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« Visualisation | Main | NFC drivers »

Update from the frontline

By Dave Birch posted Sep 10 2008 at 8:12 AM

[Dave Birch] I'm at Mobile Payments World Asia, where I've been hearing some interesting projections about what might happen in the future. Everyone is fairly bullish, as they have every right to be given the very positive consumer research on the topic. According to the GSMA, who conducted a 17 country market research survey of 2500 consumers, something like three-quarters of consumers would be happy to use their mobile to buy train tickets as well as pay for their shopping at a supermarket. The excellent case study of the Philippines apart, though, a lot of people were still talking about pilots and trials. It's a little disappointing, I think, that the convoluted dance between banks and operators is taking so long to deliver useful services to customers.

Meanwhile, the latest figures from my favourite mobile payments scheme, M-PESA in Kenya, continue to amaze. Safaricom added 870,000 new mobile subscribers in the first quarter of the fiscal year to reach 11.1 million by the end of June (a considerable increase in the subscriber base since the introduction of M-PESA). M-PESA itself is still growing and the registered user base increased 50 percent over the quarter from 2 million at 31 March. New registrations continue to exceed an average of 10,000 per day and by the end of July the total registered user base exceeded 3.3 million. Total person-to-person transfers reached KES 6.88 billion in July (about $100 million), representing a growth rate of 220 percent over the March figure. The total value of all transactions during July exceeded KES 21 billion (about $300 million), and the average transaction per user has continued to increase over the last 6 month.

Wow. I guess that the increase in average transaction size has two obvious drivers. First of all, when people come to a new payment system they may initially be uncomfortable with committing large amounts of money to it. So they being by making small payments, but send large payments through existing systems that they know work, even if they are much more expensive (eg, interpersonal money transfer via physical offices. In time, their confidence grows and the larger payments move to the new system as well. The more important driver, though, might be the adoption of new systems by business. Just as PayPal "proved" itself to consumers sending each other the occasional few bucks and then they began to use it for person-to-business payments (through eBay as first), so mobile payments systems that have proved themselves easy, reliable and cost-effective for interpersonal payments (and microfinance payments in the M-PESA case) will soon be adopted by businesses. With more than three million M-PESA users out there, what Kenyan business wouldn't want to accept mobile payments?

As an aside, I was looking at examples of innovative mobile payment applications in the developing world for a project I'm working on and I came across this fascinating case study:

The program, piloted in Nicaragua, encourages daily compliance with the (very strict, very lengthy, very important) anti-TB medication regimen in a cost-effective and very innovative way. Patients must urinate on a reactive strip every day. If the patient has taken the TB medication, the strip will change to reveal a code. By sending that code via SMS to their health care providers, he or she can prove that they have taken the medication, without requiring a daily visit from a health care worker... That’s cool enough already. But then, to get at the behavioral part of the puzzle, the "X out TB" program offers cell phone minutes as rewards for patients who have successfully communicated with the health care center on say, 25 of 30 days in a month.

[From Most mobiles…]

I love stumbling across this kind of thing, if only because it plays to my prejudice about the revolutionary nature of mobile phones and the relative conservativeness of the $100 laptop.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]


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