M-Commerce, Mobile Wallets & SMS-Banking Presented by: Esfih Mohamed, PHD in Payment Systems and E-banking UNIVERSITY TECHNOLOGY MALAYSIA Forum International de la Finance, 13th & 14th May 2008, Alger

DEFINITIONS Definition of M-commerce: Mobile Commerce is a commercial process which uses an internet enabled phone or a PDA to conduct transactions over the internet. Definition of Sms-Banking: It is a communication process between the bank and customer that can be resumed in 2 methods: Pushed Messages: The bank initiate the message without client’s request (Send Password, Balance Statement, Insufficient funds etc…) Pull Messages: The client initiate the communication and the bank replies (Balance request, Bill Payment, Transfer between accounts etc…) Definition of Mobile Wallet: It is basically an online payment system that allows transactions to be initiated via mobile phones and offers also a web admin to manage the account and the transactions

The fact speaks out: "Mobile networks now cover more than 80 percent of the world's population and 3 billion people have a mobile phone, creating an unprecedented opportunity to extend the benefits of financial services to the majority of the world's families for the first time." said Rob Conway, CEO of the GSMA Realizing the potential of penetration of their financial service Western Union liaising with GSMA decided to launch a “Mobile Wallet” technology The fact speaks out: "Mobile networks now cover more than 80 percent of the world's population and 3 billion people have a mobile phone, creating an unprecedented opportunity to extend the benefits of financial services to the majority of the world's families for the first time." said Rob Conway, CEO of the GSMA Realizing the potential of penetration of their financial service Western Union liaising with GSMA decided to launch a “Mobile Wallet” technology How this Mobile based finance started…. to be interesting What is the point ? This fact means that in many countries, a person may not have a bank account, or internet access or not even a TV, but he would most probably have a GSM phone.

With more than 2.5 billion subscribers worldwide at the end of 2006, mobile telephony has become the most popular telecommunication access mode. Well ahead of landline calling and its base of 1.2 billion fixed main lines. Mobile service now constitute operators’ prime source of revenue: earnings estimated at 573 billion USD, or half of the globe’s telecommunication service market. Sales exceeded 770 million units this past year, representing an estimated 95 billion USD (40% of the telecom equipment market). The global mobile terminal market size for 2006 is expected at 934 million units up from 836 million units in 2005, i.e. nearly 12% growth. In the long term, the mobile terminal market is forecasted at 1086 million units in 2009, i.e. a CAGR of 7.4% from The global mobile terminal market revenues for 2006 are expected to reach USD billions from 110 billion in 2005, i.e. +3.2%. In the long term, the mobile terminal market is forecasted at USD 121 billion in 2009, i.e. a CAGR of 2.5% from The GSM Market

Subscriber bases around the Globe

GSM Forecast

Statistics on the Algerian Market GSM Penetration (Mars 2006): 65% The Telecom Market in Algeria Continued to Grew by 200% for the Fourth Year In a Row and soared past the 65% penetration mark. (total population is 33 million) Publication: Business Wire, March 2006 GSM Penetration (Mars 2006): 65% The Telecom Market in Algeria Continued to Grew by 200% for the Fourth Year In a Row and soared past the 65% penetration mark. (total population is 33 million) Publication: Business Wire, March 2006 Internet penetration (August 2007): 7.3% Internet penetration (August 2007): 7.3% Bancarisation de l'Algérie (juin 2006): 30% Rapport final, "Bancarisation de masse en Algérie” Juin 2006 Mission du CGAP & l’AFD, sous le haut patronage du ministère des finances Note: Our former remark about a person who may not have a bank account or internet access but most probably would have a GSM phone seems very accurate for the Algerian market.

Sms technologies how does it work ? Ok great… but how much SMS costs ?

Source: ARPT, Bulletin trimestriel n°4, March 2006, “Evaluation of GSM Networks” The point: Relatively speaking, Algeria Telcos practices fair SMS pricing compared to it’s North African Neighbours such as Morocco and Tunisia.

Mobile phone could be today and tomorrow banking and commerce devices as it is very popular and much more people have GSM phones Than Internet connected devices or computers. Not to mention the reasonable prices of SMS. Mobile phone could be today and tomorrow banking and commerce devices as it is very popular and much more people have GSM phones Than Internet connected devices or computers. Not to mention the reasonable prices of SMS. Conclusion: Already in Japan, Docomo company has a very advanced Mobile Wallet Technology that allow Japanese people to pay for many public services Using their mobile phone. In Malaysia, in 2006 was launched the testing phase of “VISA WAVE” Technology, which allows customer to do shopping in their usual stores by waving their phone at the cachier machine. The Mobile phone actually Incorporate a bank chip. (VISA + Maybank + Maxis + Nokia) In Malaysia, in 2006 was launched the testing phase of “VISA WAVE” Technology, which allows customer to do shopping in their usual stores by waving their phone at the cachier machine. The Mobile phone actually Incorporate a bank chip. (VISA + Maybank + Maxis + Nokia)