Interview with Carol Realini, Obopay CEO

This exclusive interview with Carol Realini – Obopay CEO – was conducted for via email during October 2010 in relation to the Open Forum Mobile Money for the Unbanked.

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1. Obopay currently operates in the US and India. In Which direction does the company plan to expand? Does the announcement of “Yoban’tel by Obopay” in Senegal signify the unbanked in developing countries as Obopay’s primary focus?

Obopay was established to bring mobile payments to as many people around the world as possible in both developed and developing markets. We have live services in four countries, in India with the Nokia Money service, in Kenya with the Yu Cash by Obopay service, in Senegal with the Youban Tel by Obopay service and in the US with various financial service partners including through the MasterCard MoneySend program and distributed through FIS Global. Obopay has a strong commitment to all of these markets. Obopay will continue to enhance its services as the global market evolves to provide support for its ecosystem of partners and to meet the needs of its end user customers in both banked and unbanked countries. It will continue to expand it functionality and the use cases that it supports. It will also continue to expand into new markets beyond where it is today in the US, India, Kenya and Senegal.

2. How are issues related to interoperability between international affiliates approached, on both a technical and regulatory level?

Obopay operates in four markets currently and has experience in identifying the right requirements from both a regulatory and technical perspective in entering a market. Obopay has extensive experience in working with large financial institutions and carrier partners to meet their needs, and dealing with local regulations, making it easier to provide services in new countries with new and existing partners around the globe. As a result, Obopay is easy for partners to deploy, inexpensive, and has simple integration. It is also extensible allowing them to easily scale it into other markets.

Currently each market that we operate in allows for sending money or making payments within that market. However, we have plans to enable interoperability across markets. Stay tuned for more details on theses.

3. It is well publicized that the initial idea for Obopay came while in Africa. While the need for mobile banking is obvious in the developing world, how does a service like Obopay fit within the considerably more robust financial sectors of more developed nations?

We are seeing very strong interest in our service in both developing and developed markets. In developing markets mobile payments are ways for people to get their first opportunity access to financial services products through bringing new access to people through their mobile phones. In developed markets mobile payments play a different role in adding new services and an unprecedented convenience, as well as empowering everyone with access to payment acceptance. In the US, as an example, there are nearly 30 million people that sell goods and services, however, the vast majority of them, 24 million people, do not take any form of electronic payment today. Mobile payments provide a clear method for empowering these people with card and electronic check payment acceptance. Mobile payments also provide a better way for families and extended families to get funds to each other and stay connected.

The proliferation of smart phones makes it easy to adopt and use Mobile Banking. First, smart phones are a better platform for value added services. Smart phone users are 5 times more active in mobile payments than other phone users. With shipments of smart phones up dramatically in the first quarter of the year (47% according to NPD Group), a growing number of consumers in developed nations are making payments through their phone. Additionally, people are using their phone to make text donations. Over 5 million people donated to Haiti in course of two weeks earlyier in the year, and Secretary of State Clinton called for text to donate for Pakistan relief.

There is a pent up demand for mobile payments in developed nations. Over 50 percent of Americans, for example, are using some form of online banking. Additionally, 70 percent of small businesses don’t use any form of electronic transactions. Cash and Check combined are still the most common way people pay for goods and services, with the average person still writing 75 checks a year. Yet as a new generation of tech savvy smart phone users emerges, this is quickly changing.

Mobile payments have reached a “tipping point” and more consumers with smart phones will start to use some form of it. According to Thomas Layman, former chief economist at Visa and currently president of Global Vision, mobile payments could account for 20% of transactions by the end of 2010. Industry analyst firm Gartner has predicted that by 2012 there will be 190 million mobile payment users, and once this level is reached, more than 3% of all mobile device users will be making mobile payments—at which point the practice will be mainstream. Gartner also predicted that SMS money transfer and mobile payments will be two of the top ten mobile applications in 2012. Finally, recent research from PayPal and NACHA (the Electronic Payments Association), found that 50% of consumers surveyed expressed interest in replacing cash and checks with P2P payments for common needs.

In developed countries, banks are offering Obopay’s services both to existing and to new customers including underbanked users. Obopay’s service includes options for underbanked including prepaid cards both for adults and teens. It also enables ‘underbanked’ merchants that may have bank accounts but do not accept electronic payments to become banked in the sense anyone can accept a card payment
Banked users in developing nations benefit from Obopay’s full suite of services:

Get Paid by Obopay

Enables payments to be received for products or services. Anyone, including small businesses or individuals, can accept debit card or ACH payments from anyone. Money is received directly into the recipient’s bank account. This includes the capability to accept payments directly from a mobile phone, website, or email. Obopay offers a number of tools that people can use to get paid including payment buttons for websites, payment links for emails or email invoices, and social networking widgets.

Mobile P2P by Obopay

Enables bank customers the ability to link and send money to anyone directly from their own bank account using a debit card. Obopay takes care of validation and regulatory compliance. Recipients don’t have to be signed up for the service to receive the money and can direct the funds into their own bank account using their debit card number or bank account and routing number. They can also direct the funds to a pre-paid card, if they choose, and get instant access to the funds for online shopping.

Family Money by Obopay

Enables bank customers to send money instantly to family members for emergencies, or regularly scheduled payments. The family member receiving the money can direct it to their own bank account if they have one, or if the parent prefers, they can provide them with their own personalized prepaid card, which is great for teens. Parents can “top-up” funds instantly from their accounts or on a regularly scheduled basis. Use of the prepaid debit card allows parents to monitor spending in real time.

Transfer Money by Obopay

Enables account-to-account transfers, allowing customers to exchange funds from their bank accounts to accounts outside of their bank. This is accomplished by simply linking the accounts they want to send money to by entering that account’s debit card number or its bank account and routing number.

4. As wireless services have been rolled out in Africa, we have seen considerable economic growth in the region and many observers describe technology leapfrog with mobile phones being used in place of personal computers in the West. What role does Mobile Money play in facilitating this mobile driven growth?

First, Mobile Money has definitely been driving economic growth in Kenya where is has been heavily utilized for many years. And for the same reason, it will drive economics in developing countries. This is simply a function of a banking infrastructure, or in the case of developing countries the lack of one. Mobile money is allowing people who would otherwise not have the use of a local bank to replace cash. Cash is very limiting when it comes to distance between the sender and the receiver. If you have to literally hand over cash for every personal and business transaction it either makes distribution difficult or impossible. Imagine if every business person in the U.S. had to pay cash for the raw materials or parts they need for their business. Commerce as we know it would grind to a halt. Mobile money in developing countries, where nearly everyone has a cell phone, has become the banking infrastructure. Even the banks in large cities within developing countries have recognized this and are using mobile money to create virtual branches in outlying communities.

In developed countries, mobile payments have reached a “tipping point” and more consumers with smart phones will start to use some form of it. According to Thomas Layman, former chief economist at Visa and currently president of Global Vision, mobile payments could account for 20% of transactions by the end of 2010. Industry analyst firm Gartner has predicted that by 2012 there will be 190 million mobile payment users, and once this level is reached, more than 3% of all mobile device users will be making mobile payments—at which point the practice will be mainstream. Gartner also predicts that SMS money transfer and mobile payments will be two of the top ten mobile applications in 2012. And finally, recent research from PayPal and NACHA (the Electronic Payments Association), found that 50% of consumers surveyed expressed interest in replacing cash and checks with P2P payments for common needs.

5. With the sensitive nature of Obopay’s applications, to what degree are privacy and security issues considered and what measures have been put in place to protect end users?

Security and privacy is core to what we do. We have been focused on it in the mobile and payment space from the very beginning. We protect security through designing highly secure encrypted and protected application and back-end data storage process. This is the same type of security protection offered by any major international bank.

6. What level of infrastructure, technical and financial, is required for the success of a mobile money system such as Obopay? How do these conditions compare between the developed and developing world and do they present a barrier for expansion?

Obopay can provide the technology in nearly any country in the world. We develop solutions for each market we enter bringing together an ecosystem of banks, carriers, handset manufacturers that is right for that market. The primary issue today is local country regulations and developing the right ecosystem of partners. Obopay is one of the few companies that has successfully navigated the regulatory environments. We have successfully done it in each of the four totally different countries that we currently operate in. Our experience in this area is one of the advantages that allow us to implement so quickly. It is a set of experience and expertise that our partners value highly.

The tremendous growth of smart phones is making mobile money adoption much easier for consumers in developed countries. Consumers are beginning to expect all commercial and person aspects of their lives to revolve around their phone as apps continue to explode. However, in developed countries with strong financial infrastructures, consumers generally want their mobile banking services of all kinds to come from their local bank. Our goal at Obopay is to provide banks with the applications for mobile payments that we already know are of most interest to consumers. We can literally get a bank up and running with mobile payments in 30 days. And we offer a significant support system to assure their success. As a result, the barrier to adoption is only limited by the adoption rate of financial institutions—which we see growing rapidly during this “tipping point” in time.

7. What role does interoperability – across carriers, devices, borders, etc – play in the Mobile Money technical landscape?

Interoperability is less of a technical challenge then a challenge of managing regulatory requirements and of pulling together the right partnerships and ecosystem. Interoperability is necessary to make appropriate use possible. The technology exists; the ability to work together to enable the solution is the next challenge.

8. What degree of interoperability does Obopay provide, or hope to provide, with competing systems such as M-Pesa in Kenya?

Obopay is currently compliant with all the current standards to implement a mobile payments system. We have developed services that work across banks and across carriers in all of the markets that we operate in. There is an opportunity to also work across different mobile money providers as there is a need to where systems reach the scale of adoption that would drive that requirement. We are likely to see the need for this first in Kenya which is one of the most advanced mobile money countries in the world.

9. Obopay operates through a series of partnerships with financial institutions such as Citibank and Mastercard, how do these partnerships operate on a technical level and how are the responsibilities – security standards compliance, interoperability, etc – distributed between Obopay and its partners?

Obopay work with its partners to make their account the anchor for mobile transactions. Obopay provides a variety of flexible ways for banks to offer mobile money services. This includes the capability to get up and running quickly and easily with no core integration required.

Front End Application Integration Options

Stand Alone Applications

Partners can get up and running quickly, easily and inexpensively with bank branded mobile money applications for web and mobile services. These include branded smart phone ( iPhone, Blackberry, etc.), mobile Internet and SMS services, as well as a full offering of web applications. With the standalone approach, Obopay hosts the payment service, including the front end web pages and phone applications. The bank can link to the Obopay service from their website, and from online and mobile banking channels. The applications provided have been through extensive security audits and ethical hacks and are equipped with 2 factor authentication to ensure bank grade security compliance. Additionally, Obopay provides mobile device coverage across carriers with established distribution on major US carriers and in app stores. This option provides rapid time to market with minimal effort. Your mobile money service can be brought to market within 30 days!


Partners can bulk enroll their customers into the service providing a fast and easy mobile phone registration experience.

Single Sign On

Customer access to Mobile Money for Banks can be enabled through your existing online and mobile banking applications with our Single Sign On (SSO) integration. With SSO you can integrate mobile money services access into your online and mobile banking applications and leverage your established authentication credentials. SSO options are available for web and mobile Internet applications.

Web Services API

Banks can integrate mobile money services using a robust set of web services APIs for web and mobile applications. API integration provides for bank control and definition of users interaction with the mobile money service. Web Services API integration provides for maximum flexibility for banks that want to build their own Mobile Money applications.

Payment Processing Integration Options

Debit Network Integration

Banks can quickly, easily and inexpensively offer Mobile Money for Banks without any core integration required by using Obopay Debit Network Integration. Connections can be made available through STAR, NYCE, and PULSE. Debit Network Integration can enable Instant Send and Instant Receive, with your bank’s debit card as the transaction anchor. Connecting through debit networks allows your bank to leverage existing processes and established network rules for transactions.

Card Processor and ACH Integration

Mobile Money for Banks includes Card Processor integration to support MasterCard and Visa funding and payment transactions, and ACH integration to support transfer, funding, and receipt of money functions. The services establish the customer bank account as the transaction anchor, and include the flexibility for customers to designate multiple source accounts for all transactions types.

Core integration

Obopay also offers core integration options and custom settlement solutions. Banks can choose integration and settlement scenarios to meet specific objectives, and optimize customer experience across banks product and service relationships.

Obopay ensures security for the services it offers with its partners. We are a licenses money transmitter and operate a PCI compliant. We have been through security audits from major partners including MasterCard, Nokia, Societe Generale, Citibank, Essar, Verizon, AT&T and other, as well as regulatory auditors.

10. The “Bank a Billion” initiative with the Grameen Bank has been recently announced. Is this move beyond transfers towards full mobile based banking the direction the mobile money sector will head?

It has always been one of Obopay’s goals to bring a system of payment and security to the unbanked. The most important goal in developing a mobile money service is creating an ecosystem that brings to together the best partners to take the service to market and make it successful. Our current service continues to evolve to be at the forefront of how mobile payments are being adopted throughout the world in both developed and developing markets. Challenges include managing the unique regulatory requirements when entering new markets. Both of these areas are a key part of what Obopay has built over the last 5 years.

11. How do you see the future of mobile money?

Mobile payments are expected to become a mainstream application with widespread international adoption in the next few years. We are at a tipping point for this adoption and many banks are now in the process of selecting and deploying their solutions.

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