Friday, May 14, 2010

mPayments not just for friends and family anymore...

by Karen Coppock

mPayments are not just for money transfers between friends and family anymore - they are increasingly being adopted by mainstream firms in Africa. The mainstream firms in Africa. The Balancing Act newsletter notes that Stanbic Uganda will pay its shareholder dividends through mPayments. The change was due to the fact that it was neither cost effective for the bank to send checks nor convenient for shareholders to receive and process such low value checks. mPayments overcame both of these issues and should result in cost savings as well as increased shareholder satisfaction.

Roshan, a mobile operator in Afghanistan, pays 100% of its employees (from its janitors to senior executives) via its mPaisa money transfer service. Not only is it creating a culture of mPayments, but it is decreasing its costs and increasing the security of its employees. mPayments are a much safer payment method in unstable economies where it can be dangerous to carry large sums of cash.

mPayments may not catch on to the extent that they are in Africa in the developed world given the sophistication of alternative payment systems (e.g., credit and debit cards), but they are definitely a viable model in developing economies.

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