The Celpay Solution Miyanda Mulambo Celpay Zambia Limited

What is Celpay? Celpay. . … facilitates banking services and payment solutions using cellular network infrastructure The Principle uses. . - Mobile phone as basic instrument for payment instructions - Menu options for users to send payments to others - Money is taken from deposit accounts. No credit Celpay Making Finance Work For Africa 2

Transaction Flow GSM Network Start: Payment Order Celpay End: Payment Confirmation, Balance reduction Payment Gateway Payment Confirmation, Balance Increase GSM Network Payment Processing Making Finance Work For Africa 3

What does Celpay do? Cellular Operators Merchants MF WF A Account Holders Banks Celpay Making Finance Work For Africa 4

What does Celpay do? “ 3 -channel” electronic access to a bank account § Mobile phones § Internet § Point of Sale Devices Partners with banks and Network Operators Facilitates electronic financial transactions § Real time § Mobile § Safe § Convenient Value added services/third party applications § Individual electronic auto top-up § Wholesale airtime distribution § Stock ordering § Telephone recharge § Payment requests/Bill payments § Payroll payments § Corporate distribution payments facilities Celpay Making Finance Work For Africa 5

Celpay Features n Real-time with instantaneous account update n Cash equivalent – wireless cash: sender cannot reverse transaction n Detailed records are available for each transaction n Inter-operable across banks and operators n Affordable, easy to use and Simple solution (SMS & Handset based -no additional equipment) n Fully automated financial solution with full audit trail and reporting functionality n Real time 24/7 distribution solution that Facilitates a hierarchical distribution model (if desired) Including financial settlement n Bank level security minimizes losses and fraud Celpay Making Finance Work For Africa 6

Celpay Corporate Partners BP Zambia Plc Multichoice Zambia Chilanga Cement Plc Celtel Zambia Ltd SEEDCO INTERNATIONAL ZAMBIA LTD Zambian Breweries Plc Celpay Zambia Bottlers Ltd Seedco Zambia Ltd Making Finance Work For Africa Total Zambia Ltd 7

Celpay Partner Banks Celpay Making Finance Work For Africa 8

Celpay Services to Customers Services CONSUMERS EMPLOYERS CORPORATES NETWORKS • • • Benefits Pay at the till Pay bills at home Auto airtime purchase Bill payments at Celpay Points Low cost services Payroll Instant, remote disbursement of funds Fuel allowances Mobile recharge Carry less cash Buy what you want, when you want Safe & convenient Track spending Affordable banking services • • Easy to distribute allowances Track usage precisely Save time and money Provide employees with banking services • Take cash out of distribution • Payment confirmation • Save time • Increase safety • Reduce cash management costs • Improve reconciliation process • Replace scratch-cards with fully • Reduce theft • Never run-out of airtime • Minimise distribution costs • Sales 24/7 • Eliminate scratch-card costs electronic airtime vending system Celpay • • • Making Finance Work For Africa 9

Celpay Services to Customers Services MERCHANTS • POS Devices BANKS Celpay • Mobile Banking infrastructure Benefits • • Track spending Real time Payment Reduced cash management and fraud Greater security Remote bill presentation and payment authorization • High quality record management • Distribution management • Increase in deposits from new accounts • Reduced cash management • Lower cost of servicing new clients (unbanked) • Able to offer new products to existing clients • Able to test market for m-commerce with minimal investment risk Making Finance Work For Africa 10

Celpay Successes • Primary successes in B 2 B transactions with customers such as Zambian Breweries Plc, Zambia Bottlers Ltd, Heineken, Coca Cola, Total, BP, Mobile operators • Celpay has brought previously unbanked informal traders to the forecourt of the bank. • C 2 B adoption mainly through Multi-choice and other corporates • Over 100 POS devices in Zambia and 75 POS devices in DRC accepting payments from mobile phones • POS used for cash collection (C 2 B) and payouts ( cash back) • Direct prepaid Top up from phones • P 2 P payments showing some adoption • Exploring payroll opportunities • Celpay and its distribution network act as a payment platform to pay out ~$45 mil in cash to 75 k demobilized combatants. This a World Bank sponsored project in the DRC • Product well received by both formal and informal players Celpay Making Finance Work For Africa 11

Celpay Successes – Transaction Throughput Celpay Making Finance Work For Africa 12

Initiatives to Service the Unbanked • Investing in a Cash Point network • Celpay subscribers will be able to have Celpay-enabled bank account and withdraw cash at a cash point • Partnership with Zampost as the anchor cash point • Initiative awaiting BOZ approval • This will form backbone for payroll to those receiving their pay in cash • IT will afford the ordinary person to have a savings at very low cost • Also looking at Remittances Celpay Making Finance Work For Africa 13

Market Opportunity n Appropriate in markets with limited POS & banking infrastructure - new generation payment instrument n Alternative to making heavy infrastructure investment for ATMs and debit cards - creates pervasive network n Augments existing accounts to enable wireless transactions Celpay Making Finance Work For Africa 14

Legal Status n Celpay is an IT service provider for banks n Banks must undertake the opening of accounts n Consumers/merchants have no credit – debit balances only n Funds in the accounts belongs to Celpay subscribers and merchants, not to Celpay n Banks provide the link to the ECH Celpay Making Finance Work For Africa 15

Economic Impact n Celpay moves cash from general circulation into the banking system n Celpay formalizes previously informal transactions, creating a reliable audit trail n Celpay enables banks to offer very low cost services to a new customer base n Celpay facilitates banks’ cross-selling mainstream banking services n Celpay frees individuals from wasteful travel, standing in line, and money counting to pay bills Celpay Making Finance Work For Africa 16

Challenges Lack of Direct Integration with Bank Systems § Celpay system sitting outside bank systems has posed a challenge of Celpay having to do the bank’s job of selling and marketing financial solutions Account opening process § Account opening process is a hindrance to most people opening bank accounts especially § For the banked this entails going over the same process of account opening to have access to Celpay Depositing § Going to the bank to deposit has always been a deterrent for most people to take up Celpay § Cash Point services should help to address this challenge Celpay Making Finance Work For Africa 17

Celpay Vision Banks …. – Setup cash-points network to increase proximity from cash deposits & withdrawals perspective ; – Brand the product & offer it as value added services to existing & new customers ; – Take care of cash collection; Celpay. . . – Act as an enabler; – Support GSM Operators’ & Partner Banks’ marketing & sales teams; – Deal with reconciliation & reporting; Celpay Making Finance Work For Africa 18

Celpay Security • Authorization: – Allows multiple Account Handlers access without jeopardizing security; – Keeps track of whom has authorized which transaction; • Data encryption: – Allow highly secure data encryption through 3 DES; • Authentication: – Supports five digits Personal Identification Number (PIN); – Customer must also have in his possession the registered SIM card to use the PIN; – All money movements are fully logged and can be examined for suspect behavior; • Non repudiation capability: – The customer cannot deny having made a payment; Celpay Making Finance Work For Africa 19

Celpay - Banking for All Celpay Making Finance Work For Africa 20