Looking at economic statistics for remittance-receiving countries may be a good gauge for assessing the potential effect of remittance on the economy and the society in those countries. In particular, statistics that measure poverty may be a good indicator of the impact remittance may have.
Whereas Mondato’s Value Transfer Index measures remittance opportunity from a commercial perspective (such as “should an enterprise invest in a particular country?”) the United Nations Development Programme’s Human Development Index (“UNDP HDI”), can be used as a complementary measure, assessing the transformative power of remittance.
Haiti, since the end of dictatorship in 2004, has been making steady progress in terms of its HDI.
[1] As a steady source of emigrants, it has a continuous income through remittance, and is ahead of Colombia, for instance, and higher than the average for Central America and the Caribbean in amount received per capita. It is ahead of Bolivia and Nicaragua in total remittance. So our expectations are that the growth in remittance will continue in the coming year.
Based on the HDI, the impact of remittance, even at an average estimate of $127 per person, could be great. Yet these changes are relatively slow given the rapid impact truly needed since the January 2010 earthquake. Recently, there have been increasing complaints seen through CNN and elsewhere in the media, and people, such as ex-USA president Bill Clinton, have commenting about the lack of progress in the intervening six months.
But change, though too slow for certain, is coming. The main change we have noted is in governmental attitude, resulting in a few interesting new initiatives. A significant one is that of the incentive fund created by the Melinda and Bill Gates foundation[2], which is managed by HIFIVE, the USAID microfinance project in Haiti. Since there are no mobile money implementations in Haiti, nor are they allowed under current regulations, this initiative could not have started without tacit agreement by the Haitian government to change its approach. In a similar vein, but on a lesser scale, Digicel announced they will start a mobile banking application in Haiti.[3] And lastly, Mondato itself is embarking on assessing new and efficient ways of combining remittance, financial services and alternative distribution (off-ramp) approaches there.
It is this expanded reach approach that will transform potential impact into real impact. Much of the remittance volume is used to pay the channels (both on-ramp and off-ramp), and an efficient distribution will lower cost. Combining it with expanded penetration will allow remittance to reach faster and further into underserved areas, where the need is greatest.
We are looking forward to see how Haiti fares in another six months.
Although the Euro is the official European currency across former international borders, the banking and payments infrastructure has not been fully integrated. The EPC is the decision-making and coordination body of the European banking industry with regard to payments. Its role is to ensure the evolution of an integrated market for payments in Europe through the development and promotion of standards and best practices in order to realize the Single Euro Payments Area (SEPA).
The vision for SEPA is for one integrated Euro payments market where people and economic entities can make and receive national or international payments in Euros within Europe under the same basic conditions, rights and obligations, regardless of their location. Within SEPA, all Euro payments will be domestic, thus for example, a wire transfer from one European country to another would no longer be treated as an international transfer in terms of cost and process. SEPA payment instruments are designed to eventually replace national Euro payment instruments existing today. Existing SEPA instruments include the SEPA schemes (SCT, SDD) and SEPA Cards (SCP).
SEPA is not achieved yet and there have been talks to set a deadline for migration to SEPA services. The earliest possible date is the end of 2012, however in light of the current European economic situation the migration could be delayed even more.
According to an EPC white paper released last month, “[the] SEPA marketplace is clearly set for an immediate uptake of mobile payment services.” The EPC sees mobile payments as an indivisible part of the European financial system of the future. High mobile phone penetration and increasing use of mobile phones for other purposes besides voice and text are some of the reasons. According to the EPC, consumers are eager to embrace services based on the mobile platform, and financial services are especially appealing. In order to maximize the potential and overall benefits of mobile payments, the EPC is committed to a quick market adoption.
The EPC’s main focus is in the area of initiation and receipt of credit and debit payments (including card payments) through mobile phones and on interoperability not the competitive space. Mobile payments will comply with the EU Payment Services Directive.
In 2008, the Council conducted a market study to prioritize its work in the
mobile payments area. The criteria used to prioritize the different types of mobile payments included business and economic aspects, infrastructure and go-to-market strategy, and market potential. Thus, the EPC selected the following categories in order of priority:
1. Contactless SEPA Card Payments: P2B and B2B;
2. Remote SEPA Card Payments: P2P, P2B and B2B;
3. Remote SEPA Credit Transfers: P2P, P2B and B2B.
Mobile contactless card payments are payments using an NFC enable mobile phone and POS terminal. The customer must be subscribed to a mobile payments service and have an existing bank card (debit, credit) linked to a mobile wallet.
Both remote SEPA card payments and remote SEPA credit transfers are mobile payments, non- NFC, such as P2P money transfer or bill payment. The difference between them is that for the card payments the user has an m-wallet linked to a card, while for the credit transfer the m-wallet is linked to a bank account directly.
The EPC says it is producing implementation guidelines to help quick market adoption. And while the council indicates its commitment to help the growth of mobile payments, in the end adoption is in the hands of the individual market participants.
Source:
European Payments Council,
White Paper Mobile Payments 1st Edition, June 18
th, 2010.
http://www.europeanpaymentscouncil.eu/
