Salman is a passionate technologist specialised on Digital Payments, Products and Transformation. Having worked in leading technology companies and banks for over 19+ years, he has developed his expertise on interoperable payment platforms for financial inclusion and enablement of payment channels for the banked and unbanked population.

Salman’s interview focusing on the importance of a unified payment scheme, interoperable payments and its importance in building a transparent digital economy.

Q: How can the current landscape of Pakistan’s financial inclusion be improved? Is it a challenge or an opportunity?

Pakistan is the fifth-largest population of the world with a population of 218.6 million; having 60 per cent adult population but unfortunately, only 23 per cent population is financially included. State Bank of Pakistan and Pakistan Telecommunication Authority have done commendable efforts in developing a conducive payment ecosystem. However, financial inclusion is always a challenge due to many reasons like a lack of technological infrastructure, limited digital channels, awareness of financial services and its benefits and the absence of interoperability among payment schemes and services.

After the introduction of Third Party Service Provider (TPSP) regulation in 2016 jointly by SBP and PTA, a massive opportunity to promote financial services to masses has arrived.

Introduction of Asaan Mobile Account (AMA) scheme will play a vital role for financial inclusion where the digital finance service providers will join a Unified USSD platform; allowing any person with a feature or smart mobile phone to open a digital transaction account swiftly through a USSD code “2262” from anywhere at any time. The Telecom subscriber base of 165.4 million has the choice to open a digital payment account in any branchless banking bank and become a part of the digital economy.

The objective of the scheme is to improve the accessibility of new customers for account opening, drive usage of digital financial services through an increased number of account-to-account transactions across various mobile networks and provide digital access to a range of quality financial services. This will facilitate the poor and marginalised sections of the society towards adopting digital payments and also transform banks to shift their focus from ‘Over-the-Counter’ (OTC) services to branchless banking (BB) accounts.

Q: Mobile Financial Services were already provided by all Telecom Operators with their Bank partnerships. How is the AMA platform any different?

Correct! The existing players have done a phenomenal job in moulding the branchless banking industry. However, different models are prevalent globally. In Pakistan, we have what’s known as the One-to-One model, i.e. One Bank to One Telecom Operator. Major MFS players have strong telecom partnerships and investments, which enables an already extensive franchisee network to operate as an agent network.

AMA Scheme is an ANY-to-ANY model, it opens a new avenue for existing MFS players to compete and offer services to subscribers of other telecom operators through their banks, and provides all branchless banking players with a level playing field to enter the space while existing players will have the opportunity to gain customer base from other mobile networks and banks.

Q: How the AMA Scheme platform works with both Banks and Telecom Operators?

The AMA Scheme platform is an amalgamation of two industries. Think of it as on one end you have all Telecom Operators and on the other, you have all Branchless Banking Banks and in between both of them are connections which go through a box. That’s us, Virtual Remittance Gateway (VRG)! To make the clockwork palatable it can be simply explained as a 3-step process. First, we interconnected with the USSD Gateway of all Telecom operators to route all AMA traffic towards VRG. The USSD app processes all incoming requests from telecom subscriber handsets into an interactive session where the customer can navigate menus to use services and provide necessary details, such as entering a beneficiary account number during a funds transfer. For the third and final step, we have integrated with all branchless banking banks, to which we route all such subscriber’s request to be processed into financial transactions.

Q: How does the AMA Scheme provide Interoperability and Interoperable Payments and play an important role in the unbanked and banked population of Pakistan?

Interoperability among Banks is in place via PSO/PSPs (Payment Service Operator / Payment Service Provider) however interoperability amongst m-Wallets platforms is still non-existent; agents are required to maintain separate m-Wallet accounts with each of the providers and, in some cases, must have separate mobile phones for different service providers. Interoperability among Telecom Operator through TPSP has been recently implemented giving a unique opportunity to Banks and MFS providers to leverage the financial services to the unbanked population.

VRG has also addressed the need for interoperable payments via agents or bank branches by introducing an Interoperable Cash-In & Cash-Out services. By virtue of this service, any customer of any bank can visit any banks branch or agent and perform Cash-In & Cash-Out service using biometric verification. Using this platform, a beneficiary can transfer funds, pay bills, purchase goods as well as withdraw cash from Bank’s Agent after biometric verification.

Interoperable Cash-In & Cash-Out service is not an option now, it’s mandatory! Government to Public payments like EHSAS Program where a beneficiary will open Asaan Mobile Account remotely within a minute and perform Cash-out from any agent or branch of any bank. Subsidized Raashan payments via UTILITY STORES using AMA account with complete transparency and enablement of Government entities for Cash-In & Cash-Out services for the general public are some of the unique use cases of AMA Scheme.

Q: In light of recent initiatives taken by the regulators on Digital Payments, How AMA scheme will complement such initiatives? Are there any regulatory or operational challenges in rolling out the AMA Scheme?

National Payment System Strategy and Faster Payments initiatives from SBP is indeed a remarkable step towards digitization. NPSS addresses key areas (Payment Infrastructure, Policy & Regulations, Remittance Market, Oversight, Government & Retail Payments).

AMA scheme is a unified digital payments scheme where the umbrella of financial services is available. Having an outreach to the massive telecom subscribers and branchless banking services, the AMA scheme becomes one of the key drivers towards digital payment and financial inclusion.

Although, the State Bank of Pakistan and Pakistan Telecommunication Authority have worked day and night for the roll-out of AMA scheme especially after joining of new Governor SBP. The AMA scheme committee is routinely finalizing new services for roll out on the AMA scheme platform twice a month and ensuring the implementation and addressing the issues of AMA scheme.

Q: In the next 3 years, what will be the impact of the AMA scheme on Pakistan’s emerging digital landscape?

AMA will bring hope and welfare to millions and millions of Pakistanis. It will make banking palatable to the common man, provide them with the means to perform financial activities and ease of access to finance which is crucial to driving the digital economy with prosperity.

At a macro level, it will assist authorities in documenting the economy or the so-called informal economy, which currently makes it difficult for economic planning for development. It will enable digitisation and seamless disbursement of existing G2P initiatives, promotion of Remittance inflows, digitization of Loans, issuance of micro Insurance and Mutual Funds and would be effective in emergency funds disbursement at the time of need. Thereafter, AMA will also make the current COD (Cash on Delivery) process cash-lite which will reduce the cost of cash handling, security and fraud issues.

The article is originally published at : dailytimes