Developing Telecoms met recently with Huawei FinTech and Mobile Financial Services (MFS) team, to discuss the development and growth of Huawei’s MFS business. The interview started by asking them to outline how Huawei first entered the MFS market.
HUAWEI: Huawei first became involved in MFS when it won a contract with a famous African operator. After the growth of mobile finance business, the operator was developing its own software for mobile financial services. The branding of mobile finance for this operator was already the leading name in mobile phone finance by 2010/11. The service was feature phone based, but included some early kinds of purchasing services. The operator was also in the process of establishing services in other markets and executed an RFP for a technology partner to support this goal and Huawei was chosen.
Huawei believes it won the RFP based on 2 strengths, its R&D and Engineering capability to deliver a platform with the performance, reliability, flexibility and availability which establish the foundations for the trust you need from customers and businesses to successful grow a FinTech ecosystem. Secondly Huawei’s commitment to deliver the platform and migration to support the needs of the largest and most complex market, Kenya, where Huawei has now successfully supported a decade of growth.
DT: What success has Huawei’s MFS platform achieved?
HUAWEI: Since development of the current FinTech products started in 2012, Huawei's has deployed its platform across all of the existing mobile finance markets and expanding across Asia and Africa to more than 30 markets.
Based published mobile financial services data, and Excluding China and PayPal, Huawei’s platform supports more than 50% of the global MFS market activity. In total Huawei’s FinTech solutions now provide access to digital financial services to over 400 million people in markets worldwide who otherwise would not have this benefit.
DT: What markets has Huawei MFS entered recently?
HUAWEI: One of Huawei’s most recent customers is telebirr in Ethiopia. Ethiopia is the second most populous country in Africa, with over 120 million people. Prior to 2019 around 55% of the population did not have access to financial services due to lack of bank coverage, and the total mobile financial services user base in Ethiopia was around 10 million people.
telebirr was launched by Ethio Telecom with help from Huawei in May 2021 with the aim of meeting the government’s target of increasing financial inclusion. telebirr is aiming to achieve this by enabling rapid financial transactions throughout Ethiopia including the most remote areas. The service also aims to transform the overall economy and help Ethiopia move towards becoming a cashless society and improve cash flow throughout the economy.
Another advantage that telebirr is offering is to provides a more 'democratic' digital ecosystem, in particular giving women control over their own earnings and finances, enabling payments to be made directly to women, and for women to control their own savings and finances. The DNA behind successful FinTech services is to design your business, product and service from the beginning to meet everyone's needs rather than to target specific segments.
DT: What results have you seen so far?
HUAWEI: telebirr has gained the support of over 98,000 agents, of which 30%+ are run by women, 25,000 merchants, 18 banks and over 52 public and private institutions. It is currently serving 28.6 million users and making a total value of over 288 billion Birr transactions.
Moreover, financial inclusion in Ethiopia has increased by around 15%, and is well on the way to achieving the government’s five year target in under two years. Mobile Financial service adoption is accelerating globally and this has benefited telebirr and Ethiopia. If you compare with another market launched in 2018, a similar level of growth took over 3 years to achieve. When telebirr launched, it registered a million customers in two weeks; it has taken other successful markets a year or more to do that.
DT: What factors have contributed to this impressive growth for telebirr?
telebirr and Ethiopia was able to benefit from Huawei’s extensive experience in MFS in other emerging markets. Rather than stating with a simple point-of-sale (POS) transactional service, it started with dozens of new services based on the App, USSD and SMS, including send and receive money, deposit cash, remittance, pay bills, withdraw cash, fundraising, bulk disbursement, ticket purchase, utility service, passport service, digital lottery, donate, credit loan, micro loan, saving services and more. Other bank players in Ethiopia only provide basic services and, moreover, there are interconnection issues between different banks.
To do this telebirr and Huawei had to gain the backing of the regulators who were willing to accept things like holding biometric information electronically and registering customers electronically by matching faces and ID cards. This is actually more reliable than giving the information to a physical person. telebirr is now in the process of launching new payment services and financial services, on top of the basic wallet. It's quite an incredible journey to see that take off in one of the most populous countries in North Africa.
DT: What are the advantages of using Huawei’s MFS solutions?
HUAWEI: The first point I want to emphasise is that our solution is modular. The core product consists of the wallet, the finance services and the payment services. We then add enabling technologies for API integration, APP development frameworks, and for the future, AI Technologies to enable smarter more secure ecosystems. A Key benefit of Huawei's extensive R&D and software portfolio means that we can easily obtain and pre-integrate such world class enabling technologies to accelerate the growth and development of FinTech ecosystems.
The second point is that, in line with our product strategy, one product is the basis for all of our implementations, adapted, scaled and integrated for the needs of each market. For example, the needs of our largest market like Kenya drives key standards for performance, security, availability and reliability to the highest possible levels. The benefit of the single product strategy is a reduction in complexity and more focussed and effective use of software development investments, this also means that for all of our customers there is one product from the largest to the smallest market.
DT: How will MFS evolve in the future?
HUAWEI: The service models for MFS are now mature, and China in particular has had them for a number of years. Operators in emerging markets understand that to be successful in MFS it is now about more than the technology. Operators need to help their customers become more digital. Success will be dictated by the quality of the total package of services operators provide, and about developing super-apps to deliver these to compete with OTT service providers.
DT: Thank you for sharing your insights.