Wednesday, October 18, 2017

Marching into Hong Kong: Maurer Plays Marco Polo (Part 2)

By IMTFI Director and UC Irvine School of Social Sciences Dean Bill Maurer

The first thing I noticed when coming into Hong Kong from China was that the cab drivers wanted cash. No cab driver was using an app to receive payment. The second thing I noticed was the cash: the HK$100 note is the same size and color as the Chinese 100 RMB note. Instead of a portrait of Mao, it has an image of Chinese soldiers marching into Hong Kong to commemorate the 20th anniversary of the establishment of the Hong Kong Special Administrative Region (HKSAR). Oh, wait, it’s not exactly soldiers. It’s a military marching band, holding musical instruments. Soooo much nicer.

With cash as an everyday reminder of Chinese rule, cash and cards dominate the payment landscape in Hong Kong. Overlooking the harbor we saw a giant lit-up ad for Samsung Pay during the nighttime lightshow, but I never saw anyone use it, and no one I met had ever used it (and several had never even heard of it). Lots of cash, a fair bit of bargaining, and some credit card use. Union Pay ads adorn walkways and public areas, as well as the airport, celebrating your ability to “make your choice” and touting Union Pay’s “global payment network.”

Union Pay ad in Hong Kong.
This seems to be a selling point, at least for now. WeChat Pay can’t be used outside of China by non-Chinese citizens (and I haven’t yet seen any merchant in the US who accepts WeChat Pay – but I’ll be looking, and Rutgers graduate student Jing Wang shared with me this photo of a vendor who accepts WeChat Pay outside of the NYU Stern School of Business!). My Chinese students at UC Irvine are all using WeChat for social networking, chat, news and more. It may only be a matter of time and regulation before WeChat Pay also goes global. When that happens, I have to wonder how much more data might be available to WeChat—and the Chinese government—about residents and citizens of the United States.

Food truck vendor in front of NYU Stern School of Business.
Photograph by Jing Wang, used  with permission
This may be why there is so much interest in Hong Kong—and in China, among those I spoke with—in blockchain technology. While I was in China, the government banned bitcoin and shut down some bitcoin exchanges. Nevertheless, several of my interlocutors in China wanted to know more about the cryptocurrency and blockchain. They were ready to disparage the (ridiculous) monetary theory behind bitcoin, but were deeply interested in the potential use of blockchain for “accountability.”

I was surprised to see a whole display of books (see left) in a non-academic, non-tech, general readership Hong Kong bookstore on blockchain and fintech. I actually bought a copy of a blockchain book—in Chinese, just to have as an artifact of this moment in the history of payment and accounting—at the airport bookstore in Hong Kong (thank you, National Science Foundation).

What are the bigger lessons then? I’m tempted to make some big claims but they’re really too flimsy to stand on right now. Still: maybe the US’s messy, noninteroperable, non-seamless, kludgey payments infrastructures are not such a bad thing after all? Google’s got a lot of my data and the NSA can snoop around in it just as easily as the Chinese government can use machine learning to catch phrases in WeChat conversations or shut down entire groups or circles of payment or make it impossible for you to rent an Ofo bike, limiting your mobility. But if I can’t keep track of my various accounts for the different payment services I use, is my fragmentation across payment platforms a good thing for my liberty?

Mobile payment in its WeChat/Alipay app-based form, so different from the SMS-based world of M-Pesa, crucially depends on government-mandated identity as the base layer on which everything else is built. So maybe there’s something to be said about the line from authoritarianism to app-based mobile payment? And maybe, whenever I’m feeling like a blockchain skeptic, I should look at that HK$100 note to remind myself why a noncentralized, non-government controlled means of accountability might be a good thing.

I can’t thank by name but also can’t thank enough my various interlocutors and guides in China and Hong Kong. Xiè xiè!

All photo credits are by author unless otherwise noted.

Read first post: "Paying behind the Great Firewall: Maurer Plays Marco Polo (Part 1)"

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Monday, October 16, 2017

Paying Behind the Great Firewall: Maurer Plays Marco Polo (Part 1)

By IMTFI Director and UC Irvine School of Social Sciences Dean Bill Maurer

Before I left for China in mid-September, on a three-city, four-university whirlwind from Shanghai to Beijing to Hong Kong, I tried to read up on the mobile payment market there. The numbers were staggering: the New York Times reported $5.4 trillion in transactions in 2016, 50 times the mobile payment market in the US that year.

Now, if you’re reading this in China, of course, you can’t access that story in the New York Times, and this made the payments landscape in China even more fascinating to me. The so-called Great Firewall blocks access to many of the sites we not only take for granted in the United States but absolutely depend upon and would go into withdrawal without: for me, that’s the Times (we had a lovely reunion in the Beijing airport, by the way, once I’d passed through immigration). But the firewall blocks Facebook and Google, too among others, and made communication back home a challenge. One of my traveling companions brought several phones each with a number of different paid VPN services just to ensure near-continuous connectivity.

What’s striking however is the contrast between Internet restriction and the absolute proliferation of communication, media, social networking and payment within the platforms provided by the two mobile payment services currently vying for dominance in China: WeChat and Alipay. WeChat is a product of Tencent, the online gaming company that once upon a time got anthropologists of money and our interlocutors in other fields excited because of its native digital currency, Q coins. (Q coins also freaked out the Chinese monetary authorities. Again, see this article in The New York Times).  Its competitor is Alipay, is a part of Alibaba, which started off as an e-commerce company and has branched out in to finance and cloud computing. Although people told me that Alipay controls about 60% of the mobile payment market in China, I mostly saw people using WeChat Pay, and indeed the companies have basically reached parity now. The logos for each are as ubiquitous at the point of sale in physical world stores, cafes and restaurants as the MasterCard and Visa logos are in the US. One person who let me photograph her payment behavior said that she usually just picks whichever is closer to her when she approaches the till. Others however said that it was the suite of services offered within WeChat, and that are integrated with payment, that lead them to choose WeChat Pay over its competitor. And, indeed, to live a lot of their online and offline life within the WeChat app. (Alipay similarly offers such a suite of services).

So, what’s going on with mobile payment in China? 

First, here’s how you pay. Unlike mobile money services in sub-Saharan Africa that rely on the mobile telecommunications networks and use or at least started out using their native communications protocols which run through telco servers—SMS (text messages), and USSD (I’ll tell you about it some other time…)—or mobile payment apps in the US that use radio frequency ID or near field communication (RFID/NFC) that allow for the “tap and pay” of, say, an ApplePay, WeChat and Alipay use QR codes, the phone’s camera as a scanning device, and the phone’s display screen as a generator of a unique QR and bar code payment token. WeChat users have individual QR codes connected to their WeChat accounts. They can scan them to share contact details, become connections on WeChat’s social media platform, and also now for payment. The WeChat app also generates barcodes for scanning by specialized point-of-sale devices (usually hand-held optical scanners). I wasn’t able to observe as much about Alipay, but, again, this may say something, despite Alipay’s current market share, about shifting dynamics in this fast-moving sector in China. It might also just be a product of the specific demographic of the people l hung out with (college educated, urban, with disposable income, etc.), or regional variation (I was only in big cities), or something else. WeChat aggressively burst onto the scene through mobile social media, whereas Alipay began as a desktop platform, which may also account for some of the differences in market share and use between the two services. 

QR code in temple
QR code for bike sharing
QR codes for payment are EVERYWHERE. In temples for donations. On bike-share service bicycles (scan the QR code on the bike to unlock it and pay for it, and away you go). On business cards. On signs inside and outside shops. On waitresses, whom you can tip electronically by scanning a QR code on an oversized button pinned to their lapel. On homeless people, who print them out on paper and hold them or prop them up next to their spot on the street. People use it for peer-to-peer transactions for everything from paying for your kids’ school activities, splitting a bill, or doing a little informal forex.

(I couldn’t use it. I rented a Chinese iPhone that turned out to have an operating system too old for the WeChat Pay app. Foreigners have a hard time using it anyway, since you need a Chinese bank account, unless you get people to send you money and keep the funds it in your WeChat Pay wallet).
QR code for business card
QR codes for informal forex
Ursula Dalinghaus pointed me to this article on the ubiquity of QR codes and their multiple uses in China today, and I saw just about all of these uses in my travels. I also saw lots of examples of what I’ll just call QR code art for now—clever ways to integrate design elements, brand identification or personalization within a QR code. Nothing as fancy as these, but you get the idea.

Think back to 2008 and the rise of M-Pesa in Kenya. Back then, what did people primarily use their phones for? Mainly texting, maybe voice calls. So, it was an easy leap to develop a service that permitted payment via text message. Now think about your own phone use. How many texts or calls did you make today? How much use of your screen did you make for things other than reading texts? How many pictures did you take, receive, send, view online? If SMS had become the key functionality of the mobile phone for many people in the early 2000s, arguably, today it’s the camera and the nice big bright screen that we have come to depend on. QR codes simply leverage this fact.

They do something else, of course, too. SMS data goes through the telco and is owned by the telco (in the actual property sense but also in the metaphorical and material sense of how the data is transited and where it goes and sits for a while, in the telcos’ servers). Image data from the camera scanning a QR code is encrypted by WeChat and is inaccessible to the telco. If the user’s phone is connecting via WiFi, then the data is not even touching the telco’s pipes at all. WeChat does not have end-to-end encryption, however, in order to comply with Chinese policies. But the telco is essentially shut out of the WeChat and WeChat Pay user data streams. The folk theory—and possibly the reality—is that WeChat Pay gets “all the data” from transactions and from anything else that happens over WeChat, and the telco gets nothing, so the telcos are mad about this (again, this is what I heard). At the same time, however, everyone seems to think that the Chinese government also gets to peek into all that data, and that WeChat must be willing to share its data with the government in order to stay in business. See, for example, this kind of story, about human rights activist Hu Jia.

"Cash only" till
There are a couple of interesting things about how WeChat Pay handles accounts, too. As noted above, you can link it to your Chinese bank account, and it will then direct debit and deposit to that account. You can also work entirely within your WeChat Pay wallet—letting WeChat store your funds, which you can then use for all sorts of in-app purchases and for online/offline payment interfaces like the Ofo bike sharing service. (I don’t know what WeChat does with the float but I am told both companies invest the money in the market. Alipay is technically a product of Ant Financial, a fintech company that owns a bank and was spawned by Alibaba). There are different kinds of accounts: personal accounts and merchant accounts. I was told—and I do not know if this is true—that mom-and-pop merchants use their personal account to receive payment because it is not taxed the same way as a business account. One friend speculated that if the Chinese government or WeChat cracked down on this, there would be a rush back to cash-only payments for these merchants. (I only saw one “cash only till in my travels (pictured, in Shanghai) that is, until I got to Hong Kong, on which, read coming part 2 of this blog.

WeChat Pay’s origins in gaming show through clearly in the interface and some of its applications. Users can send “red envelopes” to one another, a fun way to send small amounts of money and to do so in a social way, spreading the love through one’s network of friends and encouraging others to pass it on. (Alipay, at least to me, shows its origins in e-commerce—it looks and feels “all business” to me, like PayPal here).
WeChat also leverages its social networking side. WeChat was primarily a social networking chat service allowing users to form groups. It has a blogging service within it too (and in fact there’s a WeChat blog that talks about the future of money and payments and mentions my work!). At events where people were meeting each other for the first time, everyone was talking out their phones and exchanging their Weixin handles or using the “Shake” function of the app to connect, or else just scanning each other’s QR codes.

WeChat also now has a full suite of services (see screenshot to left) within it such that the user never has to leave the app to do everything from pay bills, rent a bike, shop, connect with friends, read news stories, use lightweight programs, book hotels or train travel, find people willing to offer services for pay (a handyman, a tutor), and on and on. People did express concerns over data privacy: “my whole life is on WeChat.” But at the same time accepted, if sometimes with resignation, that that’s a small price to pay for convenience. Said one user, “it’s just so convenient, and my life is an open book.” Or another, “I know they’re watching but I don’t care and it’s just so easy.” The “they” here is understood to be both WeChat and the government. Still, as long as you do not discuss “politics or religion” I was told, you won’t be brought under suspicion.

Speaking of monitoring: another set of terms of everyone’s lips when I was in China had to do with machine learning. A surprising number of people in different contexts wanted to talk about deep learning, machine learning, natural language processing. Knowledge about the Chinese government’s widespread data tracking had sparked great interest in these techniques at the ground level, too.

As I said, I couldn’t download the app on my old rental iPhone. And, incidentally, I couldn’t easily get cash either. It was almost like being in Sweden, where it’s also notoriously difficult to get cash. I tried a bunch of ATMs; the only one that would work for me was at an HSBC office. Fortunately, I was on my way to Hong Kong, which turned out to be something of a cash capital.

Monday, October 9, 2017

Intermediaries, Cash Economies, and Technological Change in Myanmar and India (Part Three)

By IMTFI Researchers and Elisa Oreglia | SOAS, University of London, UK and Janaki Srinivasan | IIIT, Bangalore, India

Is mobile money changing the way people carry out their financial transactions in rural markets in Myanmar and India? Our comparative qualitative research of an agricultural market town in northern Myanmar and of a fishing market in southern India showed the multitude of ways people move, borrow, and save money in these places, and the value that humans bring to transactions that could easily be made through ICTs yet continue to be done “the old way.” ICTs and specific applications such as mobile money bring a different type of value, and in this final post we reflect on what we learned about human and machine intermediation in financial areas.

First of all, the combination of various technologies and brokers, such as traders and auctioneers, in rural markets in Myanmar and India translates the global reality of finance, financial tools, international supply chains, and political economy into an actionable reality for local farmers and fishers. A key feature of human brokers is that they are flexible and responsive to the changing political economy of their countries in ways that are not always possible for technology by moving in the grey areas between official regulations and informal economies, and thus leveraging gaps or strictures in the official economy. This flexibility is the constant value that users get from using human brokers rather than ICTs, all other things being equal. Because humans can leverage their social knowledge in their roles as brokers, they are able to adjust to changes in a broader political economy as well as to the specific users who they are working with. Thus, they can offer temporal and spatial fixes as well as their expertise in ways that are attuned to the times and their users. Technologies, on the other hand, face constraints regarding the extent to which they can be flexible based on what is inscribed into them by their creators and by the regulatory regimes in which they operate. For example, the fact that mobile money makes financial transactions visible is a feature that is inscribed into both the hardware and software that power mobile money and into the regulatory framework that allows it to operate under certain conditions. ICTs can be used flexibly, but this flexibility has to be figured out by its users, and there are limits to how much flexibility a given technology affords along a particular dimension.

A second point that we want to highlight is how brokers are usually better equipped, financially and often socially, to appropriate ICTs and leverage them to strengthen their positions in the markets, sometimes undermining farmers and fishers and reducing them to mere recipients of their expertise, or even trapping them in relations from which they cannot escape. As both cause and consequence of their trade, brokers are able to inhabit different social worlds that their clients are often not able to successfully bridge: the sense of “feeling out of place” that makes opening a bank account a much bigger challenge than simply gathering the documents required to accomplish the task. Ethnicity, gender, religion, caste, and educational levels all contribute to making people feel out of place in certain situations and environments. This kind of expertise in navigating and bridging different social worlds is perhaps the hardest to delegate to ICTs. Whereas in principle social barriers to entry are lowered on the class-less and ethnicity-blind world of ICT-based services such as digital money, or Market Information Systems, in reality such experiences are highly mediated by the offline worlds that people belong to.

Thirdly, we suggest that the question of whether or not financial transactions can be mediated more efficiently or effectively by humans or technologies cannot be answered in the abstract without referring to the specific conditions of a specific place. We will note that, for example, the problem that ICT users might have with being tracked in their transactions is less of a concern where digital technologies are introduced together with system reforms that make the system less predatory. The axis of time/space is also amenable to technological rather than human mediation, once structural reforms change people’s material circumstances. The 2016 demonetization in India and the demonetizations that Myanmar experienced in its recent history have uniquely affected certain segments of the population for whom the state was and is an unreliable financial partner. Such actions reverberate through time, and rhetoric alone is insufficient for persuading the same people that the state is now concerned about their financial inclusion. Once again, the issue of time is at the forefront: the consequences of financial encounters, either between individuals or between individuals and institutions, extend through time, and the latest ones take place in the shadow of those that happened before, thus needing the appropriate historical and political background to be fully understood.

Finally, we want to stress how it is easier for existing social practices and networks to adapt to innovation than it is for them to be changed by it. This is not a novel finding, but it is often overlooked when talking about the potential for inclusiveness of digital technologies; they are, in fact, more empowering for those who are already in a position of power, and who can thus acquire them earlier and deploy them alongside their existing tools and networks. For instance, traders acquired mobile phones before fishers and farmers did, and were able to reconfigure their own networks to take advantage of them. Once again, if looked at purely from a transactional and financial perspective, fishers and farmers are perpetually catching up with the better-established traders. Using (or not using) ICTs and tools like digital money in their own way rather than according to the expectations of the government and of financial institutions is their own act of resistance to reclaim their own well-established practices.

Read their illustrated final report, "Intermediaries, Cash Economies, and Technological Change in Myanmar and India", drawings by Krish Raghav (

The report examines the range of roles that (human and non-human) actors and material practices that are involved in conducting financial transactions have, showing the central role that historical legacies and politics play in explaining why both cash and financial intermediaries persist in the digital age.

Links to past blogposts: "Intermediaries, Cash Economies, and Technological Change in Myanmar and India (Part One) and (Part Two)."

Monday, October 2, 2017

Pastoral Adaptation to Market Opportunities and Changing Gender Roles among the Afar in Ethiopia

A report by Uthman Hassen, Adama Science and Technology University, Ethiopia

Map of Ethiopia showing Afar Region

This report is an investigation into the major changes observed in the pastoral system of the Afar of Northeastern Ethiopia, their shift towards the market and the application of money and technology, and the subsequent changes in gender relations. A combination of ethnographic methods including semi-structured and key informant interviews, focus discussions, and life histories were used to collect data from 89 respondents in five towns. Complementary data were also collected from additional informants through informal conversations with state officials, civic and clan leaders, sages and academics. It was found that pastoralism is gradually dying, and, consequently, women engaging in the market are increasing both in number and significance. However, their success is hugely constrained by various structural forces, notably state policies, failing laws and processes, lack of formal financing, price fluctuation, and absence of appropriate technology. In the face of these challenges, the Afar women continue to effectively commoditize their pastoral products and participate in wage employment. This shift has further enhanced cash income and mobility. In the absence of formal financial agencies, the traditional sources of capital and money transferring arrangements remain important to the livelihood systems of the Afar people.

Keywords. Pastoralism, Market, Money, Technology, Afar women, Mobility, Ethiopia


Who are the Afar? 
The Afar (Afar: Qafár), also known as the Danakil, Adali, and Odali, are an ethnic group inhabiting the Horn of Africa. They primarily live in the Afar Region of Ethiopia and in northern Djibouti, although some also inhabit the southern point of Eritrea. The Afar principally reside in the Danakil Desert in the Afar Region of Ethiopia, as well as in Eritrea and Djibouti. They number 1,276,867 people in Ethiopia (or 1.73% of the total population), of whom 105,551 are urban inhabitants, according to the most recent census (2007). The Afar make up over a third of the population of Djibouti, and are one of the nine recognized ethnic divisions (kililoch) of Ethiopia. The Afar are traditionally pastoralists, raising goats, sheep, and cattle in the desert, are organized into clan families, and are predominantly Muslim. []

This rich ethnographic report on the Afar is now available, learn about:
  • Their clan relationships, the importance of she-camels, and the feminization of pastoralism.
  • How ethical considerations of the Afar traditions and mobile money affect savings and other monetary practices among the Afar women in the market. 
  • How the Afar view state-backed currency versus livestock as “wealth”.

Excerpt: How the Afar view state-backed currency vs. livestock

“Commerce in the Afar region has been accompanied by two features of a cash economy: sharp fluctuations in the prices of commodities, and the arrival of an active class of merchants in the region. They agreed that for purchasing more tradable goods, there must be more money and favorable orientation to money as wealth. And these in turn depend on the purchasing and exchange value of money, especially for urban households. With very limited investment options, instead of depositing their money in a bank, backyard goat rearing serves as a store of productive assets and an effective strategy to avoid the fast falling purchasing power of money.

Over the years, there have been many variations in the exchange value of money compared against US dollar. The exchange value of money varies at different times, and so it is very difficult for the Afar to conceive of paper money as wealth. For example, just a quarter of a century ago, a qualified teacher with a diploma used to start his monthly salary at a rate of 347 Ethiopian birr. This amount was equivalent to 174 US dollars. Currently, a person with the same profession and qualification begins with a salary of 1663 birr, equivalent to 73 US dollars. The amount could be very insignificant if we calculate it on a daily basis, and much smaller if compared with the cost of basic commodities. For example, two decades ago, a loaf of bread that cost 0.10 birr is now 1.25 birr on average, and, according to informants, the size of the bread is also significantly reduced. These depreciations in the value of money and the rising cost of basic goods are the background for most women who reacted to the very question about money by saying, “Money has no value.”

For the Afar, livestock are self-reproducing assets that generate more value than money in the bank. In fact, conventionally, the value of wealth and assets is estimated by the size and diversity of livestock in rural villages, where maximization and diversification of livestock are the rules. Many informants asserted that they still do not consider money as wealth because of many factors, as an informant, aged 61, mentioned: 
‘The circumstances we have been living for so long were not favorable to have the initiative to consider money as our wealth and actively engage in commerce. It does not have any productive value. It never reproduces itself like our livestock do. We all prefer to own a cow or a goat instead of thousands of birr locked in the bank. The real value of money is controlled by the state, not by us.' 
The Afar’s orientation to money and banking has remained inseparable from the politics and policies of the state. Many informants cited the fact that the first branch of the commercial bank of Ethiopia was opened following the introduction of commercial farms in the area. After this, their livestock and natural resources had been destroyed. Banking and commercial farms are inseparable in the minds of many of the informants. The social meaning of money, locally known as 'genzeb', is more than a medium of exchange and wealth to be accumulated through the market, but rather is a symbol of the power of the state. Many informants echoed beliefs that money has been regarded, by national and regional governments, as a dependable means of buying political loyalties and national integration. Furthermore, as is true for many Muslim societies, the prohibition of usury has always occupied huge spaces among the Afar people. They view usury as establishing discord among clan members by dividing them into borrowers and lenders, and, consequently, destroying the bonds that have survived for generations.” 

Photo caption: Statue built to celebrate the Ethiopian millennium, just 9 years ago, in the ex-capital of the Afar, Aysaita town. Its shape is triangular, representing the Afar nation in three countries, namely Ethiopia, Eritrea, and Djibouti, commonly known as the Afar triangle. Symbolizing the hope for unity, on top of the clock (representing Ethiopia), there are two antenna projections, one pointing in the direction of Eritrea and the other to Djibouti.

Monday, September 25, 2017

Beyond ‘Send Money Home’: The Complex Gender Dynamics Behind Mobile Money Usage

Sibel Kusimba's IMTFI-funded project on social networks around mobile money cited by Susan Johnson in this important blogpost with Next Billion on the complexity of gender dynamics behind MM: Why and how is mobile money ACTUALLY narrowing the gender gap?

Beyond ‘Send Money Home’: The Complex Gender Dynamics Behind Mobile Money Usage by Susan Johnson, senior lecturer at the Centre for Development Studies at the University of Bath (This post originally appeared on the Next Billion Blog and is re-posted with permission) 

In spite of the rise of mobile money in sub-Saharan Africa, just 12 percent of people age 15 and older now have a mobile account, compared with 29 percent who have an account at a formal institution. But the gender gap for mobile money accounts is lower than that for formal accounts; women have 7.6 percent less access than men to formal accounts (32.7 percent vs. 25.1 percent) but just 2.5 percent less access to mobile money (12.8 percent vs. 10.3 percent). More detailed regression findings for Kenya in particular show that gender is not a significant variable in determining access to mobile money accounts in Kenya – though it is for formal financial institution accounts.

This is surprising. For information and communication technologies generally, the evidence suggests that gender gaps are significant, with the World Bank reporting that women are 50 percent less likely than men to use the internet in Africa and significantly less likely to use cell phones. So the question is: Why is mobile money different?

The standard answer is not necessarily the best

The “go to” answer for this (from groups like the Better than Cash Alliance) is that digital is solving the constraints of formal financial inclusion. Its advantages include: the proximity of agents to women whose domestic constraints render them less mobile than men; the fact that mobile money accommodates small payments with low transaction costs in ways that formal accounts do not; the fact that the technology enables money to be kept securely on the SIM card, and that digital offers a level of privacy and confidentiality that having to travel and walk into a bank does not.

However, if we are to really mind the gender gap we can’t simply presume that mobile money is succeeding by overcoming these rather conventional assumptions about the constraints to women’s financial inclusion. Indeed, from my research, these assumptions seem at best a partial explanation for why the mobile money gender gap is narrower.

Mobile money as a networked technology draws in women

To fully explain the gap, we must ask how men and women are using mobile money in these contexts and what this means for analysis and policymaking.

One obvious use is very straightforward but surprisingly not often discussed in terms of gender dynamics. The “send money home” marketing effort of M-Pesa shows us a clear gendered story of men – in this case probably well-educated, young, urban, employed men – sending funds to their rurally based mothers.

A similar gendered urban-rural story of migrant husbands was detailed by Olga Morawczynski in her early ethnographic research on M-Pesa’s use. This gives us the first dimension of our answer: Mobile money is a network technology that connects people and fits into a pattern of gender relations in which urban-based men earn and remit to rurally based women. So far, so apparently straightforward.

But the key point we must take from this is that “normal” financial services are not networked and hence do not have an impact on adoption by others – it is the networked nature of mobile money in the context of remittances that means women get included.

What’s more, it’s clear that mobile money is now far more than an instrument to enable urban-rural remittances; it has a much wider range of uses for gifts and interpersonal transfers of many types.

Family ties pay dividends

Sibel Kusimba’s detailed ethnographic analysis of the social networks around mobile money among the Bukusu in western Kenya gives us further insight. Doing well means successfully accessing extended family resources and these networks are mostly based in flows within sibling, mother and cousin relationships. Kusimba shows that women – especially mothers – are central to these networks. The contributions from men more often come from brothers and mothers’ brothers than fathers; that is, maternal kin. This is not to say that ties through patrilineal kin are not also important and institutionalized – but it is to point out that women are critical lynchpins to many of these networks.

As Kusimba puts it (page 273), “In a context of rapid social change … the hearthhold based around a woman, her relatives and her children is becoming a basis for lifelong bonds of support.” These exchanges of funds also serve to confirm the strength of relationships, transmitting affection and strengthening emotional ties (see also Johnson and Krijtenburg, 2014). Moreover, since 33 percent of households in Kenya are de jure female headed, mobilising resources for their own children through these ties to male kin is vital to their survival. Even small gifts enable investment in this woman-centric “hearthhold” over time without “disrupting widely shared ideals of patrilineal solidarity and household autonomy,” she says.

Gendered networks of resource exchange

These patterns are supported by further (as yet unpublished) analysis that we[1] have undertaken of the financial diaries dataset drawn from five locations across Kenya. This analysis involved nearly 800 low-income individuals over a period of 11 months, with data on resources received in cash, including through mobile money, and in the form of in-kind goods. We found that having a mobile phone increased the value of resources received by women through mobile money, when compared to women without a mobile phone, though surprisingly the same effect was not evident for men.

Women’s receipts were higher in total across all types of resources received and through the mobile money channel and also when they were married and household heads. Women received more via mobile money when they had more women in their network of close family sending them funds, meaning women were sending higher amounts than men, which suggests a strong woman-to-woman dimension among close family (parents, spouses, children). Yet men also gave more when they had more women in their close family network.

However, in the wider network of family (including siblings, cousins, aunts/uncles), both men and women received higher amounts when they had more men in these networks – further supporting Kusimba’s finding about the importance of male relatives. Moreover, we found that when both men and women gave to women in both their closer and wider family networks, this then raised the amounts they in turn received, demonstrating a reciprocal dynamic at work.

This evidence shows the complex gendered dynamics of finance and its networked characteristics. It is not yet possible to tell a simple story from these findings, but they tell us that in order to understand mobile money adoption, we need to recognise and understand these dynamics – and to move beyond the conventional axioms regarding gendered constraints to financial access. The implications for financial inclusion analysis, policy and product design are significant. By understanding these networks, we’ll begin to understand what both men and women actually do with their money, how it connects them to others and what financial services can do to facilitate this.

[1] A team of researchers from University of Bath and University of Antwerp with support from FSD Kenya.

Susan Johnson is a senior lecturer at the Centre for Development Studies at the University of Bath. Photo: M-Pesa’s “Send Money Home” ad, courtesy of Safaricom.

Read the original blogpost on Next Billion -

Read Sibel Kusimba's recently released final report (Sept 2017), "Dynamic Networks of Mobile Money among Unbanked Women in Western Kenya"

"Hearthholds of mobile money in western Kenya" is now available for free download at Economic Anthropology until October 20, 2017.

Monday, September 18, 2017

How Nigerian ATM fraud victims are swindled

File 20170913 23162 f2971h
REUTERS/Akintunde Akinleye
IMTFI Fellow Oludayo Tade, University of Ibadan in The Conversation

It has been three years since the Central Bank of Nigeria introduced the Cashless Nigeria Policy. Its aim was to encourage the use of electronic systems for all monetary transactions.

The policy has yielded benefits: it makes many transactions simpler and safer for more people. But there has been an increase in fraud in the banking and payment systems. These crimes are carried out using the information and communications technology that has flourished in Nigeria since the early 2000s. A 2013 report by the Nigerian Deposit Insurance Corporation identified 14 types of electronic fraud (e-fraud). Automated teller machine (ATM) fraud was in prime position. It accounted for just under 10% of the total value of funds lost to e-fraud and 46.3% of the reported number of cases. The agency’s 2015 report points to an increase in the incidence of ATM fraud in Nigeria.

Despite the apparent importance of e-fraud, little scholarly attention has been paid to understanding how it affects the functioning of the financial system and its impact on victims. That’s why my colleagues and I carried out a study to examine the experiences of ATM fraud victims in south-west Nigeria. We focused on what made a person more likely to be a victim and on the fraudsters’ tactics.

Study results

We found that a number of factors predisposed people to being victims of fraud. These include illiteracy, health problems and issues of vulnerability.
An elderly illiterate man who was interviewed said:
I was given an ATM card and nobody told me how to use it. Outside the bank I gave it to a young man at the ATM to help me withdraw cash. He did it and returned my card to me. After a few days I noticed money had left my account, which I promptly reported to my bank. At the bank I was told that the young man had swapped my card.
Our study also showed that close family members sometimes exploit people’s trust to defraud them. One middle-aged man gave his son his ATM card to draw N5,000 (USD $31.25) ahead of returning to school. He later discovered that his son had instead drawn N10,000 (USD $62.50). “If my son could do that to me while I was trying to help him, who can one trust?” he lamented.

When people are ill, they can be vulnerable to ATM fraud. They depend on others because they can’t get around. A “trusted” person may take advantage.

The story of a young man interviewed during our study helps illustrate this. He was ill and gave his ATM card to a friend to help him buy medication. He was later “shocked” to discover that his friend had drawn an extra N70,000 (USD $237.50) from his account.

The coercion factor

Of course, friends and relatives are not to blame for all ATM frauds. Some occur through coercion, particularly physical attacks and armed robbery at ATMs.

One young woman told us:
I wanted to make a withdrawal on a Sunday evening. The ATM on my street was not working so I had to look for another ATM a few streets away. Unfortunately I was robbed by an armed gang. They made me insert my ATM card to confirm the PIN number and balance. They went away with my ATM card and PIN. I couldn’t do anything until Monday, by which time my account had been drained of N200,000 (USD $1,250). They took my phone so I could not even alert the bank and block withdrawals.
The success of online fraud depends on offenders choosing easy victims.

Stemming the tide

Reducing ATM fraud depends on making people less vulnerable.

For example, anti-fraud education campaigns must use indigenous languages and consider that some bank customers can’t read. Banks must show their customers how their cards work and how to get help when in trouble. Security officers who are not bank staff should not be allowed to deal with customers.

ATM users should be taught to change their passwords sometimes. They must also be cautious about when and where they withdraw money to reduce the risk of attacks.

This article was originally published on The Conversation by Oludayo Tade, Lecturer of Criminology, Victimology, Deviance and Social Problems, University of Ibadan
Read the original article.

Read his recently published article with Oluwatosin Adeniyi in Payments Strategy & Systems, "Automated teller machine fraud in south-west Nigeria: Victim typologies, victimisation strategies and fraud prevention"

Thursday, September 7, 2017

Cash is not a Crime - New IMTFI white paper finds efforts to curtail cash use hurts poor and does little to stop terrorism financing

Because it can be used anonymously, and is generally thought to be untraceable, cash has long been linked to crime: think of the image of wads of unmarked bills in a suitcase being passed between disreputable conspirators plotting evil. And while it is also commonly thought that cash is one of the primary tools to finance terrorism, recent news on the use of online platforms to fund US terror shows otherwise. Recently, there have been calls to eliminate cash altogether in favor of electronic payments systems, or at least to eliminate high-denomination banknotes.

Ursula Dalinghaus
Photo by Frank Cancian, UCI
In a new white paper published online this week, however, Ursula Dalinghaus, a postdoctoral scholar at the Institute for Money, Technology & Financial Inclusion (IMTFI) at the University of California, Irvine, demonstrates there is little to no evidence to support the claim that eliminating high-denomination banknotes or restricting cash payments will prevent terrorist attacks. The study finds that targeting cash as a terror financing mechanism misidentifies the problem.

“Curtailing cash will do little when criminals already make use of a diverse portfolio of payment technologies and types,” she says. "Increasingly, electronic forms of transmitting and converting value are just as essential, if not more so, in supporting criminal as well as terrorist activities.”

In addition, she argues that legal tender – in the form of cash – is a public good that guarantees ease of use, accessibility, a certain level of privacy, and many other unique qualities.

“Restricting cash payments entails the criminalization of legitimate payment activities when reliable data on the full scope of cash usage of any kind is scarce,” she says. “More research on payments and cash usage is therefore essential.” 

Key findings include the importance of the interplay between multiple payment tools and jurisdictions. People use diverse payment methods together, and the movement of value across jurisdictions is subject to different regulatory environments and payment cultures. Targeting cash in isolation does not take into account this interplay, and risks displacing criminal activities involving cash to other tools and jurisdictions. Multiple methods of interdiction are therefore needed to address money laundering and terrorist financing.

Drawing upon a range of institutional, legal, scholarly, policy, news media and other sources, in collaboration with experts drawn from criminology and terrorist financing, banking, industry, and the social sciences, the report documents how digital forms of payment are also subject to abuse and do not necessarily guarantee transparency in accounting that many believe could aid in the tracking of financial crime. In addition, the shift to digital away from cash exposes people to new risks. Researchers studying the impact of demonetization in India and capital controls in Greece are observing that cash restrictions entail new social and economic burdens and are shifting the costs of making payments onto small businesses and disadvantaged groups in society.

Findings from this study have been entered into a EU-wide consultation to be used by the European Commission in Brussels to determine the policy implications of cash restrictions.

Dalinghaus concludes that there is little to no evidence that limiting cash will effectively target the financing of crime and terrorism.

“IMTFI research around the world has consistently demonstrated the complex interplay of different forms of money and payment, so we shouldn’t be surprised that the bad guys also take advantage of diverse payment options. Criminalizing cash therefore won’t solve the problem,” says Bill Maurer, UCI anthropology and law professor and IMTFI director. “This new study also reminds us that criminalizing cash may criminalize the fact of being poor and living in a cash economy.”

Funding for this paper was supported by the International Currency Association (ICA) and its Cash Matters movement. 

Read Q&A with author here: 

About the Institute for Money, Technology & Financial Inclusion (IMTFI): Established in 2008 with funding from the Gates Foundation, IMTFI is a research institute based out of the University of California, Irvine. Its core activity has been supporting original research in the developing world on the impact of mobile and digital financial services, focusing on developing grounded, nuanced perspectives on people’s everyday financial practices and the impact of new technologies. To date, IMTFI has supported 147 projects in 47 countries involving 186 different researchers. These researchers have produced 12 books and 100+ articles in scholarly and other venues, and have been mentioned in the media 170+ times, in venues ranging from Bloomberg Businessweek and the Guardian to Forbes, India.

About the University of California, Irvine: Founded in 1965, UCI is the youngest member of the prestigious Association of American Universities. The campus has produced three Nobel laureates and is known for its academic achievement, premier research, innovation and anteater mascot. Led by Chancellor Howard Gillman, UCI has more than 30,000 students and offers 192 degree programs. It’s located in one of the world’s safest and most economically vibrant communities and is Orange County’s second-largest employer, contributing $5 billion annually to the local economy. For more on UCI, visit 

About the International Currency Association (ICA): Founded in 2016 as a not-for-profit organisation, the ICA represents the currency industry across the whole spectrum. It currently has 23 members and 5 associate members;  all members are suppliers of currency, or suppliers of products, technologies and equipment used in the design, production, handling and circulation of currency. The ICA is working to ensure that its members drive innovation and offer the best commercial and technical practices to their customers, promote the highest ethical standards, do everything in its members’ power to ensure that cash is secure, efficient and effective  and support and promote currencies worldwide as universal and inclusive means of payment. For more on the ICA visit  

Cash Matters, an ICA movement: Cash Matters is a pro-cash movement, funded by the ICA, which supports the existence and relevance of cash as an integral part of the payment landscape now and in future. Cash Matters will support and initiate campaigns on a global level, taking current issues and upcoming legislative changes into account. The Cash Matters website offers authoritative and to accessible facts, figures, and news for consumers, journalists and industry experts alike. For more on the Cash Matters visit 

Original post by UCI School of Social Sciences can be accessed here.