Orange opens up Mobile Money in Africa

Orange Shop

Orange Shop (Photo credit: Wikipedia)

Mobile Money has brought a great number of benefits to parts of the developing world including financial independence and improved security. Until now, Safaricom’s M-PESA has dominated this ever-growing market. However, it comes as little surprise to many that Orange is now trying to stake its claim. Orange Mobile has just rolled out its first international mobile money transfer service called “Orange Money International Transfer” which will operate between Mali, Senegal and Ivory Coast – the first such service in the region. According to Orange, 200 million euros are transferred between these three countries every year. Can Orange cut it in the ultra-competitive world of mobile money in Africa?

A customer in The Ivory Coast will now be able to send money directly to friends and family in Mali or Senegal with their Orange Money account. The sender simply needs to dial #144# from their mobile phone, and enter the Orange telephone number of the recipient and the amount to be sent. The money is immediately available in the recipient’s account to make payments, pay bills, purchases and transfers, or alternatively it can be withdrawn at a nearby location from any Orange Money distributor, also known as a Mobile Money Agent.

Mobile Money is the simple transfer of money through SMS based services. Its success in Kenya has been replicated in many parts of Africa, and more recently India. The system has flourished due to a lack of traditional banking infrastructure (consider the costs of building ATMs and bank branches in Africa’s remote, rural areas), the relative low cost of the service in comparison to bank charges, as well as the fact that the mobile phone has become ubiquitous in the developing world over the last decade. Mobile money has been particularly successful in reaching the ‘unbanked’, those most at need in society. A mobile phone is an essential device to many people in the developing world, and mobile money is simply an extension of this.

The mobile money system is dependent on a network of people who are in essence the face of the business called Agents. Agents can be anyone from people working in neighbourhood shops, petrol stations and lottery ticket stalls. These agents are the “face” of the business and determine customers’ trust and willingness to transact over the mobile platform, and allow people to cash-in and cash-out money when required. The whole mobile money system is dependent on this network. If the network of agents is too large, then there are too many agents who are not transacting meaning they have no incentive to ensure they are ‘topped up’. If the network is too small then there aren’t enough agents to enable consumers to transact meaning the network falls down and the whole system loses credibility. This loss of credibility was particularly prevalent in West Africa, which until Orange’s foray has had limited exposure and success in mobile money. It is costly to build and manage the agent network, but these costs are worth incurring in order to get to scale and they will eventually pay off – as some of the more successful mobile money experiments are showing.

The success of mobile money depends on the network of agents to build up trust, and to be readily available for people to cash-in or cash-out. Success for Orange in West Africa will depend on the quality, training and commitment of its network of Agents. The jury is still out on whether Orange will succeed in its Mobile Money roll-out in West Africa. What is evident is the necessity of an excellent network of Agents, a build-up of trust amongst the everyday user in Africa, as well as gentle persuasion that mobile money is a more cost-effective way of dealing with money that traditional everyday means.


Future Mobile Trends in Africa

Satellite image of Africa, showing the ecologi...

Satellite image of Africa, showing the ecological break that defines the sub-Saharan area (Photo credit: Wikipedia)

Mobile access has democratised technology and allows people to communicate across geographical borders as well as acting as a social glue from a personal point of view as well as a broader societal perspective. Nowhere is this point more prevalent than in Africa.

Below are several key points derived from a recent report entitled ‘Mobile Trends 2020 Africa’ which was put together by various industry experts, as well as my response to each point.

The African market will see a flood of cheap smartphones allowing access to online information and social networks which could have an impact on the democracy of a country

We all saw the impact of  social networking, particularly Twitter, during the Arab Spring. The mobile device and is use as a mass communication tool also had an impact on the recent elections in Kenya, previously marred by mass violence, by means of monitoring results and diffusing ethnic tensions. Finally, mobile technology can also be used by politicians to communicate with its electorate and open up information on policies.

Smartphones will replace the need for physical banks, as mobile makes banking a far easier process

The success of Kenya ‘s M-PESA has been well documented and has opened up banking services to large numbers of people in parts of Africa and Asia. Africa is the hotbed of Mobile money activity, and the continent counts 15 of the top 20 countries by mobile money usage. It’s success has been such that it will also soon be launching in India.

Concerns are rightfully being raised around security, however the potential benefits to millions of’ unbanked’ people surely outweigh the risks, and opening up mobile money access acts as a tool of empowerment allowing people and businesses to prosper.

In addition, mobile devices are being used to prevent corruption, in places like Ivory Coast and Afghanistan, as mobile money payments ensure that workers get their full pay and the m-transfer prevents management from taking ‘tips’.

Mobile and associated technologies will ensure Africa acts as a hub of innovation

There are countless examples of this, the most prominent one being Kenya’s Silicon Savannah which will provide employment and act as a centre of innovation for the region, this follows on from Kenyan technological breakthroughs such as M-PESA and Ushahidi. In addition, projects like the iHub in Kenya offer an alternative picture of a bright future for the continent with a focus on technological innovation.

Live debate on the Guardian – can the poor bank on financial services?

M-PESA Mobile Money Transfer in Kenya

M-PESA Mobile Money Transfer in Kenya (Photo credit: Erict19)

The Guardian debate on the best ways to provide financial access to the poor in the developing world begins on Thursday 9th of May at 1pm. Click here to join the debate.

According to the Guardian, some of the questions posed will be:

How best do we address the challenges in creating affordable financial services? What are the most effective and sustainable ways to provide the kind of access that can reduce income inequality and increase economic growth? And after the global financial crisis, the recent critique of microfinance and the promising but uneven ascent of mobile money, will the poor be able to bank on financial services?

My response would be as follows:

There are no doubt security risks and concerns around privacy that need to be looked into when it comes to the phenomenal growth in mobile banking. However the positives outweigh these and haven’t we faced such security risks in the developed world? Surely the fact that increasing numbers of people no longer have to carry money around means they are at less risk of robbery, which is potentially more of an immediate concern? Opening up access to the financial system acts as an incredible tool of empowerment for the previously ‘unbanked’.

We are seeing an exponential uptake of the mobile phone in the developing world and this represents an opportunity to both communicate with people and give people access to financial services, where traditional ‘bricks and mortar’ banks are either not available or out of reach. Surely this is a tool of empowerment that needs to be embraced and promoted? The key is not to leave those without a mobile phone behind, and government initiatives should support the uptake of mobile devices even further.

In addition, mobile devices can be used to circumvent corruption, whereby bosses and managers have used the traditional pay packet to siphon off ‘tips’, leaving workers underpaid. Recent reports highlighted a case study in the Ivory Coast which saw state workers increase their take-home pay packet significantly after introducing mobile payments. Another report highlighted the fact that police officers in Wardak province in Afghanistan saw their take-home pay go up 30% when their salaries changed to mobile payments.

Finally, mobile payments can be a way to drive financial access for women in parts of the developing world where purse strings are traditionally controlled by men.

International development – how can mobile technology help

Five Mobile Systems

Five Mobile Systems (Photo credit:

Mobile penetration is at 89% in the developing world and could be a potential game changer for international development. The devices are being used to create crisis maps of areas stricken by natural disaster, distribute health information, enhance election monitoring, and help people without access to traditional banking services make transactions, pay bills and receive wages. The exponential increase in mobile coverage in the developing world, and the lack of traditional infrastructure means the simple device offers a cheap, alternative way of communicating to people. On top of the mass communication, mobility data is also being used in open data projects such as the IBM project in the Ivory Coast to track people’s movement in an effort to update the country’s outdated transportation system.

The impact of mobile technology is getting a lot of attention from businesses, charities and governments around the world and now USAID, the United States Agency for International Development, has recently launched a mobility office which advises the rest of the organisation on how to use mobile technology to start new initiatives. The agency works with governments in Afghanistan, Colombia, Haiti, Peru, and the Philippines to identify mobile payment opportunities, which can avoid traditional pay packets and ensure workers receive a full salary, circumventing potential corruption. For example, police officers in Wardak province in Afghanistan saw their take-home pay go up 30 percent when their salaries changed from cash to mobile payments. In addition, a recent report from Agence France-Presse also highlighted how mobile banking has sparked a ‘minor revolution’ in the Democratic Republic of Congo. It allowed civil servants to both get paid on time as well as receive exactly what is owed to them, avoiding the traditional pay packet and the problems with their superiors syphoning off ‘tips’ for their own pockets. USAID is putting tens of millions of dollars into programs to support country-level mobile money initiatives and also sees them as a way to drive financial access for women in parts of the developing world where purse strings are traditionally controlled by men.

USAID is also looking at how mobile technology can also help with education in the developing world, where traditional educational tools are lacking. For example, non-profit Worldreader  brought more than half a million e-books to children in Africa via the 10,000 Kindles it’s distributed. After a one-year pilot program, the organization has launched Worldreader Mobile, a way for any feature phone user with a 2G connection to read more than 1,400 books for free.

Sir Tim Berners Lee evangelises open data

Tim Berners-Lee at a Podcast Interview

Tim Berners-Lee at a Podcast Interview (Photo credit: Wikipedia)

Sir Tim Berners Lee spoke at an Open Government Partnership reception and highlighted how open data could help solve problems in the developing world. A 14 country study is being funded by Canada International Development Research Centre and will be overseen by leading open data experts from the Web Foundation.

The use of open data opens up numerous possibilities throughout the developing world. Whereas in the UK the use of open data is restricted by privacy laws, in developing countries it is being discussed as a potential solution to deep rooted problems. Mobility data, in particular, is helping in agriculture, education, health care,  and transport and its use is gaining the attention around the world.

Recent studies from IBM in Ivory Coast are highlighting the movement of people in an attempt to update the city’s bus system. This innovative use of mobility data is one of the largest of its kind and was made possible through the release of customer call and text data from the giant telecoms operator, Orange. Traditional surveys are too expensive so this use of mobility data, which is strictly anonymous, is cost effective.

There are of course challenges to the use of open data. In the case of Ivory Coast, Orange needed to be persuaded to release customer data and assurances needed to be made around privacy. Finally, it’s use in Ivory Coast may not be relevant in other parts of the world.

Mobile phone location data could help in fight against Malaria

Siemens SL55 mobile phone

Siemens SL55 mobile phone (Photo credit: Wikipedia)

Of the world’s 6 billion phones it is estimated that 5 billion are in developing countries. From a Big Data perspective, this offers a fantastic opportunity, particularly on the African continent. Although global shipments of smartphones have recently overtaken those of feature phones, the majority of phones in the developing world are cheap, simple phones that are used for calls and text messaging. Cheap phones can be used to track people’s movements and mobile payments, such as the M-PESA system used in Kenya and Tanzania, can also be used to analyse employment trends and give governments an insight into poverty, transportation and economic activity. The use of the mobile phone in these 2 crucial areas is potentially very powerful.

Big data from cheap phones in Africa could really help in the fight against diseases like malaria. By analysing data from mobile phones, location based data could help map people’s movements and help understand the spread of diseases. Africa has been hampered by a lack of data-gathering infrastructure, so mobile phone data can open up up a realm of possibilities but there needs to be pressure on the operators to allow access.

Lake Victoria has long been known as a hotspot and source of malaria, but what hasn’t been known is detailed information about how and when people travel to and from the area. Standard efforts at tracking people have been sketchy at best as information at border controls is poor. The use of location based data to monitor the movement of people could help indicate high risk areas and high risk times to travel. In addition, text messaging could then be used to alert people of dangerous areas and to ensure people are advised to use a bed net. In Sierra Leone, the launch of a location-based SMS system will reach up to 36,000 people an hour, with warnings of impending fires, floods or outbreaks of disease. The system is called the Trilogy Emergency Relief Application (TERA) and will allow the Sierra Leone Red Cross Society, with support from the British and Icelandic Red Cross, to reach people in need in a matter of minutes.

Last year, Orange released mobile phone data from the Ivory Coast which gave information on five months worth of calls made by 5m people. The data will be presented at MIT under the name Data for Development, part of a larger conference on data-mining projects throuout the world. A part of the data will chart travel between a traditional North South ethnic divide and may help avoid conflict in the future. There is a huge amount of excitement about this upcoming release of data and all of the possibilities it may be bring in the Ivory Coast and beyond.

We need to protect consumer privacy but there also needs to be continued pressure on phone operators to release anonymous location based user data . Mobile data may be the future of epidemiology and it could be how malaria is eradicated.