Page 332 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

Table 1 – Typologies of OTC transaction and its prevalence

Level of formality
Approved by regulators (formal) Not approved by regulators (informal)

Identified OTC services in Pakistan, Paraguay, Agent-assisted transactions in East
Guatemala, Honduras Africa
Sender and/or Transactions done at the bank branch
recipient’s Not No known examples Direct deposits in sub-Saharan Africa,
identification identified India, and Bangladesh

Another way to look at OTC is to analyse the parties involved in the transaction. Any transaction may take one
of the following forms:

Table 2 – Defining OTC transaction using the parties involved approach 5

Recipient
Mobile money No mobile money Mobile money account with
account account agent assistance

Mobile money account Not OTC Partial OTC: Agent assisted OTC:
Direct withdrawal Wallet transaction

No mobile money account Partial OTC: Pure OTC Partial OTC: Direct deposits
Sender Direct deposits

Mobile money account with Agent assisted Partial OTC: Direct Agent assisted OTC:
agent assistance OTC: withdrawal Wallet transaction
Wallet transaction

While a transaction involving agents (even a person who is not a formal agent) for sender and receiver without
a mobile money account is a form of pure OTC, transactions involving the agent’s assistance at either the
sender’s or receiver’s end should also be considered as OTC. This framework includes situations where either
the sender or recipient, or both, may or may not have a mobile money account. We find the combination
of the broad definitions used earlier with the simple frameworks developed a helpful departure point for a
deeper discussion on this controversial topic.

2.2 Prevalence of OTC

OTC’s relative ease of implementation and practical usefulness to mobile money users has made it attractive
for providers trying to build transaction volumes quickly. OTC transactions are prevalent across deployments
in a number of markets, including Bangladesh, Ghana, Pakistan, Paraguay, Philippines, Tanzania, Uganda, and
Zambia.

The GSMA reported that in June 2015, at least 37.4 million unregistered mobile money users performed an
OTC transaction. Further, 29 service providers reported that most of their transactions were OTC – most of
these services (45 per cent) are based in South Asia and 28 per cent are based in sub-Saharan Africa. OTC
6

5 This OTC matrix includes user-to-user wallet transactions where third parties who are not necessarily agents may misrepresent
identity, act as ‘informal agents’ or assist the users to carry out the transaction.
6 GSMA State of the Industry Report on Mobile Money, 2016. http:// www. gsma. com/ mobilefordevelopment/ programmes/ mobile-
money/ industry- data- and- insights/ sotir

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