A Nepali company has introduced Mobile Payment Switching System called 'FonePay' — a uniquely designed platform — eyeing global remittance facilitation through mobile phones.
"It will facilitate customers of any bank and also the unbanked customer to pay nationally at present," said chief executive of FonePay Asgar Ali.
A customer of one bank can pay a merchant acquired by another bank, with 'FonePay', he said, adding that a customer, who receives money directly in the mobile phone can deposit it to a bank account, cash out using any associated agent network, or utilise that amount for acquiring any service associated with FonePay like merchant payment, utility payment, person to person transfer or can store it in the wallet account for future purposes.
Currently, Kumari Mobile is used to pay or transfer money to only the Kumari Bank customers and similar is the case of other banks but with the FonePay platform, a customer of one bank can now pay to another bank like one can use one bank’s ATM card in another bank’s ATM machine.
Powered by F1 Soft International — one of the finalists for the 2012 Red Herring Top 100 Asia Award — FonePay will also facilitate international remittance to transfer remitted amount directly to mobile phones like Mobile Wallet.
"We are coming up with a concept of providing interest in the accumulated amount in wallet account," said Ali, who dreams of making FonePay more popular that will help cut the cost of remittance.
According to the recent World Bank brief on Migration and Development, although channelling international remittance through mobile phones has the promise of expanding access and lowering costs, this service has yet to take off in a substantial way.
"The use of mobile phones has skyrocketed worldwide from 0.7 billion in 2000 to six billion in 2011, of which 4.6 billion are being used in developing countries," it said, adding that mobile phones have been used to facilitate international remittance as mobile cash-out services allow households to receive money in accounts linked to their mobile phones (mobile wallet) and subsequently use it to conduct mobile transactions or cash-out the money at an agent.
In Nepal too, mobile penetration stands at 59.67 per cent, which is more than half the population, according to Nepal Telecommunications Authority.
FonePay targets to serve in national and international money transfer services with low cost and efficient services that will help channel more remittance into the country due to cost reduction, according to Ali.
"Since we discourage the involvement of parties where revenue needs to be shared we are focusing on minimising the involvement of cash distribution agent role which will minimise the cost by 30 per cent to 35 per cent in remittance fees in the initial days," he said, adding that the company will encourage the international remitting partner to utilise mobile technology for servicing remittance which will bring the cost of remittance down by 50 per cent.
FonePay also targets to facilitate the rural population by encouraging them to invest funds in productive sectors like education and health.
"We are trying to encourage the sender to transfer money to his spouse or mother by providing a certain discount or added incentive," he added.
Currently, FonePay has 22 member banks with a customer base of 1,500,000. The company has already partnered with nine remittance companies with more than 4,500 agent locations covering all parts of Nepal, besides the 13 international remittance companies for digital remittance, which covers more than 30 per cent of the market share.F1 Soft International has three solution payment gateway and settlement systems 'eSewa', mobile payment switching system 'FonePay', and remittance solution and network 'Transborder and CTBS', said president of F1 Soft International Biswas Dhakal.