Fighting Poverty, Profitably: Transforming the Economics of Payments to Build Sustainable, Inclusive Financial Systems

The Gates Foundation's Financial Services for the Poor program (FSP) believes that effective financial services are paramount in the fight against poverty. Nonetheless, today more than 2 billion people live outside the formal financial sector. Increasing their access to high quality, affordable financial services will accelerate the well-being of households, communities, and economies in the developing world. One of the most promising ways to deliver these financial services to the poor -- profitably and at scale -- is by using digital payment platforms.These are the conclusions we have reached as the result of extensive research in pursuit of one of the Foundation's primary missions: to give the world's poorest people the chance to lift themselves out of hunger and extreme poverty.FSP conducted this research because we believe that there is a gap in the fact base and understanding of how payment systems can extend digital services to low income consumers in developing markets. This is a complex topic, with fragmented information and a high degree of country-by-country variability. A complete view across the entire payment system has been missing, limiting how system providers, policy makers, and regulators (groups we refer to collectively as financial inclusion stakeholders) evaluate decisions and take actions. With a holistic view of the payment system, we believe that interventions can have higher impact, and stakeholders can better understand and address the ripple effects that changes to one part of the system can have. In this report, we focus on the economics of payment systems to understand how they can be transformed to serve poor people in a way that is profitable and sustainable in aggregate

Network-based business process management: embedding business logic in communications networks

Advanced Business Process Management (BPM) tools enable the decomposition of previously integrated and often ill-defined processes into re-usable process modules. These process modules can subsequently be distributed on the Internet over a variety of many different actors, each with their own specialization and economies-of-scale. The economic benefits of process specialization can be huge. However, how should such actors in a business network find, select, and control, the best partner for what part of the business process, in such a way that the best result is achieved? This particular management challenge requires more advanced techniques and tools in the enabling communications networks. An approach has been developed to embed business logic into the communications networks in order to optimize the allocation of business resources from a network point of view. Initial experimental results have been encouraging while at the same time demonstrating the need for more robust techniques in a future of massively distributed business processes.active networks;business process management;business protocols;embedded business logic;genetic algorithms;internet distributed process management;payment systems;programmable networks;resource optimization

AN ANALYSIS OF TRANSACTIONS IN E-PAYMENT SYSTEM USING MOBILE AGENTS

Commercial interactions between merchants and customers pose a significant concern as they are associated with a large volume of data and complex information, especially when there is a need for switching requirements. This paper presents an agent-based analysis of e-payment transactions with the switching operations. The model adopts an inter-bank transaction network and consists of a terminal point of sale (POI) and three essential players in e-payment: customer, bank (merchant), and the Switch. This study analyses the various payment interactions using agent technology. The agent coordinates movement while the negotiation protocol serves as an internal control of the payment agreements, while the interactive hosts are the platforms that determine the status of transactions. Each agent host is equipped with a Certification Authority (CA) to secure communication between the merchant and the customer. Different transactions that agents could make are examined with formal descriptions. The implementation is achieved in Jade and compares with the object serialization mechanism. The simulation results show higher quality adaptation of agent systems and evidence of agentisation of e-transaction with Switch.     &nbsp

Banking the unbanked using prepaid platforms and mobile telephones in the United States

The rapid growth of mobile phone usage and the continuous rise in wireless coverage fuel the expectations that access to financial services trough mobile phones could transform the way financial services are provided. The emergence of new and more efficient business models, can potentially resolve supply inefficiencies that explain the large unbanked population that exists in the USA, much larger than in most developed countries. Nearly 40 million US households (approximately 73 million people) are financially underserved (CFSI, 2007), of which 15 million households (approximately 28 million people) are totally unbanked. This problem is explained by the non adequacy of the value proposals offered by financial institutions to the demands of the US customers. The areas of poor alignment refer mostly to the design of products and the marketing and distribution networks used. To resolve these misalignments, this paper will argue that business models based on prepaid cards as products and mobile phones as transactional and distribution channels could be used in order to close the supply gap. We will call the business model proposed based on prepaid products and mobile phones mobile banking, since these two elements are the basis of the business model used companies such as Smart Money and G-Cash in the Phillipines, Wizzit in South Africa and M-Pesa in Kenya.prepaid platform; unbanked; financial services; mobile phones; prepaid cards;

Partnerships in Mobile Financial Services: Factors for Success

Mobile financial services have attracted significant attention in recent years as a potential means of accelerating access to financial services for the poor. Safaricom's M-Pesa operation in Kenya demonstrated that payments services - and more recently banking services through the M-Shwari partnership with Commercial Bank of Africa - can be extended to the mass market in a cost-effective and profitable manner

AI Agency Risks and Their Mitigation Through Business Process Management: A Conceptual Framework

After over 60 years of research and development, AI has made its way into mainstream business operations. Continuous advances in the fields of machine learning, knowledge representation, and logical reasoning are expected to result in higher autonomy of AI-enabled systems such as Distributed AI (DAI) agents that can think and act. The increased agency of the AI systems is expected to result in agency risks and the need for mitigating such risks through AI governance. In this paper, we build on agency theory and identify factors that increase the risk of an agency problem between a principal (a human or an organization) and an AI agent and propose a framework for AI agency problem analysis. The framework is illustrated through AI use cases and industry examples. Implications for AI governance research and practice are discussed

Who Learns What From the New Human-Computer Interaction: Toward a New Perspective

A new human-computer interaction (HCI) in which narrow-form interaction with devices more seamlessly serves broader-form interaction among people and organizations, especially over the Web, marks an important phase of the information revolution of recent decades. Four forms of broad computer-mediated interaction among individuals are identified: informational, cooperational, transactional, and social. Who learns what from the new HCI varies significantly across forms. In addition to the parties to the interactions, third parties that facilitate them learn too, amplifying the overall process. The perspective of the new HCI provides a promising foundation for guiding and potentially uniting future information systems research

Product Innovations on Mobile Money

We conduct a thorough review of the state of product development and innovation on mobile money platforms. It is, in effect, a first-of-its-kind catalog of products and services that have been rolled out, are being piloted or have been proposed. In each case we discuss the specific functionalities they entail, or how they build on the basic mobile money rails. Keywords: mobile money, mobile payments, financial inclusion, electronic money, electronic payment