Mobile money has seen an exponential rise in the developing world and much of its success has centred around Kenya and Safaricom’s M-PESA service. Recent research from the GSMA highlighted the fact that 74 per cent of the adult population in Kenya use mobile money, and 31 per cent of Kenyan GDP is transacted through mobile money services.
Mobile money however is not all about Vodafone’s M-PESA, as Orange demonstrated with its recent launch of the Orange Money International Transfer service which will operate between Mali, Senegal and Ivory Coast – the first such service in the region. Every year, about 200 million Euros are transferred between the three countries. According to Orange, there is an urgent need for a more convenient and secure transfer service in the area. The service will allow Orange Money customers to transfer money between friends and family within the 3 countries using a mobile device and simply dialling #144# from the mobile phone and entering the recipient’s telephone number and the amount to be sent. Orange is desperately trying to compete in the ever-growing mobile money market in Africa. Their goal is to expand this first-of-a-kind service in Africa to other countries in which the Group is present. Orange Money is already a significant player in the region and this transfer service is likely to expand its influence. Available in 13 countries in Africa and the Middle East, Orange Money has more than 7 million customers today.
The Orange Money International Transfer service announcement has been swiftly followed by an Orange partnership with Visa. Currently, Orange Money allows customers to use their mobile phones to transfer funds to any mobile phone subscriber in or outside the country, buy airtime, and pay bills. From August this year, registered Orange Money subscribers in Botswana will be able to use their Orange Money account to make Visa enabled payments and pay invoices at stores, international online merchants and at over 300 Visa ATMs across the country. To access these services, Orange Money subscribers will need to apply for a Orange Money prepaid Visa card, which will be instantly linked to their existing Orange Money account. The card, secured with a PIN code, will then allow them to use funds to make point-of-sale payments at retailers and withdraw cash at ATMs. This is a significant move forward in the African mobile money movement and could pave the way for the mobile device to become a real means of payment on top of a means of money transfer in Botswana and beyond. It could well be Africa leading the way in mobile payments with the likes of the UK learning from its efforts.
The Orange Money Visa card will be available to all sectors of society, including the unbanked, helping to reach those most in need of financial services. Botswana is the first country in the world where this new innovative program for enhanced mobile payments will be launched, following the announcement of a group-wide collaboration between Orange and Visa in 2012. Other countries in Africa and the Middle East, where Orange Money is already available, will progressively offer the Orange Money prepaid Visa card.
This is a significant milestone in the financial and mobile industry to drive financial inclusion and will contribute to drive the mobile money revolution in Africa.
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.