International Islamic University, Islamabad

December 24, 2019

Easypaisa
Easypaisa, Pakistan’s first mobile banking platform launched in 2009, is the only GSMA
mobile money certified service in the country. Initially launched as a money transfer
service, Easypaisa empowers underserved masses by bringing convenience and
freedom to their lives, and has today become the category name for money transfers,
synonymous with convenience and reliability.
With the largest footprint in the country, constant innovation, an ever-growing range of
ground-breaking digital solutions and the Easypaisa App, Easypaisa is turning into a
complete lifestyle platform which enables people across Pakistan to truly adopt the
digital way of life.
Easypaisa is part of Telenor Microfinance Bank and operates as a branchless banking
service. Easypaisa is driven by the bank’s vision and mission of transforming the
financial landscape of the country and providing instant access to convenient digital
financial services.

Easypaisa, a mobile money service launched in Pakistan in 2009, serves more than
five million customers a month through 25,000 points of service. By the end of 2012, it
had processed more than 100 million transactions with a throughput of more than US$
1.4 billion. Easypaisa was identified as a 2012 GSMA Mobile Money Sprinter — one of
the 14 most successful mobile money services.

1 Three important mobile money innovations emerge from the Easypaisa story. First,
Easypaisa was launched from a unique corporate structure. Telenor Pakistan, a mobile
network operator (MNO) acquired a 51% ownership stake in Tameer Bank, a
microfinance bank, and then established Easypaisa as a common organization across
the two companies. Second, Telenor Pakistan and Tameer Bank introduced over-the-
counter (OTC) mobile money services – an entirely new model that did not require
registration for an electronic wallet. And third, Easy - paisa achieved rapid national
expansion by relying exclusively on its existing GSM distribution structure. With a
population of 180 million and only 15% bank penetration in 2008, Pakistan presented
an attractive market opportunity for mobile money.

2 Easypaisa seized this opportunity by creating an innovative partnership, a new

delivery approach and an effective distribution model. However, these innovations
cannot stop here. OTC has become the de facto model for mobile money in Pakistan,
but it has significant constraints. Without a stored value account, there are limitations
to the product offering, reduced profits for the service providers, and an inability to
build a robust financial digital ecosystem. Mobile money providers in Pakistan should
focus their efforts on driving adoption of the mobile account by expanding registration
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locations, extending the product offering, raising awareness and educating consumers
about the benefits of a mobile account

 Structuring for innovation

The opportunity for Telenor Pakistan: Mobile financial services a s a new
revenue stream

In 2007, Telenor Group launched financial services through its company Grameen -
phone in Bangladesh, sparking excitement about the potential of mobile money. With
GSM sales slowing in Telenor Group’s mature markets, the company was looking for
new growth opportunities in industries such as broadband, financial services, and media
convergence. Pakistan, among other countries, was evaluated for mobile financial
services; with only 15% of the adult population banked, Pakistan presented an
attractive market for financial services. At the time, Telenor Pakistan’s GSM subscriber
base was 21 mil - lion and its market share was 22 %, making it the country’s second
largest MNO. The company considered itself well positioned to offer mobile financial
services.

Partnering with Tameer Bank: Gaining experience in financial services and

overcoming regulatory hurdle

The State Bank of Pakistan (SBP) issued Branchless Banking Regulation in March 2008.
The regulation called for a bank-led model, which meant that only commercial banks
and microfinance banks with an existing banking license were eligible to apply for a
branchless banking license. The regulation also specified that MNOs could operate as a

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December 24, 2019

“super agents” on behalf of a bank, providing marketing and distribution in addition to

participating in product development. In spite of a regulation that specified a bank-led
model, Telenor Group and Telenor Pakistan decided to move forward with developing
mobile financial services. Given the regulatory requirements and Telenor Pakistan’s lack
of experience in financial services, they saw majority ownership in a microfinance bank
as the optimal way to enter the mobile money market. Telenor Pakistan soon entered
into discussion with Tameer Microfinance Bank Limited.

4 Tameer Bank was established in 2005 and was at the forefront of innovation in
financial inclusion. It was the first microfinance bank in Pakistan to offer real-time
online banking at branches, open 24-hour service branches, and to make use of capital
markets to fund the microfinance bank. Tameer Bank had an experienced management
team and strong institutional knowledge about reaching the financially excluded.

In 2008, Telenor Pakistan acquired 51% ownership stake in Tameer Microfinance Bank
Limited (TMFB). The acquisition of 51% ownership was PKR one billion, equal at the
time to approximately US$ 12 million or US$ 10 million in today’s exchange rates. (May
2013.)

BRANCHLESS BANKING INITIATIVES

Since the SBP will only give branchless banking approvals to banks, a variety of
business models have been mooted. Four mobile network operators partially or fully
own microfinance banks while one mobile operator has agreed an exclusive partnership
with a mid-size bank. Two other banks are pursuing telco-agnostic models and an
independent third-party payment service provider has just been established. To date,
there are several live branchless banking schemes in the country: three of the five
mobile operators have launched their products while the remaining two are piloting
some others. The bigger banks have taken much longer to engage in branchless
banking. Only one bank, UBL, has already launched a telco-agnostic product, although
a few others are in the process of piloting their services. The current market leaders are
Easypaisa (jointly offered by Tameer Microfinance Bank and Telenor) and Omni (a UBL
product). With this evident dynamism, the Pakistani market seems poised for further
exciting developments in the branchless banking space.

 EASYPAISA MODEL AND STRATEGY

Analysis of easy paisa business model?  As a brand, one of the major indicators of
easy paisa success has been its wide spread awareness.  In a very short span of time,
it has become a well know name across segments. Just like Easy load quickly
established itself as a brand for the top-up option, easy paisa in a similar fashion is fast

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becoming a standard for branchless banking in Pakistan. Within a few months of

launch, the brand is widely recognized for its package of convenience and accessibility.

As previously noted, exchanges between Telenor and Tameer Microfinance Bank started
early on, and in time resulted in an agreement between both players that led to the
launch of an innovative mobile payment service, Easypaisa. This agreement stipulated
that Telenor would function as the super-agent for Tameer’s Easypaisa service, as well
as supporting other operational areas where Telenor has competitive strength.
Furthermore, Telenor took a 51 percent ownership stake in Tameer, a clear sign of its
long-term commitment to mobile financial services in Pakistan. From Telenor’s
standpoint, they had established themselves in 2005 and invested significant capital to
assure a strong market position even though competition had driven revenues-per-
customer down. They did foresee some core business benefits, such as churn reduction
and increased average revenue per user; but these were considered ancillary benefits.
It was largely the additional revenue that the new payment service could provide that
motivated their ‘go’ decision. Tameer saw compelling business benefits in partnering
with Telenor. Such an arrangement would:

1. Enable Tameer to build a large-scale payment service, resulting in additional fee-

based income

2. Give Tameer access to a network of 150,000 agents likely to significantly expand

their footprint and support further client growth.

3. Enable Tameer to mobilize mass savings while lowering their cost of funds (Tameer’s
cost of capital at that time was approximately 12 percent).

4. Give Tameer access to more marketing ‘muscle’, an unquestionable benefit for their
quest to become a mass-market bank.

5. Build brand value, resulting in a higher company valuation.

Although Easypaisa was initially designed as a payment service, it was anticipated from
the beginning that Tameer would need to integrate it into their core business to extract
maximize value. However, the short-term priority was to build a scalable and
sustainable payment service and with a strong brand presence before taking any
further steps to integrate the new channel with Tameer’s overall operations.

Model overview

As mentioned above, Telenor owns a 51 percent stake in Tameer Bank. And Easypaisa
is seen as a Tameer product from a regulatory perspective. As to how the roles and
responsibilities are actually split, Tameer has a super-agent agreement with Telenor.
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Accordingly, Telenor has responsibility for the distribution aspect of the business, but
also manages others such as marketing, given their mass marketing strength in mobile
telecoms. Tameer, on the other hand, is in charge of banking operations and regulatory
compliance, plus customer service since data confidentiality requirements prevent
Tameer from sharing any transaction information with Telenor. Product management is
managed jointly, although Telenor teams provide the leadership. It is anticipated,
however, that Tameer’s involvement in product development will become increasingly
important as Easypaisa gradually evolves into developing more banking products. As is
the case with many such partnerships, the relationship between Telenor and Tameer
has improved over time. Initially, however, it was complex. On the one hand, Telenor
owned 51 percent of Tameer, which prompted them to see themselves as the parent
company. On the other, they were only operating as the super-agent of a service
categorically seen by SBP as a banking service, meaning their actions were subject to
Tameer’s decisions in banking operation-related matters. Thus, making the partnership
work amounted to a subtle balancing act requiring the full commitment of top
management on both sides.

 Easypaisa Product

Easypaisa is a one stop shop for all your payment needs

Money Transfer

Transfer money to any valid CNIC, Bank or Mobile Account

Mobile Load

Top-up prepaid balance or pay postpaid bill of any network

Bills Payment

Pay your electricity, gas, water & internet bills through Easypaisa App

Loan

Personalized easypaisa loans for you and your business needs. No documentation, long
waits in line or guarantees will be required. Just dial *786*7# to get your loan of up to
Rs.10,000 approved instantly.

QR Payments

Scan and pay through QR code to enjoy a hassle-free shopping experience.

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Tickets
Instant reservation and payment of movie and bus tickets, just a tap away

Tohfa

Celebrate with your loved ones by sending gifts in a different and exciting way using
Easypaisa App

Easypaisa Debit Card

Easypaisa Debit Card allows customers to withdraw cash from ATMs and also make
payments at thousands of PoS enabled locations nationwide. Furthermore it

 can be used at all ATMs (1Link and MNET) across Pakistan

 saves customers the hassle of visiting Easypaisa shops to withdraw cash

 is chip and pin enabled which makes it highly secure to use

Mobile Bundles

All your favorite Telenor, Ufone and Zong bundles available in one app

Insurance

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 Classification of Business
Mobile Accounts: Tameer Microfinance Bank and Telenor Pakistan launched a new
service in February 2010. Within a few months bill payment and money transfer
services had generated a significant amount of transactions with close to 420,000 bill
payment transactions and more than 120000 money transfer transactions. Mobile
accounts were the third service being offered under the Easypaisa brand. On the back
of this success Easypaisa introduced mobile accounts. A novel product offering, this
allowed financial transactions to be executed through a customer’s cellular phone. This
service would allow customers to pay utility bills, transfer money and use cash in/cash
out services through their Telenor connection. Through this service customers could
also carry out cash withdrawals and deposits through Easypaisa retail franchises,
service centers, Tameer Microfinance Bank branches and Telenor franchises throughout
the country. This service operated like a virtual bank account for Telenor subscribers
which allowed them to access their account and conduct transactions from their cell
phones at any given time. The only time they needed to visit an authorized outlet was
to deposit or withdraw cash. However, Telenor subscribers had to register themselves
to avail the service.

Product Features

 No fee is applicable on receiving funds through Easypaisa international Home Transfer

service.

 Any person with a valid CNIC can receive money

 This service is not limited to Telenor subscribers; you don't even need a mobile
phone.

 There is no paperwork or form filling requirement.

 No more waiting in queues - remittance can be collected even at late hours or on

Saturdays.

 Secure encrypted transaction

 Approve by the State Bank of Pakistan

Easypaisa Services:

It includes three major services i.e., (a) Easypaisa Bill payment, (b) Easypaisa Money
Transfer and (c) Mobile Accounts. Other minor services include International Money
transfer services, Donations and corporate solutions

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 SWOT Analysis
Strengths

•With Telenor Easypaisa you can pay your utility bills and also you can transfer money
hassle free at any time of the day

•Any person with a valid CNIC can transfer money & pay his utility bill

•This service is not limited to Telenor subscribers only, other mobile network users can
also avail this facility

•You can pay your bills and can transfer your money on any easy paisa shop, Telenor
franchise and any branch of tamer microfinance bank

•More than 4000 easypaisa shops available and Telenor target is to increase them to
20000 in the coming year

•You no longer have to stand in the long queues of the bank to pay your bills

•A secure encrypted transaction which is based on GSM standards

It is also approved by the State Bank of Pakistan

•No complex paper work is involved

•With easypaisa info services you can inquire about your bill payment and money
transfer by calling them on their Helpline

•Customer can also provide heir feedback by submitting the feedback form

Weaknesses

•The biggest weaknesses of Telenor easypaisa is that a customer has to pay extra
charges especially in case of utility bills, due to which public may feel reluctant to pay
their bills through this channel

•Also, Telenor easypaisa does not include all the utility companies in order to facilitate
their customer

•The easypaisa shops are also not enough which is also a weakness

•Also, easypaisa services are not present in all cities of Pakistan till yet

•Limitation of the amount sent through money transfer

•Trust may also be an issue for new customers

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Opportunities

•Telenor easypaisa should add more services in their portfolio other than bill payment
and money transfer only
•If Telenor easypaisa eliminate or decrease the extra charges associated with their both
services it can attract more customers

•Also, easypaisa utility bills service should include all the utility companies for the bill
collection

Threats

•The biggest threat that easypaisa will encounter is that there are also other channels
like NADRA kiosks, post offices which do not take any service charges for collecting the
utility bills

•Extra charges associated with the services may result in easypaisa losing customers

•Mobile banking services by different banks may also pose a threat to easypaisa
services

 Market Placement
Market position
Tameer is the second-largest provider of microcredit in terms of the gross loan portfolio
(GLP). Its GLP was Rs12.1 billion at the end of 2015, which constituted 13.1% of the
total market size.
As for the number of active borrowers, Tameer was the fourth largest player at the end
of 2015 with 7.6% market share.
However, Tameer leads the microfinance industry when it comes to the number of
active savers and the value of savings. At the end of 2015, Tameer had over 4.9 million
micro-savers representing 35.5% of the market size. Its value of savings was Rs15.6
billion, which constituted 24.2% of the total micro-savings on Dec 31, 2015.

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In addition to Tameer, as many as nine microfinance banks, 16 microfinance

institutions, six rural support programmes and 16 ‘other’ entities operate in the
microfinance industry.
Telenor (Easypaisa) is offering millions of people of Pakistan without bank account or
credit card, chance to make financial transaction with touch of a button. This is most
innovative service by any mobile operator of Pakistan to send/receive money, pay your
bills without a bank account. With more than 15000 distribution points across the
country Telenor is offering transactions of cash, utility bills payment, mobile account
under one roof. Easypaisa business is booming and number of subscribers is on the
rise. Thousands of transactions are handled every day.

This is the best service of transaction for those who are living and working far away
from their home. Mobile phone banking popularity is on the rise in Pakistan but some
media people attach the threat of transaction with Al-Qaeda and other terror activities
but concern dismissed by VP, Financial Service Telenor Mr. Roar Bjaerum by saying the
transaction limit is short (60,000) per transaction. He added, preventive measures are
also taken to deal with fraud with the help of Tameer Micro Finance Bank and state
bank of Pakistan. Monitoring System is also working to put down any suspicious
elements.

Marketing positioning Companies positioning against competition Parameters Mobilink

Telenor Product Life Cycle Maturity Growth Market share % 59% 7% Coverage 900
cities 1100 cities Product Portfolio Jazz Octane, Mobilink Indigo, Ladies First, Talks
hawk, Telenor Azadi, DJuice Customer Base 17.2 million 3.6 million Marketing
Operations Excellent Average SEGMENTATION STRATEGY Telenor is using multiple
segmentation strategy and developing separate marketing program for each segment
because different customers are looking for different benefits from different services
they purchase. Estimating the market potential of each segment includes asking how
many prospects with how much purchase power there is for each particular want.
Which Market to Segment Regarding Pakistan different markets are segmented by
Telenor on the basis of: 1. Geographic 2. Demographic 3. Psychographic 4. Behavioral.

MARKET SEGMENTATION & TARGETING Currently the population of Pakistan is

over 155million. If we exclude 20% of the poor population and 30% children (below the
age of 10 years), we get a potential target market of about 87 million. So far cellular
mobile companies have grabbed 34.5 million subscribers which are only 39% of the
potential target market. About 59% of the potential population is living in rural areas.
Mobile operators will focus on grabbing the inaccessible areas and increasing their
penetration by expanding their networks. In future, it is expected that postpaid

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segment will grow at a faster pace than prepaid segment converting a portion of the
prepaid segment to post-paid. For e.g. Postpaid packages aimed at the youth and
students. MARKET SEGMENTATION & POSITIONING Segmentation is the process of
dividing the total market for a good or service into several smaller, internally
homogenous groups. Since Telenor is a customer oriented and quality driven company,
it segments it market on the basis of various different dimensions. Market Segmentation
& Product Positioning Analysis Market Segment Today Future 4 years Estimate Existing
Products Profitability % Youth/ students 25% 27% Djuice, Talkshawk 29% Women
10% 20% TalkShawk 21% Financially Constraint 40% 23% TalkShawk, Telenor Azadi
20% Corporate/ SME 25% 30% Post Paid - Packages 30%.

 Employees Base

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 Shareholding (Annual Report)

The Telenor Group has increased its shareholding in Tameer Microfinance Bank to
100%, which makes the country’s first and largest microfinance bank a wholly-owned
subsidiary of the Norway-based telecommunications giant.
Hussain held 29.4% stake in Tameer through his company called EMC whereas other
shareholders namely International Finance Corporation, Centurion, Nizar Noor
Muhammed and Noor Muhammad Mewawalla held 4.9%, 7.3%, 3.6% and 3.6%,
respectively. Telenor Pakistan controlled the rest of 51% shareholding in Tameer.

Board of Directors
Mr. Petter Borre Furberg Chairman
Mr. Shahid Mustafa President & CEO
Mr. Irfan Wahab Khan Director
Mr. Roar Bjaerum Director
Mr. Aslam Hayat Director
Mr. Henning Thronsen Director
Ms. Uzma Khan Independent Director

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 Rules & Regulation

The following terminology applies to these Terms and Conditions, Privacy Statement
and Disclaimer Notice and any or all Agreements: “Client”, “You” and “Your” refers to
you, the person accessing this website and accepting the Telenor’s terms and
conditions. “The Telenor”, “Telenor” “Ourselves”, “We” and “Us”, refers to our Telenor
Microfinance Bank Ltd. “Party” or “Parties, refers to both the Client and ourselves, or
either the Client or ourselves. All terms refer to the offer, acceptance and consideration
of payment necessary to undertake the process of our assistance to the Client in the
most appropriate manner, whether by formal meetings of a fixed duration, or any other
means, for the express purpose of meeting the Client’s needs in respect of provision of
the Telenor’s stated services/products, in accordance with and subject to, prevailing
Pakistani Law. Any use of the above terminology or other words in the singular, plural,

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capitalization and/or he/she or they, are taken as interchangeable and therefore as

referring to same.
The laws of Pakistan govern these terms and conditions. By accessing this website
[and using our services/buying our products] you consent to these terms and conditions
and to the exclusive jurisdiction of the Pakistani courts in all disputes arising out of such
access. If any of these terms are deemed invalid or unenforceable for any reason
(including, but not limited to the exclusions and limitations set out above), then the
invalid or unenforceable provision will be severed from these terms and the remaining
terms will continue to apply. Failure of Telenor Microfinance Bank to enforce any of the
provisions set out in these Terms and Conditions and any Agreement, or failure to
exercise any option to terminate, shall not be construed as waiver of such provisions
and shall not affect the validity of these Terms and Conditions or of any Agreement or
any part thereof, or the right thereafter to enforce each and every provision.
Exclusions and limitations
The information on this web site is provided on an “as is” basis. To the fullest extent
permitted by law, this Telenor
 excludes all representations and warranties relating to this website and its
contents or which is or may be provided by any affiliates or any other third party,
including in relation to any inaccuracies or omissions in this website and/or the
Telenor Microfinance Banks literature; and
 excludes all liability for damages arising out of or in connection with your use of
this website. This includes, without limitation, direct loss, loss of business or
profits (whether or not the loss of such profits was foreseeable, arose in the
normal course of things or you have advised this Telenor of the possibility of
such potential loss), damage caused to your computer, computer software,
systems and programs and the data thereon or any other direct or indirect,
consequential and incidental damages
Challenges
Technology growth.
Monopoly of PTA.
There is an imbalance between prices of inputs and output
SBP set tough rule for branchless banking which faces by these sector
Security

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Your information is stored on our servers at a secure location of Telenor Microfinance

Bank inside Pakistan. We treat customers’ data as an asset that must be protected
using sophisticated tools (encryption, passwords, physical security, etc.) to protect your
personal information against any kind of unauthorized access and disclosure
We commit to reviewing and revising the privacy requirements as and when the need
so arises. If you have any concerns regarding the above please contact us at the e mail
address provided above

 Supply Chain
An Easypaisa mobile account is an easy to use actual bank account, available for all
networks to access from their own mobile phones at any time.
Unless otherwise stated, the services featured on this website are only available within
Pakistan, or in relation to postings from Pakistan. All advertising is intended solely for
the Pakistani market. You are solely responsible for evaluating the use of this website.
Redistribution or republication of any part of this site or its content is prohibited,
including such by framing or other similar or any other means, without the express
written consent of the Telenor. The Telenor does not warrant that the service from this
site will be uninterrupted, timely or error free, although it is provided to the best ability.
By using this service, you thereby indemnify Telenor Microfinance Bank, its employees,
agents and affiliates against any loss or damage, in whatever manner, howsoever
caused.
Communication
We have several different e-mail addresses for different queries. These, & other contact
information, can be found on our Contact Us link on our website or via Telenor
literature or via Telenor’s stated telephone, facsimile or mobile telephone numbers.

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