Mobile Money in Times of Crisis: an unlikely hero
It is estimated that approximately half of the world’s population is today in lockdown, with the other half likely to have experienced drastic changes in their day-to-day lives as a result of the COVID-19 pandemic. Needless to say, this crisis will have severe consequences on the health of economies and global markets alike. However, it has reminded us all of the foremost priority of both public and private institutions; the human life. As citizens and institutions around the world practice and implement social distancing, I can proudly say that solidarity has truly become a global phenomenon.
In a recent analysis of the possible scenarios of both the health and economic consequences of the virus, Mckinsey(1) laid out a fundamental imperative; in order to traverse this global challenge, we need to safeguard our lives and our livelihoods. That is, for us to come out of this stronger and more resilient, we must focus our efforts on both the public health crisis and the ensuing economic disruption.
Here in Jordan, the country I proudly call home, this crisis has brought us closer, both as people, and to our public institutions. The response of the Jordanian Government has been one of the most extraordinary on a global scale. From enacting a full, country-wide lockdown, to introducing emergency fiscal, monetary, social welfare and labor protection policies and measures, Jordan has reinforced itself and its capabilities on the global stage. In addition to first responders, medics and all those working in the field for our safety, this crisis has also revealed a new type of hero: Mobile Money.
Mobile money arrived to Jordan in 2014 when the National Payments Council launched the Jordan Mobile Payment (JoMoPay) Switch, to be operated by the Central Bank of Jordan. With this, the JoMoPay laid the foundations for mobile Payment Service Providers to enter the market and offer mobile money products. The JoMoPay, however, was unique to other mobile payment ecosystems in a number of ways. First, all eMoney issuance was fully backed and guaranteed within escrow accounts, in addition to settlements of JoMoPay transactions taking place in central bank electronic money (via RTGS). Second, it was an open ecosystem ensuring interoperability by design. Third, it uniquely identified customers and wallets through a combination of Jordan’s National Identity Scheme for Jordanians and other unique identifiers for non-Jordanians as well as mobile phone numbers. It is also the only real-time micropayment system in Jordan as the crisis unfolded.
These distinguishing characteristics, which were originally conceptualized to ensure safe and accessible digital financial services for the unbanked in Jordan, adapted JoMoPay, now under the operation of JoPACC, to becoming the primary chain connecting the Government and private sector businesses and NGOs alike, with beneficiaries and employees, and an integral component of their financial survival during the lockdown.
In order to amplify this potential, and ensure the smooth implementation of economic relief measures, the Central Bank of Jordan, JoPACC, and all financial institutions in the market introduced policies, measures and actions aimed at expanding access to digital financial instruments, and most notably mobile wallets. The first of which was the sanctioning of remote Digital Onboarding through simplified electronic Customer Due Diligence (eCDD) for mobile wallets. This was done with no compromise to the safety of the financial system owing to Jordan’s comprehensive National Identification Schema and the UNHCR ID for refugees. Furthermore, to ensure that no mobile phone numbers (serving as the unique wallet identifiers) were reserved in vain, JoPACC along with all JoMoPay participants undertook a full data cleansing effort leading to the closure of all inactive mobile wallets (with zero balances and no transactions for a minimum of one year). This was of great importance as it freed up a substantial proportion of mobile numbers associated to inactive wallets for consumers to onboard with. It also provided insights with high precision on the beneficiaries of mobile wallets in Jordan, 91.3% and 2.67% of which were Jordanians and refugees respectively.
During times of crisis, innovation prevails. The Unified Agent Interface (UAI), developed inhouse at JoPACC, originally served one purpose: an interoperable platform for superagents of mPSPs to serve any mobile wallet user. However, during the COVID-19 crisis, several developments and enhancements took place on the platform, making it the center of an innovation storm geared towards automating and enabling access to mobile wallet information and services remotely. This included an online wallet inquiry service built on OCR technology for extracting information from national ID cards, a comprehensive directory of mobile money agents around the kingdom, as well as information on fees charged by each mPSP to enable consumers to make the best choice of provider. This brought our attention to the potential the UAI holds, and we are looking forward to developing it further, to transform it into a holistic platform for mobile wallet users.
The aforementioned measures paved the way for the opening of approximately 85,000 new mobile wallets during the crisis, a 20% growth in the number of wallets in Jordan. This number, albeit its relative significance, is expected to grow exponentially as the National Aid Fund continues to migrate its recipients of cash assistance to Digital Financial Services, and the government begins disbursing cash assistance for the most economically impacted individuals solely through mobile wallets, facilitated by JoMoPay’s bulk payment capabilities.
A key to the success of all the above measures and initiatives is ensuring accessibility to Cash In Cash Out (CICO) facilities for beneficiaries, as well as adequate usage opportunities. In Jordan, the wallet to agent ratio is 414:1. To lower this number and ensure higher accessibility to CICO facilities, two banks in Jordan enabled full cardless cash out capabilities for mobile wallet holders through their ATM network, making the ratio of wallets to CICO facilities 339:1, with another bank expected to join bringing the overall ratio down to 294:1. This ratio is comparable to advanced mobile money markets, such as Kenya, Rwanda, and Uganda(2).
With regard to maximizing usage opportunities for mobile money users, eFAWATEERcom, Jordan’s only Electronic Bill Presentment and Payment System is directly integrated with the JoMoPay switch, enabling seamless bill payments for wallet holders, and ensuring no interruption of cashflow for billers. Coupled with an unprecedented increase in the number of billers on the eFAWATEERcom platform, this injects substantial usage opportunities for mobile wallet users. Furthermore, the Central Bank of Jordan in partnership with JoPACC launched the COVID-19 Challenge Fund, to promote mobile Payment Service Providers to enable contactless payment technologies (such as QR using JoPACC’s EMVCo compliant QR standards) and acquire merchants to increase usage opportunities. JoPACC is also in the process of enabling interoperability of eCommerce platforms with mobile wallets and QR acceptance.
To conclude, the above summarizes some of the efforts undertaken to ensure the protection of Jordan’s most vulnerable through mobile money during this crisis. JoPACC will conduct a full impact assessment on Digital Financial Services in times of crisis, to assess the resilience of Jordan’s payments infrastructure and extract lessons to safeguard its economy against future crises.
- McKinsey & Company. 2020. Safeguarding Our Lives And Our Livelihoods: The Imperative Of Our Time. [online] Available at: https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/safeguarding-our-lives-and-our-livelihoods-the-imperative-of-our-time
- Dujacquier, D., 2017. Mobile Money For The Unbanked – Avoiding Common Industry Pitfalls. [ebook] Roland Berger. Available at: https://www.rolandberger.com/fr/Publications/Mobile-Money-for-the-unbanked.html