In this article, we dive into the second step of a mobile money integration: organize how we will be notified of customer payments. This step often overlaps with the contract negotiation with the mobile money operators, because we usually want the notification process to be included in our contract with them. Here, we will review the different integration options, the costs, as well as the timelines involved.
We will cover the following topics:
- What getting “notified of customer payments” means
- The options for the integration, from SMS to API
- The speeds of notifications
- How much it costs, and how long it takes to integrate
What do you mean by getting “notified of customer payments”?
You’re right, first things first. So, we are talking about dematerialized payments here. Basically, somebody sends you money, and, at some point, you want to know (1) that you did received money and (2) what the payment details are. Those payment details could include for instance who sent the payment, the amount, and a reference.
We can easily make a parallel with bank transfers here. Let’s suppose a customer is transferring you money to pay for a product he wants to purchase from you. For instance, on Monday 01/02/2017, John, your customer, transfers USD 50 to your bank account in order to pay for a brand new clean cookstove. Wonderful.
But, how do you actually know that money has been received in your bank account?
Different options could be used:
- Do you wait to receive your monthly bank statement from the bank, and only then process the order?
- Does the bank automatically send you a notification by email or SMS to let you know that a transaction has been credited to your account?
- Do your accountant checks every day for all new transactions that might have arrived on your bank accounts?
- Is your bank account integrated with your accounting software, and the new payment appears there in real time?
Of course, all those options allow for different time of reaction. They will have an impact on your business model, on the efficiency and automation of your processes, and on how you will be able to deliver your service. For mobile money, things are similar.
There are several options to get notified of mobile money payments that are received on your mobile money account. Those options will differ on the following dimensions:
- How quickly you are notified (real-time or not).
- To what extent the notification can automatically be integrated in your system.
- And how much it costs to get notified using this option, both in term of time invested in the integration, direct monetary investment, and ongoing costs.
The mobile money operators often have several options available, and the following ones are some of the most typical, that I met on several projects:
- Excel reports sent by email, with a list of payments received over a certain period of time, usually every week or every month.
- SMS notification sent to a number of your choice for each customer payment.
- A web portal, where you can login to check your customer payments.
- Automated transaction notifications with flat files (.csv) sent to your FTP server by the mobile money supplier, typically every 5 to 30 minutes.
- An Application Programming Interface (API), that could be an Instant Payment Notification (IPN) or a more complex integration with your system (2-way API), to directly link your IT backend to the one of the mobile money supplier.
There might be other options, but those are the most common.
How quickly do you get notified?
In terms of how quickly you are notified, those options lead to the following notification frequencies:
- Monthly or weekly: excel transaction reports sent by email.
- “Not so” real time (delay of 5 to 30 minutes) to “near” real time (delay of less than 5 minutes): transaction notifications being sent automatically by FTP.
- “Almost” real-time (less than 1 minute): the web portal being checked manually or automatically, SMS notifications, API integration.
How much does it cost, and how long does it take?
Before deciding which option to choose, we also need to consider the costs to implement them, as well as the associated timelines.
Excel transaction reports are typically part of the standard offer and come for free. SMS notifications are also usually standard. The notifications might be free, or we might have to cover the cost of the SMSs.
For the FTP notifications, it depends whether it is easy for the mobile money operator to set it up. If this option is already available in their own software, this is something they can easily offer. In terms of costs, I have not yet seen projects where we were ask to pay a fee to get a FTP integration. The implementation time will typically range from a few weeks to a few months.
For the API integration, in some countries, the operators start to have standardized Instant Payment Notification platforms. This is the case of M-Pesa in Kenya, for instance, and GSMA has launched a standardized set of APIs to help this process. However, in most cases, getting IPN or API integration requires specific developments from the mobile money operator. Depending on the volume of business, the market dynamics and the geography, the mobile money supplier might offer to do it for free, or ask USD 10k to USD 30k for the integration. In all cases, those integration projects will take between a few months and a year, depending on the operator and country. The quickest I have seen is 3 months. For the longest, the jury is still out: one of the integration I am working on started 13 months ago, and is not yet up and running.
Overall, the cost and method available depends a lot of what is already “on the shelf” from the mobile money supplier, and from the perceived volume that the mobile money operator think he is going to get from you. In the next article, we are going to review the criteria to choose which integration to use, as well as some examples that could help you to get started.