Mobile money: why isn't the M-Pesa effect hitting more countries?

 

Access to financial services via mobile phones has proven to be a huge boost to development. Why aren’t more countries following Kenya’s success? Join us on Thursday 23 April, 1-3pm BST to discuss. The Article below comes from The Guardian, and is by Anna Leach, April 16th 2015
(sponsored by Visa) Blog Ref http://www.p2pfoundation.net/Transfinancial_Economics
 

Mobile money could help migrant workers in India to transfer cash and to save. Photograph: Bloomberg/Getty Image

 

A factory worker in Mumbai is about to settle down to a snack of samosas and chai when he gets a call from his wife in Uttar Pradesh who complains she is out of cash. No problem he says, and hangs up to send a transfer via text message. This is the latest ad for M-Pesa mobile money in India - part of a strategic campaign to target migrant workers.

M-Pesa launched in India two years ago, but so far it hasn’t had the huge impact it made in Kenya. In September 2014 M-Pesa had 370,000 users in India, where Vodafone, who provide the service, has 173 million customers. This is despite the country having huge potential in this area, with high mobile penetration and millions lacking bank services.
Mobile money was so successful in Kenya because of a combination of government support and consumer demand, which was driven by the need for secure cash transactions during political instability, says research from the University of Manchester. World Bank economist Wolfgang Fengler adds that having a mobile operator (Safaricom) with more than 50% market share also helped.
As access to financial services is recognised as key for ending poverty, how can mobile money be be encouraged in more developing countries? Do governments need to do more to support it? What’s the best way to educate users about the value of the service? Join an expert panel on Thursday 23 April, 1-3pm BST to discuss.

The panel

Natalie Baatjies, senior director for financial inclusion in the central Europe, Middle East and Africa (CEMEA) region, Visa, Cape Town, South AfricaNatalie has held several senior roles at Visa across the mobile money value chain including: market development, strategy consulting and commercialisation.

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Stone Atwine, co-founder, Remit.Ug, Kampala, Uganda, @StoneAtwineStone is CEO of Redcore Interactive, a payments company that specialises in mobile financial services. Remit.Ug is its first platform, which helps facilitate international money transfers from cards and bitcoin to mobile money.
Rajiv Bhatia, head of m-commerce sales Europe, Middle East and Africa (EMEA), Ericsson M-Commerce, Dubai, UAE, @mobilerajiv
Rajiv is involved in supporting growth of mobile money, mobile banking and money-transfer solutions.
Nambuwani Wasike, research associate, Financial Sector Deepening (FSD) - Kenya, Nairobi, Kenya
Wasike is a research specialist focusing on digital finance.
Greg Reeve, chief operating officer, mobile financial services, Millicom, London, UK, @seat2d
Greg leads mobile financial services operations across eleven markets in Africa and Latin America.
Scarlett Fondeur Gil, economic affairs officer, division on technology and logistics, United Nations Conference on Trade and Development, Geneva, Switzerland @UNCTADScarlett helps produce the information economy report and develop information communication technology (ICT) statistics in developing countries.

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Alix Murphy, senior mobile analyst, WorldRemit, London, UK, @AlixinLondonBefore her current role, Alix worked as market intelligence manager for the GSMA, where she focused on mobile money.
Amitabh Saxena, managing director, Digital Disruptions, Washington, DC
Amitabh is the founder of Digital Disruptions, a mobile payments consulting firm, and previously headed mobile money for MasterCard in Latin America.
Mike McCaffrey, principal consultant - strategic operations for digital finance, The Helix Institute of Digital Finance, Nairobi, Kenya, @MobileMcCaffreyMike provides digital finance research, training and consulting services to banks and telecom companies.
Maria May, senior programme manager, Brac, Dhaka, Bangladesh, @MariaMayhem523Maria leads Brac’s social innovation lab and research and development for the microfinance programme.
The live chat is not video or audio-enabled but will take place in the comments section (below). Get in touch via globaldevpros@theguardian.com or@GuardianGDP on Twitter to recommend someone for our expert panel. Follow the discussion using the hashtag #globaldevlive.

Mobile Money in Haiti: A New Support for Disaster Relief and Development Programs

 

New mobile-based payment systems may offer a more affordable, and faster alternative to distributing cash to countries such as Haiti.

 

The following is an old article. It offers the possibility of navigating to a "large" extent corruption using electronic money via mobile phones

 

Blogger Ref http://www.p2pfoundation.net/Transfinancial_Economics

RS.   

By Matt Daggett | 2 | Mar. 9, 2011

Today, Haiti is still struggling to regain its footing more than a year after a disaster that literally shook the ground beneath it – with 250,000 people killed, 500,000 displaced, and a cost to the economy estimated between $7.2 billion and $13.2 billion (according to the Inter-American Development Bank). As if the initial effects weren’t bad enough, a series of additional challenges followed the earthquake: controversy about presidential candidates and alleged fraud in the election on November 28, the destruction wrought by Hurricane Tomas, an ongoing and deadly cholera epidemic, and riots brought on by growing resentment of international agencies and donors.
Though money has poured into Haiti for disbursement by aid organizations such as the American Red Cross, Mercy Corps, and World Vision, security concerns and scant use of traditional banks made distributing cash difficult and slow. In cash-for-work programs and other cash-based interventions, there are security concerns for both staff and beneficiaries. The threat of riots when payments are delayed is an ever-present concern for payers, while beneficiaries face the risk of being robbed on their return home. For those arriving home safely, saving can be a difficult proposition; Haitians’ immediate needs are so great and so many of them lack stable employment in competitive, productive markets.
In this context, I’m co-leading Dalberg’s research on the potential for new mobile-based payment systems that offer a safer, more affordable, and faster alternative to distributing cash in a country where 85% of households have access to a mobile phone (according to Voila, a mobile network operator) but only 10% of the population is served by the financial sector (in a study by USAID). This potential was the impetus for the Haiti Mobile Money Initiative (HMMI), a joint program of the Gates Foundation and the U.S. Agency for International Development (USAID) that is using a $10 million incentive fund to spur the growth of the mobile money industry. The program is managed by Haiti Integrated Finance for Value Chains and Enterprises (HIFIVE), an innovative division of USAID working to improve access to financial services.
After interviewing people from across the mobile money ecosystem in September and October 2010 in Port au Prince, and learning about the myriad challenges to launching mobile money, it was great to see two partnerships of mobile network operators and banks successfully launch mobile-phone-based virtual wallets and begin competing for shares of the HMMI fund by expanding their clientele. The award of the HMMI’s first cash prize – $2.5 million to Digicel and Scotiabank – marks a major milestone in the evolution of Haiti’s mobile money industry: the first partnership to reach 10,000 transactions spread across 100 mobile money agents.
With this milestone, mobile money is beginning to realize its potential for making cash-for-work and other aid programs faster and more cost- effective. Questions remain, however, as non-governmental organizations (NGOs) such as World Vision and Mercy Corps begin to rely on mobile money for their disbursements: What will be the overall costs and benefits? What obstacles will be encountered in implementation?
When my colleague Lorenzo Bernasconi and I interviewed leaders of these NGOs, many felt that mobile money held enormous promise for reducing registration times and costs for aid recipients, increasing the speed of cash disbursement, improving safety and privacy for clients, and increasing financial access for the majority of Haitians. Jean Capili, senior manager of innovation and partnering at World Vision, put it this way: “We are excited about the potential mobile banking has for participants in our cash for work program and for future programs that can utilize such mobile technology. It is an alternate mode of payment that is more secure and will reduce the existing number of days in which participants get paid, which in turn means they can purchase necessities for their children faster.” Indeed, World Vision estimated that the cash disbursement time-lag could be lowered by as much 50%, as illustrated below.

In mid-2011 and early 2012, we’ll carry out two additional rounds of research on the costs and benefits of mobile money for NGOs and government payers in Haiti – as well as the efficacy of the prize mechanism and the effects on Haitians’ lives. While our initial analysis delved into these NGOs expectations and plans, this subsequent analysis will begin to show how mobile-based payments work in practice. We will seek to answer questions like:

• What time and cost savings have NGO‘s realized in Haiti using mobile payment solutions?
• What were the required investments to introduce mobile money platforms?
• What are some of the key risks and challenges in using mobile platforms?
• When is distribution through a mobile banking platform more cost effective than cash?
• What has the reaction been among beneficiaries?

I am particularly excited about this research because the potential impact for programs in access to finance, agriculture, and health is so significant. These solutions, if effective, could increase delivery times, reduce corruption, improve tracking, and reduce costs for the full range of NGO programs working with cash payments. Around the world, examples already include the use of mobile-based payment solutions for cash-for-work programs, conditional cash transfers, loan repayments, and voucher programs for agricultural inputs and health care. Where mobile money platforms already exist, as in Kenya, new aid programs can build on the existing infrastructure.
In the coming months, I will be continuing this research in Haiti and working with funders and nonprofits to apply these lessons to their own portfolios of programs. Check back here for an update on our research later in the year. In the meantime, the Gates Foundation and USAID will continue to award prizes as Haiti’s mobile money industry grows.

Matt Daggett is an associate partner, director of Dalberg’s Washington, D.C. office, and co-leader of Dalberg’s mobile/ICT group. In addition to leading Dalberg’s research on the Haiti Mobile Money Initiative, one of Matt’s recent engagements involved determining cost and revenue drivers for a mobile money business in West Africa with more than 1.5 million base-of-the-pyramid customers. He also led analysis of the landscape of international remittances flowing through branchless banking platforms, helped advise a leading African bank on rolling out its branchless banking platform, and is now developing several mHealth and mAgriculture initiatives.