ITU Workshop on “ICT Innovations for Developing Countries” (Tunis, Tunisia, 20 June 2012) SMS Exchange: Mobile credits as an electronic payment channel. Case of RWANDA Jean Pierre NSHIMIYIMANA Rwanda Utilities Regulatory Agency & Independent Researcher piero425@gmail.com 12/8/2018

OUTLINE Overview on Rwanda Mobile Transaction status and Statistics Challenges for these systems SMS Exchange System Conclusion and Recommendations 12/8/2018

RWANDA Capital Kigali Area 26,338 km2 Population 10,718,379 Number of Households 2,187,500 Mobile Penetration 42% (April 2012) GDP 502 USD Rural Population (2009) 81.4% Urban Population (2009) 18.6% Electricity 16% (2012) and 70% (2017) Terrain Uplands and hills 12/8/2018

Photo: Internet 12/8/2018

Mobile Transaction Systems Status 1. Mobile Banking (for Banks) Eg. To buy electricity Prerequisites: To be a Bank customer To be registered for this system To have deposit The money is deducted from user’s bank account directly. 12/8/2018

Mobile Banking (Cont.) Statistics 12/8/2018

Mobile Transaction Systems Status (Cont.) 2. Mobile Money (for Telecom) Prerequisites: To be a Telecom customer To be registered and to have a mobile money account To have deposit The money is deducted from user’s Mobile Money account directly. 12/8/2018

Mobile Money (Cont.) Statistics 12/8/2018

These systems are very FLEXIBLE & AVAILABLE and technically working well, But… ? 12/8/2018

The GDP is 502 USD per year CHALLENGES 1. Low Revenue The little revenue becomes “First Aid”! There is no need to go for deposit because tomorrow it shall be needed! The effort to go for deposit = the effort to buy this utility! 12/8/2018

CHALLENGE (Cont.) 2.Geography 12/8/2018

(For Many) The use of these systems cannot justify the cost to be done Because people are scattered in the village far from the cities, it becomes difficulty and costly to make a registration and deposit (as prerequisites for these systems). (For Many) The use of these systems cannot justify the cost to be done 12/8/2018

With this situation, the purchasing of some services becomes more DIFFICULT and involves a lot of THIRD PARTY COST like transport and time consuming (especially in remote areas). 12/8/2018

SMS EXCHANGE!! Introduction Status Functionality Comparison Advantageous Challenges 12/8/2018

INTRODUCTION Through a question asked in ICT Forum in Kigali last year, How can people in the village can have access to the Mobile systems, A commitment came to make a research for a solution, hence the SMS Exchange System. As these people are having cash, the key prayer was to find an exchange object, which should so popular to that be accessed by every mobile user. 12/8/2018

That exchange point is mobile Credits: INTRODUCTION (CONT.) That exchange point is mobile Credits: the mobile penetration is 42% (4,508,666) of the whole population, ie each household has almost two mobile phones. This penetration also has a great impact of Credits availability (almost at each door) 12/8/2018

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The system is in the process of being patented SMS EXCHANGE STATUS The system is in the process of being patented It also being implemented in one of Mobile Operators in Rwanda (MTN Rwanda) 12/8/2018

It is connected directly to the Intelligence Network (Billing system); FUNCTIONALITY The system is a USSD Application and Value- Added Service (VAS) to Mobile Network; It is connected directly to the Intelligence Network (Billing system); It uses the credits a mobile user has in his phone to buy/pay some services. 12/8/2018

FUNCTIONALITY (Cont.) USE CASE DIAGRAM 12/8/2018

FUNCTIONALITY (Cont.) DATA FLOW DIAGRAM 12/8/2018

COMPARISON Mobile Banking (Banks) Mobile Money (Telecom) SMS Exchange Users Only bank customers re glistered for it Only Mobile subscribers registered for it. All Mobile users Prerequisites To be registered and activated for this service To have deposit To be registered for this service To have Deposit To have units on the mobile number Sources of Funds Deposits The units on mobile phone 12/8/2018

COMPARISON (CONT.) Mobile Banking (Banks) Mobile Money (Telecom) SMS Exchange Observations Limited to specific bank customers registered for this service The Activation period takes time Registration may be tiresome for some users Deposit takes time (queue) and may involve third party costs (like transport) Limited to specific mobile subscribers registered for this service Registration may be tiresome for some subscribers Deposit may take time (queue) and may times involve third party costs (like transport) Easy to get airtime vouchers ( they are available almost in whole country as well as the mobile network coverage) Only services charge (for USSD session) 12/8/2018

ADVANTAGEOUS Environmental impact Economic hardship applicable Social Impact The system is economically and environmentally successful because it is paperless.   The system is very cost effective because the mobile communication sector is very competitive and it will save all the third party costs (like transport) The fact that the system is environmental and economical efficient, automatically, its social impact is remarkable. 12/8/2018

It has not been easy to convince: CHALLENGES The system requires many interconnections of different players' System (Operators, Utility Providers), It requires also an important budget (for financial reconciliation at a period) It has not been easy to convince: It’s new (always this question: Show where else it has been implemented??) A big WORRY: It is touching the “HEART” (billing system). 12/8/2018

CONCLUSIONS & RECOMMENDATIONS To Telecom (especially in developing country): To promote such systems as they can help a lot of people (especially in remote areas) To Government & ICT Regulators: To promote the spirit of research so that many innovations should come up and ICT continue to go beyond core communication (Voice, SMS and Internet) but also impact the whole life even to people in the heart of villages 12/8/2018

CONCLUSIONS & RECOMMENDATIONS (Cont.) To ITU: to continue such workshops to help an innovation in one place to spread an to every one as the globe has become one home. 12/8/2018

Merci! Thank You! 12/8/2018