24 April 2018
Sriram Natarajan

Sriram Natarajan

Sriram Natarajan - Credit Risk Fraud Cards Professional

74Posts 208,569Views 29Comments

Mobile number as citizen ID - Part II

04 December 2007  |  2227 views  |  0

Further to my jottings to on the subject of using mobile numbers as citizen IDs, I thought I would get more into details on the subject.

Mobile phones can be the tipping point of reaching out the 'next billion' unbanked mass. 

Prima facie, I am sure we all agree that riding on an existing infrastructure is much better alternative than trying to start from scratch. There is also the serendipity factor - many good things will happen as we go along!

Now on to the brasstacks of using a mobile number for ID purposes.

1) Governments in the countries need to pass a central regulation or law that lays down the mobile number logic and the fact of its being unique to an individual. This way, mobile numbers will not be resuable and MSPs will be required to maintain a method in their number allocation. A comprehensive regulation will need to be passed that covers the entire gamut of credit lending and mobile phone maintainence. This would not only set a railroad but also lend solid credibility.The laws should cover prepaid and postpaid connections - what matters is the number to be attached uniquely to an individual.

2), MSPs will need a 'carrot and stick' approach to get down to issuing mobile phones across the countryside. Ideally, State and Federal governments should subsidize the cost of the mobile instrument and the line costs. I can imagine the MSPs salivating at the prospect of issuing a few hundred million more connections!

3) MSPs will deploy armies of sales persons to reach out to the masses.
Where there is an opportunity, the MSPs will lose no time in deploying their resources! The Sales force can also take digital photos of the individuals and even look a simple fingerprint storage technology. In fact, the first line of credit given out can be the phone instrument!

4) Mobile phone owners will happily go for the phone connections when they realize the benefits it offers - credit, identity and most importantly -obviating any middle men (e.g. bureacrats) and any chances of corrupt practices. Credit coming directly onto your phone in the form of electronic money provides no chance for any leakage or skimming. Any subsidies or state benefits should be paid directly to the mobile number; no question of any hanky panky.

5) MSPs will have the flexibility to price their services according to the volumes and area of operation. Since countries like India, China, Russia started off on a GMS platform, the more volumes coming in - the better the revenue / price equation.

6) How do the debtors get cash out of their 'mobile credit'? The answer lies in reaching out to the entity that is closest to the debtor. For example, in India, Post offices exist in almost every district and town - a historical legacy of the British Rule. Electronic cash dispensers (EPOS) with chip readers that can read the chip on the mobile phone will provide the solution. Fingerprint identification should easily enable operation. A live example of mobile phones as a payment option can be seen from South Korea where 'dongles' enable cardholders to use their mobile phones as credit cards. Even for repayment of instalments on the loan, these can act as payment points.

7) Credit grantors will have reference points of : designated mobile number, location, physical verification by the MSP, readily available contact and GSM tracking!

8) From an environmental point of view as well; this presents opportunities. In emerging markets, there are more used mobile phone instruments sold than new ones. As the mobile phones assume stature, there will be more effective use of instruments by pushing it down the food chain. Opportunties for solar cell powered mobile phones will automatically become a necessity.

9) Citizens will also use their mobile phones to send funds to each other - the great P2P opportunity that is yet to see the light of day may become a reality. This is already in vogue in Phillipines where citizens can send money to/from any mobile number in the country.

I am sure MSPs and credit grantors can think of many more opportunities and benefits.

So, I will now wind up my act and hope this subject gets the attention of the right people who matter!  The mobiSomething creative has to be implemented; or else for the huge mass of underbanked and underserved opportunity, 'the road to prosperity may remain under construction'.

TagsPaymentsRisk & regulation

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job title Risk Dog
location Gurgaon
member since 2007
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A consumer credit/risk and payment cards professional with interest in next generation technologies and growth strategies.

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