M-pressive prospects

A new report has given some insights into Kenya’s burgeoning mobile payments market. First launched by Vodafone and Safaricom in October 2005, the country’s M-Pesa scheme has grown rapidly ever since. But what is most striking is the potential for such a service to not just facilitate smoother transactions—but perhaps to replace banks altogether. 

Users of the service can deposit and withdraw funds in much the same way they top up their mobile phones. Money can be instantly sent to any phone, which the recipient can then cash in—and it can also be used to buy goods and services. In short, it acts much like a virtual bank card, with Safaricom resellers acting as bank branches. Users don’t even need a bank account.

The need for this is great. In a country with some 36 million people, there are just 450 bank branches. The North Eastern part of Kenya, home to some 587,000 people, has just three branches. Being able to easily send and receive money from any part of the country, via one’s mobile phone, provides a major benefit to locals.

There are many examples of how it is being used: remote truck drivers being sent money for lorry repairs; travellers depositing money at home and withdrawing it at their destination, as a protection against theft; and even taxi drivers preferring M-Pesa for payment, rather than having to carry lots of cash.

Mobile payment systems may not have gained much currency in developed markets, where banking services are easily available and most transactions can be done easily online. But for developing markets, with poor infrastructure, few banks and bigger security risks, the potential seems very great indeed.

WOM power

A recent GTF story caught our eye. It says that all the technology, advertising, and media hype in the world still doesn’t outdistance WOM - word of mouth. In a recent survey of business managers on what influences their business purchases, 53% gave word of mouth recommendations as their first choice.

How do WOM recommendations spread? Mobile, email? No, the story says it’s passed on by old-fashioned face-to-face communication. So, the moral is, if you want to promote your product or service, get out there and network.

Many thanks, Jochen!

Nice to have fans at the European Commission. As mentioned not long ago, GTF recently published the EIU’s e-readiness rankings for 2007, which separates the digital leaders from the laggers among 69 countries worldwide.

Well, a few days ago, we heard from Jochen Jesinghaus, who works in Italy in an EC unit which specialises in the aggregation of complex indicator systems. In other words, Jochen and his colleagues transform Excel spreadsheets into something that the rest of us, including MEPs and EC bureaucrats, can easily read and interpret.

Jochen wanted our permission to weave some of his magic with our rankings, putting them into a dashboard format.

The result can be seen here, in glorious colour. Go ahead and click on your country or the countries you are interested in.  The results are dramatic. And thanks again, Jochen.

E-ready or not

The Economist Intelligence Unit’s 2007 e-readiness ranking is released today and it makes very interesting reading. Scandanavia’s e-powerhouse, Denmark, tops the list for the second year running while the US and Sweden tie for second place. No big surprises there.

What grabs my attention are the huge gains made by countries with governments that are leading the digitial intiative. Singapore, for example, has jumped 7 places from 13th to 6th place in this year’s ranking. Hong Kong has leapt from 10th to 4th. Taiwan puts in a similar show - vaulting from 23rd to 17th place. All of these countries are pushing e-initiatives  - from cheap broadband to e-government services and anti-cybercrime legislation.

Meanwhile the old world is showing its age. Germany has sunk 7 places to 19th on the rankings, Belgium has slipped from 17th to 20th place, Switzerland is down from 3rd to 5th place and the Netherlands at 8th place from 6th. Australia, Finland, Norway and Canada have also slipped.

 Tiny Bermuda, meanwhile, up five places to 15th, shows what a determined government can achieve when it sets its mind to something. The holiday island now outranks South Korea in terms of its e-business environment and how amenable it is to internet-based opportunities -largely to do with its ability to keep cyber-crime at bay and provide a safe, secure place for e-commerce activities.