A global force for good

BPC’s Angelo Bertini, MD for the MENA region, Santiago Egas, MD for North and Latin America and Peter Theunis, MD for Europe, on how digital money is changing lives

BPC is a global payments company that builds digital technology that aims to make cash transactions obsolete in the not-too-distant future, thus bringing an end to a monetary system invented by the ancient Greeks more than 2,500 years ago.

But far from disadvantaging the very poorest sectors of society, as some might fear, BPC believes truly digital economies will be transformative in changing lives by extending financial inclusion.

The payments technology expert is working closely with governments and other key stakeholders around the world to help make this step-change happen.

The sheer scale of the potential in reaching those who don’t have access to financial services is breathtaking, particularly within emerging economies in Latin America, Africa and parts of Asia. In Nigeria, for instance – the biggest economy in Africa – an estimated 80 percent of the population is still unbanked. But what all these regions also share is extraordinarily high levels of smartphone ownership. And, in MENA (the Middle East and North Africa) in particular, which is experiencing a demographic bulge, the moment to act is now as almost half of their populations and the most digitally aware are only just becoming economically active, according to UNICEF. BPC argues that a massive opportunity, therefore, exists to address the global imbalance, boost economies and impact ordinary people.

It has already been involved in several successful collaborations, which it is now replicating in other countries.

For example, working closely with the Ethiopian government, the company provided its SmartVista technology to unify payment systems among the country’s 17 largest banks. This national switch both encourages more people to open accounts as access to banks is made easier and results in cost efficiencies for the banks as many cash transactions are replaced by digital ones. BPC is now rolling out national switch programmes in other countries in Africa, including Nigeria.

Meanwhile, in Indonesia, it has teamed up with Mobile Tunai Indonesia, to create a ‘marketplace’ model of agency banking that enables people who had no previous credit history to open accounts. By doing so they can take advantage of being part of an open banking ecosystem, which, as well as offering them the ability to digitally pay bills and taxes, also gives them access to credit and, vitally for small businesses like farmers, even a platform
to buy or sell goods.

Among a host of other BPC projects currently underway is one to develop digitalised payment systems for public transport in countries in Latin America and Africa, with buy-in from governments.

Angelo Bertini, MD of its MENA region, is convinced that a smartphone-based digital economy is crucial to the success of emerging nations, with cash or even card purchases replaced by token-based payment rails –such as the government-supported CoDi system in Mexico which uses QR codes.

“More and more of those governments are looking to bypass cards and go straight into mobile,” says Bertini. “They are talking about QR codes and mobile banking. I think a truly digital economy is the key to their success. And that doesn’t necessarily mean, like in the US and Europe, where everybody still holds two or three credit cards and two debit cards.

“The way they’re looking at it is to bypass all that and move into a digital economy. That also is a cost-saving for these economies – the network you need to accept a token, which could be just a mobile payment, compared to one that accepts cards, is significantly cheaper.”

The view that digital banking solutions will play a vital role in creating much higher levels of financial inclusion within developing economies is shared by Santiago Egas, who is also MD for North and Latin America (LATAM). But Egas also warns of two major hurdles that need to be overcome. The first is for governments to avoid over-regulating and over-taxing the industry. The second, specifically in the LATAM countries for which he is responsible, is the need to overcome a deep-seated mistrust of banks by a significant proportion of the population.

“The biggest challenge in Latin America is definitely government,” says Egas. “If the government opens the door to new technologies and doesn’t create barriers, this will allow the evolution of financial inclusion in Latin America through wallets, online services and whatever other solution you can provide.

“We have been talking about financial inclusion in Latin America for the past 10 years or more, and there’s been exponential growth in financial services but you still have countries where half of the population are completely unbanked,” he adds. While that has a lot to do with mistrust of the system, there is another obvious truth.

“You can have all the technology in the world, but if you don’t have the money, then you cannot use the technology,” says Egas. “That’s where the big challenge comes in financial inclusion. And that needs a lot of effort from the top, from government and the private sector.

“Financial inclusion is not all about sending and receiving money. It’s about constructing an ecosystem that will change lives.”

There is certainly no shortage of innovation in Latin America, much of it bypassing the banking system entirely, most of it focussed on payments.

Egas singles out RappiPay for particular mention.

”In just two years it’s gone from a food delivery app to become the biggest mobile wallet in Colombia,” he says. But it doesn’t really address inclusion.

In Ecuador, on the other hand, there are already as many as 15,000 ‘corresponsales no bancarios’, independent agents working with banks where Egas believes inclusion can be accelerated with the right digital tools. In fact, he goes further, describing the opportunity to onboard consumers via these digitally-equipped agents as ‘exponential’.

BPC’s global reach and level of influence allow it to migrate successful projects across continents, according to his colleague, Bertini.

“Because we have a common understanding, a common strategy within the company to go digital, it’s just a matter of adapting a technology to the particular opportunities or need of the country or the client. A success story in Mexico might apply in Indonesia, or in Myanmar, or Vietnam. The underlying technology is the same.”

Many of these technologies are being developed by companies outside of Europe.

Peter Theunis, MD for Europe and Southeast Asia, puts that down to much less complex regulations existing elsewhere, which can aid both the speed and diversity of innovations such as biometric authentication. The downside of this rush to market, he says, can be security, which, in some parts of Asia in particular, is seen as more of an ‘add on’ rather than being generally implemented.

“They need to work on security before we can take it into Europe,” Theunis says.

Wherever BPC is operating in the world, according to Egas:  “We can help build a seamless experience, from the least well off in society to the most.

“That’s what all the technology providers are working to do.”

Changing lives in Indonesia

BPC has forged a partnership with Mobile Tunai Indonesia (MTI) to develop a branchless banking system in a country with a population of 267 million people spread across 14,000 islands, of which 70 percent have had no previous access to traditional financial systems.

A network of agents has been recruited who are tasked with onboarding customers who, by and large, have no credit history.

An online payments platform was created that caters to customers’ daily financial needs, including person-to-person payments, bill payments, taxes and smartphone contract top-ups. Next came a digital marketplace to benefit local small business owners.

The system allows credit to be extended for the purchase of supplies or equipment, which is repaid when the produce or products are sold. An added benefit of the marketplace is that it allows collaboration between customers so that they can team up to bulk buy at discounted rates from major suppliers and sell goods collectively.

The marketplace is also used to help customers access other services, such as insurance, and even recruit labour.

“As well as supplying the technology, we also facilitate the creation of the ecosystems,” says Peter Theunis, MD for Europe and Southeast Asia, “because there are lots of moving parts and stakeholders who need to be brought together. There is also often government involvement because as soon as you start to talk about financial inclusion, all sorts of benefit programmes kick in. It’s about much more than building a piece of software and installing it at a bank!”