The Paypers: Obopay has witnessed a period of significant development and it appears there is no slowdown in sight. The company closed deals with Citigroup and moved to India and Kenya. Last month it announced a new business model focused on selling its software to US banks and most recently, it has partnered with Societe Generale to launch a mobile transfer service in Senegal. What is the motivating factor behind this latter partnership? Why Senegal and not Europe?
Obopay: Societe Generale Group has an ambition to promote financial services to the greatest number of people around the world. They determined that Senegal was the right place to start due to their existing presence and brand reputation in the country and Senegal’s population offered an ideal market size for Yoban’tel, with both a banked and unbanked segment, to run the initial launch of the service.This launch, and any other launch in the future, would be part of its plan to leverage the latest technological advances in the development of new payment methods. Obopay offers the bank the expertise, robust platform and service that it would need to expand into new markets very quickly.
The Paypers: What is your company`s value proposition? What services does Obopay currently offer in the payments sector and what benefits do they bring?
Obopay: Obopay’s Mobile Money for Banks is designed to make a bank account the anchor for all current and future mobile money transactions as opposed to carriers or online payment companies like PayPal. It is service that is fully brandable by Obopay’s bank partners, and offers a full range of mobile transactions and applications with simple low-cost integration and deployment. Mobile Money for Banks includes the ability to send and transfer money, makes payment card acceptance available to everyone and can be implemented in 30 days or less. Mobile Money for Banks includes:
a) Get Paid by ObopayEnables payments to be received for products or services. Anyone, including small businesses or individuals, can accept debit card or ACH payments from anyone. Money is received directly into the recipient’s bank account. This includes the capability to accept payments directly from a mobile phone, website, or email. Obopay offers a number of tools that people can use to get paid including payment buttons for websites, payment links for emails or email invoices, and social networking widgets.
b) Mobile P2P by ObopayEnables bank customers the ability to link and send money to anyone directly from their own bank account using a debit card. Obopay takes care of validation and regulatory compliance. Recipients don’t have to be signed up for the service to receive the money and can direct the funds into their own bank account using their debit card number or bank account and routing number. They can also direct the funds to a pre-paid card, if they choose, and get instant access to the funds for online shopping.
c) Family Money by ObopayEnables bank customers to send money instantly to family members for emergencies, or regularly scheduled payments. The family member receiving the money can direct it to their own bank account if they have one, or if the parent prefers, they can provide them with their own personalized prepaid card, which is great for teens. Parents can “top-up” funds instantly from their accounts or on a regularly scheduled basis. Use of the prepaid debit card allows parents to monitor spending in real time.
d) Transfer Money by ObopayEnables account-to-account transfers, allowing customers to exchange funds from their bank accounts to accounts outside of their bank. This is accomplished by simply linking the accounts they want to send money to by entering that account’s debit card number or its bank account and routing number.
The Paypers: What payment systems or products to do you consider to be the main competitor for Obopay? Why?
Obopay: The competitors that we get compared to most frequently are PayPal and Cash Edge. We have some unique differentiation compared to each of them including:
? Making the bank account the anchor of the transaction and making it a bank branded service? Enabling instant transfer capabilities through connection to the banks DDA through debit networks or direct integrations? Get paid in addition to P2P and bank transfer capabilities (me to me, you to me and me to you)
The Paypers: Just like any emerging market with enough potential, there are many propositions regarding the way m-commerce technology can be used. Some market players adopt an aggressive strategy and want to see something moving as fast as possible, while others prefer a wait-and-see approach. How do you comment on the growth registered by Boku and Zong and more importantly, how do you see the future of these companies (and your own) in the mobile payments space, taking into consideration the fact that competition gets tougher every day?
Obopay: There is extensive opportunity in the mobile payments space as illustrated by the following:
1) Widespread mobile payment adoption: Mobile payments have reached a “tipping point” and more consumers with smart phones will start to use some form of it. According to Thomas Layman, former chief economist at Visa and currently president of Global Vision, mobile payments could account for 20% of transactions by the end of 2010. Industry analyst firm Gartner has predicted that by 2012 there will be 190 million mobile payment users, and once this level is reached, more than 3% of all mobile device users will be making mobile payments—at which point the practice will be mainstream.
2) Smart phone mobile banking and payment applications. Gartner also predicted that SMS money transfer and mobile payments will be two of the top ten mobile applications in 2012.
3) The reduction of cash and checks. Recent research from PayPal and NACHA (the Electronic Payments Association), found that 50% of consumers surveyed expressed interest in replacing cash and checks with P2P payments for common needs.
Seen as a lucrative market more and more solutions are popping up all the time, however, some use outdated technology that is slow, some involve hardware solutions where distribution is an issue, and some, like PayPal, have huge brand names with a great deal of clout.
The Paypers: Obopay`s initiative to enter the online games market in October 2009 signaled a shift in a new direction, by making its mobile payment service available for online game players, thus enabling them to purchase items in social network games using their mobile phone. Does the company bring something new in the payments landscape? After all, competition has already become stiff in the field, as Zong and Boku are already in close rivalry after developing similar services that replace the credit card number with the mobile phone number. What sets Obopay at an advantage?
Obopay: Obopay’s differentiation in the market is the full range of capabilities that offers and the ecosystem that it creates in bringing a full range of mobile money services together. The ecosystem includes financial institutions, carriers, handset manufacturers and merchants. In pulling this group together and in providing a range of funding options that best meet consumer interest and needs.
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