“e-sente” – A comprehensive electronic funds transfer suite supporting both direct & online reservations and purchases using mobile money. Card activated Points Of Sales transactions processing for major vendors, merchants, retailers and local/online service providers.
PROPOSED PARTNERS:YO! PAYMENTSPay Way Uganda (Africa Vending Systems)Merchants, Retailers and Service Providers
BY: Kidasa Ronald Nabende May it be known, to the reader(s)/viewer(s) that the details & concepts of the business model laid down in this documentation contain intellectual property and are thus STRICTLY CONFIDENTIAL in nature. Disclosure, reverse engineering or plagiarism of any part of such data is subject to legal prosecution.
1. Executive Summarye-sente is a card that will reduce the need to carry cash or otherwise first liquidate one's electronic funds/mobile money before effecting a purchase at all minor and major points of sale or on the internet. I am humbled to propose to you a 24hour electronic payment solution with a comprehensive electronic funds transfer suite. To be precise, e-sente is an all-inclusive platform for direct mobile money payments and online payments for local products and services.
Considering the fact that most people withdraw mobile money to go and spend it. In 2012 alone, with about 7million users, mobile money statistics reported over 5 trillion shillings in transactions. A figure so inviting not to tap into. In this proposed business model, e-sente will ease, synchronize and automate Electronic Payment, Mobile Banking and electronic funds transfer services to maximally suit the technological advancements of today while optimally satisfying the real time demands of the 21st century phone user.
Imagine every time you went to the petrol station, a shop in the neighborhood, a hotel, bar or the supermarket you had a card you swiped to pay instead of cash. Confirming the desired transfer by simply replying a verification SMS (e-invoice) on your phone by feeding in your PIN. Then you receive another SMS that serves as an e-receipt and states your new balance. Subscribers to e-sente will be able to make online purchases, make online orders/reservations and also make direct payments at designated restaurants, hotels, bars, supermarkets, vendors, retailers, petrol stations, chain stores & even aboard Pioneer buses using their electronic purses or digital wallets to be dubbed e-sente.
e-senteProgramming of the Point of Sale Terminals, Self-service Kiosks plus development and testing of the interface/platform is pending legal partnership formalization, facilitation & approval by Venture Capitalist. This model can also be replicated beyond Ugandan borders.
The e-sente platform will initially be designed to cater strictly for activating electronic payments & online purchases but later on, when subscriptions multiply & popularity grows. e-sente will seamlessly be transformed into an electronic funds transfer suite where all e-
We had identified WARID and MARA Launch Fund as our desired pioneers & potential Venture Capitalists. Hoping that you’ll realize the profitability, relevance, convenience, feasibility and exponential growth prospects of this business model and thus, come on board to finance the development and start-up costs. This payment platform will divert much of the agent’s withdraw commissions into our merchant accounts since people will naturally opt to spend more and withdraw less because of the cost effectiveness of this purchasing process.
For instance, a withdraw of 10,000 shillings costs 700 shillings, but an e-sente purchase of the same amount will cost an e-sente card holder only 200 shillings.
3. Why opt for e-sente?SUBSCRIBER/CARD HOLDER’s BENEFITS:
The e-sente system will enable all telecom mobile money subscribers & Bank Account holders to spend their electronic funds even after the conventional mobile money agents & Banks have closed since the e-sente Point Of Sale terminals will be operational 24 hours.
It is safer to carry a card than to always move around with cash. To use your card Reduced cost of transaction since the mobile money agent’s cut is now removed
and the subscribers only pay a minimal flat rate charge to use the platform. (2% of total purchase)
THE TELECOMS BENEFITS: e-sente will take a significant cut off all daily purchases/cash transactions by
providing mobile money subscribers an easy, convenient, fast, secure instant payment option to pay their daily small bills without having to withdraw the money first or going through the whole lengthy sending procedure. Thus inviting more subscribers to the telecoms.
More transactions will be handled “in house” by the telecoms thus saving them the money telecoms would otherwise be paying out to the agents for diverted withdraws.
Increasing transaction volumes & floating capital to telecoms since the mobile money is now spendable. Users will spend more & with draw less. Gaining more float as digital financial traffic.
VENDORS, MERCHANTS & SERVICE PROVIDER’S BENEFITS: After closing of the traditional banks & mobile money agents, customers of 24 HR
businesses such as hotels, retail stores & bars since customers will have spending capacity via an alternative payment option; e-sente.
Transactions carried out via e-sente POS terminals will take place under 10 seconds as opposed to the time consuming procedures of first withdrawing, then counting cash at the teller and subsequently waiting for change. This will drastically speed up customer processing at integrated Points of Sale which means they have capacity to handle more customers in a shorter time frame. Thus availing more avenues for revenue generation.
e-sente will make online sales a reality to the dealers and service providers who wish to include an online payment option for their products/services.
e-sente will ease the process and reduce the risks and costs of real time seamless secure electronic funds transfer between service providers/retailers and their clients both for online sales and direct purchases at the various point of sale. Once on the market, as a preferred faster simpler secure payment option, e-sente is guaranteed to have very huge transaction volumes per day. Hence, promising very handsome annual returns from minimal commissions and transaction fees as compared to the available means. This will be manifested in e-sente's fast exponential growth and a rather short incubation/break even period.
As a money transfer suite, e-sente will be able to undercut all other money transfer company’s rates since thanks to the Pay Way self-service kiosks. We won’t need any agents to handle our cash deposits for a commission. Thus we’ll be the preferred option for sending money to all subscribers.
4. e-sente Business Model Overview The e-sente POS terminals will be strategically distributed out for free or at a minimal caution fee to dine outs, aboard the pioneer buses, petrol stations, in selected night clubs, in prominent hangouts, and at all leading local retailers & bigger departmental stores to target users who are most likely to spend electronic funds at hours outside conventional mobile money agents and bank working hours. Besides, availing POS terminals to such busy business locations/major points of sale reduces the subscribers’ risk burden & security threats imposed by walking around with huge sums of cash.
The transaction initiation process is rather simple and hassle free. It only requires only a swipe of the card through the POS terminal, followed by one simple SMS verification & authorization of the transfer from card holder’s mobile money account/bank account to the point of sale account. These three means are Text2sente, Online Transfer Deposit and Hard Cash Deposit.
All deposit transactions from mobile money will be confirmed by way of an e-nvoice SMS. Each subscriber on the e-sente grid will be identified by a unique Subscriber ID (phone number). When a customer arrives at any e-sente Point Of Sale or logs onto a supported website to make a purchase. All they do is swipe their e-sente card at a POS terminal to pay. For online payments, subscribers will be required to feed in their Subscriber ID & account pin into an online Electronic Payment Form (EPF), after which they’ll receive verification in form of an SMS code which is used as a proof of identity and consent to confirm and authorize payment. If the card holder’s mobile money account holds enough funds to afford such a purchase, by feeding their verification code (mobile money pin) into the EPF, the server automatically transfers the required funds to the online vendor’s account. Each POS terminal generates a time location signature for the required transaction. This TLS (Time Location
All transactions will be monitored, recorded and approved by a central server that will automatically deposit all commissions from each transaction onto our merchant accounts with the various Points Of Sale, Telecoms and partner Banks. e-sente will hold merchant accounts with each telecom & Bank where all dues per transaction will be deposited as soon as a transaction is made. The central server/POS transactions processing center will be hosted by WARID in collaboration with Pay Way, the firm which is best suited to allow us work with their existing POS terminals.
In the event that Pay Way/ Africa Vending Systems declines the offer for an equity ratio partnership and opts to take on this business model. (which capacity indeed they have since they already have a good list of existing merchants and points of sale terminal, the model will become capital intensive because there will be need to procure our own Points Of Sale Terminals, a dedicated Server to handle transactions plus the self-service kiosks which will serve as our deposit agents.
5. STRATEGIC REASONS FOR PROPOSED PARTNERSHIPSBy partnering with existing e-commerce platforms, we’ll significantly cut down on initial required capital investment and shorten the platform development processes. Shorter time to roll out and no need to hire agents since its purchases only we transact and deposits are done only via a machine. All revenue is for partners, no agency commissions are paid out.
YO! Payments: They already have a working API/portal with all telecoms for an online payment gateway from mobile money. They’ll serve as a perfect back bone for SMS activated authorization for purchases.
Pay Way Uganda /AVS: Already have POS terminals and accounts with most merchants. They own the self-service kiosks which currently only pay utility bills. Besides Pay Way has an African presence.
6. Depositing funds onto the e-sente CARDe-sente card does not hold the subscribers money, it simply initiates a secure transaction of a payment but in the event that a card holder wishes to covert use their card to spend money from their bank account. First they credit the card online/by mobile app. The bank account holder transfers money from their bank account to their e-sente account and their card becomes a debit card of sorts. Which card can then be swiped to pay or whose credentials can be used to do an online payment by filling an Electronic payment form as explained below.
Debiting money to the card will be enabled through direct Mobile App Transfer (Text2Sente), Online Transfer Deposit (OTD) and Self Service Kiosk Deposits. The e-sente card will also be working as an electronic purse/digital wallet. With one card, subscribers won’t need to carry huge amounts of money and can better budget by depositing only what they need/hope to spend on their e-sente account from their bank account or use the Pay Way self-service kiosks to send direct hard cash onto another subscriber’s CARD credit.
Fig 1.3 Direct Hard Cash Deposit onto e-sente CARD via self-service kiosk. (HCD)
Client deposits cash into self-service kiosk. Feeds in either his e-sente account ID or the desired recipient’s number/ e-sente Card ID. Digital Money is then credited to their account
7. Point Of Sale Transactions Handlinge-sente CARD Points Of Sale Transactions (POST)
The POS terminal procurement, maintenance and transaction processing will be done by Pay Way since this technology remains property of Pay Way. Of course all financial data handling will be monitored by a team of dedicated IT Security experts at YO! Payments and a dedicated e-sente server. Auditing will be done by an internal team and independent accounts application to detect and eliminate cases of fraud. All clients will have to do is swipe their card, receive an e-nvoice, reply with a PIN and receive a receipt as proof of payment.
8. Online Purchases via EPF Online purchase via e-sente Electronic Payment Form (EPF)
Since the e-sente CARDS will also support online purchases from local partner websites and online retailers/vendors, there will be a server dedicated to documenting and processing online Electronic Payment Forms plus a website dedicated to handling online transfer deposits between e-sente and subscriber’s banks. The EPF will contain 6 main key credentials that fed into our central data base:
• Subscriber’s Card ID/ (Phone number):• Amount to be paid:• Recipients Account Number:• Sender’s PIN:• Verification Code:
A subscriber will fill out the EPF (from 1-3)up to the point of Recipients Account number, at this point they will submit this form to our server which will log the request including all details and check if there are sufficient funds to permit such a payment.
If such a transaction is feasible or permissible, the server will subsequently send the e-sente account holder a verification code by SMS. So by feeding this verification code into the EPF final verification code field, the server then processes the transaction, transfers e-sente’s commission onto our merchant account, effects the electronic payments from the subscriber’s account into the website or online vendor/retailer’s account with us and the sale, reservation or order is done. A receipt can either be printed or alternatively received by e-mail & SMS depending on the subscriber’s preference.
9. Client to Client TransfersInter-network (subscriber to subscriber) funds Transfer via e-sente
In due time, another portal will be developed to handle inter-subscriber fund transfers. This server will be accessible both online via a computer and by way of mobile phone application/USSD code STK extension menu. Online Money Transfer Form will simply include:
• Amount to send:“e-mediate. e-fficient. e-nstant.”
10. Projected Revenues for e-sente: These financial projections are based entirely on the statistics of mobile money in
2012 in which year over 5 trillion shillings were transacted in transfers. Well assuming only 5% was in transaction fees.
(5% of 5 trillion): This gives 250 billion in transaction fees.
Assuming about 30 % of this 250 billion transaction fees is what the agents take as their commission/cut from the networks.
(30% of 250 billion): 75 billion of the gross transfers is the money telecoms payout as commission to agents.
Well in the worst case let us assume at least 10% of these transfers were withdraws that would have been averted if the subscribers had spending capacity instead of having to first with draw their mobile money.
(10% of 75 billion): 7.5 billion
In simple terms, if e-sente had been in existence last year with the POS technologies in place:This gives 7.5 billion as the money e-sente would have made in 2012.
Meaning that e-sente would have transacted as an agent for the telecoms and merchants grossing approximately 7 billion in one year off purchases alone! Excluding the revenue from Hard Cash Deposits.
11. Start Up Costs and Break Even AnalysisCost of a card reading Point Of Sale: 200 dollars. If about 10,000 points of sale are to be bought and given out free, this will cost about 2 million dollars.Which is approximately: 5 billion.
Each electro-magnetic strip card costs about 1000 thousand shillings. If half of the 7 million mobile money users had an e-sente card for free. It would cost 3.5 billion. (7 Bn for all subscribers)
Meaning if e-sente had been in existence last year, much as e-sente wouldn’t have broken even in the same year. It would have made back over 60% of initial capital of 12 billion. The end of this year would see it break even with about 2 billion as profit. So that’s the best way to assume a break even analysis since no prototype exists 0r has been made as yet.
12. SWOT ANALYSIS COSTS – Development costs -Implementation and ongoing costs – Limited financial resources and capital reserves – Guaranteed return on investment
MANAGEMENT – 3 level audit, Pay Way server, YO! Payments server and e-sente server.
SECURITY – Little concern about confidentiality/fear of fraud. One needs to steal your card and your phone and even know your Pin to use your card to transact. This is a secure enough plan unless there’s negligence on the card holder’s part.
TECHNOLOGY – Less complexity requiring new skills – Use existing IT/IS limiting costs of roll out and future development – Lack of trust in external IS supplies–
13. Current Progress & Long-term Prospects In due time, e-sente will be able to handle direct electronic funds transfer between clients such that we give Western Union and Money Gram decent competition. While at the same time, we’ll be in position to increase our revenue inflow by employing minimal extra capital and transacting more volumes with more POS terminals being distributed.
The e-sente CARD prototype is requires basic back end coding and simulated testing on Pay Way and YO! Payments servers. This will be followed by a beta version phase though there will be some requirements to have the system working and ready for demo/internal tests;
• A Point Of Sale Terminal with Swipe/CARD recognition Technology• Programmable Electro-Magnetic Strip Card. • Development costs for programmers.• Legal fees.
In the long run, as an obtrusive marketing campaign, every e-Sente subscriber accepting to receive their salary through their e-sente account will be allowed a secure friendly 4week salary loan. As a credit card user, 95% of their salary after taxation and NSSF dues shall be credited to their electronic funds accounts. Then e-sente will claim their salaries in full at the
This will of course have to be commissioned and undertaken under licensing & supervision of B.O.U. Once this credit scheme is established and marketed with consumer loyalty rewards and bulk discount incentives, in due time, e-Sente as credit card scheme will directly take 5% of all taxable incomes paid through our Electronic Funds Transfer credit system. Such volumes of revenue favorably and competitively position us as a digital financial institution to be recognized and reckoned with, later on to be branded as an e-bank.
14. Conclusion Once in operation, e-sente as a pioneer will have a majority stake in all electronic payment transactions at all major retailers, chain stores, major clubs/hangouts, prominent dine-outs, other Points Of Sale and most online purchases/reservations in Uganda.
We are ready to see this project from prototype phase, simulation/test phase up to market roll out & inception given the necessary financial support, legal & entrepreneurial facilitation.
Regards,Kidasa Ronald NabendeProject Head
15. LEGALCONFIDENTIALITY AGREEMENT
The undersigned reader acknowledges that the information provided by;
In this proposal & business model is strictly and purely CONFIDENTIAL in nature. Therefore, the reader of which consents and agrees not to disclose it without the express written permission of the author.
It is acknowledged by the reader that all information to be furnished in this business plan is in all respects confidential in nature. Other than information which is in the public domain
NOTE: This proposal is a business plan. It does not in any way imply or guarantee an offering of securities. Upon reaching a mutual agreement, another contract will have to be drafted and signed to affirm/confirm any awarding or exchange of securities between Kidasa Ronald Nabende and the potential venture capitalist or willing investor.
