Definitions of the Branchless Banking Supply Chain

Branchless banking can be thought of as a “supply chain.” The core functions of a branchless banking implementation are typically divided into a chain of independent companies that each specialize in managing some combination of the core functions. It is useful to define all parties in the supply chain (not just agents and ANMs).

1. The account provider is the company that manages the customer accounts. In a bank-based implementation, each customer has an account in a financial institution. In a nonbank-based implementation, such as M-PESA in Kenya or G-Cash in the Philippines, customers have an account managed on a technology platform owned and operated by a non-bank company. Funds are typically held in a pooled account at one or more banks.

2. The transaction provider owns and operates the technology channel that customers use to make transactions. The company that manages the customer accounts is often the transaction provider as well, but not always. FINO in India is an example of a company that owns and operates the technology platform that enables customers to use their smart cards to access their accounts in the State Bank of India.

3. Most branchless banking systems make use of mobile communication technology in some way. The mobile network operator (MNO) is the company that owns and operates the mobile telephone system in which the transaction technology operates, or carries data from POS terminals to the transaction and/or account providers’ systems.

4. The implementation may also include any number of third-party operators that provide additional services to companies in the supply chain or to customers. For example, a mobile money operator like Safaricom’s M-PESA is required to deposit all of the account balances into a commercial bank, which provides a global account management service. M-PESA also contracts with Equity Bank and PesaPoint so that M-PESA customers can withdraw cash from these two networks of ATMs. And utility companies have contracted with M-PESA so that customers can pay bills from their accounts.

5. The agent network manager (ANM) is the company, or companies, that play a primary role in managing the retail agents. In this document, the term ANM encompasses both full-time ANMs who manage a small portion of an agent network as well as larger companies who the provider has hired to play a particular role across the entire network, such as training.

6. The agent is the entity that operates the cash service point where the customer does cash-in and cash-out transactions. The retail agent often registers new customers.

7. The customer is the end user of the service.