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Education

Mobile operators can add cluding who you are, where you live,
whether or not you pay your bills on
value with prepaid time, size and make-up of your fam-
ily, and your credit score.

By Brion Bonkowski Carriers can leverage these data
points to easily onboard new ac-
Tern Commerce counts when customers activate new
plans, establish credit worthiness or
pproximately 2 billion adults in developing countries have mobile opt in to financial services. Telecom
phones but lack access to formal financial services. This captive cus- carriers can also affect consumer
tomer base creates opportunity for mobile network operators, who credit. They can shut off delinquent
A can sell more than phone service. Some operators have tied wallet consumers' cell phones, which for
solutions to cell phone accounts, but have not been successful due to restrictive many people, is not only a means of
maximum balance and transaction amount terms. communication, but also their com-
merce tool and livelihood.
Selling prepaid products and services would enable mobile operators to assist
unbanked customers by offering a widely accepted financial instrument. And Mobile wallets, bank accounts
partnering with ISOs, acquirers and third-party service providers would help Successful wallets in developing re-
mobile operators get a fast start. Such partnerships could also drive incremental gions, like M-Pesa in East Africa,
revenue streams and improve customer stickiness. are driven by telecom operators and

Mobile operators ideally positioned fulfill a significant need in the peer-
to-peer space. A growing number of
Mobile carriers have more access to consumer data than many local govern- merchants and service providers ac-
ments. They have already solved identity verification, a major barrier to con- cept local wallets as a form of guaran-
sumer banking. Bankers and card issuers call it KYC (know your customer), and teed payment. Many of these wallets
mobile carriers call it CIP (Customer Information Program). Telecom carriers also enable microfinancing.
routinely access valuable data points to open accounts and establish credit, in-
Mobile operators can also become
banks. In 2016, Pakistani telco Telenor
(owned by Norway's Telenor Group)
acquired Tameer Microfinance Bank
Ltd., and Orange acquired more than
65 percent of Groupama Banque in
France. The following year, Orange
launched the rebranded Orange
Bank, a mobile-focused retail bank
offering savings accounts, credit and
payment products.
Prepaid services, core banking

The increasing dependence on mobile
devices makes a clear case for mobile
operators to offer banking solutions.
However, regulatory challenges may
emerge, such as account limits on
cross-border money transfers. For in-
stance, M-Pesa customers are capped
at approximately $1,000 USD. Mobile
wallet providers also limit their cus-
tomers' ability to transmit more than
a fixed amount to and from other
countries. Replacing fiat currencies
with prepaid cards, issued by global-
ly accepted payment card networks,
would solve the capping issue.

Prepaid card programs are typically
low risk; they are not credit instru-
ments and can be flexible to accom-
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