Playing catch-up

Visa, Inc agreed to engineer Rwanda’s payments system: upgrading ATMs, installing merchant card readers, you name it. As the world’s largest bankcard network, it is a gigantic step for our economy.However, how many Rwandans have bank accounts and debit/credit cards? I suspect a considerable percentage of Rwandans do not. If this is true, hand in hand with establishing well-developed financial infrastructure with the help of Visa, we could also look into e-money as a financial enabler.Today the technology of money is catching up to social changes that have altered how people interact and how they use money. One poster child of this is electronic money that takes advantage of digital strides taken in the past few decades in ways that resemble a sci-fi movie. The mobile phone has played a major role in this evolution and changed money, as we know it, by providing a convenient means of exchange.This brings me to Kenya – home to the world’s largest mobile payments scheme, M-Pesa. Launched by a mobile operator (ironically not by a bank), it allows over 15 million Kenyans to use their mobile phones to deposit cash into their accounts and move that deposited money about with an application built on top of the text messaging function of their phones.For example, when buying bread, text the money to the bakery that is part of the M-Pesasystem, and money is debited from buyers account to credit the baker’s account. That’s not all: bars operate cash free (less robberies), farmers buy insurance for animals, online savings accounts…Kenya has left us light years behind! (One third of its GDP flows through M-Pesa).Kenya is an illustration of what mobile-driven economic transformation means for us in Africa. In all truth, Kenyans are not very different from us in that a considerable number of people lack bank accounts or credit cards; the Internet in both countries is also limited by low penetration rate. Sending cash between villages may call for an expensive courier but with the penetration of mobile phones in rural areas, a void can be filled with mobile money.When all is said and done, the work being done by Visa is going to change the financial scene dramatically but why not complement this with the mobile phone as an alternative to cash? Just like the plastic credit card or the web makes payments easier, phones make it easy for us to pay each other. Plus, unlike credit cards where users are concerned about the security of their information, with e-money transactions over the Internet cannot be tracked back to user (fraud is less likely as fraudsters cannot obtain card holder information). Nevertheless, I cannot wait to be able to do online shopping in Rwanda with my credit card!