Mobile Money is on a Journey
What started as a simple way of paying people using a phone is on the cusp of becoming the next global communications platform. Not just a means of buying goods and services, but a way of connecting with other human beings.
To understand what is coming next, we need to look back at where this journey began.
Long before coins and paper money existed, people exchanged handwritten notes that contained a promise to pay, including details of how that payment would be made, the timescale and other terms. The dialogue was far richer than we see on today's banknotes.
Eventually nations developed their own formal monetary systems.However, they remained fundamentally local dialects. Some countries opted for Dollars or Dinars, while others knew only Francs or Shillings.
When the time came to move money between countries, it was a messaging company - the telegram operator Western Union - that took care of the movement and the 'translation' from one currency to another.
The arrival of mobile money services in the early 21st century marked another step forward, but these too were local. Today there are more than 260 different mobile money services internationally, and few are interoperable.
Our company, WorldRemit, is performing the role of translator â€“ enabling people around the world to send money instantly from their smartphone to EcoCash, M-Pesa, MTN Mobile money, Airtel Money, Tigo Pesa, Zaad and others.
In fact, we offer transfers to more mobile money services than anyone else.
The speed and convenience of a true mobile to mobile service has proved incredibly popular with diasporas sending money home. More than half of all WorldRemit money transfers to Africa now go to mobile money accounts.
And we are seeing fascinating behavioural trends emerge. People are using mobile money transfers more like they use instant messaging than traditional remittance services.
In those countries where we offer both cash pickup and mobile money transfer, people send smaller amounts to mobile money (average $100 vs $200+), but they send much more often (average 3x per month vs 1.5x).
Why these radically different sending patterns? Our customers have answered that question. Rather than sending lump sums once or twice a month for general expenses, they are sending money to mobile wallets in response to specific requests â€“ buying groceries, a household bill, a meal â€“ following conversations with their recipient.
They do this, because they can. With WorldRemit, the money is transferred instantly and costs as little as $1.50.
As one WorldRemit recipient, Stellah in Uganda said, â€œit feels like someone is just next door to you, just in case you need somethingâ€Â.
We call this phenomenon the â€˜WhatsAppification of moneyâ€™, where financial support becomes part of a constant conversation between sender and recipient.
The rest of that conversation is taking place on mobile messaging apps such as WhatsApp, Viber and Facebook Messenger. In a recent WorldRemit customer survey, 42% of people said they discussed their transfers over instant messaging.
So instant messaging is both a metaphor for the way people now send money internationally, and a companion app to WorldRemit.
Alongside this, we are seeing the appearance of a mobile money ecosystem â€“ local at first, but gradually internationalising. People are building products and services connected to, and working with mobile money.
M-Changa, a social giving service, allows people to donate to good causes using their mobile money account. Recipients collect their funds in the same way.
Off-Grid Electric is a California and Arusha-based company providing affordable solar energy to rural communities in Tanzania. Their service is made financially viable because, rather than sending agents door to door to collect payments, customers can take advantage of flexible payment plans via their mobile money account.
Increasingly, this mobile money ecosystem will include international participants. We will see more innovative startups adding greater functionality and global reach to mobile money through intermediaries like WorldRemit.
Meanwhile, local telcos will expand the reach of their brands overseas. Our partner EcoNet in Zimbabwe already co-markets itself with us using the EcoCash Diaspora name.
All of these services have one thing in common - they use mobile money as a means of better connecting people, bringing them closer together and improving lives.
What is that, if not communication?