What Africa can teach the U.K. about mobile money
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What Africa can teach the U.K. about mobile money

What Africa can teach the U.K. about mobile money

Mobile MoneyUntil recently, a farmer in Kenya had more money technology at his fingertips than a London businessman.

That’s right, a major mobile money venture has finally arrived in the U.K.! The European Union recently approved Project Oscar, a collaboration between three telecoms: Vodafone, O2, and Everything Everywhere. (Kenya, meanwhile, has had the mobile money program M-Pesa – pesa is Swahili for money – since 2007.)

But this is so exciting! It must be since all the bloggers are saying so. Okay, so there’s some hype around mobile money, but consider the benefits: imagine leaving the house with just your keys and your phone. With a mobile wallet, your cash, and all those cards—credit cards, grocery point cards, bookstore loyalty cards, even your coffee discount punch card—would all be on your phone. Convenient, yes?

For businesses, it might be even more exciting. Mobile money opens new ways to connect with your customers. You can better tailor your ads and offer discounts over phones, literally putting coupons in customers’ virtual “wallets” even as they walk by one of your stores. The key to this, as the Guardian’s Simon Robinson points out, is getting people to buy into this process, which brings me back to that farmer in Kenya…

Mobile money has taken off in Africa, particularly in Kenya and South Africa. There’s great enthusiasm for the technology across the continent because of its potential to reach the millions of Africa’s “unbanked” population. Already, mobile money has brought an estimated 100 million people into the financial system worldwide, and that number is expected to double this year, as the Financial Times reported.

As consultant Tony Burkson argues, while other technology has struggled on the continent, mobile phones are everywhere. On a continent where cash is still king, Africans could skip over traditional credit/debit cards and move right into mobile money technology (potentially leapfrogging their counterparts in the so-called first world in the process). The only problem: cash is still king in Africa. Forgive me for repeating myself, but as Burkson also notes, despite the dawn of mobile money, cash is still the main transaction method in sub-Saharan Africa. And even government projects, such as Ghana’s debit card platform “E-zwich,” have failed because retailers didn’t fully adopt it.

Granted, Africa and the U.K. have different issues, but substitute “cash” for “credit/debit cards” and the developed world has essentially the same problem when it comes to mobile money: it’s hard to get customers and merchants to move en masse to a new transaction method. And widespread adoption is critical to mobile money’s success.

Still, with telecoms, financial institutions, and Google launching mobile money projects all over the world, preparing for a mobile money revolution is well worth the investment, especially for global brands.

Just think how easily you could market to that London businessman and the farmer in Kenya at the same time (with different text messages, carefully translated and localized, of course.)