Mobile Money and its Applicability to Nepalese Market:

 

Mobile Money is the latest development in the area of financial products. After automation of banking products through internet and mobile banking, the newest development is the ability to carry your bank with yourself i.e. mobile wallet otherwise called mobile money.

 

However, the question of our interest is mobile money’s applicability in the Nepalese Market.
 

 

 

The factors that support the assumption that mobile money will be a success in Nepal are as follows:

 

1)     Remittance as a  source of income:

 

In regards of remittance as a portion of GDP, Nepal is the third largest country with USD 3.5 million inward remittances in 2010. The growth rate was 10.5%.

 

If you see how mobile money has evolved in the countries where it has become popular, you will realize the initial development started with receiving remittance in mobile phone. The structure later grew to encompass merchants and transfer of money within the country. As mobile money transfer is a more convenient way to remit money compared to the traditional remittance, mobile money can be a popular product in Nepal as well.
 

2)      Unbanked population:

 

It is apparent to all that a large portion of the Nepalese population is unbanked and this population is also the recipient of remittance. Mobile money provides a safe and secure way to store money for this population. Investment in cattle or farms is not a secure way as they crops or cattle could turn out bad. Similarly storing cash or gold has the danger of being stolen. However, mobile money is a secure way of storing the money for unbanked population.  Mobile pin codes will keep the money secure even if mobile is stolen.

 

Although there are convincing reasons to believe that mobile wallet will be successful in Nepal, we have seen mobile money products fail in countries of similar location and cultural background, therefore for the success of mobile money, certain precautions that we must take, which are as follows:

 

1)      Strong agent and merchant base:

It is utmost important to have a strong merchant and agent base for the success of mobile money in any market. Users will get hooked to mobile money if it is easy for them to upload money and if they have an opportunity to use it like physical money. Thus, before launching a mobile money/wallet in Nepal the organization launching it should ensure it has a strong agent and merchant base.

 

2)      Unified Mobile Wallet:

If we observe the cases where mobile money has been implemented, we can see mobile money has been a success only where single or two providers have introduced wallet. When the market is segmented it is hard to have a big merchant and agent base. There is also limited transferability of the money stored in the wallet. Thus there is limited chance of the product being a success. There should be a unified mobile wallet with full transferability for the wallet to be a success.

 

CCMS in IME Finance

F1Soft International’s card life cycle management software Card Center Management System (CCMS) is aimed at helping banks manage their entire card operations throughout their network. The system not only includes card management and full card life cycle, but also incorporates the reconciliation module which is very helpful in determining the status of transactions. The software is especially useful for banks which have huge ATM network but cannot afford their own switch system. The system also replaces query based enquiry to user friendly GUI.

 

IME Financial Institution is one of the many satisfied customers of CCMS.

 

IME Financial Institution has 26 branches and 14 ATMs throughout Nepal and also has its function overseas. The bank has an impressive number of 42000 customers who have subscribed their cards services. Their average amount of per terminal per day is Rs. 300,000. 5-10% of the cards used in their ATM’s are of other banks and 10% of the cards are international. The number of ATMs, branches, customers subscribing cards and average transaction amount, all show an increasing trend.

 

Prior to the installation of CCMS,  the information related to customers’ card was retrieved through query to the database. Two employees from the IT department were devoted for the purpose. Further, 3 more employees in the operation department were also doing work related to card other than query. Currently, with the installation of CCMS, IME has established a card department. There are only two employees in the department, who finish all the work related to card by midday and the saved time is utilized to help other departments as well. Above all, they have also been able to provide better service to their customers.

 

The success story of CCMS at IME shows that banks with similar background will be benefited from the software. CCMS will not only reduce the workload in the card department but will also help provide better service to banks’ customers and provide workforce to deploy in other departments.