Safaricom expands M-PESA

East Africa's largest mobile operator, Safaricom, is expanding its M-PESA mobile money transfer service across Africa, a move likely to heighten competition for mobile money-transfer services in the region.

The rollout of the mobile money transfer service by Safaricom comes less than two months after MTN and Western Union partnered to introduce international remittance services in 21 countries where MTN has a presence. Meanwhile, the Zap service - formerly run by Zain and now operated by Bharti Airtel - has also been expanding steadily over the past year. MTN's mobile money transfer already boasts over 1 million registered customers in Uganda alone.

The rollout of the service by operators is threatening the continued existence of traditional money transfer services. Most Africans are now using mobile financial services to buy goods, pay utility bills, buy mobile airtime as well as receive funds from abroad.

The M-PESA service is currently available in Africa and the Middle East including South Africa, Kenya, Tanzania and Afghanistan and is currently being piloted in India. The service will allow users to send and receive money across the continent using a mobile phone. Safaricom is in partnership with Vodafone of UK for the provision of mobile commerce services in the region. Plans are under way by the companies to expand the service to the Democratic Republic of Congo, Mozambique and Lesotho.

Former Safaricom CEO Michael Joseph who chairs the board of directors of both Safaricom and Vodacom is expected to lead the expansion of the M-PESA service across Africa. Vodafone owns 65 percent stake in Vodacom Group, based in South Africa. Joseph was instrumental in making M-PESA a success when he was at the helm of Safaricom and is expected to drive the regional expansion program. The M-PESA mobile commerce was launched by Safaricom in 2007 and has since been expanding, with more than 13 million subscribers at this point.

Last year, Zain Africa - now Bharti Airtel - expanded the Zap mobile money commerce to Malawi, Nigeria and Sierra Leon after a successful rollout of the service in Kenya, Uganda and Tanzania and claimed 10 million people subscribe to the service.

"I used to travel to the village to pay my workers. But now I send the money through a phone because there are centers nearby where my workers collect money," said Lawrence Banda, a mobile commerce user in Zambia.

Zap is part of Airtel's One Network Platform, which allows subscribers to call countries where the service is available without paying roaming charges. The platform also allows travelling customers to make calls and SMS messages at local rates as well as recharge their mobile phones will locally purchased top-up cards. Using the platform, travelling customers are also able to send money back to their families and business from those countries where the Zap service is enabled.

Generally, most Africans do not have banks accounts and customers typically have to travel long distances to access traditional bank facilities. As a result, Africa is experiencing an explosion in mobile money transfer services as banks and mobile providers compete for customers who would otherwise not have a bank account.

Research and Markets publishes new forecasts for South African Telecoms, Mobile, Broadband for 2011

Research and Markets has announced the addition of the "South Africa - Telecoms, Mobile, Broadband and Forecasts" report to their offering. This annual report provides a comprehensive overview of trends and developments in South Africa’s telecommunications market.

South Africas telecom sector boasts the continent’s most advanced networks in terms of technology deployed and services provided. In a virtually saturated voice market, four mobile networks Vodacom, MTN, Cell C and Telkom SA who are competing for market share in the next growth wave, mobile broadband. 3G/HSPA mobile broadband services now rival available DSL fixed-line offerings in terms of both speed and price, and consequently subscriber numbers. 2010 also saw the first trials of the next generation of mobile technology, LTE (also referred to as 4G) in South Africa.

While emerging as the country’s leading broadband providers, the major mobile operators are also branching out into fixed-lines, fibre backbone networks, international fibre connectivity, mobile banking and entertainment in a rapidly converging environment. Fixed-line incumbent Telkom SA has reacted by launching its own 3G mobile network and the country’s first commercial WiMAX service, but various competitors are hard on its heels rolling out the same technology, including second national operator Neotel.

Following years of delays with its licensing, Neotel is gaining traction in the market in competition with Telkom. This, in combination with other sweeping liberalisation measures, also delayed by years, has changed the country’s telecoms landscape fundamentally and brought prices down. In addition, the government has created Broadband InfraCo, a national infrastructure company to provide cheap backbone network capacity to service providers. Despite the significantly increased competition between different service providers, many municipalities in South Africa, including the country’s largest cities, are implementing their own fibre and wireless broadband networks.

Under a converging regulatory regime, hundreds of alternative service providers are now pushing into the market with converged services. The legalization of VoIP Internet telephony in 2005 marked the beginning of a fundamental change in the country’s telecoms landscape. Billions of dollars are being invested into IP-based next-generation networks that are capable of delivering converged services more efficiently. Telecom carriers and ISPs are moving into delivering audio and video content over their networks, while in turn the traditional electronic media carriers have discovered the potential of their infrastructure for telecommunications service delivery.

Key regulatory events shaping the market in 2011 will be the complete unbundling of the local loop, the staged reduction of interconnect charges, the auctioning of WiMAX and LTE spectrum, and a deadline for mobile subscribers to register their personal details with service providers under new legislation, which could lead to a significant drop in mobile penetration.

All of the major players are involved in the various international submarine fibre optic cables that have reached the country in the past two years. Following the end of Telkoms monopoly on international submarine fibre-optic cables, the arrival of Seacom as the second international cable in 2009 has brought down the cost of international bandwidth dramatically. A third international cable, EASSy landed in 2010, and more are scheduled to go live in 2011 and 2012.

South Africas Internet and broadband market has finally taken off after years of stagnation due to an expensive operating environment created by Telkom SAs dominance in the fixed-line and international bandwidth market. The new converged licensing regime has created hundreds of companies licensed to offer Internet services. There has been consolidation in the sector which is expected to continue.

With its relatively well-developed and diverse infrastructure, South Africa is also taking a regional lead role in the convergence of telecommunication and information technologies with the media and entertainment sector, promising reductions in telecommunication costs and better availability of information and services. Digital media and social media have reached a level of development to foster an associated advertising and marketing industry. The FIFA World Cup held in the country in 2010 has showcased these developments. While South Africa lags behind other countries on the continent in the development of e-government, e-health and e-learning applications, it is a regional leader in the areas of electronic banking and mobile banking services.

Glitch leads to double charges

More than 200,000 people in Britain may have been double-charged on New Year's Eve because of a glitch in a Lloyds Bank payment system, bank officials said.

The bank said the problem was a system error in Lloyds TSB Cardnet terminals, and could affect anyone who paid with a credit card at a restaurant, bar or nightclub using the system to process credit card payments.

Lloyds released a statement saying cardholders would be reimbursed for any overcharges.

Director fined and banned over £2 million insurance fraud

The Financial Services Authority (FSA) has fined Barry Williams £25,000 and banned him from working in regulated financial services for his part in a scheme that defrauded leading London market insurers of more than £2 million.

Whilst not a participant in the fraud, as a director of Surety Guarantee Consultants Limited (SGC), Williams deliberately ignored his responsibilities as an approved person, turning a blind eye despite clear warnings about the true nature of the scheme.

SGC was established in 2004 to write a form of insurance known as surety bonds. Between January 2005 and August 2006 SGC held binding authorities with London market insurers, Markel and QBE (through its agent Amalfi) and wrote business that exceeded its authorised limits, exposing Markel and QBE to greater liabilities than they had agreed. In doing so, SGC made secret profits and withheld over £2 million that should have been paid to the insurers.

When SGC was audited by the insurers it produced false documents intended to show that it had kept within the terms of the binding authorities.

Williams did not profit directly from the fraud, however, he deliberately ignored serious concerns about signing surety bonds on behalf of the insurers in excess of the agreed limits. He was also found to have lied to the insurers to hide the scheme, allowing himself to become involved in the fraud.

Margaret Cole, FSA director of enforcement and financial crime, said:

"In believing that he could be a 'sleeping director' without incurring any responsibility, Williams did not take his accountability as an approved person seriously. He recklessly abused the trust and confidence placed in him by leading London market insurers and by doing so enabled secret profits to be made from the fraud by his colleagues.

"The London market relies on the trust and integrity of those who work in it. This sort of breach of fiduciary duty and lack of integrity amounts to very serious misconduct and will not be tolerated in the insurance industry or anywhere else in financial services. We will continue to take action against anybody else tempted to act in this way."

From a proposed fine of £50,000, The Upper Tribunal (Tax and Chancery Chamber) reduced the penalty to £25,000 in light of Williams' personal circumstances. It upheld the decision to ban Williams and withdraw his existing approval.

In July last year Timothy Higgins and Clifford Felstead of SGC and Ralph Brunswick of Templeton Insurance were banned from working in regulated financial services for their role in the fraud. The action against Barry Williams brings the FSA's enforcement action against all those active in the fraud to a close.

PayPal scammers targeted in US

US authorities have raided the house of two foreign exchange students suspected of involvement in a Vietnam-based crime ring that uses stolen credit card numbers, eBay and PayPal to con retailers out of millions of dollars.

According to an affidavit filed supporting a search warrant request, Winona State University students Tram Vo and Khoi Van are suspected of participation in the scam that has hit Amazon, Apple and Rosetta Stone among others.

The pair are accused of setting up over 150 eBay, and more than 300 PayPal, accounts using stolen identities. The accounts were used to sell items such as video games and iTunes gift cards worth over $1.2 million on the auction site.

To obtain the items they were selling, the men are alleged to have bought them directly from manufacturers using stolen credit card details, shipping the goods directly to the eBay buyers.

The stolen funds were then transferred from PayPal to dozens of bank accounts with banks such as Wells Fargo and HSBC before being moved on to Vietnam and Canada.

The affidavit, connecting Vo and Van to identity theft, money laundering and wire fraud is related to a US Department of Homeland Security investigation dubbed Operation eMule that has been running since 2009.

According to local press reports the search warrant was issued and computers seized from the men but charges have yet to be laid.

Reserve Bank of India's Draft Guidelines on Basle advanced measurement approach for calculating operational risk capital charge

The Reserve Bank of India has released draft guidelines on advanced measurement approach (AMA) for calculating operational risk capital charge. Comments/feedback on the draft guidelines have been requested from the Indian Banking industry before February 7.

The Reserve Bank had announced timeline for implementation of advanced approaches for computation of regulatory capital under the Basel II framework in India in July 2009. The guidelines for the standardized approach (TSA)/alternate standardized approach (ASA) for operational risk were issued in March 2010 and those for internal models approach (IMA) for market risk were issued in April 2010. The Reserve Bank had, in July 7, 2009, advised banks that they can, among other things, apply for migrating to Advanced Measurement Approach (AMA) for Operational Risk from April 1, 2012 onwards.

Is Google getting ready to launch a mobile payment service?

According to those in the know, Google is considering building a payment and advertising service that would let users buy milk and bread by tapping or waving their mobile phones against a register at the checkout. The service may make its debut this year according to anonymous sources. The system will be based on near-field communication (NFC) technology, which can beam and receive information wirelessly from 10 cm away.

Google joins a whole range of companies that want an in on the NFC market, and which may account for a third of the $1.13 trillion in global mobile-payment transactions projected for 2014, according to IE Market Research. In November, Verizon Wireless, AT&T, and T-Mobile USA formed a venture called Isis to offer an NFC-based service in 2012. Visa is testing contactless payments and planning to roll them out commercially in mid-2011, says Bill Gajda, Visa's head of mobile innovation.

"It's a land grab," says Jaymee Johnson, a spokesman for Isis. "Folks are sort of jockeying for position." "

EBay's PayPal may start a commercial NFC service in the second half of 2011, says Laura Chambers, senior director of PayPal Mobile. The system would also power peer-to-peer NFC transactions. For example, a restaurant patron might beam his share of the bill to his dining companion's phone. PayPal is open to partnering on NFC payments with companies such as Google, Chambers says.

Speaking about NFC at a technology conference in November, Google Chief Executive Eric Schmidt said, "You'll be able to walk in a store and do commerce. You'd bump for everything and eventually replace credit cards." Andy Rubin, Google's vice-president for engineering, declined to comment on future services and products.

A single NFC chip on a mobile phone would hold a consumer's financial account information, gift cards, store loyalty cards, and coupon subscriptions, say the people familiar with Google's plans. Users may also be able to make online purchases from their phones. By scanning a movie poster, for instance, a consumer might read reviews and use the Google service to purchase tickets.

"NFC could displace the cash register," says Charles Walton, chief operating officer for NFC chipmaker Inside Secure. "This is going to come superfast."

Google may be in a good position to disrupt the payments industry because merchants and consumers already use its technology widely. Some 300,000 people activate phones daily that use its Android software. On December 6, Google released its newest version of Android, called Gingerbread, which has some NFC features, such as reading information from NFC tags. More functionality "will come out pretty quickly," says Google's Rubin. On the market since December 16, the NFC-enabled Nexus S phone, developed with Samsung Electronics, will serve as a test for a Google payment and ad service, says one of the people knowledgeable about Google.

Last year, Google bought Zetawire, a Canadian startup with a patent on a way to combine a phone-based wallet with a reward-and-loyalty system. Google Ventures, the company's venture capital arm, also invested in Corduro, a closely held developer of mobile-payment solutions in Southlake, Texas.

Philippines remittances may top $20 billion

Remittances channeled through banks by migrant Filipino workers may exceed $20 billion this year, Bangko Sentral, the central bank said over the weekend.

Bangko Sentral Deputy Gov. Diwa Guinigundo said the bank saw money remitted by the workers increasing by about 8% in 2011, matching the projected 8- percent growth in 2010.

“But we have to review that,” Guinigundo added.

Remittances in 2010 were projected to reach $18.7 billion, based on the 8-percent growth assumption from $17.3 billion in 2009.

Data showed that remittances in the first 10 months of 2010 rose 7.9% to $15.5 billion. The bulk of the remittances came from Filipinos living or working in the United States, Canada, Saudi Arabia, Japan, the United Kingdom, United Arab Emirates, Singapore, Italy, Germany and Norway.

A projected 8-percent growth in remittances in 2011 will bring the total to $20.196 billion this year. The projected figure represents only those captured by banking channels.

A local bank also expects remittances to grow 5 to 10 percent this year. “Consequently, this could continue to underpin consumer spending which accounted for about 78 percent of the Philippine economy,” said Mike Ricafort, assistant vice president and head of domestic and global research of Rizal Commercial Banking Corp.

Bangko Sentral said the deployment outlook for Filipinos overseas remained upbeat given the continuing bilateral talks with some host countries, aimed at matching manpower requirements with the competencies of Filipino workers.

Remittances, which contribute more than 10 percent to the gross national product, are expected to help the economy achieve strong growth this year and support the appreciation of the peso against the US dollar.

Guinigundo said the peso was expected to trade at 43 to 45 against the US dollar this year while the gross domestic product would grow within a range of 7 to 8 percent.

RCBC, meanwhile, expects the peso to range 41.50 to 43.50 against the US dollar by December this year.

Remittances are seen to keep the country’s balance of payments in a surplus in 2011, although this would not be as strong as the $13.2 billion recorded in the January-November period last year, Guinigundo said.

The recovery in imports this year is seen to result in a wider trade deficit and a narrower BoP surplus, according to the government’s economic managers.

Exports in 2010 grew faster than imports, translating into a lower trade deficit. Total imports in the first 10 months of 2010 grew 26.3 percent year-on-year to $44.826 billion while exports surged 37.2 percent to $43.084 billion.

My Blackberry is not working!

And you thin that you have problems? Just to get the New Year off to a relaxed amusing start. Enjoy!