The New York Times is reporting on Bank of America going mobile, and BusinessWeek is doing the same for Barclays. That’s all well and good, but I doubt mobile banking has as much potential in the US and Europe as it does in places like Africa.
This brings me back to the issues that we find in Africa when it comes to opening up eCommerce to the continent. (For those interested, I first wrote about it a year ago here, and more here.) The base problem is that there are no options for entrepreneurs who don’t have some type of “connection” to get into the game. There is no way for them to build micro-credit or micro-debt. There is no way for them to accept payments by credit card.
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The International Market Problem
A lady in Senegal weaves baskets that are highly in demand by US and European buyers. She even manages to get them up on eBay for sale. Though many are interested, none buy. Why? Because there is no way for her to accept payment. PayPal, eBay’s payment system, won’t work in Africa.
The Local eCommerce Market Problem
A team of bright young programmers in Uganda decide to create “the next eBay or Amazon for East Africa” application. It will be the trading platform used throughout the region. However, there’s a small problem. How will people pay for the goods? The final connection is again missing.
Okay, but how about some of these other services? What about the mobile payment options that are cropping up in South Africa, Kenya and some other countries?
Well, the problem there is that they are tied down locally to a particular carrier or bank. Again, the need for a platform agnostic system is greatly needed. Something that lets people without traditional banking needs get started. A secondary reason is that, thought they are a great step forward, they only answer the banking handled in a specific region. Many of those same transactions are still done in cash and there is little need for that mobile payment system.
At the end of the day, we might estimate that there are billions of dollars of commerce NOT being done in Africa, primarily because there is no means for the transaction to happen. The good news is that I’m convinced someone will move into this space soon and really start innovating. How could they not, when there is this much money being left on the table?
(Photo via Ken Banks Mobile Gallery of Kiwanja.net)
May 24, 2007 at 2:38 pm
Oh yeah, our favourite subject 🙂
100% d’accord, and another missing factor: transport.
There’s much more to the transport business than shipping old cars & computer to the continent and flying out fresh fish and horticultural products.
But then, mobile payment systems are easier to implement than physical actions such as getting product A to B.
May 24, 2007 at 7:57 pm
I presented my final software project on an online clothing store 2 days ago. Malaysian jaws dropped when I explained why I hadn’t injected a PayPal module in web app, due to a lack of e commerce smart partnerships with 3rd parties in Kenya. To them it was an absurdity to us it’s the sad reality we experience.
It is possible to set up bankers cheque modules and perhaps Cash on delivery arrangements deals in Kenya and indeed Africa, along with a host of other e payment solutions, but the major parties involved are rigid and wary of such e commerce arrangements.
Why is it that technology in Africa, especially when fueled by a younger generation, involves force feeding corporate hardliners bent on maintaining old and increasingly outdated techniques of doing business? Save for the lack of infrastructure, cyberphobia remains an obstacle in Africa’s bid to catch up and set trends in the world of IT.
May 25, 2007 at 7:28 am
Seth, that’s one of the best comments I’ve had lately… I’d love to know more about your software project, so shoot me an email if you get the chance.
Africa is overlooked and/or disregarded when it comes to eCommerce, and it’s a shame. There is so much missed business opportunities because of outdated policies or from people not willing to risk setting up a platform for this to take place on.
May 22, 2008 at 9:07 am
Very interesting point. I’m convinced the answer has to do with cell phone money transfer. If the cell phone operators can find a way to allow money transfer from one cell phone to another, this will open up the ecommerce market. The cell phone operators are moving in this direction in any case with the ability to transfer air time from one phone to another.
September 16, 2009 at 3:31 pm
This is a great blog!
I run an errand/grocery delivery service in Ghana called kaya Errands.
http://www.mykayaonline.com/defaults/index.php?option=com_content&task=view&id=19&Itemid=40
I am very excited about MTN mobile money which just launched this month.
Does anybody have an idea how an errand service can improve its service delivery with the help of mobile money?
I deas would be very welcome