Archive for: Mobile Phones

Emergency aid used to be a short-term fix to a grim situation: handouts of food and other needed goods to alleviate the suffering of some of the world’s poorest beset by famine, drought or flood. Now, aid agencies increasingly deliver cash in continual social protection payments which help the poor build safety nets and avoid crises. And a few pioneering thinkers in the aid industry realize that cash + technology can also = infrastructure for financial services. Donors and governments can not only get social payments to the right people, but improve access to finance for entire communities historically off the radar screen of traditional banks.

Aid agencies are wising up to new ways of delivering help. They’ve realized that smaller amounts of aid, spread out over time and in the form of cash, can help poor people build there own safety nets, before a crisis hits. Cash is also much cheaper and more efficient way of delivering aid. Some 65% of America’s US$ 2 billion food aid program is eaten up by red tape and logistical costs, according to a US government report.

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Recently I had the opportunity to talk with Lazarus Muchenje. Based in South Africa, Muchenje is the CEO of Celpay Holdings (Pty) Ltd., which operates mobile phone banking in the Democratic Republic of Congo and Zambia. He says working within existing regulations – which often do not take into account the technology – is Celpay’s toughest challenge.

Tell me about Celpay. We really operate in two markets, Democratic Republic of Congo and Zambia. If I was to compare the two then Zambia is a little less challenging, the stage of development today vis-a-vis the Congo. Zambia has been a democratic country for a long time, while DRC has just had its first democratic elections last year.

Regulations are not clear-cut? In DRC we don’t have clearly defined legislation governing e-commerce yet. This is quite normal in a post-conflict country, however, if tomorrow a new law to regulate e-transactions, that does not support our current business model is promulgated this may jeopardise our investment. The Central bank of Congo has assured Celpay that they are working on the necessary regulatory framework. In Zambia, the National Payments Systems Act has just been promulgated last month. It is very broad in its current format but it is an excellent starting point in defining how e-commerce is regulated. Generally I would say the regulatory environment is extremely challenging, from undefined to starting to define how to manage e-transactions, e-commerce. Read the rest of this page »

…potential access points for payment services.

It also happens to be the number of handsets that Nokia has manufactured in India in the 18 months since its operation openned in Chennai, according to numbers released Thursday in New Delhi.  Those phones are not just for India or its neighbors, as LiveMint reports:

Kallasvuo said the firm exports nearly half of its Indian unit’s production, comprising low and mid-end GSM phones, to 58 countries in South-East Asia, Africa and West Asia. The firm started the plant to assemble entry-level handsets, mainly for the local market, and started exporting phones produced there only in mid-2006. Higher-end models, such as the Nseries are still not manufactured in India.

Meanwhile, more than one-third of Indians responding to a survey of Asian consumers said they would consider switching to a bank that offered mobile banking services.  As the Economic Times reports:

Among Indians, 49% of respondents to the survey claim to actively use their mobiles to check their bank balance, well above corresponding figures of 13% for Australia and 9% for China.

Seems like the days of subscriber trunk dialing are a bit numbered.

In the world of mobile telephony, Jan Chipchase needs no introduction. Suffice it to say he studies – on a global scale – how people use mobile phones. Jan’s title is “Human Behavioural Researcher” at Nokia, and CGAP and infoDev recently had the chance to host him at the World Bank to talk about his work, as well as the impact mobile phones are having in developing countries.

Jan noted that for many people the mobile phone is the first thing they see in the morning and the last thing they see at night. They wake up with it and fall asleep with it.

“That’s immensely challenging – to understand the context – the need to be able to go in there and understand how a device fits into the context of human experience,” Jan says.

As for what this has to do with increasing access to finance (that’s our focus) for some of the world’s poorest people, Jan asks this question:

“What do illiterate people and billionaires have in common?”

The answer: both groups like to delegate tasks.

“Illiterate people can do anything on a mobile phone. The way they get around tasks that they don’t understand is by asking someone else to do it for them. In a way, it’s like asking someone else to complete the design process.” He says this is especially true for text messaging.

Will illiterate people buy a phone specially designed for them? Jan Chipchase doesn’t think so – too much stigma attached.

“The biggest innovation to help the poor?- and I’m speaking for myself here – is to get phones down to a price point that poor people can afford,” Jan says.

Full disclosure: I penned this for psdblog! 

Okay, we’re three days into the era of the iPhone. While my first-hand experience playing with one over the weekend was exciting (I’m intrigued but will keep my beat-up Treo 650 for awhile, thanks very much), there’s another nascent development in cell phones that could potentially be a much bigger deal over time: mobile (cell) phone banking and its potential to increase access to financial services for poor people.

At CGAP, we’re partnering with companies like Globe Telecom to explore how poor rural communities might be better served with appropriate, responsible services through mobile phones. As this effort gets underway, we’re also taking a look at how regulators in several countries, including the Philippines, are dealing with mobile phone banking. Here are some highlights from our preliminary assessment of Pakistan’s banking regulations when it comes to so-called branchless banking:

- Several mobile network operators (MNOs) have started developing concrete proposals to offer mobile phone payments and banking directly;

- Improving access to financial services features highly on the agenda of the Government of Pakistan;

- Key regulatory issues that may help “branchless banking” increase access to financial services are (a) allowing the use of agents (such as retail shops) outside bank branches; (b) easing account opening (both on-site and remotely) while maintaining adequate “know your customer” standards; and (c) permitting a range of players to participate in payment service provision and e-money issuance (especially MNOs), enabling innovation from multiple parties.

In addition to Pakistan, CGAP is working on similiar assessments in Brazil, India, Kenya, South Africa, the Philippines, and Russia. So, more to come…

“Slow down the future.”

This is how a former head of strategy for Vodafone Europe described to me what mobile operators try to do. Theirs is essentially a fixed-asset business, in which networks have been built and the aim is to maximize the return from customers. In that sense operators are not about innovation around new technologies, because they’re trying to recoup their investments in technologies they’ve already deployed. 

Does this mean operators aren’t interested in mobile banking?  So far, quite the opposite.

Mobile banking and payments are two potential revenue sources from existing customers.  They may be particularly useful in increasing average revenue per user or ARPU of low-income customers who generate low revenue and low margins.  Payment and banking products that are fee-based and reduce customer turnover might be just what’s needed to make these customers more profitable.

Where do handset makers like Nokia and Motorola come out on m-banking?  They make money when they sell phones, so adding new features and functions is essential. Building new payment capabilities into phones is just the kind of differentiator that will make the next generation of models sell.

Will handset makers build in this capability even if there are few places where you can tap your phone and make a payment? Which standard will they use, if any? And how can combining the motivations of operators and handset makers increase mobile banking services for poor people? A few questions we’ll continue to explore.

Pakistan’s government has made expanding access to finance a key policy priority. The Consultative Group to Assist the Poor (CGAP) found policy makers already attuned to some of the ways in which information and communications technology and new branchless banking models might be used to reach massive numbers of presently unserved poor people. Moreover, they are open to regulatory change to make this possible. Industry players, too, particularly mobile network operators, see the enormous potential of branchless banking as a profitable value added service.

But the challenges to branchless banking posed by current regulation in Pakistan are also formidable. To address these, while paying due regard to the new and enhanced risks that branchless banking can carry, a committee has been assembled involving financial system and telecommunications policy makers and industry representatives. Moreover, the central bank in close consultation with the industry has started exploring legal and regulatory adaptations to facilitate branchless banking. As a result of this work, some potentially viable paths are already emerging.

Notes on Regulation of Branchless Banking in Pakistan

As part of its recent entrance into the US mobile payments space, Citibank recently began advertising via SMS. When USA Today readers receive stock quotes on their mobile phone, they now find an accompanying advertisement asking if they’d like to check their Citibank account balance or even find the nearest ATM. Uptake of these offers is around 15 to 20 percent, several times higher than traditional advertising.

SMS advertising is a frequent topic of discussion around CGAP. As many mobile banking services in developing countries have had difficulty maintaining adequate volumes of usage, we often wonder if users would respond to SMS messages reminding them of this service and encouraging use of e-money. What if we could use SMS to provide financial management tips? Could we use SMS to encourage clients to save a small amount after each transaction? The potential of SMS advertising is indeed exciting, but in thinking of how I would respond to a pesky advertisement on my own phone, I feel less confident. Is SMS advertising the new telemarketer?

Exploring and testing innovative ideas is the cornerstone of CGAP’s Technology Program and SMS advertising is likely to play a role in at least one of our projects. Perhaps users will find the service more helpful than annoying and the skeptic in me will be proven wrong…?

Here’s the Powerpoint of my presentation at a roundtable with regulators and people from the banking and telecom sectors in Karachi, Pakistan. It was a half-day event, attended by the Governor of the State Bank. CGAP’s Steve Rasmussen moderated. Stefan Staschen and I made two presentations to jumpstart discussions around the morning’s topics of (a) international experience with branchless banking, and (b) observations from CGAP’s Pakistan diagnostic.

BBC reports on how villagers in India can request web content — from cricket scores to photos of Britney Spears — as part of

The business was dreamed up by MITians a few years ago. The underlying technology is called DakNet — a wifi “village area network” created when vans and motorbikes fitted with short-range wifi devices are driven through villages giving people access to the internet for a short period of time. Kiosks, schools, and other common locations are equipped with PCs and wifi devices.

DakNet may have borrowed its name from Dakiya which is what bicylce riding postmen were called in India and for many still symbolize a remote village’s only connection to the world.

Not sure if the business is sustainable but villagers subscribe (Rs. 50 for a lifetime membership) for a range of services from email to SMS. You can also shop online. Delivering web content on-demand might be a new service.Villagers submit a request for specific content which is available hours later as the van or bike drives through the village broadcasting it over a wifi network.