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In Africa, Money not necessary for mobile banking

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Necessity, they say is the mother of invention. It couldn’t be more true in case of Africa, where pre-paid airtime is fast becoming the ‘virtual’ currency for Pan-African trade, overcoming conventional currency exchange and lack of banking infrastructure. It started out as phone users in Nigeria, especially in the rural areas trading minutes, but then the transactions took a mercantile trend.

Instead of paying cash, people started paying in airtime. Minutes became moolah and since the trend has caught on, and is being used for cross border trade as well.

The First National Bank started mobile division, Celpay, and others like Barclays are thinking about setting up m-banking. Wizzit, a division of South Africa Bank of Athens has processed more than 250,000 transactions in less than 24 months.

There are over 100 million mobile phones in Africa, and it is one of the fastest growing mobile regions. This number will increase to 378 million by 2011, according to Portio Research.

telecom info africa mobile forecast

This story is a perfect example of how communications can transform societies, especially mobile phones. In the past, I have written about the profound impact of mobile phones on the Indian society, and other emerging mobile regions like Bangladesh and Philippines (Watch video.) While, most in the developed world fret about developing elegant and complex mobile transaction systems – folks who need mobile banking figure out things on their own. Using a little bit of common sense.

Read the full story over on

15 Responses to “In Africa, Money not necessary for mobile banking”

  1. Djakoto

    Need more indepth reporting here.

    First off, it’s not “AFRICA” or “in the case of Africa” , it’s just in a few countries on the continent. If Africa were “allowed” to become like the EEC… Digital cash will have a huge impact – one currency but relative to “unit cost” in each country and between carriers. Better unit cost/airtime could become a hot commodity. New agreements between cell companies, banks & governments… monitored communications controlling economic transactions… cess to the transaction records, registration etc.
    What happens when the unit accounts are worth more than the phone? Help us

  2. Mobile payment systems is going to be one of the biggest hits in africa for operators who truly connect to the everyday reality of the consumers. Me2u airtime sharing service has been elevated to a mobile remittance system among families and friends in most markets in the region.

    The obvious next level is to progress this to a full-scale bank-supported, easy-to-use but very secure platform that make this another killer app
    The success of MPesa in Kenya is a learning for us all

  3. I believe mobile technology holds a number of exciting opportunities.

    The bridge between the mobile phone and the internet is key. We have now launched a pilot project doing just this. We have given a number of African reporters a mobile phone. They are now in the process of making video, photographs and text reports that they can publish on the AfricaNews website with a push of a button.

    See some examples and let us know what you think!

  4. Yep I’d also like to see a little more substance to this article – chasing down leads like Wizzit leads me to believe this article is crap and someone has spun a story for particular reasons – when i come across badly written (eg obvious pr spin like these posts ) you know something is rotten in Denmark.

    Sorry guys – you got sold a pup.

    If you have source evidence to the contrary I’d love to read a follow up article.


  5. It stirs up many questions regarding regulation and taxation, or rather how the government will attempt to regulate such activities and collect there perverbial pound of flesh. Using mobile airtime is an interesting use of “primative money”. Bullets, salt and other material goods have been used as currency in the not too distant past. Now we take a non-physical such as cellphone minutes and turn it into a medium of exchange. This evolution is very interesting indeed.

  6. Very interesting post Om – thanks. I’ve written before about how mobiles are leapfrogging the mobile internet in Africa. Mobile is becoming the de-facto platform for almost all communication and service delivery. Another thing this points to is e-cash solutions that emerge rather than are planned. This is particularly relevant in emerging economies, but may happen elsewhere. I’ve written about this in more detail at:

  7. Interesting post, Om—thanks for the pointer.

    My thoughts:

    Networked technology enables us to codify and transact information in a systematic way. It stands to reason that people will find more and more ways to tie the ephemeral values of that information to tangibly valuable things and services. And they don’t need banks or governments to mediate the process (although the taxman is bound to take an interest soon enough!).