A new fa­cil­ity for the ru­ral com­mu­ni­ties.

Southasia - - CONTENTS - – F.U.

Of­fered by bank­ing in­sti­tu­tions through mo­bile phone, mo­bile bank­ing is gain­ing mo­men­tum all over the world. In keep­ing up with rapidly chang­ing tech­nol­ogy, Sri Lanka, how­ever, takes the edge as its postal depart­ment has been play­ing the role mostly played by banks in other parts of the world. Of­fer­ing bank­ing ser­vices through a chain of post of­fices is an in­no­va­tive con­cept for re­mote ru­ral towns and vil­lages hav­ing no di­rect ac­cess to bank­ing ser­vices.

In June 2014 Sri Lanka Post in­tro­duced M-ePay, a new mo­bile elec­tronic pay­ment sys­tem. Con­nect­ing all sub-post of­fices to the main post of­fices through mo­bile phones, the sys­tem was pri­mar­ily im­ple­mented by the postal depart­ment us­ing post of­fices as banks to re­duce the du­ra­tion it takes for money to travel across the is­land.

The M-ePay is a web ser­vice based mo­bile ap­pli­ca­tion which helps lo­cal peo­ple make all kinds of pay­ments and fi­nan­cial trans­ac­tions by us­ing mo­bile phones in nearby sub-post of­fices, in­stead of go­ing to banks lo­cated in spe­cific ar­eas. In a very short time, the new ini­tia­tive came out to be a rev­o­lu­tion­ary step, which was mainly taken by the Sri Lankan gov­ern­ment to fa­cil­i­tate both the ur­ban and ru­ral pop­u­la­tion. The rea­son be­hind the huge suc­cess of the new pay­ment sys­tem was sim­ple: it has pro­vided cit­i­zens across the is­land the means to carry out a range of fi­nan­cial trans­ac­tions and pay­ments, such as util­ity bill pay­ment, money trans­fer, etc. us­ing their mo­bile phones.

In Sri Lanka, post of­fices are di­vided into two cat­e­gories, - main-post of­fices and sub-post of­fices. Main post of­fices are lo­cated in rather de­vel­oped ur­ban ar­eas, while sub-post of­fices op­er­ate as branches of the main of­fices and are gen­er­ally lo­cated in re­mote ru­ral ar­eas. Main post of­fices are sys­tem­at­i­cally

linked to a cen­tral­ized server through the in­ter­net but sub-post of­fices in ru­ral ar­eas are not linked to the main server be­cause of no in­ter­net con­nec­tiv­ity.

As telecom­mu­ni­ca­tion ser­vices are avail­able across the is­land, the M-ePay sys­tem links sub-post of­fices to the cen­tral­ized sys­tem us­ing mo­bile phones. To use the ser­vice, users must have a mo­bile phone with a unique user iden­ti­fi­ca­tion (ID), which is pro­vided by the Sri Lanka Post. To ob­tain a per­sonal ID, a user needs to fill and sub­mit a com­pul­sory ap­pli­ca­tion form to the near­est sub-post of­fice, which for­wards it to the ICT di­vi­sion of Sri Lanka Post for fur­ther pro­cess­ing and ver­i­fi­ca­tion. Once the ap­pli­ca­tion is ap­proved, the user is pro­vided with a unique ID, which also serves as a pass­word to en­ter the mo­bile pay­ment sys­tem. The in­for­ma­tion about the newly-reg­is­tered users with their par­tic­u­lar user-IDs is also shared with the sub post­mas­ter who may carry out trans­ac­tions on be­half of the user when asked.

In sub-post of­fices, ev­ery post­mas­ter has a sep­a­rate user iden­tity which al­lows him to make pay­ments through a pre-for­mat­ted text mes­sage by ac­cess­ing the main server. Sent from the post­mas­ter’s reg­is­tered mo­bile num­ber, a small SMS is enough to make any fi­nan­cial trans­ac­tion on a user’s be­half. The post­mas­ter also re­ceives a con­fir­ma­tion mes­sage as soon as the trans­ac­tion is made. The best part of this sys­tem is that it does not re­quire users to have ex­pen­sive, high-end phones, as trans­ac­tions are based on sim­ple text mes­sages that can be de­liv­ered and re­ceived through any phone.

In ru­ral parts of the South Asian coun­tries, a post­mas­ter al­ways en­joys high re­gard in his vil­lage and stays closer to the peo­ple in a wider so­cial con­text. As he is the per­son who is re­spon­si­ble for their letters, parcels and money or­ders, vil­lagers do not hes­i­tate to hand over money to him. The tra­di­tion has played a lead­ing role in mak­ing M-ePay a phe­nom­e­nal suc­cess, par­tic­u­larly in such ru­ral com­mu­ni­ties where the lit­er­acy ra­tio is poor and peo­ple face many dif­fi­cul­ties in us­ing new pay­ment sys­tems.

Lo­cal peo­ple uti­lize this sys­tem for a va­ri­ety of pur­poses such as mak­ing util­ity bill pay­ments and money trans­fers, re­ceiv­ing EPF (em­ploy­ees’ prov­i­dent fund) and ETF (em­ploy­ees’ trust fund) pay­ments and other money trans­ac­tions. The M-ePay ser­vice uses GovSMS, the gov­ern­ment SMS gate­way and en­ables peo­ple to send and re­ceive SMSs from gov­ern­ment de­part­ments across GSM and CDMA net­works.

In Sri Lanka, the num­ber of bank branches per 10,000 pop­u­la­tions aged 16 and above is 14.12, while al­most 98% of these banks op­er­ate in ur­ban ar­eas only. The ru­ral ar­eas in Sri Lanka com­prise more than 80% of the na­tional pop­u­la­tion, but be­ing in a clear ma­jor­ity these ar­eas don’t nor­mally have banks or sim­i­lar fi­nan­cial in­sti­tu­tions.

On the other hand, the coun­try has a size­able net­work of post of­fices with 654 main post of­fices and around 3,410 sub-post of­fices in ru­ral towns and vil­lages. Al­most ev­ery vil­lage has a sub-post of­fice that plays a piv­otal role in en­hanc­ing the liv­ing stan­dards of the ru­ral com­mu­nity.

The M-ePay mo­bile trans­ac­tion ser­vice has turned the gov­ern­men­t­op­er­ated postal plat­form in Sri Lanka into a prof­itable in­sti­tu­tion that has an ever-grow­ing cus­tomer base with size­able earn­ings ev­ery year. Ac­cord­ing to sta­tis­tics, since the im­ple­men­ta­tion of the mo­bile pay­ment sys­tem in June 2014, the Sri Lanka Post has earned around 1.3 lakh Sri Lankan ru­pees (LKR) from 8,540 phone bill pay­ments, around LKR3.7 lakh from 5,537 money trans­fers and around 64 lakh ru­pees (LKR) through 396,040 elec­tric­ity bill pay­ment trans­ac­tions.

Work­ing un­der the Min­istry of Telecom­mu­ni­ca­tions and Posts, Sri Lanka Post has 4738 of­fices with over 17,000 em­ploy­ees work­ing in dif­fer­ent de­part­ments, di­vi­sions and main and sub-post of­fices all over the Is­land. Be­sides de­liv­er­ing letters and parcels, these sub-post of­fices have started de­liv­er­ing money un­der the new sys­tem and that too in a mat­ter of sec­onds. For the most part, the rev­o­lu­tion­ary M-ePay plat­form has ap­peared to be a fi­nan­cial life­line for the ru­ral com­mu­ni­ties in Sri Lanka who nor­mally don’t have an easy ac­cess to con­ven­tional bank­ing ser­vices com­pared to the main­stream ur­ban ar­eas.

If sent by off­line money trans­fer chan­nels, it would take some days to de­liver money to its des­ti­na­tion in Sri Lanka. Some­times it takes even more than a week to send money from one point to another, con­sid­er­ing the long dis­tances, rough ter­rain as well as the lengthy times in­volved to reach far flung ru­ral ar­eas. More­over, the fi­nan­cial trans­ac­tions that are car­ried out through man­ual meth­ods in a pa­per en­vi­ron­ment lead to many mis­takes and er­rors. The mod­ern mo­bile trans­ac­tion medium has re­duced these er­rors man­i­fold, lead­ing the en­tire sys­tem to bet­ter pro­duc­tiv­ity, ef­fi­ciency and di­rec­tion.

Liv­ing in dis­tant ru­ral towns and vil­lages, ru­ral peo­ple keep mov­ing to ac­cess ba­sic util­i­ties and the much­needed bank­ing ser­vices. In ad­di­tion, the thought of sub­urbs, slums and shanties, brings for­ward im­pres­sions of back­ward, ig­no­rant masses de­prived of ba­sic civic ser­vices. How­ever, Sri Lanka’s M-ePay plat­form serves as an epit­ome of good gov­er­nance as it has em­pow­ered its more than 80% ru­ral pop­u­la­tion by bring­ing to the fore in­stant ac­cess to bank­ing so­lu­tions through mo­bile phones. The suc­cess story also shows how a small, com­mu­ni­ca­tion de­vice can make a big im­pact on the lives of ru­ral pop­u­la­tions.

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