Given the extent of mobile phone penetration and usage in Nigeria (and the need to buy recharge cards loaded with pre-paid minutes) I wonder if there is any system in the country that allow the use of pre-paid minutes (on recharge cards) as “currencies” for online transactions? The minutes can be exchanged for services or goods via mobile phones. After all, the “essential function of money is that of acting as a medium of exchange”, according to Wikipedia.
I’m aware there are already systems that allow limited transactions via mobile phones, but these systems (Flash Me Card, WebPay, eTranzact, GloCard, etc) either demand users to have an account with the issuing bank, prepay for the transaction through a voucher or ATM, or be on a ‘network’. Some even demand a registration fee!
Yes, your airtime minutes may not be be appropriate for buying “big-ticket items” and obviously has some “divisibility issue”, for instance, how do you pay for a good worth Naira 555.70? There are some advantages that fit well with the unique characteristics of an emerging market as Nigeria: Access and availability (24-7 in some cities) just walk down a street corner and viola, you would find several hawkers of recharge cards; you don’t have to deal with any of the hassles listed above, and the only fee incurred would most likely be for using “recharge card currency”, and of course you pay with pre-paid minutes!
I read a while back how Safaricom was able to do this in Kenya, it sure could work in Nigeria.
I wonder what will be the exchange rate between an African minute and a New York minute?
March 5, 2007 at 6:05 pm
About 128:1, Don!
March 5, 2007 at 6:30 pm
There is/was a scheme that included that idea, Operation Cashless. I worked as a part of that, but that aspect of the operation was on hold as at when I resigned.
March 5, 2007 at 7:20 pm
InterSwitch requires having an account with a bank on their network, but only about 40-60 percent of productive Nigerians have a bank account!
March 5, 2007 at 7:32 pm
The african minute is risky free.
March 5, 2007 at 11:58 pm
Part of the challenges of using pre-paid currency as virtual currency is the issue of networks diversity. As a Glomobile subscriber, how do I pay an individual who is on another network?
Again, the value of a minute differs from one network to another (and is also constantly changing).
Certainly, the existing networks need to be involved in some way. There must be an agreement and some sort of harmonisation.
March 6, 2007 at 3:26 am
It sounds like a good idea.
March 6, 2007 at 7:49 am
Yomi: There will always be challenges, and there are ways to work around them, I believe. Having a “clearing house” could tie some of the loose ends of the transactions together.
March 6, 2007 at 11:17 pm
I have a solution that takes care of this and it converts airtime to cash, we can discuss send me an email.
March 15, 2007 at 3:10 am
Bankelele, a Kenyan blog has some information on how Safaricom, a mobile telephone provider in Kanya has perfected M-PESA , as a means of transferring money using through mobile phones. It doesn’t require having a bank account.
March 15, 2007 at 12:13 pm
My solution is being adopted by one the banks in nigeria and it works based on almost the same principle as the kenyan model.
March 16, 2007 at 2:08 am
[...] One “common denominator” characteristic of most Nigerians - including those in the informal economy - that I’ve discovered is that they all purchase airtime minutes. Could those minutes be used some how as legal tender for online transactions and e-commerce? Bookmarks:These icons link to social bookmarking sites where readers can share and discover new web pages. [...]
September 27, 2007 at 7:36 pm
[...] Grandiose Parlor has this to ask: One “common denominator†characteristic of most Nigerians - including those in the informal economy - that I’ve discovered is that they all purchase airtime minutes. Could those minutes be used some how as legal tender for online transactions and e-commerce? [...]
October 1, 2007 at 9:03 am
[...] Grandiose Parlor has this to ask: One “common denominator†characteristic of most Nigerians - including those in the informal economy - that I’ve discovered is that they all purchase airtime minutes. Could those minutes be used some how as legal tender for online transactions and e-commerce? [...]
October 1, 2007 at 3:54 pm
[...] Ny mahazatra ny ankamaroan’ny Nizeriana hitako – eny fa na dia ireo tsy mpandoa hetra aza – dia ny fividianana fahana ho amin’ny finday. Ara-dalà na amin’ny takalo ara-barotra an-tserasera sy ny e-varotra ve ny halavan’ora azo iantsoana amin’ireny fahana finday ireny ? [...]
October 3, 2007 at 10:40 am
Webmoney has the best solution I know of for non-bank transactions. They have prepaid cards, prepaid PINs for email delivery, Ukash, paysafecard and cashU for exchanging local cash to a voucher which can instantly fund their online Webmoney accounts. Cell phones can be used as well. Perhaps a local outlet for vouchers can be partnered with an existing network of nationwide shops for accepting cash and issuing vouchers or prepaid cards.
Webmoney works just like e-gold for online transfers and paying merchants.
Mark
DigitalMoneyWorld
October 6, 2007 at 9:29 am
Let’s get this straight. Digital money is never giong to happen without efficient telecommication infrastructure for seamless data exchange. The current telecommication networks are just too feagued and disjointed to support any meaninful data interchange talkless of e-transactions. GSM networks are particularly terrible with data services. Note that they are primarily established for voice services which we are still hoping they get right some day.
The institutionalization of e-money will occur naturally with the establishment of fast and efficient telecommunication networks. And this will only happen if there is someone at the top, preferably the president, who wants it to happen.
He must be ready to set and enforce standards for telecoms practice. If i can make calls, send SMS and access my email anywhere without having to sleep at the computer, I will be more willing to explore paying and receiving e-money
In a few decades if not years, children in some countries will be going to the museum to see the currencies we use now, just the way we go to museums to see the cowries our ancestors used in their days. Where will Africa be when this time comes?
October 9, 2007 at 3:20 pm
See Africa’s ‘cyber’ currency
October 22, 2007 at 3:23 pm