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Mobile Money Transfer, An African Miracle

So powerful a tool it is that the UN Economic Commission of Africa elects mobile money transfer service as a means to tackle the endemic and to some proportions, pandemic plague of the 21st century: World poverty.

a man is served by a vendor of a mobile money transfer service

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The global group points out that technology, more precisely information technology and mobile commerce to be exact, enable SMEs not only have better market access but also serve their customers better.

By facilitating the business of SMEs, information technology vouches for itself as Small & Medium Enterprises are seen as the vehicle that will lift the world’s poor from the suffocating shackles of poverty.

Moreover, centers agitating for human rights acknowledge that technological advances like the Internet have bolstered the human rights crusade by facilitating activities like the monitoring of incidents of human rights violations, advocacy issues and dissemination of justice.

Such noble efforts aimed at protecting human dignity have blossomed in the global information village.

What’s more? Inter-governmental discussions aimed at resuscitating the Sustainable Development Goals crusade are narrowing down on information technology as an enabler. Industry regulator, GSMA bets on the mobile phone revolution, to liberate the world by injecting some life into such global efforts.

This is because reducing world poverty levels inexplicably calls for improvement of livelihoods in Africa; a continent where a majority of the failings of the 21st century are incubating and hatching in oceanic proportions and at mach speeds.

Information Technology laying down the Pipes for Mobile Money Transfer Services

So what exactly is Information Technology? IT is the industry of computing, microelectronics, broadcasting and telecommunications.  Naturally so, it therefore occupies itself in three key areas:

  • Content: Includes works of fiction to company information availed either in the form of the ‘written word’ or as audiovisual media.
  • Networks: Epitomized by the increasing penetration and subsequent use of the Internet world wide. This is  evident in the unprecedented growth of telecoms in emerging economies. Moreover,huge untapped potential in developing and under developed regions holds even bigger promise. This momentum in ’emerging economies’ gives a boost to the steady growth already being experienced in the more mature communication industries of the developed world.
  • Devices: In the 21st Century, technological advancement is all about the merging of technologies. Take for instance the observation that telecommunication networks have recently acquired additional use as conveyors of audiovisual material like videos. They also increasingly finding use as platforms for mobile money transfer.

It is this foray into commerce by technology that is generating so much excitement. With IT providing the backbone infrastructure, money, thanks to the emergence of mobile money transfer services has evolved once again.

In the 13th century, cowrie shells spread out from China to the rest of the world. Emperor Constantine gave us the  ‘solidius’- a 4.5 gram coin made of pure gold. The  21st century it seems,  is all about e- commerce and its ‘spin off’ m-commerce.

E- Commerce v M-Commerce

Whereas e-commerce entails the electronic handling of the entire business transaction process; from marketing to procurement, selling, buying and supply chain management. E-commerce involves such  activities like e-booking, e-ticketing , e-shopping and online banking.

M-commerce on the other hand, differs in the respect that M-commerce relies on wireless networks, specially designed operating systems and increasingly multi-functional mobile devices to carry out financial transactions. M- commerce is therefore explained by some scholars to be the scion of the marriage of communication and commercial channels.

Through mobile phones, millions of people across parts of Asia and Africa are doing more than just chatting and texting. They are accessing the Internet, downloading music, doing their banking and conducting money transfer. All this are the ingredients of mobile commerce.

Retail Banking Paving Way For Agency Banking?

Agency banking is effected via a network of mobile phone service providers affiliated kiosks ran by mobile money transfer entrepreneurs in Asian economic powerhouses like India . More recently this has taken root in East Africa’s largest economy: Kenya where the kiosk is replacing the banking hall.

Convenience, ubiquity, personalization and localization are the key value prepositions for the consumer. Gone is the hustle of queuing in banking halls. Away with the inconvenience of strict banking hours. No more swollen feet courtesy of doing the mill window shopping for that bargain in banking services. In with on-the-go sms alerts on the progress of a bank transaction. As well as other useful information like traffic updates and news alerts .

For a few cents, you can even personalize your call waiting tone replacing the traditional ring din with the latest hits of Kenyan music from your favorite artist. All this from a hand held device,  the mobile phone.

The range of value offering from m-commerce has thrust a tantalizing prospect into the world of traditional commerce. While the motivation for a majority of businesses that have adopted m-commerce platforms in dealing with their clients has been gaining and retaining market share, the origin of this spring of change is the market.

M-Pesa & M- Kesho

In the backdrop of what is being billed as the worst global economic meltdown since the great depression, focus is somewhat shifting to newer markets such as Africa. Additional statistics that show that a majority of Africa still remains un-banked serve as seed for this latest IT revolution. Take for instance the story of M-Kesho, a mobile banking product introduced by the market leader in mobile telephony in Kenya- Safaricom and Kenya’s largest bank by customer numbers Equity Bank.

A product aimed at allowing saving in small increments , it roped in 700,000 accounts in weeks of operation. A figure way above the total number of bank accounts in Kenya’s GDP(PPP) 62.56 billion economy. Some recent estimates point out that M-Pesa, the mobile money transfer service run by the same company, will move an equivalent of 20% of Kenya’s GDP in 2010! Talking of a revolution.

Safaricom Launches M-shwari

In collaboration with CBA ( Commercial Bank of Africa) Safaricom now runs a mobile loan facility which allows subscribers to save as little as 1 Kenyan shilling through the M-Pesa platform. Through the savings, the subscriber can access short term loans.

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