3 posts tagged “mobilephone”
Use your cell phone to call a friend's cell phone. Hang up after the first ring. Your telephone number is now registered at the top of your friend's call history log as a missed call and you pay nothing for airtime. Prank call or mere annoyance? In Africa and parts of south Asia, this practice, variously called "beeping," "flashing," or "bipage," is a vital low- or no-cost communication tool.
The key to the beeping phenomenon is the recognition that buried in the features of every standard mobile phone is a free pager. The recipient of a "beep" responds in a predetermined way, usually by calling the "beeper," but the message could just as well mean "I've arrived at the market" or "I'm done, please pick me up." The subtext of a beep is often that the "beepee" is better off (or at least has more airtime to burn) than the "beeper."
African mobile networks are likely the most advanced and well-developed infrastructure on the continent, but the average person doesn't always have the disposable income to be a full-fledged user. Beeping is a way to access the benefits of mobile communication at a lower price point many poorer African consumers can afford. Other favorite strategies for reducing cost are buying only a SIM card and using somebody else's handset to make calls or sharing one phone among many people.
According to Jonathan Donner, a researcher for Microsoft who has documented the beeping phenomenon, as many as a third of all calls that come across mobile networks in Africa are missed calls. In response, some African service providers have attempted to limit or monetize beeping by adding value to the paging function.
Orange Senegal lets customers send a "Call me back" message when their airtime credit drops below ten cents. A Kenyan provider does the same, but limits users to five messages per day. Vodocom DR Congo charges a penny for its service. Presumably, some consumers will choose these services over beeping because they don't have the ambiguity of a simple missed call.
Back in like Ninety-One, paging technology was the cutting edge. Many people (myself included) paid the same monthly airtime bill for a pager that we do now for a PDA equipped with a QWERTY keypad, camera, internet connectivity, and who knows what else. Leave it to the world's most cash-strapped consumers to ferret out the free underlying features of a technology we take for granted.
I first heard about this technology in connection with Semapedia.org, which allows you to generate QR codes that point to entries on Wikipedia.org. The idea is that, using Semapedia.org, people will "hyperlink" objects in the real word by placing QR code stickers on them that reference their entry on Wikipedia. For example, if you were walking by a dumpster and saw a QR code on it, you could scan it with your cell phone and link directly through to Wikipedia's treatise on dumpsters.
The reason this technology really floats my boat is that it's unbelievably easy to set up and use and its application is totally open ended. You need a web-enabled cell phone equipped with a camera, a QR Reader application loaded onto your phone, and a website that allows you to create QR codes.
I downloaded the i-nigma reader, which seems to support the widest range of phones (most Nokia, Sony Ericsson, and Motorola phones, among others). Then I clicked over to i-nigma's Create Codes page and made a couple QR codes to try out.
Using the site, you can encode a URL, contact information, or up to 4,296 characters of alphanumeric text which are output as an image. I made a QR code for the URL to the Hoole Intelligence Report. Launching the i-nigma reader on my phone automatically triggered the camera, which I pointed toward the center of the QR code. It locked on to the barcode and asked if I wanted to go to the web. I hit the select button and there I was at my blog. Super!
QR codes are the rage in Japan, where they can be found on products in grocery stores, in magazines, and on flyers. Also, it's common for Japanese business cards to be printed with a QR code, so that contact information can be easily input into a phone's address book via the onboard camera. I created an address book code for myself, scanned it with my phone, hit the select button, and voila -- the tel., e-mail address, and name were entered into my Outlook address book!
Even if a better technology eventually comes along and surpasses QR codes, what you've got here is a taste of the future. Unlike most gee-wiz technologies it's easy to set up and use. It took me less than five minutes to download the necessary software, make my own code, and scan it. QR codes get extra points for robustness (up to 30% of the code can be obscured and it will still be read accurately) and for being a flexible, do-it-yourself technology. The Hoole Intelligence Report heartily endorses QR codes.
The rise mobile banking as a phenomenon is owed to two trends -- the growth of the world mobile phone network and the technology-driven prominence of micropayments in the field of finance (a topic a future post). As the technology improves, mobile banking will gain traction internationally, but the intriguing thing about it is that the world's poor are the most significant early adopters.
By year's end, according to Reuters, the number of mobile phone subscriptions will equal half the world's population. Each day, a million people open new mobile phone accounts -- eighty-five percent of those are said to live in the poor areas of the world. In India alone, five million new subscribers are added each month. According to the World Bank, one in nine Africans has a cell phone. Big players like Samsung and Nokia are manufacturing and marketing mobile phones specifically with the world's poor in mind.
Along with its obvious function as a basic communication tool, the mobile phone is emerging as a platform for financial transactions in parts of Africa and Asia where access to conventional banks by rural and city populations alike is limited by poverty and poor infrastructure. Mobile banking utilizes the SMS (text messaging) protocol to do such things as repay loans, collect loan disbursements, send remittences to family and friends from abroad, buy airtime, and pay utility bills. Here is the skinny:
Pay-as-you-go -- It goes without saying that the poor populations of the developing world don't have a lot of folding money for cell phones or airtime. Pre-paid airtime, which can be rationed and purchased as more money becomes available, has brought mobile phone service within the reach of an astounding number of low-income consumers. Pioneering Philippine provider Smart Communications offers the "Smart Buddy" cellular phone which is equiped to purchase pre-paid airtime in increments priced as low as $0.54. As an easily transferable and widely desirable commodity, cell phone minutes themselves have become a kind of currency and are exchanged as such for goods and services.
Banking without Banks -- Poor populations are isolated from bank branches, can't afford the minimums an account requires, and have financial needs conventional banks don't service. Mobile banking provides extremely simple, flexible financial services that require only a handset and mobile service. In cooperation with Kenyan provider Safaricom, Vodafone has introduced M-PESA, a service that allows Kenyans to deposit, withdraw, or transfer money. According to the New York Times, around 2,500 Kenyans sign up every day for a total of more than 175,000 subscribers since the service went online three months ago.
M-PESA is not a bank and isn't regulated as such, allowing it to focus on facilitating the simple transactions its customers demand. An M-Pesa transaction simply changes the computer record of how much money belongs to which user. The fee for each transaction, which amounts to less than a dollar, is split between the sender and receiver.
For both Smart and M-Pesa, the cash points (venues where physical money from mobile transactions can be collected) are a network of widely dispersed brick and mortar businesses, like gas stations and sundries stores. Use of the service is open-ended, allowing transactions with financial institutions or person-to-person. M-Pesa was built to facilitate institutional loan transactions, but person-to-person transactions have proved to be most popular. Filipinos living abroad are using Smart's service to send an estimated $50 million in remittances back home every month.
Relationship Selling -- Poor infrastructure and hard-to-reach rural populations make distribution a major obstacle to large scale business in the developing world. The innovators of mobile banking have skirted this by adding the reach of the cellphone network to existing personal and commercial relationships.
The products themselves -- pre-paid airtime and money transfers -- are delivered over the mobile network. Marketing and service are delivered entirely by existing small merchants and private individuals. Smart Communications of the Philippines has built a network of over 500,000 retailers including not only small merchants, but individuals set up to "network market" airtime locally. According to Smart, these roving agents of the company can earn up to $18 per day in airtime re-load sales.
In South Africa, where over half the adult population has no bank account but 30% have cell phones, a mobile banking service called Wizzit employs over 800 "Wizz Kids" - typically unemployed university graduates from low-income communities - to promote the product in the townships and help customers open accounts.
In Conclusion -- By using a simple technology (text messaging), mobile banking lowers transaction costs, enabling flexible use by the consumer and the opportunity for the service provider to profit from many small transactions. It surely won't be long before governments in the developing world discover that accepting mobile payments will help overcome their own infrastructural barriers to collecting taxes and utilities fees.
The mobile phone's role in development is sustainable because it offers clear benefits and an affordable price for consumers at the bottom of the economic pyramid and is proving profitable for the companies who sell the phones and the service.
Mobile banking is a frankly exciting example of how new technologies can leap-frog over the massive infrastructural limitations of life in the developing world. Can't get to a bank -- cool. Unreliable power grid -- that's OK. Only have two coins to rub together this week -- let's set you up with two coins worth of air time. How futuristic is it that the world's poor use their cell phones more intensively and with greater sophistication than we do?
