Insights from Southeast Asia: Cambodia’s WING &
Thailand’s True Money
Paul Leishman, GSMA
The MMU programme is funded by a grant from the Bill & Melinda Gates Foundation
Restricted - Confidential Information
© GSMA 2009
All GSMA meetings are conducted in full compliance with the GSMA’s anti-trust compliance policy
Agenda
Why analyze WING and True Money?
1 Neither story is entirely about money transfer
Insights on challenges and opportunities of launching bank-led and convergence
2 supported deployments
3 Numerous distribution insights, including impact of tiering and categorizing agent
networks, and using scratch cards
Structure of analysis:
1 Who uses the service?
2 What service has been most popular and why?
3 How has each deployment approached distribution?
Confidential 2
WING: Implications of Launching a Bank-Led Offering
Launched in Cambodia in 2008, WING Money today has 80,000
customers. The scheme is operated by ANZ and offers customers the
ability to send and receive money domestically, and buy airtime on four
mobile networks.
Implications of launching a bank-led offering:
1 Need to build a new brand
- 94% understand WING can be used to send money fast
- 89% understand WING can be used to send money for low cost
- 63% understand WING can be used to send money safely
2 Need to build a new distribution network
- 493 WING Cash Express Agents; 1,700 Pilots
3 Need to partner with mobile operators
- Integrated with 4 out of 9 mobile operators
- Access to 2M out of 6.5M connections in Cambodia
Confidential 3
Agenda
1 Who uses the service?
2 What service has been most popular and why?
3 How has each deployment approached distribution?
Confidential 4
WING: Reaching the Unbanked at Base of Pyramid
1 WING’s early adopters have been the 2 Roughly a quarter of WING’s
unbanked segment, some of whom customers live on less than US$5
see the potential to use the service per day; higher proportions of low
for savings income early adopters come from
rural areas
% of WING Customers Previously Unbanked WING Customer Income
90% 81% 79% 100%
80% 90% 15%
23%
70% 61%
56% 80%
60% 46%
44% 70% 56%
50% 35%
40% 60% 39%
30% 50% $5000+
20% 40% 31% 13% $2000-$5000
10% 30%
0% 50% < $2000
20% 38%
Total Base Phom Penh Kampong Siem Reap Kompong Som
31%
10% 22%
Cham
0%
Phom Penh Kampong Siem Reap Kompong
Cham Som
Confidential 5
Agenda
1 Who uses the service?
2 What service has been most popular and why?
3 How has each deployment approached distribution?
Confidential 6
WING: Envisioned for Money Transfer but Adopted for Airtime
Confidential 7
WING: Why Adoption of Money Transfer Has Been Slow
1 Lower density of rural agent network 2 Difficult to foster trust in a new brand
makes urban-rural remittances tricky
Awareness of Brand Promises
Phnom Penh
Kep 100%
Pailin 80%
Sihapoukville
60%
Kandalt
Siem Reap 40%
Stung Treng 6X Avg. 20%
Ratanakiri
Kampong Speu 0%
Pursat I can send and I can send and I can send and
Koh Kong receive money receive money receive money at
Kampong Chhnang fast safely a low cost
Prey Veng
Takeo
Battambang
Banteay Meanchey 3 ‘WING to WING’
Preah Vihear
Svay Rieng
Mondulkiri
Oddar Meanchey
Kampong Thom
Kampot
Kampong Cham
Kratie
Confidential
- 20,000 40,000 60,000 80,000 100,000 120,000
8
Population Per Agent
WING: Why Adoption of Airtime Purchase Has Been Higher
Reduction in cost of
1 Operators value the distribution savings 5-7% distributing airtime
2 Operators value the incremental revenue
33% Purchases outside
store hours
70% Purchases at $1 price
point
3 Customers value the convenience
Confidential 9
Agenda
1 Who uses the service?
2 What service has been most popular and why?
3 How has each deployment approached distribution?
Confidential 10
WING: Challenges of Flat Agent Network with Multiple Categories
Tiers: 1 -- Categories: 2 Tiers: 2 -- Categories: 1
Key Challenges:
1 With no oversight, it’s difficult to ensure agents maintain liquidity
2 With no oversight or career path, it’s difficult to retain ‘pilots’
3 Cash In/Out agents miss out on the most lucrative commissions
Confidential 11
WING: Impact of Changes to Distribution Network
2 Creating the ‘team leader’ function
Implementing the master WING
1
Cash Express tier has improved for WING Pilots has improved
agent liquidity by 15% retention by XX%
% of Agents Maintaining Liquidity Minimums
50%
45% 43%
40%
35%
30% 27%
25%
20%
15%
10%
5%
0%
October 2009 November 2010
% of Agents Maintaining Liquidity Minimums
Confidential 12
WING: Outstanding Distribution Challenges
1 Because WING Cash Express agents do not typically register new customers,
their source of income in the early days is limited in the absence of:
- Rapid customer adoption
- High active rates
- High transactions per user
Actual Scenario: 3%
15%
Earnings breakdown of an agent who does everything
20%
Overview: 21%
Chirn Prom runs a small phone shop and sees the
potential in WING. He has become a master cash
in/out agent, and a team leader to 50 WING Pilots.
41%
Summary: Retainer: Team Leader
- 3% of income from facilitating cash in/out Commissions: Team leader
- 35% of income from ‘leadership’ activities New Customer Registrations
Retainer: Master WING Cash Express
- 62% of income from pilot-related activities
Commissions: Cash In/Out Transactions
Confidential 13
WING: Key Learnings
1 A balanced distribution network is required to facilitate urban-rural money transfer
2 At some point in the development of agent networks, multiple tiers will often make sense
3 If registration is separated from cash in/out for agents, consider impact on agent income
Confidential 14
True Money: Implications of Launching as Converged Provider
Launched in Thailand in 2005, True Money today has 6,000,000
customers. True Money is part of True Group, a converged
communications provider that also offers fixed line, cable TV, internet and
other services. True Money is licensed by BOT to issue e-money, and
their service enables customers to pay bills, send and receive money
domestically, and buy True Move airtime.
Implications of launching from a position of convergence:
Payments becomes a higher priority than money transfer, given the
1
potential benefits of making your service easier to access
2 Convergence-based cross-promotion becomes viable
Confidential 15
Agenda
1 How has each deployment approached distribution?
2 Who uses the service?
3 What service has been most popular and why?
Confidential 16
True Money: Impact of Using Scratch Cards for Distribution
True Money Cash Cards
- Rolled up several single purpose True
cards into one multi-purpose card
- Main source of funds for e-wallet
- Comparatively high cost of ‘cash-in’
Impact of Using Scratch Cards:
1 Rapid path to broad distribution
2 Cannot profitably facilitate money transfer
3 Cannot profitably facilitate many types of bill payments
Confidential 17
True Money: Impact of Introducing True Money Express Agents
Challenge of Using True Money Cash Card: The Benefits of TMX:
Introducing TMX has lowered
1 the cost for True to facilitate
Cost of facilitating cash-in: 5% 1% cash-in and enabled access to
money transfer
Composition
Commissions to dealer network 4.5% NA
Introducing TMX has created
Cost of production & distribution 0.5% NA 2 the distribution and cost
Commission paid for cash-in NA 1% structure needed to access the
bill payment market
*Directional: exact figures withheld
Confidential 18
Agenda
1 How has each deployment approached distribution?
2 Who uses the service?
3 What service has been most popular and why?
Confidential 19
True Money: Why Payments Has Been Most Popular Use
1 Convergence provided a ‘beach-head’ and logical start
2 Thais have more options for money transfer than people in other markets, like Kenya
3 Bill payments is a bigger market, and thus has been a higher priority for True
- 177 million money transfer transactions in 2008
- 720 million bill payment transactions in 2008
4 True have not created a distribution network that facilitates cash-out
Confidential 20
True Money: Key Learnings
1 Leverage other corporate assets for cross promotion where available
2 Scratch cards with high embedded costs preclude bill payments and money transfer
Confidential 21
Questions?
Paul Leishman, GSMA
The MMU programme is funded by a grant from the Bill & Melinda Gates Foundation
Restricted - Confidential Information
© GSMA 2009
All GSMA meetings are conducted in full compliance with the GSMA’s anti-trust compliance policy