Bringing New Digital Life to Mobile Money

Driven by smartphone popularity and new technologies (i.e., AI, IoT, Big Data, etc.), mobile financial services (MFS) are expanding beyond basic eWallet to encompass ecosystem payments and microfinance. The market size will reach $60 billion by 2025.

Mobile Financial Services are expanding much faster in recent years. According to GSMA data, the industry took 10 years (from 2006-2016) to reach 100 million active users, however, in the recent 5 years, it has reached 346 million active users. There is now a golden window of opportunity that MFS operators can seize to scale their Fintech businesses.

In this article, we look at the operator’s major challenges as well as the capabilities of the Huawei FinTech solution to enable operators to provide efficient financial services to consumers, specifically, how the platform can improve the financial lives of underserved customers in emerging global markets, allowing them to access comprehensive mobile Fintech services simply, efficiently and safely.

Operator Challenges

Today Mobile Fintech can  put access to the capabilities of bank in  every end user’s pocket. Service providers ensure 24/7 access to these financial services via wireless networks and mobile apps integrating with and complementing the capabilities of the formal banking system. Currently, there are 316 global mobile Fintech operators and 191 of those providers are telecom operators with cross-border operations.

Successful Operators provide the connectivity to safe, open ecosystems for fast on-boarding of agents, merchants and partners. They offer wireless networks and elastic capacity to bridge the gap between the mobile phone penetration rate and access to digital financial services. Although lots of companies have launched mobile Fintech services, only 22% of them make a profit. Ultimately there are 3 major challenges that operators need to overcome to become successful, these are; slow user development, poor transaction activity, weak monetization.

After years of development, the conversion rate/penetration rate for telecom users to mobile money adoption is still less than 30%. Operators also must cope with poor transaction activity, such as customer money transfers that occur less than three times per month and loyalty is low. Along with that low frequency, the average revenue per account (ARPA) typically totals less than $20. Furthermore, in the future OTT competition environment, the transaction fee based traditional business model may be subverted thought disintermediation of transactions by OTT wallets.

These challenges require a future oriented FinTech platform that offers a frictionless customer experience to improve retention and increase the number of monthly transactions and monetization capability.

Huawei FinTechend-to-end solution

The Huawei FinTech platforms incorporate advanced authentication and encryption to protect private transaction information. The platform’s open API architecture demonstrates the leadership and collaboration required for fast mobile money development and to enable customers to safely manage their money and finances.

The solution also incorporates features to improve  user development increasing penetration from 30%  to 80% through online fission marketing and the offline agent network. Online fission marketing features provide more than 10 online fission marketing activity assets, including: festival pocket money, member get member, lottery, discount, instant kill, cashback, coupon, membership card, group, nearby, C2B customer service, chat, search etc. For example, Huawei has helped one Operator reach almost 100% penetration and helped another Operator  to develop 18 million subscribers within one year of launch.

Through providing a one-stop ecosystem platform, Huawei makes it possible to increase transaction activity from the wallet only average of 3 to 15 times/user/month. The platform enables operators to quickly build a full lifestyle payment scenario though allowing partner services to go live within one week. In addition, Huawei also can introduce more than 100 partner integration templates across 22+ industries derived from the successful digital ecosystem that exists already in  China.

The one-stop ecosystem platform includes the capability to establish super apps for consumers. For businesses these apps encompass store management, employee management, fund management, and operation dashboard. Along with mini apps/official account and H5 embedded and payment clearing and settlement, the platform also features + 700 open APIs with orchestration and the APPCUBE development platform.

In 2018, Huawei partnered with Operator K to provide the end 2 end  platform and operation services, this platform now connects 9 million users and 300 thousand merchants across more than 10 industries, achieving an average transaction frequency per month in excess of 15.

The final operator challenge is weak monetization capability this is the ability to drive Average Revenue per Account (ARPA) from below $20 to $40 or above to counter this deficit, the Huawei platform provides rich finance services integration and intelligent risk control to manage bad debt risks. The 10+ finance product incudes overdraft, device loan, micro loan, installment loan, consumption loan, insurance and savings. The solution’s intelligent risk control ensures a bad debit user identification accuracy rate up to 90%. For example, we have an Operator whose ARPA is $32, one deployed financial service  already contributes $5, or 15% of the ARPA. In the future, more financial services will be added to further increase ARPA through further monetization of partner financial services.

Huawei expands global mobile money services

Over the last decade, Huawei FinTech has grown and transformed the lives of 380 million unbanked individuals from more than 30 countries across Asia and Africa. In 2021, the platform has carried over US$350+ billion in transactions. Huawei FinTech uniquely combines the strengths of Agile Business Development, Rapidly Scalable Platform, Finance Grade Regulatory and Security Compliance and finally Accurate Real-time Risk Control, to safely accelerate Digital Financial Inclusion, enabling access to the growing Digital Economies for every person and organization.