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04/21/23 This information is Confidential and belongs to Global Technologies Investment, Inc.
Brief Overview on the OiPAGGO Operation
Disclaimer: The information written in this report is only intended to be used by the Oi Executive Team and the McKinsey Consulting Company. GTI, Inc. has tried to ensure that
the information in this document is correct but does not accept liability for errors and omissions
04/21/23 This information is Confidential and belongs to Global Technologies Investment, Inc.
Introduction
Our company was invited by McKinsey & Company Group to share our experiences with their client, OiPAGGO.
On May 8th, 2008; we visited Oi and shared our vision on developments in the m-Payments industry.
By request of Mr. Joao Silveira, COO of Oi, we are writing this document with an external vision of the OiPAGGO situation and business model.
We focused on two main areas: Business Model and Technology.
04/21/23 This information is Confidential and belongs to Global Technologies Investment, Inc.
Agenda:
Business ModelCurrent Business ModelIdeas for the Future
TechnologyCurrent Technology and Suggestions
04/21/23 This information is Confidential and belongs to Global Technologies Investment, Inc.
Current Business Model:The credit system that was put together
by OiPAGGO is unique and extremely innovative. We have not seen any other m-Payments operation with a “credit line”
The system currently takes advantage only of the traditional credit users.
OiPAGGO should try to reach to a significant share of the pre-paid market.
04/21/23
What we think is missing….M-Bill payments Paying utilities and recurrent bills on
the go (electrical, water, phone). Bill triggers a m-Payment application
and user authorizes it. Verifies identity, PIN, etc.
SMS confirming transaction. Available online to print. REVENUE: Per transaction fee (biller),
OiPAGGO loan. This is working in: U.S., Europe, Asia,
Africa.
m-POS (PL HUB)
P2P
m-Remittances Ability to charge credit/debit cards with
a cell phone. Cash based services can collect money
from CC (Oi, Private Label, Visa, MC, AMEX, etc) PL HUB Concept
TARGET: Sales Teams of door to door, multilevel marketing, taxi, street vendors.
REVENUE: Per transaction fee, OiPAGGO loan, mobility commission (0.5% to 3%).
This is working in many places with proprietary hardware (Zebra, Windows Mobile, etc.)
When two cell phones interact between them: OiPAGGO loan, Pre-Paid, m-Wallet, Bank Accounts.
New ecosystem develops. MONEY never leaves the master account.
REVENUE: Per transaction fee, OiPAGGO loan
This is working in: U.S., Europe, Asia, Latinamerica. Obopay, PayPal Mobile.
Local and International remittances. Vast capilarity of payment points. Integration with Global Remitters
(Transfer Orbit) REVENUE: Per Transaction fee,
ecosystem for P2P, money exchange.
This is working in: Philippines, Kenya, Middle East, Latinamerica. SMART Padala, MPesa, Vodafone, G-Cash (Global Telecom), Citi, GSM Association-Western Union, etc.
GTI: MHS m-Remittances module is ready-to-use.
Integration with Global Remitters (Transfer Orbit) and other future remitters connected abroad.
Customization and Integration We have it in: Transfer Orbit***in the
U.S. OI: Agreement with bank to comply with
remitters law. Promotion and Advertisement
* Fully integrated but not commercially launched** Fully integrated and working under pilot*** Process of integration
What we can offer and what Oi needs to do:M-Bill payments GTI: MHS m-Bill module is ready-to-
use. Customize middlet for Brazil billers. We have it in: Produbanco-Ecuador,
Banco Nacional de Costa Rica*. OI: Agreement with bank to hold
money. Agreement with bill payment services
(same bank) Promotion and Advertisement.
m-POS (PL HUB)
P2P
m-Remittances
GTI: MHS P2P module is ready-to-use.
Customization and integration. We have it in: Banco Fin Comun
in Mexico**, Produbanco* in Ecuador.
OI: Agreement with bank to hold the money.
Promotion and Advertisement commercials that you already have!
GTI: MoviPOS system is ready-to-use. Customize middlet (s) for one or various
cards. (Oi, VISA, MC, Private Label, etc) PL HUB Concept.
We have it in: Datafast*, Medianet***, Diners Club***and Yanbal in Ecuador, ATH and AlignNET**in Costa Rica/Peru.
OI: Agreements with issuers/companies. Trust account or Bank to hold money
Promotion and Advertisement
Assessment and SuggestionsAssessment of current technology
The communications channel primary used between the mobile application and the servers is SMS which is not the best option, there have been random delays (18% transactions > 50 sec) and low throughput, it should be replaced with data channels where available.
1
Software Platform must be re-designed.Too many requests to servers for approvals (now up to 6 sms vs. 2 data request/approval)Time and completion rates are far below any reasonable standard. (55sec vs. 15sec).
2
Hardware implementation is not stable, prone to failures and not fault tolerant. It suggests weak integration
3
GPRS, EDGE, UTMS Use SMS only as fallback in case of
absence of data connection. Do not use SMS as primary option. Only
backup.
Suggestions
Use standard high end tools to develop applications (Open Architecture).
Don’t use custom made databases or programs. Use commercial tools, available in the market, easy to adapt, to change, support and to maintain.
Reengineer the hardware systems. Reengineer the software system and integration among them.
Turn key systems may speed up the process and cause less impact.
Tech Support and monitoring has too many entities responsible of the operation. (M4U-Paggo-Oi). Don’t do manual propagation of failures.
4 Concentrate all processes under one tech team. Do not use “shared responsibilities”
Unify tech operations management and trouble ticket handling process under a central authority. Automate process.
5 Adopt security standards that are being used in other markets. Ex. Encryption, tokens, etc.
Security in transactions must be enhanced.
BACKUP
BACKUP
M-Bill Payments and Notifications of New BillsRETURN
M-Bill Payments and Notifications of New BillsRETURN
P2P: Produbanco Ecuador
RETURN
TOKEN SYSTEM, NOW INTEGRATED IN MicroHUB and MoviPOS.
RETURN
Diners Club and Tokens (Transaction above $1,000)
Security: Enhanced Token Generator built in MicroHUB and MoviPOSRETURN
Diagram of Connection of MoviPOS with a VISA, MC, AMEX and Private Label credit/debit cards processor.
RETURN
Capture of phone screens in MoviPOS mode operating with credit cards (Private Label HUB Concept)
RETURN
Peer to Peer Payments: Fin Comun-Mexico
RETURN
P2P: Fin Comun Mexico
RETURN
m-Bill Payments in Europe RETURN
OBOPAY.- CitiRETURN
SMART PADALARETURN
G-CASH - CitiRETURN
GSM World Association-Western UnionRETURN
m-Bill Payments: ProdubancoRETURN
m-Bill Payments: Banco Nacional Costa Rica:
RETURN
m-Remittances: Transfer OrbitRETURN
Diagram of Connections between MHS-Mobile Operators-Banks-Processors
Diagram of Connections between MHS-Banks-Processors DETAIL