

52 percent of all money transfers in Kenya now done through Cell Phones - cwan
http://mobilemoneyafrica.com/archives/877

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evgen
A question that everyone saying "this is so cool, why don't they do that here"
should be asking is why so many people find this option necessary? The core
reason is that the banks in Kenya suck. Period. (Okay, I was only there for
two weeks but three trips to banks in that time period were more than I would
wish on just about anyone...) They make US cable companies and telcos look
like paragons of good service and low friction transactions.

In a country where there are not ATMs on every corner, credit card swipers in
even the most insignificant bodega, and where you stand in line for an hour to
get the cash you will need for a week or month's worth of purchases any system
that reduces transaction friction (especially for small-scale purchases) is
going to be a win. In places where the economic transaction infrastructure has
already pushed down the cost of doing business the appeal of such a system
becomes one of convenience rather than necessity.

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petermarks
I used prepaid sims from MTN and SafariCom when I visited Kenya and east
Africa this summer. 50 cent activation fee and $5.00 for all the minutes I
needed (including to the US) for 3 weeks on a network that seemed as reliable
as my at&t service. Humiliates American carriers in terms of value.

People from literally all walks of life use cell phones like this. From the
Masai herdsmen in Tanzania to the dirt dwelling inhabitants of the Kibera slum
in Nairobi. Here's a mobile shop in the heart of that slum:
[http://www.flickr.com/photos/petermarks/4017875315/in/set-72...](http://www.flickr.com/photos/petermarks/4017875315/in/set-72157622326180485/)

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listic
I suspect you can get away with things like these in Kenya because the state
is weak and cannot enforce regulation in the banking sphere, i.e. demand
banking licenses and proper accounting from phone companies.

Allowing for easy money transfer between cell phones leaves less control for
the state and opens up opportunities for financing illegal activities and
money laundering. From egoistical or anarchistic point of view it would be
cool, but one can clearly see why it isn't allowed in many other countries.

In Russia banking system also sucks (though not so badly) and usage of banking
services by the general population is low. So is quite widespread to pay small
amounts, like for paid web services, with SMS, or to repay small personal
debts by topping person's cell phone (prepaid system is prevalent). But phone
to phone transfers are not allowed. And if you wish to receive payment for
your online game via SMS, operators take commission of 30% to 50%. Is it that
bad in other countries as well?

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pelle
Overly strict regulators are actually one of the main reasons that banks in
developing countries can be such a PITA.

Most of these countries in Africa with mobile payment providers have spent a
lot of time with banking regulators getting these systems approved and they
have received a lot of praise by people in the payment industry for doing so.

You idea that easy money transfer allows less control for the state seems to
me to be misplaced. This fear of the money laundering is a huge problem in the
US and Europe and is stifling innovation.

Most people in Africa work in the informal sector, so yes by OECD standards
just sending money they illegally made selling Yam at the market back home
would in theory be money laundering.

However there is pretty good anecdotal evidence that M-Pesa in Kenya is really
helping develop the economy from the bottom up.

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foldr
Maybe this will finally shame US banks into removing fees for wire
transfers...

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stcredzero
What parallel-dimension US are you living in? In mine, banks just see stuff
like this as an opportunity to collect _more_ fees!

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foldr
But...but...I come from a country where wire transfers are free. Surely it's
possible here too? Please? Why am I still writing a check for my rent?

