Information and Communication Technologies
Efficient, accessible and safe retail payment systems and services are necessary to extend access to transaction accounts to the 2 billion people worldwide who are still unserved by regulated financial service providers.
Having interoperable payment services addresses several important challenges regarding financial access and broader financial inclusion. This is because via a single transaction account.
Establishing payments interoperability is a formidable task. Our experience shows it is important to find the right balance between cooperation and competition when reforming retail payment systems. Despite the advantages that interoperability brings, not all market participants will necessarily embrace interoperability initiatives, e.g. if they fear to lose their dominant position and/or competitive advantage. In an earlier Blog the role authorities to facilitate interoperability has been discussed. Central banks are a key driving force in any payment system reform, but they cannot – and should not – act alone. Other regulators – such as financial and telecom regulators – are also important to achieving interoperability.
Interoperability – a term used in a variety of industries, including telecommunications and financial services – is generally understood to refer to the ability of different systems and sometimes even different products to seamlessly interact. For payment systems, “interoperability” depends not only on the technical ability of two platforms to interact but also the contractual relationships between the entities wanting to interact. Traditionally, interoperability has been established by the same type of institutions, by banks’ participation in a central retail payment infrastructure (e.g. a central switch or an automated clearing house) and adhering to a payment scheme (e.g. a card scheme or a credit transfer scheme).
These days interoperability in retail payments is no longer limited by national borders and the overall ecosystem has become more complex. Non-bank payment service providers have emerged (many of them mobile network operators-MNOs) and there are new types of payment instruments (e.g. mobile money). Innovative payment instruments often start as proprietary solutions, processed in-house rather than via a central platform. In that regard, interoperability can help tear down barriers by enabling transactions between customer accounts of different mobile money solutions. In some countries, interoperability even facilitates transactions across different type of accounts (e.g. deposit transaction accounts held with banks and mobile money accounts held with non-bank service providers).
Telenor believes in empowering societies. Motivated by the prospect of building something that can make a difference for customers with very limited access to traditional financial services, we ventured to leverage our mobile tele-density strength in developing countries to bring about financial inclusion. Telenor has committed to enabling 50% of its customers to use their mobile phones for financial services by 2020, which means 100 million customers will have access to mobile financial services. We joined the UFA2020 initiative eager to learn from other players on shared challenges, drive strength from a common goal, and scale solutions that have demonstrated success in other markets.
We are about to launch in Myanmar and have obtained a banking license in India. We are already working in Bangladesh, Bulgaria, Hungary, Malaysia, Pakistan, Serbia and Thailand. In each country we have adopted different models of financial services catering to the needs of that market. For example, in Serbia fully owned Telenor Banka is the first fully mobile and online bank, consolidating banking needs in a unified digital interface, making it the fastest growing bank and the highest rated banking app in the region. In Pakistan, Telenor’s subsidiary Tameer Micro Finance Bank offers mobile financial services under the globally recognized brand of Easypaisa, serving over 20 million customers for domestic and international remittances, purchase airtime, pay utility bills, receive government social cash transfers, pay taxes, save and borrow money, buy insurance or make online retail purchases. We are picking up speed in delivering straightforward digital banking services in most of our Asian markets. Last year we established the groundwork for business in five out of six Asian countries, and this year we are focusing on expanding our footprint in these markets. When all businesses are up and running, we will be ready to build scale and to reach our 100 million customers target.
Interoperability was a trending topic at this week’s Mobile World Congress (MWC) 2016.
Getting payment products to “understand” each other, or to be “interoperable,” is a big challenge to solve if we want to expand overall digital services and financially include the 2 billion people worldwide who are currently excluded from the formal financial system.
Making it easy for people to access transaction accounts and payment services matters.
We see interoperability as a means for people worldwide to make electronic payments in a convenient, affordable, fast, seamless and secure way through a transaction account.
When payment systems are interoperable, they allow two or more proprietary platforms or even different products to interact seamlessly. Interoperability can promote competition, reduce fixed costs and enable economies of scale that help ensure the financial viability of the service and make payment services more convenient.
Charity Wanjiku pitching for Strauss Energy
What does the journey of an entrepreneur look like? For founders like Mark Zuckerberg, it often begins with a groundbreaking idea, followed by several rounds of fundraising through Ivy League and Silicon Valley networks. But what if you weren’t raised in the United States? And what if your idea is not global in reach — but instead addresses clean technology needs that are unique to your region?
The World Bank Group’s Climate Innovation Centers are one solution to this challenge. The seven centers — in the Caribbean, Ethiopia, Ghana, Kenya, Morocco, South Africa, and Vietnam — support more than 270 clean-technology startups with training programs, grants and mentorship. Increasingly, the centers have turned to competitions to help entrepreneurs grow.
Bootcamps and pitching competitions have emerged as promising opportunities for jump-starting an entrepreneur’s journey. Participants train intensively with seasoned entrepreneurs to perfect their pitch. They learn to showcase their business idea and strategy in mere minutes before a panel of judges. Winners bring home significant prizes — and, perhaps more important, connections with potential investors and a greater understanding of the business landscape.
The 1776 Challenge Cup is a pitching competition on a grander scale. The Challenge Cup is a tournament for startups from around the world to share their vision on a global stage and compete for more than $1 million in prizes. 1776, a Washington-based incubator and seed fund, hosted its first annual Challenge Cup in 2014. Past finalists have developed mobile training for Middle Eastern women entering the workforce, have built charging devices for electric vehicles, and have disrupted the value chain in Kenya for perishable goods like bananas.
How many bank accounts do you have? One, two or more? For people in developed countries, a bank account is a fact of everyday life. A constant presence. Something that is pivotal to your home, your work and your family. But imagine if you didn’t have one. How would you be paid? How could you pay for your rent or mortgage, your food, utility bills, and so on?
Heading back from a recent mission to Ghana, I felt really proud of what we have accomplished: training 20 of the most promising local clean-tech entrepreneurs through the Green Innovators Bootcamp. The words used to inaugurate the event are still in my head: “This bootcamp is not an end in itself. It’s the beginning of your journey as entrepreneurs.”
Indeed, bootcamps for startups and SMEs – as well as close cousins like Hackathons, Start-up Weekends, and Business Plan Competitions – are an increasingly popular activity used to catalyze innovative ideas and provide entrepreneurs with the tools and resources they need to launch their ventures.
In Ghana for example, infoDev -- a global innovation and entrepreneurship program in the World Bank Group -- organized a two-day training event to help a group of 20 early-stage entrepreneurs assess the feasibility of their business concept, identify their customer base, and refine their business model.
Organizing a bootcamp can be very challenging and time-consuming, but, when done properly – read “7 things you need to do to prepare for the perfect bootcamp” – the payoff is big. "Bootcampers" find these initiatives very useful to identify new solutions to the challenges they face to launch their businesses -- mostly access to finance, product development, and marketing. Furthermore, "pitching competitions" and "business contests" offer new entrepreneurs an excellent and safe stage to refine their business pitch -- a key tool of every successful entrepreneur.
One of the goals of bootcamps and pitching competitions is to bring together different stakeholders – from entrepreneurs to investors and policymakers – to facilitate the creation of ecosystems in which entrepreneurs can grow and thrive. But is it realistic to expect that bootcamps and similar training initiatives are enough to enable promising entrepreneurs to reach their full potential? The answer is simply: No. Make no mistake: Bootcamps are an exciting tool to create buzz and interest in countries that have little entrepreneurial history and culture. In most contexts, however, there is no follow-through with effective action plans that can keep the momentum going. This not only limits the value of these initiatives, but can also cause harm to a nascent ecosystem.
Why is it important for the private sector to help with this first step?
In increasingly competitive global markets, companies are searching for ways to differentiate themselves, to deepen their reach in existing markets and to expand to new markets. Greater financial access for women would yield a growing market opportunity with phenomenal profit potential for companies. The size of the women’s market, and the resulting business opportunity, is striking:
- Business credit: There is a $300 billion gap in lending capital for formal, women-owned small businesses. Of the 8 to 10 million such businesses in 140 countries, more than 70 percent receive few or no financial services.
- Insurance Products: The Female Economy, a study in the Harvard Business Review, reported that the women’s market for insurance is calculated to be worth trillions of dollars.
- Digital payments: Women’s lack of cellphone ownership and use means that millions cannot access digital-payment systems. Closing the gap in access to this technology over the next five years could open a $170 billion market to the mobile industry alone.
Greater financial access for women would yield a growing market opportunity with phenomenal profit potential for companies.
For the past several years at IFC, I’ve been working with the private sector, namely financial institutions, to address the supply-and-demand constraints that women face when trying to access the formal financial system. IFC tackles these constraints in three ways:
- Defining the size of the women’s market, female-owned and -led SMEs, and as individual consumers of financial services
- Showing financial institutions how to tap into the women’s market opportunity by developing offerings that combine financial products, such as credit, savings and insurance, with non-financial services such as training in business skills
- Increasing women’s access through convenient delivery channels, such as online, mobile and branchless banking
A new global network of Climate Innovation Centers will support the most innovative private-sector solutions for climate change.
Pop quiz: What does an organic leather wallet have in common with a cookstove for making flatbread and a pile of recycled concrete?
Believe it or not, each of these represents something revolutionary: a private sector-driven approach to climate change. Each of these products – yes, even concrete – is produced by an innovative clean-tech company. And as of March 26th, those businesses, and hundreds more like them, have something else in common. They’re connected through infoDev's newly established global network of Climate Innovation Centers (CICs), an innovative project that is taking the idea of green innovation beyond borders.
Having piloted the CIC model in seven different countries – Kenya, South Africa, the Caribbean, Ethiopia, Morocco, Ghana and Vietnam – it was time for infoDev, a global entrepreneurship program in the World Bank Group’s Trade and Competitiveness Global Practice, to follow a time-honored business practice: to scale up and take this movement global.
And so, as part of last month’s South Africa Climate Innovation Conference, we joined forces with 14 experts from the seven different countries where the CICs operate to establish the foundations of the world’s first global network devoted to supporting green growth and clean-tech innovation.
CIC staff debate and discuss the new CIC Network during the South Africa Climate Innovation Conference.
This global network of Climate Innovation Centers – business incubators for small and medium-sized enterprises (SMEs) – has been designed to help local ventures take full advantage of the fast-growing clean-technology market. The infoDev study “Building Competitive Green Industries” estimates that over the next decade $6.4 trillion will be invested in clean technologies in developing countries. An even more promising fact is that, out of this amount, about $1.6 trillion represents future business opportunities for SMEs, which are important drivers of job creation and competitiveness in the clean-tech space.
- sustainable development; sustainable leadership; climate change innovation; alleviating poverty;
- Climate Change
- climate action
- Apps for Climate Change
- Apps for Climate
- Africa climate change
- Information and Communication Technologies
- Private Sector Development
- Climate Change
- South Africa