Monday, February 24, 2014

One Lunar New Year resolution every financial regulator and mobile payment platform should have

By IMTFI researcher Anatoly “Jing” Gusto
The last day of January marked the first day of the Lunar New Year, a celebration and time of renewal in many Asian cultures.  Resolutions aren’t part of the Lunar New Year tradition, but I have grown to appreciate it as a reminder that Jan. 1st is not the only day of the year on which to make resolutions. I would like to offer one, which I hope bankers, mobile money issuers and financial regulators will consider adopting, which for me was the key takeaway as a panelist on behalf of IMTFI in last year’s Alliance for Financial Inclusion (AFI) Global Policy Forum (GPF), held in Kuala Lumpur, Malaysia.  AFI is a network of central banks and other financial regulatory bodies from nearly 60 developing countries who exchange knowledge on financial inclusion policies.

Interoperability:  Just Do It

Our panel on “Research Findings in Financial Inclusion” focused on bringing to policy makers the latest research in the field of financial inclusion. First to present were Nina Laven and Nurina Merdikawati of INSEAD, who did a research on payment risks and security.  Their study brought out three related insights:  (1) interoperable systems pave the way for payment security; (2) security is key in building consumer trust; and (3) trust, in turn, is key to new technology uptake. They found that isolated technology platforms were not necessarily more secure and that those countries with interoperable payment systems have a better chance to have a significant level of consumer adoption for financial services.

From the emphasis on trust, I segued into the need for technology-driven payment alternatives to be contextualized to local conditions based on findings from my IMTFI case study of Green Bank’s text-a-payment loan facility. I explained that integrating mobile technology into bank services will not necessarily lead to financial inclusion and encourage savings buildup, particularly if initiatives fail to address the human and organizational aspects of financial transactions or rectify problems with interoperability. There was little uptake in the use of the mobile money that could run in the bank’s platform as it only worked with mobile phone users subscribed to one specific mobile network operator, limiting the ability of clients to perform their day-to-day transactions with merchants or family members subscribed to other telcos. 

Jing Gusto next to the Maya Declaration sign, "How can I lend a hand so we all win?"

Finally, Aishwarya Ratan of Innovations for Poverty Action, presented how IPA’s study on commitment savings in agriculture in Malawi highlighted the need for a financial environment that fosters diversity in services and delivery channels and more sensitivity to user types to promote financial inclusion.

The panel discussion highlighted inter-linkages and complementarities between financial inclusion, security, and diversity in local context and user types. Overall, I think it emphasized the need for interoperability in reducing the dependency on cash for payment transactions, which is integral in enabling inclusive economic development and poverty alleviation.  Alternative modes of payment and value storage remain second to cash largely because they are missing one important ingredient, and that is the ability for users to readily transact for their day-to-day use, anywhere, anytime.  

Regulators and private players in the financial and telecommunications sectors need to think outside the box and find ways for their respective payment/financial platforms to communicate and interact to expand their outreach and open up market boundaries. Deepening convergence will be one of the major driving forces behind the adoption and usage of technology in financial inclusion but a broader discussion about interoperability needs to start first.

And I hope it happens in 2014.

Video archives of selected sessions at the 2013 AFI Global Policy Forum are available. Click here to watch.

Tuesday, February 18, 2014

New Working Paper: Mobile Money and Susu Savings in Ghana

IMTFI announces its latest working paper by Dr. Eric Osei-Assibey from the University of Ghana: What Drives Behavioral Intention of Mobile Money Adoption: The Case of Ancient Susu Operations in Ghana. This study provides insights into the ancient susu savings operation in Ghana and the behavioral intention or willingness of susu collectors and users to adopt a mobile money (MM) platform as part of their savings practices. More specifically, this study investigates human and technological factors that determine one’s intention to adopt MM as a savings channel, particularly in place of more traditional ways of saving among many people in West Africa. 

Photo by Eric Osei-Assibey
The study reports many interesting findings, but one that is striking is the importance of the physical presence of the susu collector, which was found to be statistically significant but negatively influencing one’s behavioral intention to accept MM. This, which was found to be the primary reason motivating susu users to honor their savings commitment, is potentially an important factor in explaining why respondents were not sure whether an MM platform would be an effective method of saving. While MM uptake remains significantly low, the study findings suggest that the way to increase uptake is to create more awareness, embark on financial literacy programs, and reduce mistrust and perception of risk of the MM platform.

Photo by Eric Osei-Assibey

Monday, February 10, 2014

Announcing TRANSACTIONS: A Payments Archive

By Taylor C. Nelms and Robert J. Kett

Through 2013, the Institute for Money, Technology and Financial Inclusion has funded over 125 researchers in 38 countries. Every year they come together at the University of California, Irvine to share their research questions and conclusions. They also bring with them more tangible lessons: an incredibly diverse assortment of artifacts that also help to tell the still-unfolding story of mobile money.

We did not anticipate becoming a museum. But one of the important side-effects of our large and still-growing research network has been the accumulation of stuff: state and local currencies in multiple denominations, promotional material from mobile money deployments, and artifacts of everyday monetary practice, from cell phone sleeves to piggy banks. We have been fortunate to receive many of these as gifts from our researchers, and early on we realized the treasures that had begun to gather in our offices. We began a partnership with the British Museum to receive many of these artifacts for its own collection of modern money paraphernalia, and as we have documented before, many of these objects can now be seen in the Citi Modern Money Gallery.

In 2013, inspired by this incipient collection, IMTFI research assistants formed a new partnership with the Intel Science and Technology Center for Social Computing (also at UC Irvine), as well as a range of other institutions (from the Fitzwilliam Museum at the University of Cambridge to the Khipu Database Project at Harvard University), to launch a new website and online collaborative collection. Called TRANSACTIONS: A Payments Archive, this collection brings together artifacts from partner collections and written commentaries from independent contributors to spark a conversation about the material cultures and histories of payment and debt.

You can read more about the TRANSACTIONS archive in Anthropology News:
How might attention to such objects, their contexts and uses illuminate the longue durĂ©e history of forms of payment and transactional record-keeping and reframe understandings of the materiality of debt and money? And how might we reassemble a material history of money, debt, payments, and transactional records across their often-disconnected institutional contexts? […] Transactions is our attempt to constitute a collaborative framework to address these questions.
TRANSACTIONS needs your help!

We invite public participation in this collaborative endeavor in two ways:

1) Submit images of transactions artifacts of your own (or those you have come across in research) to our Collaborative Archive, along with a short explanation detailing their who, what, when, and where. Visit our site and click the “Contribute” button to learn more.

2) We welcome commentaries of 500-1500 words that offer more in-depth reflections on transactions artifacts, either those we have selected from our partner collections or those you have found in your own research. We have already hosting commentaries and other reflections from scholars such as Jane Guyer, Joe Deville, Alexandre Roig and Waldemar Cubilla, Lana Swartz, and Carlyn James.

Feel free to contact us at