Archives for posts with tag: mobile payments

Screen Shot 2014-10-28 at 11.38.40 AM Las Vegas, NV November 2nd-5th 2014 – MMIT will be attending the Money 20/20 Conference at the Aria Casino and Resort in Las Vegas. Money 20/20 is the leading conference for global innovations in money and will be attended by over 7,000 people, including 700 plus CEO’s from 2,400 companies in 60 plus countries. There will be over 500 speakers and some of the key note speakers at this year’s event include Hill Ferguson from Paypal, Kenneth Chenault from American Express, and Tom Taylor from Amazon to name a few. There will also be over 400 sponsors and exhibitors at this event. To find out more about Money 20/20 please visit http://www.money2020.com.

MMIT is a mobile payment processing company that focuses on the Sub-Saharan African market. We work with some of the largest financial institutions in Africa and have access to over 80 million consumers in East and West Africa. MMIT’s mobile technology platform offers secure, fast, and easy payment solutions. MMIT is dedicated to creating forward thinking payment solutions for each transactional demand, all through your mobile phone. To find out more about MMIT please visit http://www.mmitonline.com. Rebecca's blog signature

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AccraH-d1bf92b9-9b06-40bf-8f94-3d70442b4c4eGhana’s Mobile Landscape

The next destination in MMIT’s mobile market series is Ghana, a country that is populated by more mobile phones than people. Ghana presently has a mobile phone penetration rate of nearly 109%, one the highest in all of Africa. However, this statistic does not equate to every Ghanaian owning a mobile phone; this high percentage is due to people having multiple phones or SIM cards. Even so, this statistic is eye-catching to those in the mobile industry and Ghana is a country that should not be ignored.

Phones in GhanaThe actual number of unique mobile phone owners in 2013 was an estimated 15 to 16 million. Ghana continues to see rapid growth in the amount of mobile subscribers, and of all the Sub Saharan countries it is ranked 4th behind Kenya in amount of mobile users.

Ghanaian consumers are more connected to media content compared to other countries in Sub Saharan Africa, largely due to the fact that the country boasts the highest penetration of mobile broadband in the region. Data subscriptions are growing faster than voice and are the focus of players within the industry. Ghana’s telecommunications industry has 6 major providers: MTN, Tigo, Airtel, Glo, Vodafone, and Expresso.

Mobile GhanaThe Ghanaian Consumer 

The spread of media and technology has penetrated so deeply into the country that media touches even the most rural areas. TV, radio, and internet penetration rates exceed most of their African counterparts, while the more traditional newspapers and magazines lag behind. Mobile phones are predominately used for text messaging followed by voice calls and accessing the internet. Social media is extremely popular and ever growing in Ghana placing it behind South Africa, Nigeria, and Kenya for most users. The presence of media greatly influences Ghanaians as they are easily swayed by packaging, advertising, and the reputation of a brand.

Ghana ED School

As seen throughout much of Sub Saharan Africa, Ghana has a youthful population, 56% of the 26.4 million residents are under the age of 25. The abundance of youth is the ideal environment for introducing the latest technologies as they are quick to adapt to innovations. Additionally, a large portion of the population is financially excluded. According to Fidelity roughly 70% of the adult population in Ghana is unbanked as of March 2014.

An unbanked population is an opportune environment for mobile payments, as people do not have bank accounts, lack trust in the banking system, and are at large a cash-based economy. Visa reported in 2013 that the Ghanaian market is one of the leading mobile money markets in the world. A survey that was conducted by the payment company revealed 93% of respondents were aware of mobile money options.

Although this may be an attractive market to enter, many mobile payment providers have failed to tap into the market due to its intricacies and barriers to entry.

Business and Economic Environment

Ghana was recognized in 2013 by the Economist as one fastest growing economies in the world. As a result, the country has attracted the interests of investors from all over the world. The political environment is stable and often considered a model for success in West Africa.

Unfortunately, this impressive growth has declined since early 2014 due to currency issues. Ghana has seen the world’s worst currency slide as the Cedi plunged 36% against the dollar this year. As a result of this currency crisis, inflation has spiked to a hefty 15%. This causes concern for entering the country as it effects foreign exchange rates and cost of goods to consumers.

cedi

This currency crisis has led to a rise in taxes on bank transactions. Fees can be as high as 17.5% as a VAT (Value Added Tax) rate, causing people to pull money out of the banks and close their accounts. This only furthers Ghanaian’s mistrust in the government and banking systems.

In light of these issues, many banks have been reacting to the crisis by revamping their brand images, adding new innovative products, and launching new mobile apps in effort to retain and attract customers. Many of these initiatives popped up at the beginning of 2014 and focus on reaching unbanked consumers or debuting never before seen value added services into the product mix.

These issues present an interesting opportunity for the mobile payment market, as people will avoid traditional banking methods or transactions with associated fees. Mobile money is a convenient way to address the unbanked and bring people into some form of financial inclusion.

With changes developing so quickly within the Ghanaian market it presents considerable barriers to entry and thereby furthering the difficulty of entering the market. Those who can successfully enter this market will reap considerable benefits, as the market is risky yet ripe with opportunity – particularly in the mobile sector.

Please check out our “Mobile Market Look” series for Kenya and Nigeria

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In the Western World the idea of mobile banking/payments starts with our smartphones.  Our chief concern usually centers around privacy and security.  In the emerging World, especially Africa, mobile banking/payments are quite different and the concerns are quite different as well.  I recently talked to MMIT COO – Kim Fraser about the unique concerns and problems that face mobile wallet users in Africa:

AB: First of all thank you for taking the time today to meet with me Mr. Fraser.  I was hoping you could elaborate on the issues faced by mobile wallet users in Africa?

Kim: Thank you, and yes I can definitely speak on that.  In the west traditional banking services are universally accessible to a majority of the population through the use of ATMs, credit cards and debit cards. In Africa and other emerging markets banking services are not so universally widespread and accessible to the majority of the population. This is due to a number of factors such as the high cost of brick and mortar establishments, account opening criteria with the need for credible references, and relatively high initial deposit requirements, minimal balances, high transactional fees, cash based salary payment for many low end wage earners, etc.

In the west most mobile wallets or mobile phone banking products are based on the use of credit cards, and debit cards. They store the users card details on the phone. In developed markets most users of mobile phone technology are aware of the constant problem of identity theft in the mobile phone industry and the underground business that surrounds this activity such as illegal phone shops. Thus many view this as a security issue and an avenue for the theft of their financial details and the impending havoc it can create in ones life.

In Africa and the emerging markets with high rates of poverty the percentage of the population that is banked and using credit cards and debit cards is very small. Mobile banking in its original state, as introduced in Kenya by Safaricom (M-pesa), was not intended to target the banked but the unbanked, those that have no bank account, and no credit facilities. In this market segment the issues around adoption are different. Security is a concern but it does not revolve around identity theft but instead around the risk of carrying physical cash as opposed to carrying virtual cash, which is seen as safer. Also transaction fees for mobile banking are lower than brick and mortar banking fees, there are no minimal account balance barriers, and signing up for a mobile wallet/ bank account normally doesn’t require two reputable references that are already clients.  All it requires is a photo ID, and your phone number, and can be done at any of the mobile banking agent outlets.  Today there are 30,000 M-pesa agent outlets in Kenya and everywhere there is mobile phone service.

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AB: So really the perspective is totally different in Africa than in the West?

Kim: Yes, in Africa and other emerging markets most of the population perceive such services from a totally different perspective than in the west.  It is a game changer and an enabler not a convenience factor such as is the case in the west, where a larger percentage of the population carry smart phones and have credit, debit and ATM cards.

AB: Thank you Kim for your time and knowledge and remember you can follow Kim and MMIT at http://www.mmitonline.com.

MMIT COO – Kim Fraser