by Ruth Aine - 01 May 2016
When it comes to financial systems in Africa, we can all agree on a couple of things. The most important being that Africa, especially Sub-Saharan Africa, is leading in regards to mobile money. The banks are adapting, the people have adapted and so have the telecom companies.
What is even more ‘cool’ is how young people on the Continent continue to use mobile money to create more opportunities for themselves. One such young person is Stone Atwine who, along with his colleagues, has started a money transfer company that uses banks and mobile money. Through the mobile money platform one is able to send money from your bank account to a recipient and it will be received on his or her phone any time of the day, seven days a week. The reason this was started was the exorbitant fees that one has to incur with money transfer companies like Western Union and also the convenience of being able to do this from anywhere, not just a bank or shopping center, among other things.
I asked Mr Atwine four questions:
What is the future of money transactions and how are you tapping into that?
The future of money transfers is digital. It is mobile money, it is social networks, it is interoperability, it is probably blockchain1 (in the long term). Any digital avenue that reaches a massive number of people can very easily be used for money transfers. Facebook is a fantastic example of a platform that can be used for remittances. It reaches 1.65bn people every month and it can very easily integrate a wallet, or work hand in hand with money transfer companies to build the required infrastructure in terms of regulatory compliance. Transfers will continue going digital, mobile money in Africa is a fantastic way to look at it. We build useremit.com because of challenges we were having sending money back home. Brick and mortar agents who are open during banking hours only just were not cutting it. More and more payments, including remittances, will go digital.
What other financial trends, apart from what you do, should we take note of?
Banks are facing a challenge that they cannot afford to downplay anymore. Financial technology and fintech companies are offering cheaper and more efficient products than the banks. And it is not only startups like useremit.com, it is also big players like Google, Apple and Samsung. This group of companies is becoming hungrier in rapid fashion, and they won’t just be in payments processing. They are getting involved on lending, money transfer and credit rating - all fields that are the lifeblood of banks. The wait and see approach does not work anymore. Banks must now get involved by either acquiring fintech companies or getting internally involved in fintech themselves. The strategy that I think will win though, is for banks and other traditional financial services providers to work hand in hand with fintech companies and take advantage of their innovations.
50 years down the road, what could we expect to see in regard to financial transactions?
In 50 years cash will be dead. Movement of value will be fully digital. You will be able to pay in so many ways. Whatever gadgets we will have on our bodies then will be wallets that can transfer value.
Do you take time to reflect on the past and project the future of your work? If so, how has that helped your work?
Yes we do. It has helped a lot. We see the numerous mistakes we have made in the past and take stock. We are also very keen on trends in financial technology. We have had numerous small pivots in product and focus as we grow the company. It is very important to stay switched on with regards to trends in the industry and also to reflect on past performance and mistakes. This is a cut-throat business and that’s the only way to keep the business going.
1A blockchain is a public ledger of all Bitcoin transactions that have ever been executed.