How the use the mobile money
technology has had a positive effect
on the rebuilding of Haiti following
the devastating earthquake a year ago,
and how this technology can be used to
benefit all communities around the
world who have been affected by
disaster.

By Heather McLean

MoreMagic has spent the last 12 months working with Haitian network operator Voila and local bank, Unibank, to offer T-CASH, Haiti’s first mobile money service. T-CASH has given the majority of previously unbanked Haitians access to secure financial services for the first time.

The service was created out of the urgent need to provide economic mobility to Haiti after its technology infrastructure was destroyed in last January’s earthquake. Yet what Mobile Money Exchange finds particularly interesting about this project is that it utilises low end phones in the sub-$20 price range for highly secure transactions over the network, unlike other mobile banking services that require high end smartphones. Additionally, a mobile operator is running the service, unlike similar services that are controlled by financial organisations.

MoreMagic’s CEO, Pankaj Gulati says the introduction of mobile money to Haiti has represented a significant milestone in the country’s recovery and growth, by providing safe and secure access to basic financial services.

Making changes
Gulati states: “Haiti is showing the world how to use a $20 mobile phone to do secure financial transactions. The Haiti story is still in its very early stages, but our objective is to take as much cash out of the system as possible, and put it back in electronically. Most people in the developing world don’t have bank accounts – 97% of Africans don’t – so where is cash stored? Under the mattress! We also want to take the middle man out of the equation, who is able to help himself to a large cut of employees’ wages in a cash-based system, and to create an environment of security for people. It’s about keeping cash secure.

“Additionally, in the developing world there are many social issues people have to deal with. One of the key issues is if a family receives $10 wages, normally the person that takes ownership of that money is the dominant man in the household. But now, with mobile money, women who work will get paid their wages to their mobile phones, so they won’t have to ask for money to buy milk for their children. The biggest impact this service will have is on women in developing countries, empowering women to control the money they’ve worked hard to earn. We are part of the Obama mobile initiative for women.

Another area that mobile money has helped in Haiti is the ability for users of the T-CASH service to save time, and therefore become more efficient. Gulati explains that before the earthquake that hit the country in January last year, the few banks in the capital of Haiti, Port-au-Prince, would have queues of customers 200 to 400 people long, waiting to pay utility bills and cash their wages. With T-CASH, people can carry out their transactions locally rather than have to shut down their businesses for the day, travel by bus to the nearest bank and queue for hours to carry out a simple transaction, as they used to have to do.

Gulati adds: “Yet we haven’t cut out the banks in this new system; while Voila is the service provider and we are the technology provider, Unibank is a central partner in this project, holding the master account for T-CASH, yet it no longer has to deal with 400 people queuing outside any more.”

The service has been a resounding success since its launch in December last year, following a trial that began in November 2009. Gulati remarks: “People are taking up the service in droves; we expected 20,000 transactions would take place in the first three to four months of T-CASH being made available in early December last year, but we did that in just two weeks. This shows people trust the service and see the value.”

From airtime to banking
MoreMagic began its work with Voila three years ago. The first application of MoreMagic’s mobile payment platform that the operator decided to deploy was airtime sales, making them electronic to save on the cost of distributing through other channels, making it more secure, and to begin to educate end users that they could use their sub-$20 mobile phones for mobile commerce.

Gulati says 85% to 90% of Voila’s subscribers were using the airtime mobile purchase system within two years. This success was no mean feat given that as the poorest country in the Western hemisphere, Haitian people needed to interact with the new airtime purchasing system every day, buying a small amount at a time.

“Mobile airtime sales became a great
education for people to realise the
benefits of their mobile phone, above
and beyond the ability to make calls,”
says Gulati. “It showed people they
can trust a mobile phone-based payment
system, which leads into trust of
mobile banking, and gave us the
ability to, after two years of running
the airtime service for Voila, to
introduce other services; the ability
to store salaries, pay micro-loans and
utility bills, and pay the local
grocery store for a loaf of bread.”

While MoreMagic and many other companies around the world have NFC technology at their fingertips, Haiti was new ground as the people cannot afford to buy NFC-enabled handsets, and shops cannot afford to implement NFC-enabled point of sale terminals. So, MoreMagic took a previous mobile money project it had developed in Sierra Leone with a financial services provider as the lynch pin of the system, and working with Voila, developed T-CASH.

How it works
T-CASH essentially means people’s wages are paid as required – daily, weekly or fortnightly – to their mobile phones, and they are able to go to banks, petrol stations and larger shopping chains displaying the T-CASH symbol to make purchases, pay bills, make transfers to friends and family, or withdraw cash from their T-CASH balance.

For example, the consumer, who has registered for a T-CASH account with a local T-CASH partner who is paid to check the required ID of potential users, goes to a T-CASH branded shop and asks the person at the till if the amount they would like to withdraw available in cash. If the person at the till confirms they do indeed have $X available, the customer simply sends the T-CASH partner’s ID number, which is displayed in the shop, using USSD to the required number.

All accounts and balances are automatically checked and confirmed, and the customer’s account is debited, the partner’s account is credited with the amount they are to pay out plus a small percentage of the transaction, and the person at the till gives the customer their cash. The system is also compliant with local banking regulations, adds Gulati.

Gulati sums up: “The system is fulfilling a basic need of the people, which is to save their money.”

MoreMagic is set to make more announcements for similar projects in developing countries around the world over the next year. Watch this space.