“Hang around a telecoms industry conference long enough and you start to get big-number fatigue – as one stack of seemingly impressive statistic blurs into the next. The numbers that have stuck with me over the years came from our research into the lives of the working illiterate: people who have jobs and want to keep them – spending time with people who work 16 hours days, 7 days a week with just a few days off per year is not uncommon. Who benefits more from the introduction of mobile money management services – a white-collar worker in New York City or a migrant manual labourer living out of a dormitory in Xi’an? For many access to mobile money services is a game-changer.
For practitioners working in this space (hei) the most useful section is likely to be on mobile phone practices and behaviours: covering mediated use from the perspective of customers; agents and the service providers themselves; charging; and multiple-SIM card practices.”
Posts in category 'Financial'
The December edition will focus on Mobile Money and Payment technologies for Africa.
Download magazine (November 2009)
It acts as an ‘emotion mirror’ in which the intensity of the user’s feelings is reflected.
Research shows that home investors do not act purely rationally: their behavior is influenced by emotions, most notably fear and greed, which can compromise their ability to take an objective, factual stance.
This insight led to the Rationalizer concept in which online traders are alerted when it may be wise to take a time-out, wind down and re-consider their actions.
Mobile tech as a tool for social development is making the front pages in 2009. They are hyped as panathea for global issues such as rural health in developing countries, poverty alleviation, making rural markets more efficient, and activism.
We have been working in this field since 2005 and have been leading industry analysist, with direct work in a number of areas such as elections and democratic participation. While we agree that mobile phones are revolutionizing the developing world, we think it is time to take a very honest and realistic look at the promises of mobile tech for development and social change, and where these promises are falling short — and of, course, why, and what to do about that.
We are starting the series off in our first part with a post by Ethan Zuckerman, a close friend and collaborator of MobileActive.org. He gives a thoughtful overview of some of the key issues that we will be dissecting throughout the month of October.
His reflections on the subject are based on a recent IDRC-sponsored day of conversations art Harvard’s Berkman Center, and why Rip van Winkle might be surprised, and possibly dismayed if he were to wake up now. They were first published on Publius.cc and are a response to A Dialogue on ICTs, Human Development, Growth, and Poverty Reduction, also published on the same site
Here is what you will hear more about in the coming weeks:
- A Penny for your SMS: The Cost of Mobile telephony in many developing countries: why it’s so high, what that does for social development projects, and why it does not have to be that way.
- The Perpetual Pilot Syndrome – and the issue of scale: Much has been said about the many mobile pilot projects that never go anywhere but end when the funding runs dry. We will critically examine the numbers, what it takes to scale, whether it’s desirable, and take a close look at the most recent hype of ‘horizontal scale’ ion mobiles in development.
- Mobiles for Open Societies? Much has been said and written about the power of mobiles in opening societies, enabling political participation, and engagement. We are taking this notion apart with a deeper exploration of key issues, going beyond the hype.
- Are Development Organizations Missing the Mobile Wagon (or just failing to ride it?) A critical discussion of the role development organizations have been playing in using mobile tech to advance their goals – and whhat is working, and what is not.
- What is the Role of Donors in M4D (if any)? After dissecting whether development orgs are helping or hindering the deployment of mobiles in the social sector, we turn to donors who have discovered mobile tech as their new fad, though are mostly pondering right now how to effectively fund mobiles in development.
- Mobile (In)Security will delve into how networks operate, who knows what about mobile communications, and what that means for activism, advocacy, and social development.
- Mobiles as a Male Enhancement Tool? A close look at the issues of mobile phones and women’s empowerment, both politically and economically.
- Do you have to read to use a mobile? As much as 20% of the global adult population is illiterate. Given the ubiquity of SMS services, as well as text-heavy interfaces, what does that mean for reaching the next billion uses (and serving those that already have a mobile but can not read) effectively?
- Mobile Payments for the Middle Class? We will, of course, take apart the most recent hype about mobile payments and who is benefitting most – as well as who is left behind, promotions in mainstream media notwithstanding.
- So, Realists, What’s Next? No series would be complete with the obligatory look into the future. We summarize key issues, and make some concrete recommendations on how to realistically and effectively think about, and do work, with mobile tech in social and human development and change.
“The weak dollar. A Federal Reserve constantly being second-guessed. It’s times like these when talk inevitably turns to alternative or complementary currencies. While local currencies have come and gone, many involved in social networks are hoping peer-to-peer (or P2P) virtual currencies will, given the momentum to retool the financial system, have more staying power.”
The article features Hub Culture, a social network of globetrotting adventure-travellers, and its digital currency Ven, which is pegged to the dollar, and allows members of the social network to trade goods and services as well as knowledge; as well as the Attent application by Seriosity, which uses a digital currency called “Serios”.
Also look at an earlier Experientia project, called KashKlash.
CGAP, the independent policy and research center dedicated to advancing financial access for the world’s poor, looked at M-PESA merchants in Kenya for clues about the profit drivers for agents .
“We studied 20 agents with 125 locations. We focused on small stores of the kind found in urban slums and rural areas, which make up the vast bulk of M-PESA agents. We spent 3 weeks in the field. What did we find?”
“While producing information costs money, information as such doesn’t necessarily carry monetary value; it mostly carries intellectual, social, artistic, practical value. And that’s why, historically, news has been commercially, publicly, politically and privately subsidized.
That information is not necessarily connected to a physical good (paper) or a concrete service (the delivery), or a limited quantity anymore, making it difficult to measure its price. We have difficulties spending money for digital information because at the end of the transaction we neither save time nor do we hold anything concrete or limited in our hands.”
From the Nokia press release:
“Nokia Money has been designed to be as simple and convenient as making a voice call or sending an SMS. It will enable consumers to send money to another person just by using the person’s mobile phone number, as well as to pay merchants for goods and services, pay their utility bills, or recharge their prepaid SIM cards (SIM top-up). The services can be accessed 24 hours a day from anywhere, meaning savings in travel costs and time. Nokia is building a wide network of Nokia Money agents, where consumers can deposit money in or withdraw cash from their accounts.” [...]
“Mobile payments will be the next step for delivering financial services to hundreds of millions of people, both urban and rural, who are underserved by existing payment means, especially in emerging economies.” [...]
“The Nokia Money service will be operated in cooperation with Obopay, a leader in developing global mobile payment solutions, which Nokia invested in earlier this year. The service is based on Obopay’s mobile payment platform, with unique and newly developed mobile elements. Nokia intends the service to be open and interoperable with other payment services as well.”
The announcement received a huge amount of press and blog play – a round up:
CGAP: “This alone isn’t enough to crack open internet banking for the poor: PayPal may claim to be in 190 markets, but its not terribly easy to access the service in all of those places.”
CNET News: “The new service may find a special niche in the U.S., which has lagged behind countries such as Japan in the ability to pay for items on the fly through a cell phone. “Rural consumers will particularly benefit from money transfers and, for urban consumers used to online services, we are enabling services such as payment of utility bills, purchase of train and movie tickets, top-ups, all through their mobile phones,” said Teppo Paavola, Nokia VP and head of corporate business development.”
Deals & More: “It sounds like it won’t just be for the owners of Nokia phones, though, since the company says it will work on ‘virtually any mobile phone.’”
Fast Company: “Nokia has already said it plans to become the world’s largest entertainment network through its vast share of the mobile handset market. Now it looks like the Finnish mobile device maker aims to become the world’s largest mobile bank as well.”
Financial Times: “The developing world will likely be Nokia’s first target as it seeks to roll the programme out. [...] Nokia sees a market opportunity here, and said there are 4bn mobile phone users today, compared with 1.6bn bank accounts.”
Kiwanja/Ken Banks: “Details remain a little sketchy, but Nokia Money appears to be operator-independent, meaning mobile owners on any network can send or receive payments to anyone else on any other network. This would be a direct challenge to many existing models which require users to switch networks, or to be on the same network as the mobile service they’re looking to use. In addition, it looks like Nokia Money users can sign-up without needing to swap out their SIM cards, making up-take of the service considerably more efficient logistically. If this thing were to grow, it could grow fast.”
Register Hardware: “Unimaginatively called Nokia Money, the service will enable you to send money to someone else using their mobile number.”
Reuters: “Mobile money is one of the hottest topics in the wireless world, but so far take-up of services has been limited mostly to a few emerging markets, as in developed countries, the popularity of online banking has been a brake on mobile money.”
Techcrunch: “Nokia will hardly be the only player in these emerging markets — other competitors include mChek and Paymate.”
The Register: “Nokia isn’t the first company to look at payments via SMS – your correspondent managed to pay for a meal by text back in 2002, just – but with Nokia’s brand behind it, and a focus on economies where traditional banks are hard to come by, it could be the one that makes it.”
Wall Street Journal: “‘This is absolutely what Nokia should do,’ as there will be big demand for mobile financial services and because the company has so far struggled to offer attractive, easy-to-use applications that rival those provided by the iPhone’s App Store, said Evli Bank analyst Michael Andersson, who has has an accumulate rating on the share.”
“Hyper-localized currencies have been popping ever since the economy went sour–not surprising, since local currencies also gained popularity during the Great Depression. Five local Massachusetts banks have developed Berkshares–there are 185,000 paper notes are already in circulation–each of which is designed by a local artist. California’s Humboldt County has distributed $130,000 in currency since 2005, and Canada’s Toronto Dollar moved $90,000 worth of currency in the past year.”
But there is work to be done: according to technology research company Gartner, only 3 percent of people in North America are expected to conduct mobile payments in 2012.
“Despite growing agreement on the potential of technology to expand access to finance, or branchless banking, there is surprisingly little data publicly available about low-income users. This Brief draws on some of the first ethnographic research on M-PESA, one of the earliest success stories in mobile phone-based delivery of financial services. The research offers insights into how poor people use M-PESA, its impact on their lives, and some unexpected consequences.
This Brief presents 10 observations on how poor people use M-PESA and how it has impacted their lives.”
(See also this news story on The Guardian)
“However, the mobile phone revolution continues to leave large parts of the continent behind.
While countries like Kenya, South Africa and much of North Africa are approaching 100% mobile penetration, in Burundi, the Central African Republic, Eritrea, and Rwanda it is less than 30%.
Low incomes, illiteracy and large signal black spots are all obstacles to the sale and use of mobile phones. Taxes, which can be as high as 30% in countries like Tanzania and Uganda, are also a disincentive.
Telecoms experts say that many African markets remain too risky for mobile phone companies, which have targeted more stable and wealthy countries first. “
In which contexts do alternative uses, e.g. savings, become popular and why?
The final report will be presented during autumn 2009 and made available at the project blog. Meanwhile, they sent a dispatch to the CGAP blog:
“While M-PESA in Tanzania has had a hard time competing with its sibling in Kenya in user uptake, there is one way of sending money via the mobile phone that is very popular in the country. That is by using airtime top-up vouchers. The most common way to do this is to buy an airtime voucher, scratch it in order to get the code and then text the code in an SMS to the person you want to send money to. It is then up to the recipient to go out and sell the code to people who want to buy airtime, or resellers and shops that in turn will sell it to people wanting airtime.”
He asserts that “user-centric identity, “the ability of individuals to carry their information from one site to another in a “cloud” of their own making, will become increasingly important.
Article on Future Banking in which John Clippinger describes some of the ways in which traditional information asymmetries between enterprises and their customers are being redressed to allow individuals more control over their personal information.
“There was also a smaller player that had a vitally important role in the conceptualization and development of the application. That is, Sagentia, a technology consultancy firm based out of Cambridge. The firm not only wrote the software for M-PESA, they also designed the business processes, and provided operational and technical support during the pilot and after launch.” [...]
“They assured me that M-PESA was just the beginning. Using the mobile as a platform, they plan to create developmental services that penetrate other spheres —m-health, agribusiness. They further predicted that the mobile will soon begin to revolutionize these other spaces as well.”
See also these earlier CGAP posts about her work (oldest posts listed first):
- Why has M-PESA become so popular in Kenya?
- The diary of an M-PESA user: the case of the shoemaker in Kibera
- Findings from the field: An observation on M-PESA usage during the post-election violence
- Findings from the field: An observation on M-PESA impact
Morawczynski is the author of a forthcoming CGAP brief on M-PESA and recently co-authored Designing Mobile Money Services: Lessons from M-PESA with Ignacio Mas.
A selection of articles relevant to the topics of this blog:
Vikram Akula: mobile banking could be the future of microfinance
In an interview with India Knowledge@Wharton, Vikram Akula, founder and CEO of SKS Microfinance, spoke about emerging trends in microfinance.
India’s rural poor: why housing isn’t enough to create sustainable communities
The real story of rural India must be told with more than five hundred million characters who live on less than a dollar a day, most of them in terrible living conditions.
The poor deserve world-class products and services
C.K. Prahalad has long championed the notion that business — rather than government handouts — represents the most effective solution to poverty.
Rural India Snaps Up Mobile Phones
India’s cellphone industry continues its steady growth, led by demand from rural consumers, and is showing no signs of slowing down.
Doing well by doing good?
The mobile phone is now one of the hottest development tools world-wide, with corporations eyeing untapped rural markets in the hope that new mobile-phone services can boost rural incomes and corporate revenue at the same time.
The series is sponsored in part by Neo.org, a non-profit he is working with. Because of Neo’s efforts toward defining and implementing a new digital currency, Boyd hopes that a series on the future of money might line up well, and draw some attention to Neo’s efforts.
Each interview comes with a video and a bulleted set of highlights.
Christian Nold and The Bijlmer Euro
In this interview Christian Nold, an artist, designer and educator working to develop new participatory models for communal representation, discusses his project in the Bijlmer area in South East Amsterdam, where he aimed to develop a prototype system for an alternative local currency that could support local development and work in conjunction with the Euro.
“When you are interested in magic, you might want to talk to a witch doctor, so when I started to think about the future of money, I thought I should talk to a science fiction author. Who better? As it so happens, I know one,” writes Boyd.
Bruce was kind enough to mention me [i.e. Mark Vanderbeeken], our company and the recent KashKlash project we did with Heather Moore and the Vodafone UE Group.
Alternative currencies: Is small the new big?
This third piece reflects on the value of alternative currencies, starting with the following two questions:
1. Does an alternative currency have to be in large scale use? Is it possible for it to be a ‘success’ at small scale?
2. Do alternative currencies have to stand for something? Do they have to represent a strong position on some issue or social cause?
Intangible Money + Cell Network Banks = Secure Money
Olga Morawczynski is a doctoral candidate at the University of Edinburgh, posting some of her work on mobile banking in Africa at the CGAP (Consultive Group to Assist the Poor) website. She noted that the normal flow of fund transfers in Kenya — from the cities to rural relatives — reversed during recent violence there.
Richard Smith and the Dollar ReDe$ign Project
Richard’s deep motivation was to help restart the economy, and the means? Redesigning our money, and rebranding it, to shift our thinking and to help the little bits of paper in our pockets act as a sort of social catalyst for change. He set up the project in the form of a contest, and received dozens of truly wonderful designs.
And there is more to come still…
Here are the feature articles (of which the last one, which is excellently written and directly dealing with the current state of user experience, is my top recommendation):
Education: Business is increasingly plugging the skills gaps of the world’s workforce
by Sarah Richardson and Paul Tyrrell
With skills shortages affecting both developed and developing countries, business is increasingly stepping in to help educate the workers of tomorrow – feature includes examples from the Fashion Retail Academy (UK), BP Angola, Intel Corporation. and more.
Small sums, big benefits: microfinance brings banking to untapped markets
by Sarah Murray
Across Africa, Barclays is giving fledgling entrepreneurs access to modern financial services for the first time.
Simplicity: new designs focus on making complex products easy to use
by Rob Tannen
Leading companies are realising that they need to refocus on what consumers actually want and need, rather than stuffing more into products and services than their rivals.
“A conversation turns to currency when people discover something meaningful in a “conversational” experience, they are prepared to spread the conversation as if it were their own. [...] Conversational currency is created by the propagation of a conversation by others that incorporate your conversation into their own narratives. The more valuable your conversation is the more likely they are to be propagated by others.”