Mobile money is still in its infancy with countless providers and big issues with interoperability. But in Africa, where mobile Web is expected to overtake desktop Web before anywhere else in the world and where many people do not have traditional bank accounts, mobile money/mobile transactions has the most potential to change lives.
The interview below is with Barry Coetzee, chief executive officer, iVeri Payment Technologies, a South African company that provides mobile transactional technology to merchants and banks across Africa. He is a regular speaker on mobile transactions at conferences; catch him next at AITEC Banking & Mobile Money West Africa in Accra, Ghana, June 8-9, 2011.
What does the ‘mobile money’ revolution mean for the average African consumer?
To me, the most important part of the mobile revolution is that consumers now expect to be able to use their handsets to do financial transactions. The reason consumers are embracing mobile transacting is obvious – convenience, and consumers put a high value on convenience.
What are the business opportunities presented by ‘mobile money’ in Africa for big and small business?
Mobile money is still a newborn. It is still unclear which of its parents – mobile operators or banks – it looks more like. It definitely has aspects of both parents. Nobody really knows what the future will bring, but we are sure that it will be different. Currently we are in an opportunistic phase, with all sorts of companies offering mobile money products/services. However, as scale grows, interoperability between these products will become a big issue. Money has to be interoperable – without it there is no convenience for the consumer. This should bring maturity the industry and help to dictate the future direction. Until then, all players continue to jostle for position.
What are the opportunities presented by ‘mobile money’ in Africa for governments, NGOs and other organizations?
Probably the biggest opportunity for all that is gained with mobile money is that it brings accountability for transactions that were previously performed with cash. Cash is the greatest driver of corruption. But when you make a mobile payment the transaction is electronic – this means there is an audit trail for these transactions. This is very important for large organizations, including governments who lose large amounts in the cash economy. Unfortunately many governments aren’t big supporters of auditable mobile money transactions – perhaps the resistance comes from the dishonest people within these governments who would no longer be able to enrich themselves anonymously.
For NGOs it is different, as they require convenient ways to distribute funds, especially in rural areas. Mobile money assists here and also makes reporting to their donors easier.
What are the risks involved with mobile money? Do the benefits outweigh the risks?
As mobile money grows and matures, the risks it faces will increase and new rules will be required to address these risks. This has always been the case with bank notes – despite the fact that bank notes are centuries old, we are still making new rules and implementing new technologies to protect their integrity.
Along with new “ways to pay” will inevitably comes a growth industry in new “ways to steal”. Consumers will make decisions based on their own risk profiles, whether they think the benefits outweigh the risks. E-commerce is/was the same; some people will always avoid purchasing things on the Internet, because they feel it is too risky, while for others, the convenience of e-commerce outweighs the risks.
What does the rest of the world need to learn from what’s happening with mobile money in Africa?
Africa will be the first continent where mobile Web access will overtake desktop Internet access. Other continents will follow – after all, one in three people accessing Facebook does it via a mobile phone. In Africa the mobile handset is the main platform for IT development. This means that while developers and entrepreneurs in the developed world will continue to focus on desktop-based systems for the foreseeable future, young people in Africa will work with mobile first. This is the foundation for development of this young mobile money industry.
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