3 Comments

Summary:

MIT researcher Nathan Eagle regaled the audience at the O’Reilly Emerging Technology conference yesterday with tales of technical innovation from East Africa. “Kenya has some mobile phone services that are years ahead of what we have right now,” he said. Eagle was at ETech to present […]

MIT researcher Nathan Eagle regaled the audience at the O’Reilly Emerging Technology conference yesterday with tales of technical innovation from East Africa. “Kenya has some mobile phone services that are years ahead of what we have right now,” he said. Eagle was at ETech to present his new startup, Txteagle, which aims to be a kind of mobile Mechanical Turk, using countless mobile phone users in Kenya and beyond to solve easy tasks and earn small amounts of money in return. (There’s a good writeup in Wired News today)

It’s definitely an interesting idea. But to me, the real story is how mobile phones have transformed a country like Kenya in recent years, making not only services like Txteagle possible, but also shaking up the region’s entire economic system.

Eagle spent the last few years going back and forth between Kenya and the U.S., and he witnessed this transformation firsthand. I caught up with him after his talk to learn more. According to Eagle, local incumbent Safaricom had started a minute-sharing service for its prepaid cell phone plans a few years back. The idea was to enable users to send minutes to family members in rural areas, who weren’t otherwise able to buy prepaid phone cards. However, Kenyans quickly came up with other uses. “Lots and lots of people were using it as a surrogate for currency,” Eagle said. “[You] could literally pay for taxi cab rides using cell phone credit.”

Safaricom realized a huge opportunity and started a mobile payment service called M-PESA. To call M-PESA a success would be an understatement, according to Eagle. “Within about a year, (Safaricom) became the biggest bank in East Africa.” Today you can use your phone to pay for cab rides and electricity, to get money out of ATMs without owning an ATM card or even having a traditional bank account.

Eagle shared another striking example of the transformative power of mobile payments during his ETech talk. Rural communities used to have to pay a lot of money upfront in order to get a modern well capable of providing clean drinking water. Now, there are companies that install these wells for free, complete with an integrated cell phone payment system. Want some water? Just pay as you go with your M-PESA account.

“It has transformed the country,” says Eagle

  1. Mohit Agrawal Thursday, March 12, 2009

    I absolutely agree with the comment that mobile phones have transformed Kenya. It is not only Kenya, they have increased the economic growth of every country. It is estimated that for every 10% increase in penetration, the GDP growth goes up by 0.6 – 1.4% You may read further on the impact of mobile phones on the economy on Telecom Circle website http://www.telecomcircle.com/2009/01/impact-of-mobility-on-economic-growth-in-developing-countries/

    Regards,

    Mohit
    http://www.telecomcircle.com

    Share
  2. Safaricom currently exchanges 5% of Kenya’s GDP at 200 million a month. All that in slightly over a years time. The same service is now used in Afghanistan to pay the troops. http://internetthought.blogspot.com/2008/09/safaricom-m-pesa-is-just-cool.html

    Share
  3. [...] has an interesting post about mobile revolution in areas such as banking in [...]

    Share
  4. [...] résume Nathan Eagle, dont les propos sont rapportés par le site GigaOm, les villageois devaient avancer une très importante somme d’argent pour se fournir en [...]

    Share
  5. [...] Servicio móvil novedoso: Banca virtual (Inglés)gigaom.com/2009/03/11/kenyas-mobile-banking-revolution/ por pumpum hace pocos segundos [...]

    Share
  6. [...] Kenya’s Mobile Banking Revolutions The story of Safaricom and its mobile payment service M-PESA is well known by now. The service enables its customers to send money to family members who often living in rural areas who do not have access to formal banking services. Perhaps most interestingly they are able to pay for goods and services using airtime minutes. Om Malik points out that other uses for this kind of virtual currency are rapidly emerging citing paying a taxi cab fare, getting money out of an ATM without a bank account, and cellphone-enabled wells that provide clean drinking water. [...]

    Share
  7. [...] ricercatore ha avviato in loco una startup chiamata TxtEagle. L’obbiettivo – ironizza Janko Roettgers su GigaOM – è molto simile a quello del Mechanical Turk di Amazon: far eseguire un [...]

    Share
  8. [...] in Fiji to understand what the possibilities for the technology are. Consider the example of mobile banking in Kenya.  The incumbent operator Safaricom (a Vodafone partner) launched a service that would allow for [...]

    Share
  9. [...] “Eagle shared another striking example of the transformative power of mobile payments during his ETech talk. Rural communities used to have to pay a lot of money upfront in order to get a modern well capable of providing clean drinking water. Now, there are companies that install these wells for free, complete with an integrated cell phone payment system. Want some water? Just pay as you go with your M-PESA account.” [Via GIGAOM] [...]

    Share

Comments have been disabled for this post