![]() Interoperable E-Wallet issuers will have to either monetise their data really well, or else interchange fee system will come back with a vengeance to rule Payments in 2020. The billion dollar question here if E-Wallet issuers will be able to monetise their data.Īnd THAT brings us to our game theory exercise. But you can't eat data for breakfast can you. But as we all know - they're really in it for the Data play. I used it because of the incentives - and those incentives are unlikely to continue when the investor gravy train stops.īig Loser (*or biggest winner) E-Wallet Issuer: It would appear to at the on-set that the E-Wallet Issuer does not earn any fee. I recently purchased a new iPhone using my credit card through a ride-sharing payment app. While acquirers more or less earns the same as before, existing bank acquirers will find themselves at the shorter end of the stick in a game that is already under heavy margin pressure.Ĭonsumers are at a losing Risk (2): Consumers are heavily incentivised today to download and use an E-Wallet app. Switching out will be a piece of cake - so this is now unlikely to be a business a bank would want to play in. But what about the other stakeholders?Īcquirers are at a losing Risk(1): In an open wallet model, a QR can be used by "any" E-Wallet and therefore a merchant is fully incentivised to go with the cheapest acceptance player. ![]() Merchants are really going to be happy with this model. Looking at the diagram above, it's immediately obvious that the merchant now pays a much smaller Merchant Discount Rate. Call it whatever you want - it's the first step towards an Open Wallet Model. In other words - the interchange fee.įor E-Wallets to thrive, they would need to be interoperable. At the root of it, it's a disruption of the business model of payments as a whole. It may not be obvious to a average consumer, but the true fight of E-Wallet vs the incumbent E-Payment product isn't about QR vs CHIP/Contactless or Plastic. What does E-Wallet have anything to do with the interchange fee? The MDR prices in the interchange fee which funds the consumer product incentives in a credit and debit cared. Until quite recently, if you were a merchant, you pretty much had no choice but to price-in the MDR into your sale price if you wanted to accept card (aka E-Payments). And by paying the MDR, merchants could tap into the cashless market. Card brands (Visa and Mastercard) would argue that there is a cost to accepting cash anyway - transportation, theft etc. The illustration above shows all the beneficiaries in a traditional E-Payment transaction. The merchant is technically the only party who pays a processing fee - called the Merchant Discount fee (MDR). ![]() ![]() In a four party payments model (merchant, merchant bank, issuing bank and cardholder), the fee itself represents a sustainable income where everyone stands to gain. The interchange fee has pretty much been the bloodline of retail payments for the last 60 years or so. First off - What in the world is the interchange fee? This brings us to the topic we have for today - the future of the interchange fee. They called it their "digital" strategy.īut for mass adoption of E-Wallets and a complete market change (displacement of cash + cards), there must be a sufficiently strong underlying economics. Its a VISA-powered e-wallet that customer of any bank can use to recharge mobile, send money, shop anywhere, pay bills and much more. Most surprisingly, banks found themselves pressured to join the bandwagon with the partnerships. With the increased pressure to gain acceptance points, wallet players went on a blitz of partnerships with every other E-Wallet providers out there. In the later part of 2018, things got interesting. Startups, Telcos, Banks, Merchants all had to get their hands on launching their own E-Wallet. Game theory tree below is limited to it's singular view along with static assumptions.Ģ018 was certainly the year of the E-Wallets. This op-ed piece consists of a number of assumptions along with industry observations. 11 Reumeg Complex, Town Centre, MkushiĪddress: Plot No.18624,off Great North Road 13 MilesĪddress: Opposite Cochrane Trucking Great North RoadĪddress: Plot No.(If you're a bank, what would your digital play look like 2019 and beyond) All you need is an FNB account and be registered for Cellphone Banking.Īddress: Room No. Telephone Numbers: +260 212 610 006/ 610 007ĭeposit and withdraw cash conveniently at any FNB Cash Plus agent listed below instead of queuing at branches or ATMs. Our ATMs (automated teller machines) are situated within the FNB Zambia Branches Plot 19222, Zone 3 Building, Manda Hill MallĬorner Great East & Manchichi Road, Lusaka FNB offers a network of branches for all your face to face banking requirementsįax Number: +260 211 253 057 / 250 Code : FIRNZMLX
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