Category Archives: Mobile Phones

Latest Post for the World Bank CGAP: Smartphone-Led Digital Finance: Three Areas to Watch

This post was published on the World Bank CGAP website here.

The rapid uptake of smartphones stands to enable a transformational opportunity for digital finance. Last year, less than a third of all connections in developing regions were smartphones, while in the next five years, four in every five smartphone connections globally are predicted to come from developing regions. While basic and feature phones aren’t going extinct in the near future, smartphone-based connectivity presents an opportunity to drive forward digital finance efforts where they have yet to take off.

GSMA’s “From Feature Phone to Smartphones: The Road Ahead”

This dramatic trend also raises important questions concerning meaningful access and design for lower-income consumers as well as privacy and data security, as flagged in CGAP’s recent publication, Doing Digital Finance Right.Here are three areas in particular for the digital finance field to watch as more smartphones make their way into the hands of financial consumers in the developing world: new functionalities, new players and new risks.

New Functionality

At the end of last year, there were almost 300 million mobile money accounts, but more than 60% were inactive. Mobile money usability research in India found that on average more than 25 errors were made trying to complete a single financial transaction on feature and basic phones. In contrast, smartphones aren’t constrained by USSD-based interactions, which require numerous steps and are prone to timeouts, providing the potential for more intuitive, advanced services.

With the launch of GCash, Lenddo, M-Ledger, pesaDroid and Zuum, we saw the first wave of these more icon-driven and dynamic digital finance apps in emerging markets. More experimentation is under way. For example:

As these apps gain traction, there is an opportunity to move away from error-prone, one-size-fits-all mobile money services and iterate towards more intuitive and and tailored solutions.

New Players

The flourishing Android smartphone ecosystem is not only driving down prices — as low as $40 on India’s ecommerce platform Flipkart — it’s also opening up market entry opportunities to new players. At the beginning of the year, Xiaomi, now the world’s third largest smartphone maker, launched an interest-bearing mobile wallet; Google recently launched Android Payand is in the process of introducing a peer-to-peer payments app; and this month, Samsung has started trialing its new payment service in South Korea.

Visualization of Android operating services across 682,000 surveyed devices by OpenSignal

The financial inclusion field should also be paying particular attention to efforts tackling costly mobile data rates. This area is fertile ground for new business models and partnerships for serving low-income customers. For example:

As more service providers enter the ecosystem and partnerships solidify, there is an opening for competition to not just drive down prices but also continue to catalyze new mobile financial services.

New Risks

In 2015, the amount of mobile data traffic around the world is expected togrow 59%compared to last year. As a main contributor, smartphones raise the stakes on data privacy and security measures, and consumers are worried, at least in some markets and some segments. A survey of more than 11,000 mobile internet users across Brazil, Colombia, Indonesia, Malaysia, Singapore, Spain and the UK found that 83% have concerns about sharing their personal information when accessing the internet or apps from a mobile device; however, 80% of users agree to privacy notices without reading them because they tend to be too long or legalistic.

Smartphone data may become harder to protect in this more fragmented ecosystem and ever-changing value chain. Security mishaps, such as what occurred at Venmo in 2014,suggest a prioritization in some companies of growth over security and privacy, and protective measures remain largely reactionary. In addition, reports of data breaches and malicious malware strains are hard to ignore, including an Android-based mobile payment malware that reportedly “could extort money from users by hijacking personal information and spoofing bank apps into sharing personal data.” This impacted users in more than 100 countries including, for example, over sixty thousand users in Vietnam.

As providers continue to garner richer user data through smartphone apps, the leaders in this mobile ecosystem will need to have better solutions and clearer answers to consumer concerns about the safety and privacy of their data. Last year, 6,000 consumers in 12 countries were asked the question, “If you are considering trying a mobile money transfer service, what would make you try it sooner?” Details of security and privacy measures were the top answers cited, and even more pronounced by those surveyed in emerging markets like India, Brazil and China regarding mobile payments.

In Conclusion

With these three trends converging alongside the unprecedented proliferation of smartphones to all corners of the world, what remains to be seen is how digital finance will co-evolve and keep pace with mobile technology’s advancement. However, what is clear is that those in the digital finance space that aren’t experimenting with this new functionality, fostering these new partnerships and coming up with cost-effective and robust ways to mitigate these new risks, may very well be left behind.

What is the universal impact of mobile technology?

Last week, as part of their Mobile Economy Project, the Brookings Institution invited me to participate in panel discussing the universal impact of mobile technology. The event highlighted how mobile technology is affecting economies, politics, education, and healthcare, and only just getting started. In my remarks, I argued three main points: Continue reading What is the universal impact of mobile technology?

Event: Networked Nation – How Technology Is Transforming The Economy

I recently participated in a panel hosted by The Atlantic and National Journal to discuss how technology is transforming the economy and the way individuals interact with companies and institutions. Clive Crook from The Atlantic who was moderating the panel (and did a great job) put me on the spot right at the start by asking how I saw technology disrupting the norm in my work and research. See the video of my panel below: Continue reading Event: Networked Nation – How Technology Is Transforming The Economy

The Big Idea: Taking Mobile Money Forward

This article was originally written by Eric Tyler for Next Billion.

The excitement of mobile money has been dampened by an inability of deployments to take hold outside a handful of successful markets. Driving the enthusiasm forward is the opportunity to bridge the gap between one billion people in emerging markets who have mobile phones but no bank account. On Tuesday, McKinsey & Company released a report “Mobile money: Getting to scale in emerging markets” seeking to cut through this excitement and identify critical success factors for implementation.

Through interviews and workshops with 40 mobile money providers, the report stresses three important elements as critical for a successful mobile money enterprise post launch:

(1) Pay close attention to managing the agent network;

(2) Create a compelling product offering;

(3) Maintain a corporate commitment.

The report also rightfully acknowledges other pre-launch factors like regulation, market structure, technology execution, and partnerships, as being central to a mobile money deployments’ success.

There is also a clear need to answer the important questions before launching a product. After comparing developed mobile money environments with the developing environments of Brazil, Nigeria, Sri Lanka, and Thailand, the IFC has worked to develop a framework to assess a country’s potential for a successful mobile money deployment, including demand and user perception surveys and current regulatory and financial services assessments.

As part of the SPINNAKER project, we have focused our research in Kenya and the Philippines on two of the leading mobile money environments in the world. And in a report being released next month, we examine the regulatory framework and financial management behind the growth of agent networks in Kenya and early examples beyond mobile transfers of integrated mobile money and financial products.

With 130 mobile money deployments underway and 93 in planning according to the GSMA, it’s helpful to evaluate what lesson we have learned so far, and the McKinsey findings and IFC framework help to refocus the excitement of the field. But what is also needed is a re-evaluation of the end goal of mobile money, which is an opportunity to progress mobile money beyond money transfers into mobile banking and deeper financial inclusion for the next billion.

Are Mobile Solutions Overhyped?

This article was originally written by Eric Tyler for CNN.

Yes, if you are predicting that mobile technology will mean the end of the digital divide and that a mobile phone in every hand will solve all problems. No, if you are saying that utilizing mobile phones already in the hands of nearly 6 billion people is profoundly better than dropping tablet computers out of helicopters.

Mobile phones are leading the developing world into the information economy and digital age. Already, we’ve seen the potential of the devices to transform an entire industry, as mobile money did in Kenya. And for a large portion of the developing world’s next generation, it will be through mobile phones that Internet connectivity is gained.

But let’s not get ahead of ourselves and throw mobile phones at every problem we see. The sustainability and effectiveness of mobile solutions will be closely tied to the human reality and context that surrounds these devices. And important questions still need to be asked around replicability and costs. For example, why has mobile money not yet taken hold outside of Kenya? And how can prices come down for those who cannot afford mobile phones?

A promising sign of mobiles phones’ potential are early randomized evaluations of projects showing a range of positive impacts. One such study of a mobile money transfer project in a drought prone village in Niger showed a huge reduction in distribution costs and greater diversity in crop allocation, purchasing decisions, and diet for mobile transfer beneficiaries.

“Mobile development” is still in its infancy. After all, the first call was made from a mobile less than forty years ago. The inventor Martin Cooper picked up the two and half pound handheld and dialed his rival company’s head researcher to gloat. Martin couldn’t have envisioned the implications of his breakthrough for helping the world’s poorest, and the picture is still coming into focus today. Whatis already clear is that this is just the beginning, and as mobile phones get smarter, cheaper, and more widespread, they will continue to play an integral role in adapting international development to the digital age.

Mobile Phones and 21st Century Poverty Reduction

This blog post was originally written for the Global Assets Program of New America Foundation.

The first place winner of the State Department’s Apps 4 Africa Competition – a calling for technologists in East Africa to build the best digital tools to address community challenges – was awarded to a mobile application called iCow.  The voice-based App helps farmers maximize the value of their cows by tracking breeding periods and monitoring nutrition levels leading up to a calf’s birth. Another winner was an SMS service called Mamakiba, a mobile platform designed to help low-income women cope with the financial burdens of maternal health such as antenatal care and clinical delivery. The App maintains savings targets for user’s healthcare costs and establishes prepayments through a mobile money platform (M-PESA). 

If there could be a competition for the technology device with the fastest adoption in the developing world, mobile phones far and away would take first place. From 2003 to 2009, in Least Developed Countries, average penetration of mobile subscriptions rose from 2 per 100 inhabitants to 25 per 100 inhabitants (with this penetration likely being higher due to numerous mobile users and multiple SIM cards per single phone). To put this into perspective, a report from the United Nations University concluded that more people in India have access to mobile phones than bathrooms. Globally, by the end of this year, there will be an estimated 5.3 billion mobile cellular subscriptions; more astoundingly, the developing world will account for more than two-thirds of these subscriptions. No such technology has ever seen such a rapid rate of adoption according to the International Telecommunication Union, and the developing world is leading the way.

So how is this ubiquitous device being leveraged as a tool for poverty reduction?

Just as the winners of the Apps 4 Africa Competition demonstrated, mobile phones can be utilized by those living in poverty in a number of different ways. One of the most revolutionary methods is mobile banking. A CGAP Paper published last month examined the question: does branchless banking live up to the hype and actually lead to increased and more effective financial services for the poor? After studying 18 branchless banking providers (only four of which were completely non-mobile[1]), with more than 50 million customers in 10 different countries around the world, their conclusion was quite simply yes. 37% of the active users examined had previously been unbanked, and transaction values were almost 20% cheaper than traditional banks.

Just as mobiles are spreading so are mobile banking services beginning to take off and expand. For example, M-PESA, a mobile banking platform that has processed more transactions domestically in Kenya than Western Union has globally, had reached 44% of households in 2008, and only a year later, seven out of every ten households were using the platform. The GSMA provides a live deployment tracking of mobile banking around the world; currently, 96 services are underway, and nearly the same amount (91) are in planning.

Mobile phones have the ability to be amazingly entrepreneurial –as proven by the winners of the Apps 4 Africa competition – while also never losing touch with their users, which sadly can be the story of many humanitarian technology employments. Take for example the 40,000 sugar cane farmers in the Warana District in western India. Fluctuating supply and demand and difficulties coordinating with sugar mills that process and then sell the sugar often leads to farmers travelling long distances (up to 15 miles) only to find their crops out of demand. To bridge this gap, a computer-based information exchange system was constructed, but due to high costs and poor infrastructure, the website fell to disuse. Soon after, a mobile-based system using text messaging was piloted, connecting the farmers to market information. The wireless system was less costly, easier to maintain, more accessible and provided immediate price information. Over eight months, the unwired system has had widespread usage and success, resulting in savings of more than 1 million rupees for the farmers.

It is clear that communities in the developing world have chosen their own tool for poverty reduction. In many rural and poor communities where schools and hospitals struggle to get the resources they need and intermittent electricity and inadequate roads remain, mobile phones and the infrastructure to support them are booming. A report examining income expenditures of 17 African countries found that on average the poorest individuals in over half the countries were spending more than 16 percent of their income on mobile services. And where non-financial barriers present themselves, users have adapted solutions to remain engaged with their mobile phones; car batteries have become phone chargers, and even illiteracy has not stopped users.


Mobile phones provide those living in poverty with an opportunity to be their own problem solvers, business entrepreneurs and aid workers. Connectivity and creativity have transformed mobile phones from a technology device into a tool of economic empowerment, and their rapid spread in recent years have established it as a powerful tool of 21st century poverty alleviation.

[1] The four non-mobile branchless banking providers are Banco Postal (Brazil), Bradesco (Brazil), Caixa  Economica (Brazil) and Fino (India), which are the larger branchless banking institutions studied, and additional four services use both mobiles and smartcards.