PNG businesses meet to discuss mobile money

April 7, 2011

Ninety members from the business community met last week to discuss the prospects for mobile money in Papua New Guinea and how the business community might benefit from it.

The event was hosted by the Port Moresby Chamber of Commerce and Industry (POMCCI) with guest speaker Mr. JoepRoest, a Financial Inclusion Specialist for the Pacific Financial Inclusion Programme (PFIP). Mr. Roest’s presentation drew largely from his previous work as Business Development Manager for WING, a mobile money provider owned by ANZ Banking Group in Cambodia.

Mr. David Conn, POMCCI Chief Executive Officer, opened the breakfast introducing Mr. Roest. “There is a great appetite for information on mobile money in the business community. This presentation is timely as we read about likely launches of this service in PNG.” He also noted that WING was one of the early investments of the Enterprise Challenge Fund. The four Papua New Guinea t projects given grants by the ECF is managed by the Port Moresby Chamber of Commerce .

Mr. Roest explained that the Pacific Financial Inclusion Programme (PFIP) had been working with multiple stakeholders throughout the Pacific, including PNG, to expedite the launch of mobile money services. The term mobile money is used to describe a variety of services. It includes mobile wallets, known as m-wallets, that allow holders to store and transfer money electronically including paying bills as is currently done in Fiji. Another approach is mobile banking, known as “m-banking”, in which clients have bank accounts and use the phone to do many of the transactions that are currently offered through on-line banking. “Behind both of these approaches is a regulated financial institution. M-wallet funds are held in one large bank trust account and the m-wallet system does all of the accounting to identify the balances of each client. M-banking is different in that each client has their own individual bank account and the accounting is done on the bank’s core banking system. There are also some hybrid models, but these two approaches are the most common around the globe.” The presentation included discussion on how payroll or bulk payments for business could be processed through mobile money.

Questions from attendees focused on the security of the system as well as the view of the Bank of Papua New Guinea (BPNG) on this new way of banking. “As with any on-line service, mobile money only functions if the user of the phone knows the password. Like on-line banking, mobile money information is not stored on the phone. If your phone gets stolen, you don’t lose your money,” commented Mr. Roest. Mr. Roest noted that the Governor of BPNGvisited WING in Cambodia two years ago and has been interested in this service for PNG for quite some time. This was echoed by Mr. Conn who noted he has heard the Governor speak enthusiastically about mobile money. BPNGsponsored a one-day workshop on mobile money with PFIP in August of last year, which drew many participants from the business community .

While the focus of the presentation was on business uses for mobile money, Mr. Roest noted that PFIP’s interest was primarily in using this new technology as a means to give unbanked people access to financial services. Many of the services people of PNG need to improve their quality of life, and the future prospects for their children, like education and healthcare, can cost large sums of money and therefore necessitate savings and a safe way to transfer money. Mobile money services have been launched in Fiji, Samoa and Tonga in the past year and PFIP data shows that 25 percent to 30 percent of subscribers to the service don’t currently have bank accounts. “Mobile money has the greatest potential in PNG of any country in the Pacific. The great need for a safer way to move money, a young population and the fast rate at which people adapt to new technologies in PNG creates a good environment for this service,” said Mr. Roest.

Port Moresby Chamber of Commerce and Industry (POMCCI) is a non-profit, and non-government organization that plays an important advocacy role for changes that facilitate business , is the voice of over 270 business organizations in the nation’s capital and has a wide range of social and civic projects and urban safety initiatives on its agenda . It has an ongoing commitment for the development and growth of the country’s economy to make it a better place for the people who work and live in Papua New Guinea.

PFIP is a Pacific-wide programme helping provide sustainable financial services to low income households. It is funded by the UN Capital Development Fund (UNCDF), European Union, AusAID and the United Nations Development Programme (UNDP) and operates from the UNDP Pacific Centre.