
An African money-transfer firm with big ambitions - edward
http://www.economist.com/news/finance-and-economics/21674798-african-money-transfer-firm-big-ambitions-transfer-window
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reitanqild
Tangentially related: Anyone here has good alternatives for electronic
payments in East Africa, and mid/East Asia?

This is for a commercial startup that that is already working in these areas,
currently using mobile payments.

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bradvl
What problem are you looking to solve? I may be able to help.

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reitanqild
Thanks!

They are trying to collect small monthly payments for a service that is better
than the service these people/businesses already use.

Currently distribution works using mobile payments:

1\. Customers pay using telecom companies:

2\. A voucher sms is sent out.

3\. This voucher can be entered into automated distributed distribution center
that will release what the customer bought.

It works surprisingly well, but sometimes they are tempted to use scratch
cards in some of the markets.

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aianus
The commission to send $100 to Somalia from the UK is 7.5% according to their
website.

Imagine working your ass off on a construction site in London to send money to
your family in Somalia and realizing that one out of every 13 dollars you earn
is being pocketed by these middlemen.

There's nothing to admire here.

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pavlov
Did you read the article? They rely mostly on staff knowledge to ensure the
money reaches the intended recipient.

Imagine sending that $100 with a destination that reads: "Deliver to Mirjam,
daughter of Anna, who lives in the red house down the street from the Hargeisa
old town well."

7.5 dollars seems pretty cheap for that kind of service.

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aianus
Physically handling this much cash and verifying IDs and all this manual
garbage is not actually necessary to solve the real problem which is
transferring value to Mirjam.

The correct solution is to open accounts for these people like an actual bank
and subsidize ATMs and electronic POS systems to encourage people not to have
to actually take out cash.

Then you have a nice stable assets line on your balance sheet and you can
start lending money out and enabling investment and making a profit from the
interest.

> 7.5 dollars seems pretty cheap for that kind of service.

Sure, but if you send $1,000 it doesn't get any cheaper. Still worth $75?
$750?

