In all parts of the world, the challenge is to provide financial services that are affordable, accessible, and empowering for customers. Innovative alternative financial products, such as prepaid debit card programs, have already proven themselves in the United States and Europe as an easy, low-cost mechanism for individuals to enter the mainstream financial system. This model has yet to spread pervasively throughout the rest of the world. However, through investments in three portfolio companies, MPOWER Ventures & MPOWER Labs seek to expand prepaid debit and mobile payment services worldwide.
MPOWER Ventures is a double-bottom-line venture capital fund that invests in companies whose products and services empower the underserved. Launched with an initial fund commitment of million and a focus on financial services, MPOWER Ventures has made six investments to-date. All companies receiving investment from MPOWER Ventures must excel at a double-bottom-line, demonstrating both high return on investment and substantial social impact. Unlike traditional venture capital funds, MPOWER Ventures has a minimum 15-year maturation of its investment, thereby promoting long-term strategy and the development of programs with maximum impact. To support the portfolio companies, the founders of MPOWER Ventures created MPOWER Labs, a global technology incubator and business accelerator providing technical services and infrastructure to the portfolio companies.
Reaching the most isolated markets requires technological innovations that go beyond traditional prepaid debit. The most promising opportunity to expand financial services to the underserved is the unprecedented penetration of mobile telephony around the globe. Worldwide, there are now nearly 3 billion mobile phone subscribers, and developing countries account for more than 70 percent of mobile phone subscribers worldwide. As a result, the expansion of financial services markets to the underserved will come through the combination of prepaid payment cards and mobile payment technology. To accelerate this expansion, MPOWER Ventures & MPOWER Labs will make investments to create a fully-integrated, global prepaid/mobile payment network. Through an investment of million over five years, MPOWER Ventures will fund the launch of four key portfolio companies: R?v Latin America, R?v Europe, R?v Asia-Pacific, and MPOWER Mobile. MPOWER Labs, in turn, will provide consulting and infrastructure to support the growth and scale of these companies.
The R?v companies are responsible for the creation of prepaid debit programs in each region of the world. To this end, they establish partnerships with local banks and build nationwide networks of retailers where unbanked customers are able to open and reload their accounts. All R?v prepaid cards are enabled with MPOWER Mobile's proprietary mobile payments platform - YAP -- which includes three revolutionary programs: YAP Send, YAP Accept, and YAP Buy.
Through YAP Send, users are able to send money to any other mobile phone user instantaneously using a simple, SMS-based interface. This program can be used for inter- or intra- country remittances, to exchange money for a purchase, or to send money to friends and family.
YAP Accept is a program that enables mobile phone subscribers to accept credit and debit cards using their mobile phone. This program is designed specifically for micro-entrepreneurs who until now have been working exclusively in a cash economy. By being able to accept credit and debit card payments with a cell phone, they are able to: expand their customer base; develop a logged cash flow that can be used to document credit-worthiness; and increase the security of their financial transactions. This program is being launched in partnership with Comex, one of the largest chains of paint supply stores in North America. With YAP Accept, Comex painters will be able to accept credit and debit card payments through their mobile phone, thereby enhancing the ease and security of conducting large transactions, like painting a house.
Finally, YAP Buy is a program that enables mobile phone subscribers to make purchases instantaneously using a 'short code' on their mobile phone. For example, in companies where customers regularly re-order products, customers simply text message the product number and the price is automatically deducted from their prepaid account and the product is able to be shipped or picked up immediately. This program is being launched with Grupo OmniLife, an international nutritional supplements company, whose 2.5 million distributors regularly order and re-order products for local sale. YAP Buy enables companies (and customers) to save millions of dollars in transaction fees resulting from payments made by check or cash.
The combination of the YAP mobile payment programs with the R?v international prepaid payment network is revolutionary in its ability to deliver affordable access to financial services to millions of individuals around the world who until now have been excluded. Not only will these individuals have the opportunity to better safeguard their money, but by having a logged transaction account, they will also be able to better manage their cash flow and leverage that transaction information for opportunities for future credit. In addition, once individuals are enrolled in a prepaid account, it is much easier to offer long-term asset-building solutions, like savings, insurance, credit, and investment vehicles, as well as financial education programs. The combination of prepaid and mobile payments is an accessible gateway to integrated financial services that can empower customers with the ability to develop long-term financial stability in their lives.
R?v Asia-Pacific has existing card programs in Australia and has already become the leading prepaid provider in that market. R?v Asia-Pacific will expand operations in 2009 to include another three major Asian markets and by 2011 will operate card programs in at least six countries in the Asia-Pacific region. R?v Europe will launch its first program in Romania in 2008, expanding to at least five other Eastern European countries in 2009. R?v Latin America will launch its first programs in Mexico with follow-up rollouts throughout South America and the Caribbean. In all regions, R?v card programs will be bundled with MPOWER Mobile's YAP mobile payment applications.
Measures of Success:
December 31, 2009 - 200,000 accountholders
December 31, 2010 - 500,000 accountholders
December 31, 2011 - 1,000,000 accountholders
December 31, 2012 - 3,000,000 accountholders
December 31, 2013 - 5,000,000 accountholders
Anticipated Launch: September 30, 2008
SEEKING: MPOWER is looking for investors, distribution partners (retail businesses, government entities, non-profits, microlenders), financial partners (issuing banks), and mobile payments partners (telecoms, etc).
OFFERING: implementing partners, best practices information.