Dialog eZ Cash has become the world’s first fully integrated mobile money service after joining hands with Etisalat, another leading mobile service provider in Sri Lanka. There were speculations from last month about this landmark deal which has been in works from last year, after Dialog announced that the next phase of eZ Cash service is to expand it to other service providers. Even the outgoing Etisalat CEO Dumindra Ratnayaka recently said in a local interview that Etisalat is considering joining hands with eZ Cash and mCash, for mobile banking solutions, rather than starting their own service. And yesterday, the two companies hosted a joint press briefing where they officially announced the expansion of the service, after relevant approvals were obtained from the Central Bank of Sri Lanka.
According to GSMA, there are more than 225 mobile money deployments around the world, as of March 2014. And this is the first time that such a partnership has been formed between two rival service providers to deliver end to end interoperable mobile money service. Speaking at the press meet, operations expert from the GSMA’s Mobile Money for the Unbanked programme, Gerald Rasugu stressed the importance of awareness on the mobile money/ mobile banking initiatives to the general public.
eZ Cash: Introduction and Current Status
Dialog, Sri Lanka’s leading mobile service provider launched the revolutionary eZ Cash service around 2 years ago, approved by CBSL under the payments and settlements act No.28 of 2005. I used to have a personal blog at that time and did a post on how eZ Cash works on any USSD enabled mobile phones. You can check it out here. eZ Cash turns your mobile phone into a secure mobile wallet, and allows you to make transactions or send and receive money around the country. Last year when the service completed its first anniversary, the GSMA published a detailed infographic showing the growth of eZ Cash in Sri Lanka. According to that, Dialog – the market leader in Sri Lanka has around 8 million mobile subscribers and Etisalat, third in line in terms of market shares boasts more than 4.5 million subscribers.
The new partnership will bring the eZ Cash service to around 12.5 million Sri Lankans around the country, which by number, is equivalent to more than 60% of the Sri Lankan population. Last June, Dialog announced 1 million registered users for the eZ Cash service out of which 20% were active users. Dialog also reported that they handled Rs.6 Billion worth of transactions last year and currently they are processing Rs.700 million worth of transactions per month. These numbers are bound to rise with Etisalat joining the club. Speaking at the press conference, Dr. Hans Wijesuriya, Group CEO of Dialog Axiata PLC, thanked the CBSL for maintaining open regulations that let to the success of the eZ Cash service.
For The New Users: What Can You Do With Ez Cash
Dialog eZ Cash allows anyone to send and receive money through mobile phones. One can top up for eZ Cash at any merchants and then send the money to anyone around the country. The receiver has the ability to withdraw the money at a similar merchant outlet. This hassle free method also becomes useful to those who can’t utilize the conventional banking facilities. eZ Cash model offers more secure and widely available service options. (Verification PINs are sent to the user’s handset before completing the transactions). Ez cash also allows the users to pay various bills including utility bills (CEB, NWSDB etc). It also gives the option to pay insurance premiums through mobile phones. The service provides secure option for users to make payments for their online purchases. There are also more than 100 partner merchants who accept eZ Cash payments. Dialog also has a dedicated hotline (7111) for eZ Cash. They have also launched a very informative website for the service as well as an Android app for ease of use on smartphones.
How Does The New Inter-Operable Model Works?
As you already know, eZ Cash services can be accessed through #111# USSD commands on the mobile phones. Etisalat subscribers who register for the eZ Cash service will be able to use the same method to perform the transactions. The USSD menu will consist of the same options which are offered for Dialog customers. The user experience will not be affected for different service providers. Even the costs (service charges) born by customers will be the same. Dialog currently has over 16000 eZ Cash merchants around the country. It will continue to remain responsible for managing this agent network, while adding any customer service networks of the new providers on request. As a first step Dialog has added the flagship stores of Etisalat that are located around the country, and selected service points to this network. Dialog will also manage overall customer service issues that arise during the transactions. But Etisalat will be requested to look into any issues faced by customers they bring into the service. Hatton National Bank continues to act as the custodian bank for the service and the service will be further secured by a trust agreement administered by Deutsche Bank. A third party service provider like KPMG or PWC will act as a Customer Profile Manager in between the eZ Cash platform and Etisalat.
There will also be a revenue share agreement between Dialog and any other provider joining hands with them – in this case, Etisalat. Accordingly, Etisalat will be sharing the transaction revenue from the eZ Cash service with Dialog,
1- for using the eZ Cash brand which has been established and marketed by Dialog
2- for making use of the eZ Cash platform built by Dialog and
3- for benefiting from the already established & managed Dialog merchant network
On Dialog’s side, they will be getting additional revenue and wider user base for their eZ Cash platform. And from Etisalat’s point they get to offer mobile banking service to their customer base at a fraction of a cost that they would have encountered to deploy their own service.
Looking at the customer base numbers after the new partnership, eZ Cash service looks less challenged by the competitor mCash service offered by Mobitel. But it is also notable that outgoing Etisalat CEO recently noted that they are also considering to join hands with mCash along with eZ Cash, though I’m not sure whether there will be any need to proceed with that move.
Challenges and Future
The primary challenge I noticed when the service was first announced, was the adaptability issues faced by merchants. The merchants were reluctant to allow customers to withdraw money since the business model was new and strange. But Dialog had taken much efforts to educate merchants on the benefits of the service.
According to experts, there are more than 225 mobile banking services deployed in various ,markets. It shows the growing trend of mCommerce. But it is notable that many of the services around the world are facing adaptability issues due to various reasons and Dialog’s interoperable model is expected to be adopted by many other service providers around the globe.