[Dave Birch] I dropped in at the RSA for another seminar, this time including Nick Hughes from Vodafone talking about one of our favourite projects, M-PESA. He gave an excellent talk about the role of m-payments in improving the life of people in developing countries. A few points he made to establish context (my paraphrasing):

  • The average European cow gets €2.50 per day in subsidy and 75% of Africans live on less than that: they don’t have much spare money.
  • In Kenya, 30% of household income goes on what we in the West would call bribes.
  • A fifth of working Kenyans send money from the cities back to the countryside but there are few banks or ATMs. High transaction fees for sending money hit them hard.
  • In Kenya, mobile phone penetration is already 30% (in South Africa is it 60%).
  • As The Economist pointed out back in March 2005, poor countries don’t need a PC in every home, they need more mobile phones.

They’ve certainly done something right. There are already 477 agents live where you can take in cash to top-up your M-PESA account and the number of people signing up has accelerated to currently 2,500 per day (it was 1,500 per day last month) and there are now around 140,000+ customers. Safaricom are now targeting a million customers by the end of this year. They’ve processed around a million transactions. The average customer is already doing 3-4 transactions per month. The average P2P transfer is for UKP23 (say around $40). By the end of May, a billion Kenyan shillings had been through the system. Nick mentioned that the scheme is now being trialed in Afghanistan and Tanzania and will soon begin trials in Sri Lank and also gave some examples of the scheme’s use, which I won’t repeat here, except to note that they demonstrate how a good, functional payment system makes life better for the average person.

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As a complete aside, the other speaker who was talking around innovation and community was from Lego. Since there is no nook and/or cranny in my house that does not have a Lego brick in it, I was actually quite interested in the discussion about how Lego has transformed its fortunes, partly by becoming part of a community with its customers. I can testify as a parent that Lego deserves every scrap of praise it gets, both for providing what is undoubtedly the best play time per dollar invested toy value ever and for integrating the real and virtual worlds so thoroughly and effectively. Incidentally, if you think this has nothing to do with digital money, you are very probably wrong. On one of his slides was a mention of the Lego virtual world that is about to be launched where (if the general pattern of virtual worlds is anything to go by) RMTs will be inevitable and, if my household is anything to go by, on a vast scale.

Note: RMTs = Real Money Trades.

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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