Most mobiles…

For those interested in mobile banking, here are a couple of recent articles I’ve found particularly helpful:

1) Gautam Ivatury and Ignacio Mas at CGAP have released yet another insightful focus note, this one on “the Early Experience With Branchless Banking“ (related blog post here).  In part of the note, they integrate data from Brazil, Russia, and South Africa suggesting that (at this time) branchless banking customers use the payments and transfers features, more than the savings features.  To me, this starts to peel back the layers on both the behavioral and the “mental models” questions, where data has been notably scarce. These early findings suggest that users may initially understand the services as virtual post offices, rather than virtual wallets.  However we are still early in the domestication/structuration process - meaning, there is plenty of time for the social norms and use patterns to emerge in a different direction.

2) (via Jan Chipchase’s blog).  Bill Maurer at UC Irvine has a draft concept paper, Retail Electronic Payments Systems for Value Transfers in the Developing World.  Maurer presents a broad overview of the transfer functions of the m-banking space, and differentiates between emerging narratives (stories) that various interested communities apply to make sense of it.  (Note again my interest in the mental models of m-banking).  Depending on where one stands, the emerging story of m-transfers is one of empowerment, market share, new sources for fees, or the arrival of new strain of ‘tulips’.

I’m just finishing up a broad revision to this conference paper, and am grateful to have these two papers to draw on and reference.  I’ll post or link to the revision when it is ready.

Sara Corbett just completed a lengthy piece on mobiles and economic development for the New York Times Sunday Magazine.   Its primary focus is the interesting and influential work of Jan Chipchase and his colleagues at Nokia, and it also touches on other exciting developments in the field, including Grameen Village Phone and M-Pesa to kiwanja.net, and the World Resources Institute. 
This paragraph, in particular, is a nice summary of what a lot of us are up to:

This sort of on-the-ground intelligence-gathering is central to what’s known as human-centered design, a business-world niche that has become especially important to ultracompetitive high-tech companies trying to figure out how to write software, design laptops or build cellphones that people find useful and unintimidating and will thus spend money on. Several companies, including Intel, Motorola and Microsoft, employ trained anthropologists to study potential customers, while Nokia’s researchers, including Chipchase, more often have degrees in design. Rather than sending someone like Chipchase to Vietnam or India as an emissary for the company — loaded with products and pitch lines, as a marketer might be — the idea is to reverse it, to have Chipchase, a patently good listener, act as an emissary for people like the barber or the shoe-shop owner’s wife, enlightening the company through written reports and PowerPoint presentations on how they live and what they’re likely to need from a cellphone, allowing that to inform its design.

Recently, I attended HOIT 2007—Home/Community Oriented ICT for the Next Billion.  Hosted at IIT-Madras, this was the first time the conference has been held outside the US or Europe. The “next billion” theme of this year’s version provided an umbrella for ICT4D discussions, and included a keynote by Prof. Ashok Jhunjhunwala. 

I presented an updated version of my thoughts on m-banking—although the basic paper is unchanged—as part of a panel called “Living and Livelihoods: ICTs and the Blurring Domestic and Economic Spheres in Emerging Economies”. The panel’s other presenters were my MSR colleague Nimmi Rangaswamy (ICTs in middle class Indian families, with an emphasis on mobile phone sharing), Jan Blum from Nokia Design (street-smart businesses in China and Brazil), and Vinod Gopinath of Novatium Solutions (an overview of Novatium’s netPC).

There were only a few presentations which directly addressed mobiles-in-the-developing-world. Of those, the keynote by David Frohlich of the Digital World Research Centre about the Storybank Project was particularly interesting, Storybank is exploring the use of simple, affordable ICTs to capture to stuff of everyday life in villages in the developing world (David called it community centered design). As the Storybank website explains:

Cameraphones and digital library software will be used to support the capture and sharing of this information in the form of a short audiovisual story. We use the word story to refer to a spoken language report, illustrated with still or moving images. By focusing on audiovisual information of this kind, we hope to give a stronger voice and role to people who cannot read and write, or use the internet to record and access textual information

This general approach has a long history (e.g., Through Navajo Eyes), but mobile technologies open up new possibilities for these initiatives to capitalize on the handset’s affordances for simultaneity, customization, and ubiquity. New projects like Storybank can help us explore the boundaries of mobile appropriation and community use.

Speaking of digital libraries, some of concepts highlighted by Storybank remind me of similar efforts in the Digital Green project, led by my colleagues Rikin Gandhi and Rajesh Veeraraghavan at MSRI.  Digital green is focused specifically on agricultural productivity, but also relies on content generated by members of the community rather than on content created outside.

The logic of blurring the user/producer dichotomy, so central to recent developments in new media and social software, is currently finding its way into all sorts of interesting projects in the developing world; Storybank, Digital Green, and MobilED are just a few.

Here is a nice piece in the New Scientist, outlining some of the ways smartphones are being used in a variety of important initiatives in the developing world: microfinance, m-banking, civil society, health surveillance, and education.  The crux/core quote: 

“Smartphones are probably much more revolutionary for developing countries,” says John Canny, an engineer at the University of California, Berkeley, who is creating educational video games that run on smartphones… “Here smartphones are a bit gimmicky. In the developing regions you have hostile conditions for a PC so phones have a lot of potential to become the computing platform for people,” says Canny.

The article starts by describing some applications which run on basic handsets, and then moves on to detail those which are utilizing more advanced functionality like photography, audio recording, and data transfer. I’d put a slightly finer point on things, and would emphasize that hardware and connectivity costs still limit the settings into which smartphones can be deployed.  What the more broad-based, often occasional, applications lack in processing power they make up in accessibility and ubiquity.  For example, the M-PESA system, like many m-banking systems, runs as well on a $30 handset as it does on a smart $300 handset.

On the other hand, we are seeing fascinating smartphone initiatives, where a relatively small number of devices are distributed into specialized settings with relatively intense informational needs (such as classrooms or microfinance organizations). The costs of the smartphones are often surmountable as long as the devices can be dedicated to certain high-value tasks, or shared between lots of people.  As the cost of smartphone functionality comes down, and as data access becomes more available and affordable, we’ll see these distinctions blur, and the set of possibilities will continue to expand.

One additional comment on the headline, which I think does the otherwise informative article a disservice. Smartphones are a helpful and affordable way to accomplish many of the tasks for which previously one might have wanted to use a PC. But smartphones are not, as the article’s headline asserts, “the PCs of the developing world.” The developing world is now and will be characterized by a higher ratio of mobiles to PCs, but that does not make PCs irrelevant, unaffordable, or unwanted. Ask the local “developing world” hospital, or the university, or Wipro, for that matter, if they are ready to give up their PCs for smartphones. 

While perusing Balancing Act (Issue #365), I found a link to this story on m-banking in Namibia and Botswana, centered on an interview with First National Bank (FNB) cellphone banking CEO Len Pienaar.  Among the quotes:

“In SA, we have a high density of banking options, such as ATMs, card-accepting devices, and even branches. In Namibia, for example, this is much lower and you have a huge rural population,” explains Pienaar.

He says the bank’s approach to cellphone banking has adapted to the needs of different countries, with customers in Namibia and Botswana having to register for mobile banking in-branch so they can be shown exactly how to use the technology.

“Mobile networks are well-established in most of the countries we are in, and the technology, such as SMSes, is well-known,” says Pienaar.

In the space of just a few lines, Pienaar has touched on many of the factors which will influence m-banking’s trajectory in Africa and elsewhere in the developing world:  an awareness of what m-banking offers, relative to alternatives, the need for some hand-holding to get new users comfortable with the system, and the relative familiarity that people have with the technology (SMS) already.  Sounds like a diffusion of innovations case study, and I mean that in a good way.

A recent piece in the Economist highlights the increasing importance of information technologies, particularly mobile communication technologies, to international aid and disaster relief efforts.  Most of the piece details the nuts-and-bolts of logistics, for which mobile ICTs are clearly a helpful new arrival. Responders can stay in touch and better coordinate their efforts. So too can displaced or fragmented families, who can find each other via electronic databases.

The article contains two other elements which make more sweeping claims about the “shifting balance” or reconfiguration of relationships between the aid community and those they are trying to help.  The more grounded example is that of the role of large remittance flows via m-payments systems and shop-at-a-distance sites like Makuru.com. I think this raises an important point: as families with overseas members become increasingly connected via mobiles and other ICTs, there are real opportunities for micro-level, family-centric responses to macro-level events like floods and famines.

The second point is less clear-cut.  The article leads with a quote from the Horn of Africa, in the form of an SMS delivered to UN officials in London and Nairobi. 

“MY NAME is Mohammed Sokor, writing to you from Dagahaley refugee camp in Dadaab. Dear Sir, there is an alarming issue here. People are given too few kilograms of food. You must help.”

It’s a great anecdote–though perhaps still more aspirational than descriptive–which the author(s) use to assert that “a familiar flow of authority, from rich donor to grateful recipient, had been reversed.” It will be interesting to watch how, over time, donors and other actors in the humanitarian space integrate mediated feedback and participitory input from ‘recipients’ into relief response. 

In the meantime, we can draw a different theme from the anecdote: the author of the SMS found the contact numbers at an internet café. And, conversely, you and I are reading the quote via the internet again.   This hybridity of media—an intermingling of SMS messages and internet content—is something I expect we’ll see more of in the developing world.

Vodafone, Nokia, and Nokia-Siemens Networks have released a new collection of papers on m-banking in the developing world, called “The transformational potential of m-transactions”. As was the case with Vodafone’s earlier collection on mobile phones in Africa, the report has attracted a fair amount of attention (e.g., Economist,  NYT, blog1, blog2).  The word “transformational” makes a few more appearances than some might prefer, but all and all, it is a great addition to a small but growing literature on m-banking.

Three of the six core papers deal with regulatory and business model issues.  One contrasts some of the leading systems (m-Pesa, Wizzit, and Globe) in more detail.  The remaining two describe user-level experiences with systems in Kenya and Egypt.

The more granular user data is found in the piece by Walia and Goodman on Airtime Services in Egypt.  Airtime transfer is sort of a cousin/antecedent to currency-based m-banking; it allows users to share load between accounts, which opens up all kinds of opportunities to share, barter and transact in real time. I am unaware of any other detailed surveys of airtime transfer behavior, so I was happy to see their segmentation of airtime sharers into “heavy users”, “sharers”, “receivers”, and “light users”.   Their paper points to some of differences in norms and expectations at play between, say, proximate families sharing minutes, émigrés sending minutes back home to their families, and business partners using airtime as a proxy for currency (which the authors point out is the exception, not the norm).  One of Walia and Goodman’s propositions is that “balance transfer use supports social networks”.   Probably so, although as I’ve mentioned elsewhere, I’d like to see more attention paid to how social networks support and structure balance transfer use.

At the ICA mobile communication preconference, I presented some (preliminary) thoughts on the links between mobile banking and social networks/social capital. There is a great deal of enthusiasm about mobile banking in the developing world right now, and I don’t think it is misplaced; the technology can have a real impact in reducing the costs and increasing the reliability of moving and storing money for people who otherwise have little access to financial services.

The paper argues that social science research can be applied to improve the design, pricing, and marketing of m-banking services. In particular, I suggest that it would be helpful to use social network approaches to assess the impact of mobile banking for the poor and unbanked. In a sense, the mobile banking channel overlays/blurs communication and financial networks, which leads us back to one of the core questions in the technology-and-society debate — do communication technologies help people create new network ties, or improve/amplify the ones the ones they already have?

Two great resources for m-banking research are CGAP (the Consultative group to Assist the Poor) and infoDEV.