services and the payment of invoices that we have also begun to launch in South Africa and other countries in Africa. Usually the business model is based on a commission for both the retailer and for PSITEK using of our technology platform. So it's mass market, where commissions are generally very low but, in volume, it can be profitable indeed.
Journalist Goulven, what do you think?
Goulven Bescond
Indeed, this is exactly what we are working on our side at eServGlobal.
Everything starts with the realization that, in these populations in developing countries where access to financial services is almost null when you leave the major cities, people still need to pay bills or receive money from their relatives in the cities.
If we take an example that is relatively well-known in the Mobile Payment industry, MPESA, in Kenya, is based on these transfers of money between individuals. These people ask to have these services and the operators respond to this request by offering a range of services, ranging, as Julian said, from prepaid recharge, electronic or voucher, to payment of electricity bills, water, etc. And I really insist on national money transfer service which has been a key factor for the first successful solutions in Africa, responding to customer demands.
Journalist Is it very easy to transfer money like that?
Goulven Bescond Yes, it's very easy. Specifically, the operator implements the Mobile Payment PF. Each user is then associated with an electronic purse and this electronic wallet may or may not be connected to a bank account. Obviously, as we talk to people from emerging countries, most will not be associated with a bank account and then once it is associated with that rate, he moves from the corner store, which has already the ability to sell the physical prepaid recharge scratch cards.
In addition the operator gives the opportunity to these retailers do what is called a cash-in, meaning a money deposit into the user’s electronic wallet and, lastly, an SMS or a single USSD frame is sent by the user to sent money from his account to his relative (friend or family) account.
Journalist There, we talked about Africa. I know that eServGlobal is in other markets. Are there the same problems there?
Goulven Bescond Indeed, it can be generalized to all emerging markets, whether in Asia, South America or Africa as we just said. The mobile phone users in all these emerging countries are beginning to use more and more of these services. Most of the time, the reason it’s blocked is just due to regulators, as well as banks who don’t want to see the telecom operators encroach on their territory and take market share.
Journalist We also see here, in France, with all these mobile phone payment platforms that it raises problems and creates tensions between the banks and operators.
Goulven Bescond In the French example, or a developed country like France, I am not convinced that people want to have another account in addition to their bank account, in addition to their credit card and so on, in order make payments. In emerging markets, we are really in another situation where people lack access to an account, so the only way people really receive money is in cash.
Journalist Still on the Mobile Payment subject, what does it represent for national and international operators?
Goulven Bescond It is true that the goal of operators is to enter a new market. Understandably, once we start talking about payment, operators enter the banking market and there are several published studies, by the GSMA and a group of the World Bank, who believe that in a few years, 2012, 2013, we will reach 5 billion dollars of direct revenue for operators.
Journalist Are the poor African countries seen as attractive markets because of the example of micro-credit or micro finance? Is it that all players have said look, it works very well, microcredit and microfinance in poor countries, so they are creditworthy people and we will launch our offers? Is it linked to this or that has nothing to do with it?
Goulven Bescond If you say that it is completely linked to that, I have no definitive answer. But in any case, it is certainly linked to the success of micro-credit, because in the Mobile Payment area, microcredit is part of the services we must be able to propose as supplier.
Journalist Just for the services, the GPRS or mobile solutions we talked about, for you, will the market really move on those devices and networks?
Julien Faure Yes, I think it's an obligation. They have little choice. If you look at the penetration of fixed lines, in order to make effective transaction, currently the only channels that are available in emerging countries and the channels made available by telephone operators. Currently there is GPRS. There are other technologies that provide solutions where a transaction can be made by a remote platform. All these new technologies that offer mobile technology can connect to both telephony technology and IT technology, thus providing transactional services.
Journalist Thank you very much.
