Progressive, Inclusive and Customer-Driven Mobile Payment Programmes

In Insights, Mobile Solutions by Salim Dhanani

Mobile money programmes are swiftly undermining the axiom “cash is king” in emerging markets.


In Sub-Saharan Africa, the opportunity was clear – an estimated 40% of the continent owns a mobile device yet only a quarter of the population holds a bank account. These factors led to the development of a peer-to-peer, mobile payment system that could provide the core benefits of banking services without subscription barriers.

Vodafone led the movement in 2007 with the introduction of M-Pesa for Safaricom and Vodacom. M-Pesa is a money programme that allowed users to exchange prepaid airtime for other goods and services. This is perhaps the shining example of how the proper technology was developed to meet the needs of the consumer and subsequently facilitate economic growth. But how did experimental programs like M-Pesa become the defacto banking solution? How does it compare to traditional banking and remittance solutions?


We unravelled these questions while speaking with a well-versed mobile money customer, Tesfalem Woldeab. Originally from Eritrea, he has moved between Kenya and Uganda in the past few years through his work with the UN. During this time, he has seen the expansion of mobile money across African borders. In 2014, he was forced to seek refuge in Ethiopia due to religious persecution. He found himself in a liminal position – detached from his home and without the residency status and official identification to allow him to apply for any sort of government or financial institution assistance. What he did have access to was a mobile phone – a communicative and transitional tool for setting up his new digital identity.

Starting anew was expedited by the ubiquitous use of mobile money in Ethiopia.Tesfalem immediately set up his mobile banking account with a local merchant. When asked what the registration process entailed, Tesfalem replied, “You only have to upgrade your SIM card, go to any mobile money agent and register your account for free.” Mobile money systems do not require expensive monthly contracts or data networks to accomplish everyday transactions – payments can be made at any registered business, from grocery stores to restaurants, via text.For merchants, potential errors in counting and processing thousands or millions of shillings in cash have been eliminated through mobile money exchanges.

As for the security of consumers and retailers, every transaction is verified with a password. In case of phone loss or theft, your mobile money balance can be retrieved when your registration number is re-assigned to a new SIM card and phone. Tesfalem is one of millions who have benefited from the convenience and accessibility that mobile money provides.

Governments have seen the benefits of similar groundbreaking programs as well. In 2009, the US launched a mobile money program for the salary payments of the Afghan police force in an effort to stamp out internal corruption. This quick, direct and transparent system scratched out the possibility of cash falling into the hands of middlemen in the hierarchy; employees were shocked to finally see their full wages reflected in their mobile balances without the unsolicited cuts.

MAZAR-E-SHARIF, Afghanistan (March 25, 2010) - Afghan National Civil Order Police/Afghan Gendarmerie Force Training Center graduates parade in formation honoring Mohammad Atta Noor, Governor of the Province of Balkh where 193 trainees graduated in the center's first enlisted graduation. (U.S. Air Force photo by Staff Sgt. Jeff Nevison)

There are important lessons to be learned from this sample of progressive, inclusive and customer-driven mobile payment programmes. As we think about how more people are leading itinerant lives, either by force or choice, we can take notes on how scalable solutions can be efficiently deployed across different markets to eradicate cash mismanagement and financial exclusion while increasing security.