Mobile Banking Blog

While living in Senegal and observing people’s life, mostly that of my wife’s family, I could observe many things about how money circulates between people, confirming that mobile-banking services will probably have great perspectives in such a country.

First observation: in Western Africa the majority of people is lacking the regular financial resources to make a living (salary, social allowances etc.) and a lot of persons never seem to possess a coin in their pocket. Nevertheless, however hard life is, you can see lonely women or unemployed people occasionally paying for others when needed (rent, medicines, food etc.). It may seem a mystery how they obtained the money, but if you investigate a little, you will see that it comes from various people, sometimes living afar: relatives, close neighbours, friends etc. The circulation of money between people is very common and has become an everyday necessity. I would recommend reading Le mandat, a novel written by Senegalese writer Ousmane Sembene , to see how important money transfer is for people having no wages. As soon as the hero receives a mandate from his nephew working in France, he tries to withdraw the money but cannot make a step outside home without his neighbours and relatives begging for a small borrow.

Second observation: mobile phone services have reached an increasing number of Africans, from 25% to 65% of the population, depending on the countries. Executives from the mobile sector in Senegal frequently joke that even beggars possess mobile phones. As money circulates a lot, often entailing problems of safety and cash handling, turning cash into virtual money through mobile banking seems an obvious solution. However, this is not because people have mobile handsets that they will rush automatically to mobile banking services. As mobile banking deals with daily life events and sometimes matters of survival, what people need is trust. Trust implies a service that is simple, safe, cheap and available everywhere. Simple solutions mean solutions that can be handled without risk by everybody, including fragile and poorly-educated people. It is not only a question of technology but of customer training. In Kenya, M-Pesa (Safaricom) uses USSD while Zap (Zain) uses STK technology. It is up to banks or mobile operators to have their solutions tested by real people; it is their responsibility to define simple client experiences and educate customers to use their services. Operators have to build networks of partners and agents to boost the use of mobile-banking services. It is a long-term load but it works: after months of operational issues since its launch in 2007, M-Pesa has become a strong success as 50% of Safaricom customers are using the service to send money, buy airtime etc.

In Senegal, Orange mobile customers are used to sending airtime with an USSD-based service called Seddo (“share” in the wolof language). People without any technological knowledge send airtime daily, and the service has become very popular. Orange Money is due to launch this year. Its customer interface will probably be based on USSD, which should ease the use of the service. But the success of the service will depend on its ability to integrate quickly in people’s daily life. Iam waiting for the launch of mobile banking services in Senegal, and I am a bit curious about when my wife will decide to use them. Will the service be simple enough and readiliy available so that, at the next baptism or wedding far from home, she will send her relatives money by phone instead of waiting to pay them a visit?