Page 262 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

WeChat is the benchmark for linking social and financial accounts. Over 300 million of its users have linked
a financial account to their WeChat account. Interestingly, governmental regulations have helped increase
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financial account linkage. Receiving a Red Packet may be a user’s first WeChat payment experience. But,
before spending their digital cash, users must verify their identity. Linking a bank account or credit card is one
verification method. This option enables the user to enter WeChat’s vast commercial ecosystem.

4 Potential benefits to the BoP

The fundamental issues of Internet affordability, phone design, and financial inclusion need to be solved
before social networks can impact a large portion of the BoP. But, paradoxically, social networks may actually
become digital on-ramps by offering simple, low-cost communication and information services. Beyond helping
the BoP get online, social networks can provide a broad range of benefits, such as making agricultural value
chains more efficient, providing a ubiquitous payment network, helping consumers buy more efficiently, and
helping the BoP earn more money.

In some cases, social networks’ unique traits (size, network structure, customer insight, etc.) enable these
benefits (e.g., broad payment acceptance). In other cases, traditional web sites or mobile apps can also deliver
the same benefits (e.g., exposure to new customers). But, since social networks can be the way BoP users
experience the web, it is important to include both sources.

4.1 Digital on-ramps

Social networks, and chat platforms in particular, can make establishing Internet access easier, more desirable,
and less expensive. Important social network capabilities include:

• Over-the-top (OTT) services: OTT mobile services are voice, messages, video, and other content a third-
party delivers without the MNO being able to control the distribution (e.g., prohibit, price differently). This
capability is significant because it allows social networks to offer inexpensive messaging and voice. Since
these services use an MNO’s data service, messages and calls do not count toward a mobile subscriber’s
SMS or voice package. Users can save significantly under this arrangement by arbitraging differences
between data, SMS, and voice tariffs.
• Low bandwidth options: On traditional websites, a shopper or site visitor may wade through dozens of
pages filled with data-heavy images and videos which leads to unnecessarily high data costs. Contrast
that with social network approaches that could reduce data charges:
– Chat scenario in which a shopper reviews several product suggestions a merchant provides.
– Streamlined version of a social network (e.g., m.facebook.com, Free Basics by Facebook).

• Standardized user experience: Social networks usually present a standardized interface to their users.
For example:

– Navigation menus are consistent from page to page and from use case to use case.
– Merchant information such as business name, hours, or phone number are in a similar location and
format on social network-hosted merchant pages.
– Payment experience is the same across merchants.
– Universe of users and merchants can be found in a single directory.
This standardization makes the learning curve much faster. Essentially, social networks provide a ‘learn once,
use always’ experience. Contrast this with the ‘regular’ web in which every website has a different look and

5 Chan, Connie. Money as Message. How WeChat got users to adopt payments as a way to grow its network. Andreessen Horowitz
blog. July 24, 2016. http:// a16z. com/ 2016/ 07/ 24/ money- as- message (accessed August 19, 2016).

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