Page 196 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

MSP or Merchant Aggregator would be the ideal PF candidate. In addition to support of processing and
settlement, the PF plays several critical roles across the value chain including market development, merchant
of record, risk underwriting and management, as well as provider of value added services. The MMO would
earn revenue through incremental merchant purchase volumes generated by the partnership while the PF
owns the customer relationship, providing processing services to its merchants. Though a merchant acquirer
would be necessary, the PF would do the heavy lifting – aggregating merchants and routing authorization
requests to its acquiring partner within the market, as well as providing the back-end processing necessary to
settle directly with sub-merchants. 14

In each of these cases the expertise of third parties is likely required. This expertise can both enable the
deployment of these technologies as well as the realization of their full potential. Furthermore, there will
be adoptions and innovations as these technologies are applied to eMoney deployments to realize their full
potential, resulting in further business model innovation.

8.3.1.3 Model Three-Merchant Acquirer Approach
The third model, exemplified by EcoCash in Zimbabwe, illustrates the deployment of the merchant acquisition
model found in card acceptance. In this model, a merchant acquirer performs all activities across the value chain
to enable merchant acceptance. The MMOs responsibility would end with the issuance of mobile wallets and
or companion cards as well as transaction authorization in pull payments. This model supports interoperability
by facilitating the acceptance of multiple payment types at merchants. It drives scale by coordinating flows
between a number of issuers or MMOs on one side and merchants and their corresponding providers on the
other side.

Figure 10 – Overview of Merchant Acquirer Acceptance Model

Unlike M-PESA or ZAAD that have trust accounts with banks or created their own bank much later in the
process, Econet Wireless bought Steward Bank (previously TN Bank) early on to leverage its expertise in financial
management, underwriting, processing, and funds settlement. EcoCash’s merchant acquisition is driven by
a small division of the bank, PayBay, dedicated to recruiting, educating, and acquiring small merchants, and
executing all activities across the merchant acceptance value chain. Its POS terminals distributed across
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10,000 locations are interoperable and NFC compatible.
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14 Salazar, D.G. and Miller, P.M (2013), Expanding Card Acceptance to Small Merchants Globally Through Mobile Point of Sale
(MPOS), MasterCard Advisors Global Insights Series
15 Levin, P. (2013), Big ambition meets effective execution: How EcoCash is altering Zimbabwe’s financial landscape. GSMA eMoney
for the Unbanked, July, 1. Retrieved from http:// www. gsma. com/ mobilefordevelopment/ wp- content/ uploads/ 2013/ 07/ EcoCash-
Zimbabwe. pdf.
16 Customer Case Study (2014), “EcoCash from Econet Wireless Zimbabwe." CISCO. Retrieved from http:// www. cisco. com/ c/ en/ us/
solutions/ collateral/ service- provider/ vni- service- adoption- forecast/ case- study- c36- 730961. pdf.

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