Few weeks ago, I had the chance to discuss with a young burkinabe, who is actually the developer of « Faso Pharmacies », a mobile application that lists and maps closest pharmacies around, in Burkina Faso cities. When I asked him if he thought he’s able to make his app profitable, his answer was quite pessimistic, like most other mobile app developers with whom I had to discuss this issue.
Local content wanted in Africa
Demand for local content online has never been greater than now in Africa. The rise of mobile technologies coupled with a growing internet penetration rate on the Continent (although still quite low), are leading to a growing demand for content meeting African needs and daily challenges. However, the online content to an African target is still sparse. It is easier for an African to find an app on Google Play Store to book cabs in NYC than one to order his dinner in Abidjan. Yet, we have to admit that real efforts are being made on the Continent. More and more bloggers, app developers are scaling up to provide quality content online for African. To me, there are two major barriers for a significant outbreak of local content in Africa. First, there is almost no platform promoting African content online like how Google Play Store and Apple Store do. Secondly, there is a critical lack of online payment solutions for Internet users in Africa. To be honest, promoting local content online for Africans is a noble cause, but not to be mistaken to philanthropy. All these bloggers, photographers, musicians, writers, app developers dedicate time and resources to their passion and might be able to get some reward back. Today, when it comes to monetizing online content, the only way is advertising either from online advertising agencies, or other advertisers. Unless one reaches downloads and users record level, incomes generated by online advertising solutions like Google AdSense are insignificant or sometimes zero. And unfortunately, there is very few companies in Africa showing willing to advertise online or on mobiles.
State of the art of online payment options in Africa
The average banking rate in SSA is about 11%. This means that only 1 out of 10 SS Africans has access to conventional banking services, while all the available online payment solutions (Visa, AmEx, Paypal, MasterCard, etc.) are strongly linked to banks. Therefore, these solutions are excluding de facto the huge proportion of Africans who have no access to classical banking services. Majority of mobile and Internet users in Africa simply have no mean to pay online for the content and services they need. Meanwhile, mobile money is about to gain the upper hand on the Continent. The success story of M-Pesa has pushed major MNO to replicate the adventure elsewhere in Africa. Personally, I was forced to admit the fact a couple of weeks ago, when my usual snack bar’s tenant told me she now accepts mobile payments.
Mobile money is still confined to classical money transfers
Definitely, mobile money for cashless payments is a great solutions for those who are excluded from the traditional banking system. However, mobile money is so far confined to the role of traditional money transfer, and the potential of eCommerce has not yet been integrated. Even if I can now use my mobile to pay my bills, to pay my lunch in my usual snack bar, and to transfer money to a friend in another city, I still can not buy the latest released edition of Gbich! or subscribe to Notre Afrique online. And this is precisely where I think mobile money has a good shot to play and can bring some innovation and added value. Providing a solution to this huge population of mobile owners to use their mobile money accounts and shop online would be more than useful. That would undeniably boost production and uptake of local content and online services in Africa.
Some possible solutions
I’m going to disappoint you. I don’t have a ready to use solution to make you use your mobile as online payment option. I still have some ideas though. One of these tracks, would be to develop an API for mobile and web developers on top of existing mobile money solutions, with just little changes of the current transaction process. In the current model, to send money or make a payment with his mobile, a customer has to select the mobile phone number of the recipient (or the vendor code of the seller) as an ID, and then enter the amount he wants to transfer before validating the transaction. For online payments, the process could be roughly the following:
- Customer selects mobile payments option
- Customer provides his mobile number
- An unique transaction code (corresponding to the transaction amount) is generated by the vendor (actually by the API)
- From his mobile phone the customer makes the payment as usual, using the transaction code as recipient vendor code (with no need to provide the amount)
- Concordance of Phone number/transaction code is automatically checked at the vendor side (via the API)
- Transaction is validated by the vendor
Along these steps, we should also take in account interactions between the vendor (website/mobile app) and the mobile money solution provider (mostly the MNO), the third actor, in order to generate the unique transaction code, check the customer mobile phone number validity, An API would easily solve these technical requirements.
Exploiting the potential to meet the needs
Mobile users in Africa represent a population of almost 1 billion people. One billion users who increasingly need content, music, applications, movies, e-books, services that match their reality. Promoting African content online takes to support content producers. To do so, we have to empower online content consumers and give them means to pay for what they are looking for online. In this journey, I am convinced that mobile money must have a significant role to play. And so central banks and financial regulation institutions do.