I just got back from Rwanda and Uganda, and systems like this (including m-Pesa itself) are ubiquitous. However there are some interesting risks associated with them, not so much in stealing individuals credentials, but stealing authentication for the kiosks.
-- Charles On Thu, Jul 5, 2012 at 12:26 AM, Eugen Leitl <[email protected]> wrote: > > > http://newswatch.nationalgeographic.com/2012/07/04/the-invisible-bank-how-kenya-has-beaten-the-world-in-mobile-money/ > > The Invisible Bank: How Kenya Has Beaten the World in Mobile Money > > Posted by Ken Banks of National Geographic Emerging Explorer on July 4, > 2012 > > Click a few keys, exchange a few numbers, and it’s done. With just a mobile > phone and a registration with Safaricom, Kenya’s mobile service giant, you > can pay for anything in seconds – no cash, no long journeys to towns to > reach > a bank, and no long lines when you get there. This is m-Pesa, the > revolutionary approach to banking which is changing economies across > Africa. > The service allows customers and businesses to pay for anything without > needing cash, a bank account, or even a permanent address. In today’s > Digital > Diversity, in honour of its recent fifth birthday, we present a beginner’s > guide to m-Pesa and examine its implications for financial access in > developing economies. > > Digital Diversity is a series of blog posts from kiwanja.net about the way > mobile phones and other appropriate technologies are being used throughout > the world to improve, enrich, and empower billions of lives. > > By Olivia O’Sullivan > > In the developed world, we are used to the idea that we created the model > of > industrial and economic progress which other countries must follow. Many of > our big ideas about development rest on the assumption that the West > cracked > the formula for economic progress sometime in the 19th century, and what we > need now is for the developing world to ‘catch up’. Even the language we > use > encapsulates this idea, in the division between ‘developed’ and > ‘developing’. > But new innovations are challenging the idea that development requires > handing ideas down from developed to developing. In banking and finance, > the > big ideas in cashless transfers and mobile, flexible exchanges are not to > be > found in Geneva or London or New York. A revolution in mobile money > transfer > has occurred, but not in these financial centres. Instead, it’s happened in > Kenya, with m-Pesa. > > The service was developed between Safaricom and Vodafone, and launched in > 2007. And it’s not just something used in cities or by big commercial > interests. By 2010, over 50% of Kenya’s population had used it – this means > rural villagers haggling over produce, then using their Nokias to make the > final deal. It means Masai herdsmen bringing their phones to market along > with their cattle, ready to stock up on essentials to bring back to their > homes. > > The widespread use of mobile phones in Africa provides huge potential for > innovation. (Photo: Kiwanja) > > For people who live in isolated areas, the service means no longer having > to > carry lots of cash to markets or towns, risking losing huge amounts to > banditry and theft. For people without permanent addresses or bank > accounts, > the service means they can pay what cash they have to m-Pesa in exchange > for > mobile credit, making payments and transfers and building up savings – > becoming participants in an economy from which they had previously been > locked out. For migrants, the service allows them to send money home to > their > families and villages safely and simply. Safaricom’s international money > transfer service uses a similar system for international immigrants, > coordinating great webs of remittances and payments across the world. For > Kenyan businesses, the service means payments for stock or repairs can > happen > almost instantaneously, wiping out the need to rely on bank clearances and > flawed infrastructure which had clogged the economy with inefficiencies and > delays. > > So how does it work? m-Pesa relies on a network of small shop-front > retailers, who register to be m-Pesa agents. Customers come to these > retailers and pay them cash in exchange for loading virtual credit onto > their > phone, known as e-float. E-float can be swapped and transferred between > mobile users with a simple text message and a system of codes. The > recipient > of e-float takes her mobile phone into her nearest retailer when she wants > to > cash in, and swaps her text message code back for physical money. There are > already more m-Pesa agents in Kenya than there are bank branches. > > An mPesa agent. (Photo: Laxman Rajagopalan) > > Such a system also requires intermediaries, to get the cash to m-Pesa > agents, > and ensure cash movement keeps up with e-float exchanges. In this way, the > system has created new jobs, with some intermediaries and retailers earning > $1000 a month in commission from m-Pesa transactions. > > As of m-Pesa’s fifth birthday – March 6 2012 – it had been used by a > staggering 15 million people. The system was employed by the ‘Kenyans for > Kenya’ campaign to raise money for Kenyans suffering from the Horn of > Africa > drought – just one way in which it has contributed to independence and > innovation in Kenya’s economy. > > In response to m-Pesa’s success, the model has been imitated in other > countries. Africa’s biggest mobile operator MTN has rolled out schemes > elsewhere, the most ambitious in Kenya’s neighbour Uganda. Central banks in > some countries, such as Brazil, have now created financial inclusion teams, > with a vision for using similar systems to bring financial access to the > poor > and isolated. The Indian government has also shown determination to achieve > this aim, and analysts predict, with its strong IT infrastructure and dense > population, India too could be on the road to becoming a cash-light, > financially inclusive economy in the near future. > > m-Pesa is a triumph of thinking locally but dreaming big. (Photo: Kiwanja) > > m-Pesa has big things to say about the future of African economies. It > demonstrates the potential in the huge and rapid dissemination of mobile > phones and other flexible, adaptable technologies on the continent. But it > also shows the value of dreaming big but thinking locally. M-Pesa is not an > attempt to recreate developed countries’ banking systems in Africa. > Instead, > it’s an idea which has been tailored to the Kenyan environment. Rather than > giving up on poor, isolated communities as unbankable, it has extended > financial services to their most apparently unlikely customers. Rather than > giving up on sophisticated economic transactions in countries with poor > infrastructure, it has found a way to circumvent that infrastructure, > creating a virtual, mobile one of its own. > > Olivia O’Sullivan has worked for the Guardian newspaper, the Sudan team of > the UN Peacekeeping Department and with the London NGO Waging Peace. She is > an MPhil in International Relations at Cambridge University. She previously > studied History at Cambridge University and Diplomacy and World Affairs at > Occidental College, California. She is currently the Research and Media > Assistant for kiwanja.net/FrontlineSMS. > > Digital Diversity is produced by Ken Banks, innovator, mentor, > anthropologist, National Geographic Emerging Explorer and Founder of > kiwanja.net / FrontlineSMS. He shares exciting stories in “Digital > Diversity” > about how mobile phones and appropriate technologies are being used > throughout the world to improve, enrich, and empower billions of lives. > > You can read all the posts in this series, visit his website, or follow him > on Twitter. > > >
