“I know first-hand in Kenya, where farmers have seen their income grow by as much as 30% since they started using mobile banking technology and one World Bank study found that a typical developing country, a 10% increase in the penetration rate for mobile phones led to an almost 1% increase in per capita GDP. Put this into context, that would for India translate into almost $10Billion a year.”
Hillary Clinton, Sec of State
The quote from Hillary came out last week so I am expecting a growing awareness of the potential of mobile banking among the Davos crowd. That being said it is not a topic of any Davos session except for a private workgroup on Thursday. I have found last night at the opening reception and the technology awards dinner a growing acknowledgement that mobile banking has potential in emerging markets.
The opening reception was packed. Mingling was easy since it was so crowded people were physically too close not to talk to one another. The group is truly international and eclectic combination of roles; civil society leaders, politicians, business leaders, academics, top journalist, technologist, non-profit leaders. The first time attendees aren’t exactly sure what to expect, the return attendees are glad to be back and enthusiastic about the week.
The technology pioneers awards dinner was attended by corporates that fund the program and the technology pioneers. The picture above I took of our table at the awards dinner. Each business was very interesting. Except for the Twitter CEO, the CEO’s I spoke to discussed their recent fundraising challenges. Most were involved in long cycles to raise money – but acknowledged that they also needed to find short term approaches to their business that required less capital. Fundraising is always an entrepreneur’s challenge – but in 2009 it was especially painful.
The sponsors of the technology pioneers awards were interesting. I sat with the Chief Scientist from BT. He made it clear that BT knows that they need to look outside of their corporation for innovation. He saw this program as a way to have innovation insights and select companies to partner with. I was struck by the fact that innovation and research has changed dramatically from the old Bell Labs, IBM research phase. Then the big companies saw innovation coming from within, and funded it heavily. Now companies know the world is changing quickly and that some of the most valuable innovations will come from outside their companies and their current business models.
Busy day ahead, first session is the Growing Influence of Social Networks. I am going to get there early to make sure I get a seat. I wasn’t able to get a place at the Rise of Asia dinner.
Less time to blog now, so I expect this will get shorter and less refined but I will try to blog at least once a day. Will also be tweeting (carolrealini).
February 1st, 2010
Obopay CEO Carol Realini
What excites you about having Obopay’s mobile payment services operational in Kenya?
As many people know my experience while traveling in Africa was key to the founding of Obopay. While on a social-action mission I saw people with bags of devalued currency buying prepaid minutes in a mobile phone store – it looked exactly like an image you would expect to see in a bank.
So I asked why mobile phones couldn’t become defacto banks, allowing people to move money around in ways they never could before. This was especially exciting since only about 5% of all people in Africa are banked.
So from that beginning in Africa, the big idea of Obopay was to leverage the growing ubiquity of mobile phones to deliver financial services to all people.
This launch in Kenya is especially exciting since we with Essar Telecom are delivering on that promise. We are now operational in three countries on three continents – US, India, and Kenya.
Why did Obopay partner with Essar to deliver yuCash by Obopay?
As you may know, Essar Communications Holdings Limited, the telecom subsidiary of Essar Global Limited, invested in Obopay in 2008. They share our vision for financial inclusion, and delivering advanced mobile banking and payment services. Although yu is new to Kenya, they are the fastest growing mobile operator in East Africa.
How do you imagine yuCash by Obopay changing people’s lives and small businesses in Africa?
I can image a lot. In some ways, Kenya is one of the most advanced mobile banking and payments market in the world. Already in Kenya, consumers know mobile banking changes things. Money can safely be stored on their phone, sending and receiving money can be done reliably, securely and instantly via their mobile phone, and now consumers are beginning to look for solutions to do even more with mobile money.
With our initial launch, we have already included new features and capabilities consumers are asking for. YuCash by Obopay displays a host of unique features which enhance the subscriber’s experience over and above just sending and receiving money. One very useful feature is the ability of a consumer to get a complete record of their transactions of the past 30 days – enabling them to keep a clear track on their transactions, eliminating the need to keep a manual record.
Banking empowers people in their life and work. Mobile Money brings banking to millions of people in Africa that have for so long been unserved by traditional bank methods. In the long term, I can image mobile money being the most important currency in Kenya – more important than cash, check or cards. Obopay is very excited about being there and teaming with such innovative partners as Essar Telecom, yu and Equity Bank.
What is different about yuCash by Obopay mobile payment services?
Already the service has unique features for Kenya; transaction history, invitations for family and friends, on the mobile phone help, short messages with transactions, and the ability to request money. Request money is a unique feature that enables the recipient of the money to initiate the transaction and request the sender to send a certain amount of money. The sender only has to confirm and have sufficient funds to send and the transaction gets concluded.
And this is just the beginning. The Obopay platform is the leading global mobile payment platform – and the number of great partners is growing.
You can tell I am really excited about the partnership with Essar Telecom, Equity Bank, and the launch of yuCash by Obopay. This is the realization of my dream of Obopay in Africa.
December 16th, 2009
Why did you start Obopay?
The idea for mobile phones to serve as the catalyst to deliver financial services was seeded when I was on a trip in Africa to support social entrepreneurs. I was in Congo (DRC), where the infrastructure was inadequate – power, roads, electricity. Yet in a place where so little worked, mobile phones were connecting large numbers of people who never had a land line.
This was in 2002, when there were only about 1.5 billion mobile phones in the world. It wasn’t obvious to me before that trip, but once I saw how people in Africa were using mobile phones, it became clear that sometime soon everyone in the world would be connected via the mobile phone. Today, there are more than 4 billion people with mobile phones, out of a total world population of 6 billion people. I knew that this was going to transform the world of communications.
Why mobile payments and mobile banking?
When I got home from Africa, I couldn’t stop thinking about mobile phones and banking. It was a simple idea – use the soon-to-be-ubiquitous model phone network to deliver financial services to everyone with a mobile phone. This would give everyone with a mobile phone access to basic banking services –savings, credit and electronic payments.
The idea had two dimensions – first, mobilizing the existing banking products, and second, developing new low cost mobile- based services that would be affordable to the underserved. The potential was huge – about 1 billion traditional consumers and 3 billion underserved. And connecting the two was key since so many of the traditional consumers send money to the underserved.
But, you were in retirement, no?
I was retired from technology, but helping non-profits foster entrepreneurship in developing countries. This non-profit work gave me easy access to other people who were thinking about the potential of mobile financial services. Many connections really came from the microfinance community, they were always talking about technology to propel things forward and mobile payments was one of the special topics at microfinance conferences.
It was not my plan to go back to work. After finishing extensive research, the founding team came together to make our idea a reality. We saw our careers in a different context – the three of us felt very passionate about the potential of mobile financial services and saw our past careers as great preparation for building Obopay.
What’s the connection between what you experienced in the Congo and what you started in the U.S.?
The connection is everyone needs banking. In places like the US, most people have good access – although there is still a large segment of our population that is underbanked (overcharged and underserved). In the U.S., we can give people banking and payments via mobile and do a better job at a lower price for the underserved. For emerging markets/developing countries where the banking infrastructure can be quite weak, mobile will leap frog traditional approaches and be the primary way people do banking.
In most places in the world, the simple act of paying a merchant or holding money you have in a bank is not easy to do and the impact on small business, individuals and families is huge. And, it has all sorts of impact on the economy, personal family and small business success.
What background work did you do to understand the market opportunity what drove you forward to start Obopay?
We did quite a lot of global research to understand what early projects were happening in the world – Korea, Philippeans and Africa. At the time, the most advanced mobile money implementations were in Japan and the Philippines. These implementations were just beginning and were local to those markets but demonstrated the potential. Since then, there have been other successes and proof points, but it was that research project (again I was not going to go back to work) that really propelled me forward to start Obopay. At the end of the research project, I read the research report. At the beginning of reading the research report, my career was behind me and at the end of the research report, my career was in front of me. I got so excited and passionate about the opportunity to leverage the growing number of mobile phones to enable financial services, I just had to come out of retirement and start Obopay.
What did you think would happen with the research if you didn’t start Obopay?
I don’t really know. I thought we would publish the research or maybe get some entrepreneur to take it on. If we just published the research we would never know the full impact of disseminating the information. I probably would have stayed living in Aspen with my husband and become a really great skier. But, that wouldn’t have been nearly as exciting as Obopay. At Obopay, we have the opportunity to empower people’s lives and change the way businesses transact. What could be more meaningful?
In Part 2, we’ll hear from Carol about the “early days of Obopay,” surprising feedback from early investors, and how the Company’s partnerships evolved.
December 1st, 2009
Netbanker studied articles by The Wall Street Journal’s
October 14th, 2009
In developing nations, women are using their mobile devices as a communications and mobile banking hub, writes Latoya Peterson at Jezebel.com. She also quotes the 2008, New York Times Magazine feature, “asking ‘Can the Cellphone Help End Global Poverty?‘ The story followed ‘human behavior researcher’ Jan Chipchase in his Nokia-sponsored quests to understand how people use their cellphones in a variety of environments.” Latoya also quoted stories in the publications below:
In Rural Africa, A Fertile Market For Mobile Phones [NY Times]
Can The Cellphone Help End Global Poverty? [NY Times]
Mobile Marvels [The Economist]
Beyond Voice [The Economist]
October 7th, 2009
Javelin’s James Van Dyke hits a nerve in this post on the Javelin Strategy and Research blog. Mobile banking, he writes, may be a bigger success than most industry observers think. Even outside of the U.S., mobile banking is now being tapped for growth in India, writes ZDNet’s Swati Prasad.
October 2nd, 2009
Yes, it is true, if you take the necessary precautions writes Eric Larkin on PCWorld.com. Eric smartly outlines the the myth of mobile insecurity and how to practice safe mobile banking.
Since we launched Obopay in 2005, security has been top of mind. We even have a Security Statement on our website.
Obopay takes the security of each account holder very seriously. We protect all Obopay accounts against unauthorized transactions and use advanced security technology whenever possible to prevent unauthorized access to account holder data.
September 24th, 2009
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