Page 214 - ITU-T Focus Group Digital Financial Services – Technology, innovation and competition

ITU-T Focus Group Digital Financial Services
Technology, Innovation and Competition

H TECHNICAL AND COMMERCIAL RESPONSES TO COMPETITION
BOTTLENECKS

13 Thin SIMS

13.1 Overview

One novel technical method to compensate for restricted or unfavorable access to STK and USSD is to use
what is known as ‘thin SIMs,’ also known as ‘sticky SIMs.’ Technically a SIM overlay technology, a thin SIM is
a paper-thin plastic sheet embedded with a number of contact points and a chip on top of a standard SIM
card. Thin SIMs provide an alternative and often cheaper access method for SPs and other third parties,
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by allowing access to networks that ostensibly provide standard QOS, better reliability, and cheaper rates for
USSD and STK access.

Despite its ‘thin’ form factor, it is a full-featured SIM. Once placed over a larger SIM, the thin SIM essentially
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converts any handset into a dual-SIM phone. 223
Switching between MNOs is done either manually via the accompanying STK menu, or by inputting a specific
short code to do the selection.

The thin SIM will ‘listen out’ for a specific DFS-linked short code and if the short code belongs to a MNO or
SP supported by the thin SIM, any DFS-related USSD or STK traffic will be directed to the alternate network or
provider. Any voice traffic linked to the original, larger SIM underneath the Thin SIM will remain unchanged.
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The solution is device agnostic so it works with feature or smart phones. It is also MNO-agnostic, so it works
with any MNO operator independent of the underlying SIM card. This technology is now in use in a number
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of countries for DFS purposes, but is as yet not in widespread use.
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13.2 Country examples

China

Chinese SP F-road has used Thin SIMs to enable access for over 15 million users from 1,300 banks in 27 of
China's 31 provinces. Its pre-programmed Thin SIMs are distributed to customers via financial institutions,
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and are inserted in phones to ensure encrypted SMS. F-Road’s technology can be used on over 95% of the
phones in the local market including smart phones. 228

221 The technology was developed in China by Shanghai-based tech company F-Road in 2005, primarily as a mobile phone solution
to support multi-operator access, designed to avoid roaming fees.
222 The thin SIM supports GSMA/3GPP/ETSI standards, making it compatible with all standard devices from older feature phones to
the latest smart phones.
223 Users can then access services on both networks and having two SIM cards in one slot of the device which means the user does
not have to physically remove and exchange the SIM card when the user travels, eliminating the possibility of losing and misplac-
ing the cards.
224 Therefore users can keep their original voice number on MNO 1, but use USSD and STK services on MNO 2.
225 It also has a patented secure, encrypted SMS technology.
226 A CGAP report identified only a few instances where thin SIMs were being used because of competition-based issues with access
to USSD and STK bearer channels. See Hanouch & Chen (2015) ibid
227 It handles more than RMB 5 billion daily transactions. See Micro Finance Gateway (2016) Shanghai F-road Wins 1st Prize in Wall
Street Journal's Financial Inclusion Challenge, available at https:// goo. gl/ DLn9Ur.
228 F-Road follows a B2B2C model—its customers are financial institutions that, in turn, serve individuals. The company’s technology
platform enables financial institutions, mainly Rural Credit Cooperatives and Rural Commercial Banks, with mobile-based secure
DFS access. See Shrader, L (2013) China – The Future Leader in Branchless Banking for the Poor?, available at https:// goo. gl/
C3cEZw . See also IFC (2016) F-Road Company Profile, available at http:// goo. gl/ 9C1lP8

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