Tuesday, July 1, 2008

E-Commerce/M-commerce - which way for Africa?

As pointed out by White African in his blog, there are lots of ideas flying around regarding payment solutions that can both fit and function according to the needs of the broader African populace. Top amongst these is the opportunity (or should we call it challenge) that mobile telephony offers.

It has been well documented by the ITU that mobile telephony in Africa is growing faster than in any other part of the world. This is supported by World Bank reports that "The African mobile market has been the fastest-growing market of all regions, expanding at twice the rate of the global market." There is therefore every reason to see mobile telephony as an avenue towards delivery of financial services to the largely unbanked population of Africa.

White African very elaborately says that "What we need is a carrier and bank agnostic ecommerce platform for Africa." This is further borne out in his discourse on the benefits of such a platform and the potential risks associated with current models that are tied to a single network operator. A couple of years ago during a period of much reflection on the same subject I came across a company that has implemented such a system in South Africa.

Wizzit - mobile banking in South Africa
Wizzit - is the name of the South African service that provides a cellphone based banking and transaction system. The company deliberately kept a low profile during it's early days to avoid been stonewalled by the larger banks in South Africa and instead developed it's product in partnership with a small bank that had enough flexibility and innovation to support the development of the product. The most significant aspect of Wizzit is that it works across all networks i.e. it is not linked or tied to any of the mobile operators - any subscriber with any network can sign up and use the service by simply purchasing a 'starter pack' for the equivalent of Kshs 60 (US$ 1) at any filling station convenience store or major supermarket.

Employing the Unemployed
Another very cool aspect of Wizzit's intervention is that instead of going the conventional route and hiring a sharp and savvy team of marketers and sales people, they created something called Wizz-Kids and invited unemployed youth; trained them, suited them up in very cool, branded gear and sent them out into the townships, rural areas and nether regions of the country to sign up customers. The initial team of close to 1,000 kids brought in over 10,000 accounts and in excess of 100,000 transactions within the system within the first couple of months. Since it's launch in 2004 Wizzit has provided thousands upon thousands of South African youth with employment.

Banking the Unbanked
Users don't have to have a bank account, but get a Maestro Debit card with the starter pack, which is linked to their Wizzit account which they can load up with money at any of thousands of agents, post offices and bank branches across the country. Once an account is loaded they can make person to person payments or transfer money to any other Wizzit user or merchant, load up airtime and pay for utilities. For those who need cash, a network of 'cash back' outlets at post offices and major supermarkets countrywide is available.

What about the rest of Africa?
Wizzit's innovation has had an incredible impact in South Africa but unfortunately has not been 'exportable', 'transferable' or capable of replication in countries outside of South Africa. In 2005 I made a number of efforts to engage with Wizzit guys and discuss the possibility of bringing the brand and model to Kenya. Unfortunately the fees and percentages that came out of these discussions were unbearable (or to be more precise commercially unviable). And for whatever reason, no one in other countries seems to have been able to put together a similar package of partnerships, agreements, legal loopholes to allow delivery of a similar model (at least none that I know of)

So, what can we do about getting something like this going in other parts?


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