Vodafone M-PESA and Nokia Money

Mobile money makes the world go around

Mobile money Vodafone is launching its mobile money product, M-PESA in South Africa, via subsidiary company, Vodacom South Africa. Pesa is Swahili for cash. The service is already up and running in with Vodacom in Tanzania, Safaricom in Kenya (40% Vodafone stake) and with Roshan under the brand name M-Paisa in Afghanistan (no Vodafone company stake).

Meanwhile, Nokia has teamed up with YES bank, a private sector bank in India to commercially pilot Nokia Money in India. The service will be tested in Pune, one of the largest metropolitan areas in India, and will be called Mobile Money Services.

Both countries have huge populations, with little or no access to credit, bank accounts or any electronic facilities beyond a basic phone. An estimated 26 million people in South Africa, and many times this number across India can potentially benefit from these products.

Whenever I see mobile money products discussed in the UK media, the fraud and security risk is highlighted by journalists. The situation must be greatly magnified in the developing world. Beyond PIN misuse or shoulder-surfing to spy on a users details, there must be good reason behind the 14 armed guards I saw in Asia, standing outside a branch of HSBC while cash was transferred from a nearby Mall. From the Bank and Mall’s point of view, anything that reduces the need for armoured cars and guards will hugely reduce costs.

(To be entirely fair to all my friends in India and The Philippines, I was almost equally surprised to see two security guards on duty at a branch of Nationwide, by the coach station in Bristol, UK.)