Mobile Money Transfer explained – Bobby Srinivasan, co-founder of Roamware


Bobby Srinivasan is the co-founder of Roamware and spearheads the company’s worldwide operations. Over the last seven years he has been instrumental in transforming the company from a start up into a global roaming and value added solutions provider.

Kieron Osmotherly interviews Mr. Srinivasan recently about Roamware’s acquisition of Macalla, their groundbreaking partnership with Grameen Solutions and his vision for creating a totally interoperable mobile money ecosystem.

Please explain the evolution of Roamware into the mobile money space.

Roamware is a company that has pioneered the world of voice and data roaming and interoperability over the years. We have a footprint of over 400 GSMs operator networks around the world, across 146 countries.

The logical next step having done interoperability of voice and data was to look at money. We’ve been looking at the area for some time and within the area of mobile money transfer there are a lot of misnomers as far as I’m concerned. The question for us was wherein lies the opportunity for Roamware and how can we leverage our relationships with the mobile operators. How can we extend our platform to provide mobile money services?

What we decided to do internally was undertake a product search, looking at around 25 companies in the MFS space, with the outcome being that we decided to acquire Macalla.

How will the acquisition of Macalla support or expand Roamware’s MMT services?

I’ll try to give you our views on the various verticals that we’re adopting. Firstly is simply mobile banking as an extension of internet banking. Then there is the deployment of mWallets around the world and the next generation of M-Pesa type solutions.

The focus even before we made the Macalla acquisition centred on our partnership with Grameen Solutions because I believe the big opportunity for mobile money sits with the unbanked and the underbanked. What we’re doing is building a whole range of applications, from agent management to micro savings, micro loans, and micro credit scoring, micro insurance, micro trade etc.

There are a range of applications that we can deploy on any wallet or any ecosystem such as M-Pesa, G-Cash, Smart Money or others. And we believe that what these things will do is fundamentally drive traffic. Because part of the problem today is that there can be very clear corridors without any traffic, and the question becomes, how do you begin to encourage people to use these corridors?

Right now the only people winning are the Western Unions of this world because all they are doing is expanding their already large agent base. I think there are much more viable solutions out there, so we’re focussing in on the unbanked and underbanked in certain areas, and of course, we deal in cross border airtime transfer and we have hubs that we are building for interoperability.

What will be the killer application within the mobile money toolkit?

I don’t think a single application will be the killer application. I think that there needs to be a genuine ecosystem with corridors that are a fraction of the cost of those provided by traditional money transfer networks.

What we’re looking to do is create an any-to-any solution; ATM to ATM, ATM to cash, ATM to wallet, wallet to bank, bank to agent – it doesn’t really matter, the real opportunity here is complete seamlessness, completely joined up in the way that you can provide any-to-any interoperability for banks as well as operators. These are applications that drive traffic into the corridors and act as the next generation of financial products for the unbanked and underbanked, such as micro savings, micro loans, and agent management.

Which markets are Roamware strategically focussing on?

We are active in virtually every market (with a footprint in 146 countries). So for us looking at the unbanked and underbanked, we think that Africa, Asia, Latin America and the Middle East are all important regions. We target certain countries so that people will begin to use these corridors and the only way that they will begin to do that is if you show these developing markets that you can provide real reasons why they should use mobile to become financially included.

Which region will have the greatest growth for MMT in the next 5 years?

Well clearly Africa and Asia are going to be huge, Latin America presents a significant opportunity and the USA-Mexico corridor is big. The fact of the matter is, there is a big potential segment and I believe it can substantially increase ARPU for operators.

I believe it is a very interesting opportunity for microfinance institutions to get involved in the value chain, and I believe there are millions of unbanked citizens with mobile phones that can be brought into the system. Ultimately I believe that emerging markets will be the true focus for growth of this new technology.

You announced a partnership with Grameen Solutions. Can you give us an insight into what you want to achieve through that partnership and how it has developed to date?

My background out of college is that I started off working for the World Bank, so I have a great empathy for development banking, and with this partnership it’s a bit like life is coming back full circle for me. Muhammad Yunus is a man who has been an inspiration to me. I went to meet him in Dhaka, explained what I was doing and he said ‘look, let’s partner together because we have a common vision’.

I’m hoping that our development team and our deployment team will all be based out of Dhaka. It’s great to be working with the guys that fundamentally understand microfinance and banking for the poor the most. They built Grameen Bank based upon banking for the poor, so to have all their ideas and IP going into what we’re doing is extremely exciting.

Would you comment on the opportunity for cross border MMT?

The opportunity is huge and the precursor really is airtime. Cross-border remittances are the logical next step and I can assure you that within a year or two we will see a significant operator network around the world that will be a viable alternative to existing money transfer networks, at a fraction of the cost.

Projections forecast the value of the MMT market at $202 billion by 2013. What will the value of mobile money be to consumers over the coming years?

Firstly I have a hard time believing all these numbers. If you add up the revenue from a vendor perspective associated to the technology deployments of mobile money, I can tell you that it’s less than $100 million today. How do you go from $100 million to over $200 billion?

I think a big issue is making sure that the regulators around the world really understand what the possibilities of this are, both from a domestic and an international perspective. They need to have a true understanding of how this can alter the lives of billions of people around the world and financially include them. That’s where we can make a real difference to people around the world and make them considerate economic citizens. We can provide healthcare and insurance, all these types of things that can truly improve quality of life.

So for me, I’m not sure about all these projections, but the hard reality is that there is a real opportunity for operators to come together, regulators to come together, and for banks to work in cooperation with operators to serve the unbanked and underbanked. When all of these things come together, there is a great opportunity for us collectively to hit a home run out of the ball park.