Mobile Money Transfer
The Crimson Mobile Money Transfer (MMT) solution consists of a customer front-end based on a Java interface running on a mobile phone or a low-cost USSD implementation. The backend includes a flexible general ledger (GL) for account management and a high-throughput transaction processor. The MMT provides an end-to-end system that enables money transfer between subscribers in different mobile networks.
The solution provides all the modules and functionality required to implement a Mobile Money Transfer ("MMT") service. Crimson MMT supports both a local, single-country scheme and an international scheme. The Crimson MMT is unique in that it uses an independent agent-based distribution scheme where the risk of distribution is shared by a network of agents all operating on a prepaid, available-funds basis.
Recipients interact with the agents and claim money based on their possession of tokens issues by Crimson. The recipient presents the token in the form of an SMS message or written record to the agent who will then claim and pay the funds to the recipient. The Agent uses the online Crimson interface to verify the token and to process the transaction and pay the funds in cash. Crimson credits the agent's account in real-time if this is allowed by local regulations.
Crimson MMT forms the fundamental component of a flexible and reliable exchange system suitable for deployment in countries with very little formal banking infrastructure. The system is also applicable for use where a network of dedicated ATM machines are available and where the general recipient audience is trained in the use of ATMs.
Who uses MMT?
- Migratory workers – In large parts of Africa it is common for people to work in another city or another country. In many cases the worker will have dependants at home with very few options of sending money. The normal way is to send money, physically, via a taxi or personal courier with expensive fees involved. MMT provides a simple solution, with a simple, controlled process at a much lower cost to the customer. MMT makes it possible for operators to channel huge volumes of cash based on very small fees.
- Agents in rural areas – There is simply no banking infrastructure in many parts of Africa. Merchants keep large amounts of cash with very little opportunity to bank it. MMT provides a simple way to convert and bank the cash as part of the MMT process. Agents can bank their excess cash simply by accepting transfer tokens from customers and paying the cash to them. The system automatically deposits a corresponding amount in the Agent's account.
There are two basic business cases for money transfer using the Crimson MMT platform. The platform is suitable for use by a single operator in a single country or for use as an exchange mechanism used internationally between operators with the necessary settlement agreements in place.
National Money Transfer
The simplest model involves only a single operator. The operator runs the Crimson MMT and manages the distribution chain. There is no need for inter-operator or international settlement procedures.
International Money Transfer
The international model is more complex. It usually involves the conversion of money from one currency to another and includes settlement arrangements between the two participating operators. In most cases each operator will need to have an agreement in place with a settlement bank cleared by the applicable reserve bank. Conversion is done by means of mutually acceptable conversion rates, agreed upon on a daily basis.
The Crimson MMT system
MMT consists of three main components, namely:
- The user interface accessible through a handset;
- A backend-system hosting the transaction processor and accounts; and
- A distribution system.
The handset triggers a transaction transferring funds from the subscriber account to a recipient. The Crimson MMT backend facilitates the payment and provides user interfaces for dealer and vendor management and hosts the customer accounts. A distribution network (typically a network of shops or partners) distributes the funds. This is shown in the following diagram:
Crimson MMT supports a number of handset interfaces.
- USSD – This channel is accessible from all GSM handsets and provides a reasonably secure transaction channel. It is simple to operate and reliable, requiring no complex distribution of handset applications.
- SMS – This channel is suitable for small-denomination transfers where security is less of a concern.
- Smart Client – The Crimson Smart Client is a secure and user friendly application deployed on the mobile phone.
The MMT backend consists of all the components and interfaces to enable the end-to-end transfer of money:
Each system includes the ability to connect to other instances of MMT through a switching network. The Backend-system hosts the transaction processing facility ("TPF") and the General Ledger.
The most fundamental component of MMT is the set of financial accounts. A subscriber might have an account containing funds or a linked bank account. The same subscriber may earn bonus points per transaction. These are all accounts housed in a General Ledger. A transaction processing system must be able to define and track millions of these accounts and be able to process transactions that alter the account balances at very high rates.
The financial switch manages the exchange of moneys between systems. It receives and transmits all of the messages between systems that are required to exchange money. The Crimson switch supports ISO-8583, an international standard for payment processing.
An important part of MMT is the processing of mark-off files for inter-system reconciliation and settlement. The main business function of this process is to ensure that all the parties involved in transactions agree on the exact transactions and amounts as well as the amounts that must be settled between the parties. The two parties agree a file format for mark off processing and one or both parties will then at an agreed time send the file to the other party. The file contains all the transactions performed between the two parties within a set period. Each party will then compare the entries in the mark off file with its own records and determines if the accounts balance. Only once this has been completed will the parties settle the correct accounts.
The Distribution System
The most important aspect of Money Transfer is related to how the intended recipient collects the funds.
Automated Tellers Machines
Customers send funds to recipients using a mobile phone or an Internet service. The recipient receives an SMS message with a redemption code. The recipient withdraws the cash at any supported ATM machine using the redemption code combined with a secret code agreed by the two parties.
The ATM machine forwards the codes to the switching network and to the Crimson MMT server. If approved, the machine will dispense the cash.
Crimson supports distributing funds using an agent network. A unique and valuable aspect of the Crimson approach is that each Agent is registered in the MMT and has an associated account. The Agent uses this account to receive funds for payment to recipients after verification.
The system depends on the Agent's own available cash in return for the quick availability (dependent on local rules) of funds in his Crimson account. This approach removes the need to distribute cash, while working on a reliable, prepaid scheme.
The system will not honour a payment of funds unless the funds are secured through an equal amount held in the agent's account.
An additional advantage of this system is that it provides an agent with a simple and effective mechanism for depositing his or her own cash without having to visit a bank. An agent simply exchanges cash for funds received via MMT.
The system automatically calculates any commissions and fees and includes these amounts in the payments into the account. Agents can access and manage the funds at any time. Access is via the online Internet management site or via a mobile phone.
The Crimson MMT uses the standard CAP3 management console that allows you to control, configure and monitor the entire system using a web browser in a format that is user-friendly and understandable.
CAP3 is a single interface to the entire distributed system. All configuration changes can be applied without restarting the system while transactions are active.
The CAP3 interface provides the following MMT specific features through a web browser:
- Management of the distribution network (Agent definition, reports, etc.)
- View Financial records and audit entries
- Trace any transaction
- Manage currency exchange rates
- Manage fees and commissions
The handset interface provides the following features depending on the channel:
- View account balance
- View mini statement
- Transfer funds to recipient
- Fault Reporting – you can configure the system to alert you of any problems via SMS, SNMP or E-mail. You can also view all fault reports online.
- Log Files – you can dynamically define log files from the CAP3 interface. Each log file can source events from any of the internal modules; the logging of each event can be customized per log file. The log files can be downloaded remotely from a web browser.
- User Management – create users, groups and assign rights to different system features.
- Queue Status – CAP3 shows the status and length of each persistent queue.