To 28-year-old Kenyan Mary Wanjiku, her cellphone is not just a cellphone. It is also a cheap, safe and easy way of sending her mother US$40.
By using it to ping cash to friends and family, she and millions of Africans are joining Japan in breaking a technology barrier that remains in Europe and the US and paving the way to what could be the cash of the future.
“Before, I would be forced to make the journey home to deliver the money,” Wanjiku said outside a Nairobi shop that doubles as an agent for M-PESA, the virtual cash network that means “mobile money” in Swahili, Kenya’s lingua franca.
PHOTO: REUTERS
“M-PESA has revolutionized my life,” she said.
The network, owned by Kenya’s biggest mobile phone firm, Safaricom, has its roots in Africa’s lack of infrastructure — particularly bank branches — and the enthusiasm with which people have taken to mobile phones.
Only one in five people have bank accounts, mainly because of the prohibitive cost to the banks of operating branches in far-flung parts of a continent where many of the population of 1 billion live on a few dollars a day or less.
But mobile phones are spreading extremely fast: to 270 million in 2007 from just 50 million in 2003, industry association GSMA said.
Teaming up with Kenya Commercial Bank to let phone users who do not have bank accounts send each other money, M-PESA hit on a formula that has attracted 6.5 million customers, or one in six Kenyans, in just over two years.
In Japan, which has pioneered the technology and business models toward wallet phones, about 55 million mobile phones have an e-money function, so about half of Japanese users carry them.
The global market for mobile money is growing at 70 percent a year and should attain “mainstream” status by 2012 with more than 190 million customers, or more than three percent of mobile users, IT consultancy Gartner said in a report last month.
Other phone companies such as South Africa’s MTN — the continent’s biggest operator — and Kuwait’s Zain are piling in with similar services in a slew of countries including South Africa and Nigeria and have pilot schemes stretching from the Middle East to Afghanistan.
“Mobile handsets are in an excellent position to become the primary digital channel for providers of banking and related financial services in emerging markets,” Berg Insight analyst Marcus Persson said.
In much of Europe and the US access to fast Internet connections — enabling online banking — has been a brake on mobile money, but Berg Insight expects it to catch on as wireless technologies such as Bluetooth spread.
The scope of the African systems has grown quickly from simple cash transfers by text message to payments for everything from a taxi ride to a utility bill, and it is possible to spend a day in Nairobi without carrying any cash.
“This is just the beginning,” Safaricom chief executive Michael Joseph said. “What you are moving towards is a person going out without cash in his pocket.”
The cost of building and administering a network of 9,000 trustworthy agents to carry the cash that must be paid at the end of the chain means it has yet to make a profit, Joseph said.
But beyond simple profit, Zain Africa chief executive Chris Gabriel said that the real value of mobile cash to phone firms lies in securing a long-term connection with customers as cut-throat competition in the mobile market eats into revenues.
“We see it as a tool to create stickiness,” Gabriel said. “Yes, it’s a revenue service but at the cost of an SMS, you’re not going to get rich quickly.”
Cellphone cash has already gone deep into Kenya.
Companies such as tea plantation owners are finding they can pay staff via cellphone and charities can receive and distribute aid.
Although the phenomenon is young, the World Bank in Africa has labeled it a “cornerstone for development” for its potential to mobilize remote rural economies.
University of Edinburgh researcher Olga Morawczynski said villages were getting up to 30 percent more in remittances because of M-PESA, allowing farmers to diversify out of subsistence agriculture into small businesses such as furniture making.
“It’s allowed money to penetrate more easily into rural areas where it’s really needed,” Morawczynski said.
Authorities have detained three former Taiwan Semiconductor Manufacturing Co (TMSC, 台積電) employees on suspicion of compromising classified technology used in making 2-nanometer chips, the Taiwan High Prosecutors’ Office said yesterday. Prosecutors are holding a former TSMC engineer surnamed Chen (陳) and two recently sacked TSMC engineers, including one person surnamed Wu (吳) in detention with restricted communication, following an investigation launched on July 25, a statement said. The announcement came a day after Nikkei Asia reported on the technology theft in an exclusive story, saying TSMC had fired two workers for contravening data rules on advanced chipmaking technology. Two-nanometer wafers are the most
Tsunami waves were possible in three areas of Kamchatka in Russia’s Far East, the Russian Ministry for Emergency Services said yesterday after a magnitude 7.0 earthquake hit the nearby Kuril Islands. “The expected wave heights are low, but you must still move away from the shore,” the ministry said on the Telegram messaging app, after the latest seismic activity in the area. However, the Pacific Tsunami Warning System in Hawaii said there was no tsunami warning after the quake. The Russian tsunami alert was later canceled. Overnight, the Krasheninnikov volcano in Kamchatka erupted for the first time in 600 years, Russia’s RIA
South Korea yesterday said that it was removing loudspeakers used to blare K-pop and news reports to North Korea, as the new administration in Seoul tries to ease tensions with its bellicose neighbor. The nations, still technically at war, had already halted propaganda broadcasts along the demilitarized zone, Seoul’s military said in June after the election of South Korean President Lee Jae-myung. It said in June that Pyongyang stopped transmitting bizarre, unsettling noises along the border that had become a major nuisance for South Korean residents, a day after South Korea’s loudspeakers fell silent. “Starting today, the military has begun removing the loudspeakers,”
CHINA’s BULLYING: The former British prime minister said that he believes ‘Taiwan can and will’ protect its freedom and democracy, as its people are lovers of liberty Former British prime minister Boris Johnson yesterday said Western nations should have the courage to stand with and deepen their economic partnerships with Taiwan in the face of China’s intensified pressure. He made the remarks at the ninth Ketagalan Forum: 2025 Indo-Pacific Security Dialogue hosted by the Ministry of Foreign Affairs and the Prospect Foundation in Taipei. Johnson, who is visiting Taiwan for the first time, said he had seen Taiwan’s coastline on a screen on his indoor bicycle, but wanted to learn more about the nation, including its artificial intelligence (AI) development, the key technology of the 21st century. Calling himself an
RSS