T-Cash town? Food aid and mobile money in Saint Marc

Marie sits with a group of other women outside a small vendor in Saint Marc, Voilá mobile phone in hand. They are waiting to spend the 1600 gourdes (US$40) that Mercy Corps just sent to their T-Cash accounts. As heads of households with IDPs (internally displaced persons) from the earthquake, they are among 5,000 recipients in Saint Marc who will receive money on their phones to buy rice, oil, beans, and cornflour from fifty small, local merchants. Our host for the day, Andrew Lucas, explains to us that this is a much more dignified way of distributing aid than MINUSTAH-guarded blind giveaways, and we wholeheartedly agree. Mercy Corps in Saint Marc are doing their best to make sure that their donations go to people who are most in need, and that their program is conducted with as much benefit to small businesses as possible.

Food aid recipients such as Marie seem to be using their mobile money without too much trouble. Mercy Corps help recipients register for T-Cash, give them a mobile phone, help the recipient activate their phone, train them to make payments using their mobile accounts, give them printed instructions, and visit vendors to make sure everything is running smoothly. Mercy Corps also employ volunteers to assist vendors and aid recipients during the transactions. Vendors are also happy: they are moving a lot more stock and making more money. Technical problems that crop up are worth the extra profit. Mercy Corps monitor prices in the town and encourage customers to seek out the lowest prices, as they normally would.

What's interesting to us is the overall mobile money landscape in Saint Marc. Thus far, Digicel's TchoTcho Mobile has no presence in the town, and Mercy Corps / Voilá have big plans for the next few months that will integrate an interesting range of players into their program. In April and May, Mercy Corps and the Red Cross will run a market once per week in which 2,500 of the current recipients will be given a one-off payment of US$250 to spend on materials to build or renovate their homes, or to pay school fees (including technical/trade school). Later on, half of these recipients will be selected for a third time to spend a further US$250 on tools for small enterprises.

This approach–of targeting customers, merchants, agents, and billers simultaneously–is a promising solution to mobile banking's 'chicken-and-egg' problem of providing enough users for agents, and enough agents for users. It the potential to achieve a critical mass of users that will secure mobile money's future in Saint Marc, so long as the transition from food aid to a publicly available service is handled correctly. At the moment, there is no fully-functioning T-Cash outlet in Saint Marc. Indeed, having functioning agents goes against Mercy Corps's mission, because it would allow beneficiaries to cash out the money they have been given rather than spend it on food. But future users of mobile banking in Saint Marc will need to be given the entire service if their town is to link up with users across the country–and these connections are essential to the future success of mobile banking in Haiti.

Who will become T-Cash agents? At the moment, many of the businesses accepting food aid payments are displaying T-Cash signs and banners but are not actually agents. This is problematic because there is a risk of losing customers' confidence, should they try to use a service and find that it is not working. At the moment these merchants can accept payments for food aid and nothing else; their customers cannot cash in or cash out, nor can their other customers who are not aid recipients pay for food. Furthermore, most of these vendors are not eligible to become T-Cash agents because they are not registered businesses. Mercy Corps is working to train them in business skills and help them register their businesses.

We are optimistic that Saint Marc can successfully transition to be a true T-Cash town. But we recommend the following: that Mercy Corps and T-Cash keep a critical eye on their joint operation to ensure that there is no conflict of interest; that they work closely with customers, merchants and agents in Saint Marc to ensure the development of a publicly available service rather than a closed aid program; and that they encourage link-up between different agents around the country. We also encourage TchoTcho Mobile to establish a strong presence in Saint Marc, in order to ensure that mobile banking in Haiti is competitive and prices stay low. Resolving the chicken-and-egg problem is not just about achieving a balance between users and agents; it is also about ensuring that different chickens are laying the eggs, and that the eggs can be transferred from one basket to another.

--Erin B. Taylor

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--Photo #1: Women waiting to buy Mercy Corps food using T-Cash. Photo by Erin B. Taylor.

--Photo #2: Merchants filling out paperwork for food aid purchases. Photo by Erin B. Taylor.

--Photo #3:Food aid beneficiaries waiting in line at a merchant, phones in hand. Photo by Erin B. Taylor.

--Photo #4: Small Mercy Corps affiliated merchant in Saint Marc. Photo by Erin B. Taylor.

Not all agents are created equal

The uptake and success of mobile money in Haiti will be affected by user experience at mobile money agents. While users should have similar experiences wherever they choose to use mobile money, we have found that their experiences vary depending upon what kind of agent they use. The centrality of the agent to the success of mobile money means that we cannot take the word “agent” for granted.

Who is the mobile money agent? In Haiti, businesses providing a mobile money service have a sign on the front of their shop identifying them as an “Agent Authorisé” (authorized agent). The business has gone through the training provided by the mobile money operator and is able to carry out the different transactions involved. However not all agents are created equal. Our research has found several types of agents.

In the ideal model, the small business owner is always the one who carries out the mobile money transactions. Not only is the owner always present at their place of business, but the commission represents an incentive for the business owner to promote the service. This is the case of Andy, the owner of a cyber café. He is the most successful among the agents that we have interviewed. Because he stands to gain from registering new clients, Andy says that he tries to turn as many of his regular clients into mobile money users as he can.

Unlike Andy who is the owner and representative, there are agents that are placed into stores by another company, which has multiple outlets and places its agents in different businesses. While these employees have an incentive to promote mobile money because their employment status depends on the continuing success of mobile money, the fact that they are not fully integrated in the businesses where they are placed means lack of consistency in the provision of service. Cases when these agents are absent and those in the store cannot tell the client when they will come back means that one cannot always expect service at some locations even when they are the closest to one’s house or place of business.

Some mobile money agents are additions to already existing money transfer businesses. Voila’s T-Cash outlets are currently located in UniTransfer offices. The placement of the mobile money at the UniTransfer office is not without problems. Because there is only one line for money transfers and mobile money, T-Cash customers face the same amount of time waiting in line that existed prior to mobile money. Furthermore, mobile banking customers are more likely to be robbed using transfer houses than other kinds of businesses that are not associated with withdrawing cash. Long lines and the potential security risk associated with walking out of a mobile money outlet will discourage customers.

The most common, yet problematic, “agent” scenario is the one where the business owner decides to sign up for mobile money and designate just one of their existing employees as the mobile money agent. For these employees, serving as the mobile money “agents” is an addition to their schedule of duty and is not necessarily accompanied by an increase in salary. Not only do these employees lack the incentives of business owners but the fact that providing mobile money services is one of the many things they have to do means that they may not have enough time to provide all the information a client may need.

Benjamin, a computer programmer at a cyber café represents one of those “agents” whose work load was increased by the addition of mobile money service at his outlet. On the one hand, he is one of the most enthusiastic agents we have met because he is a true believer in the product and its promise. However, he is also a bit discouraged because as he said: “I am working for the mobile money operator but I do not feel that I am benefiting from them.” According to Benjamin, the agents are not the only ones who suffer. Clients do not receive the kind of attention they deserve, especially for a service that is so new and that involves their money. He explains, “When someone comes and are about to give them their money you have to spend all the time they need and answer all of their questions in order for them to trust you with their money.” Given that the target of mobile money are unbanked people for whom every penny counts, their ability to trust their agents is crucial to their adoption of mobile money. If clients cannot count on their agents being there or the agent has to rush off to serve other customers potential mobile money clients will think twice before adopting mobile money.

As mobile money providers are looking to expand their agent networks in Haiti, they need to be aware of the fact that while the businesses owners have an incentive to become mobile money agents because of the commission and the added traffic that mobile money brings, the way they set up service provision will affect customer experience and return business.

--Espelencia Baptiste

--Photo #1: Digicel TchoTcho sign. Photo credit Espelencia Baptiste, 2011

--Photo #2: TchoTcho user and client. Photo credit Espelencia Baptiste, 2011

--Photo #3: Unitransfer T-Cash sign. Photo credit: Espelencia Baptiste, 2011

--Photo #4: T-Cash user. Erin B. Taylor, 2011

Will mobile money really bank the unbanked?

Wherever mobile money touches down–whether in the Philippines, Kenya, or Haiti–it is touted as the next big thing in development. M-PESA in Kenya was lauded as a success because it provided financial services to thousands of poor, previously unbanked people. Mobile money has arrived in Haiti with the same aim: it is a commercial enterprise but it is also has development potential for the 80% of Haitians who are unbanked. Whether mobile money achieves its development goals depends upon the commercial viability of mobile banking and its adoption by the target population.

Our research to date suggests that mobile banking in Haiti is commercially secure despite the small size of the current market. Mobile money may have taken years to be developed in Haiti if it were not for the incentives offered by the Gates Foundation (Haiti Mobile Money Initiative).

A similar story operates with respect to mobile money outlets. It is in the interests of small businesses to sign up for mobile money because it requires very little initial investment, is not labor intensive, and has the potential to bring in new clientele. Outlets must be registered businesses who have passed a credit check with the mobile money service's partner bank and attend a one-day training seminar (or send an employee). The only technology they need in the site of their business is a mobile phone. Some outlets are complaining that they are not seeing any benefits in this early period, but they have no intention of pulling out and do not seem to be discouraging other businesses from signing up. This augurs well for the growth of outlets.

The willingness of businesses to become outlets is crucial to mobile money's success as a development project. Mobile money will only succeed in reaching Haiti's unbanked if outlets are more widespread than any other formal financial service. If outlets are not nearby, people will stick to their tried-and-tested informal routes of money transfer (friends, buses, boats) and continue to store money in their homes. Mobile money will be commercially competitive if outlets achieve the same saturation as transfer services like Western Union and MoneyGram, but as a development project outlets also need to be located in remote areas. In this case, outlets and their access to banking facilities and reliable mobile infrastructure will be the main technical factors limiting where outlets operate.

Accessibility is not the only obstacle to widespread registration for mobile money services. Education and literacy may prove to be serious stumbling blocks for both the commercial and development sides of mobile money. First, people need to know that mobile money exists, what it can be used for, and how to access it. T-Cash is currently advertising on Radio Caraibes and we have seen people on the street wearing bright green t-shirts that display the T-Cash logo and price list. Digicel will launch its advertising campaign in late April. So far we have encountered numerous people in Port-au-Prince who have heard about mobile money but do not know what it is for or where to find it. Indeed, they keep asking us to teach them about it, thinking that we are Digicel employees.

Once people are convinced of mobile money's value and have signed up, they also need to be shown how to use the service by an agent, an outlet, or by friends. Our major concern here is literacy. Most Haitians are numerically literate and have no problem using a mobile phone to make calls or check their balance. This is fine with T-Cash, which only requires a string of numbers to be entered. But TchoTcho Mobile customers must be able to read the French-language menus to make a transaction. It is curious that the simplest form of banking in Haiti requires the highest literacy rate, whereas formal banks do not require any literacy at all because the teller fills in the customer's form. Technological literacy and access is also an imperative, as it is not uncommon for Haitians to use their phones (or other people's) to make calls and nothing else.

Currently, mobile money is well positioned to appeal to a particular demographic: it is likely to work best with people who are already well connected, literate, urban, young, and employed. We feel that mobile money has a significant chance of bringing large numbers of Haitians into the formal banking system. However, if it is to help the poorest and most marginalized Haitians, targeted development programs that build upon the intricate relationships between the economic and social should run alongside commercial activities.

--Erin B. Taylor

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--Photo #1: Voilá office in downtown Port-au-Prince. Photo credit: Erin B. Taylor, 2011

--Photo #2: Entering in a string of numbers to make a transaction using T-Cash. Photo credit Espelencia Baptiste, 2011

--Photo #3:TchoTcho Mobile's text-based menus. Photo credit: Espelencia Baptiste, 2011

Resisting the devil: using mobile money in Haiti

As I boarded a plane bound for Haiti in December 2010, I received a text from one of my research assistants that says that Voila had just launched its mobile money service, T-Cash. It was followed closely by Digicel’s TchoTcho mobile. The advent of mobile money in Haiti is interesting and exciting. As an anthropologist I was curious to see how this new technology was going to change internal migration and remittance patterns between Port-au-Prince and the provinces. My interest in mobile money is also personal. As a Haitian with friends and relatives living in different parts of the country, the prospect of sending money electronically is particularly welcome. With mobile money I no longer have to rely on expensive money transfer services, bus drivers who offer remittance services, or send money with friends and relatives who are travelling back to their home towns.

Once in Haiti, I set out to register for both services. Registering for Voila’s T-Cash required sending a text to their dedicated number using your Voila phone. Within a few minutes you receive the secret pin required for withdrawal and transfers. Digicel’s TchoTcho Mobile is a little more bureaucratic as it requires in-person registration with a valid state-issued ID and a photocopy of said ID.

As with any new service, there were some kinks that both companies needed to work out. Although both companies boast agents throughout the country, or Port-au-Prince in the case of Digicel, finding an agent is not always easy. On the day I registered for TchoTcho, I had to visit four agencies. At the first store we were told that the agent had been called away elsewhere; the second agency did not have an internet signal, while the third had sent their laptop out for repair. However, six weeks on, it is easy to find functioning TchoTcho agencies, even though Digicel has not officially launched their service and are not advertising. T-Cash is another story: while we have found numerous businesses with the T-Cash sign on the front of their shop, few of them are actually operational.

Digicel and Voila’s tariffs for transferring and withdrawing money are similar except that Voila offers a lower maximum that one can hold on a T-Cash account. While it may seem odd that customers have to pay to withdraw their own money, so far we have not heard any complaints about the fees. Prior to mobile money, the only safe place to hold money was the bank but banking was a time consuming undertaking. Mobile money offers a middle ground between the bank and cash. With mobile money, money is available but one is able to save. As Josué, an artist, explained to me, “If I have money in my pocket, I will use it on beer, cigarettes and women, but if it is not there I cannot spend it as fast. After all, money is the devil, it makes you do crazy things.”

Safety issues are one of the main attractions to mobile money in Haiti. Discussing the risk of being mugged, Max, a plumber and TchoTcho customer, told me that an advantage of mobile money is that you can deposit your salary at an agent near your job and withdraw it at an agent in your neighborhood. Not only do you not run the risk of your money being taken away from you as you travel from your job but you do not have the stress of travelling with money. Max went on to say that he likes the fact that TchoTcho agents are located in regular businesses. If he walks out of a restaurant or a clothing store, no one will know that he just withdrew money.

Another one of mobile money’s attractions is the ability to top up your phone account from your mobile money account. Using mobile money, you save the 10% tax that you pay when you buy a phone card. Mobile money is also economic in terms of time and convenience. Prior to mobile money I could only top up my phone using a phone card or a Pap Padap vendor. These transactions are limited because they require agent which is not always available either because of where I am or because shops are closed. While online top up is available, it is not an option for many people because it requires internet access and a credit card, two luxuries that are not readily available in Haiti. No story could illustrate the significance of mobile money for topping up your phone as this scenario presented by Samuel, a 19 year old university student. He said, “Have you ever been talking to a girl late at night and just when the conversation gets interesting you run out of money on your phone? At this hour there is not a store open or an available Pap Padap or Direk Direk vendor. Even if there were, you would be too scared to go out at that time. With Mobile money you can continue the conversation without losing momentum because once lost, you cannot recapture that moment.”

Whether to keep the conversation going with your girl, transporting your salary across town, hiding money from yourself or sending money to your ninety-year-old aunt in Carrefour George, mobile money is definitely a welcome addition to the financial landscape in Haiti.

--Espelencia Baptiste

--Photo #1: Espy topping up mobile money. Photo credit: Erin B. Taylor, 2011.

--Photo #2: I can sign up for Tcho Tcho while I get my drink on. Photo credit: Espelencia Baptiste, 2011

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The rollout of mobile money in Haiti

In December 2010, both Digicel and Voilá launched mobile money services in Haiti in a bid to win the $2.5 million dollar prize offered by the Gates Foundation. Digicel came out on top, being the first to meet the requirements of making 10,000 transactions (100 agents, in 100 locations doing 100 cash-in/cash-out transaction each), and were awarded their prize on the 10th of January 2011 at a ceremony in downtown Port-au-Prince.

Mobile banking is a promising solution to the problems that most poor Haitians face when trying to access financial services. Last year, I worked with Dr. Espelencia Baptiste and Dr. Heather Horst to research the movement of money and use of mobile phones around Haiti. Working in Port-au-Prince, Cap Haitien, Jacmel and Anse-a-Pitres, our report shows how poor Haitians face major obstacles when trying to send each other money or conduct simple banking transactions. We identified three major obstacles to the use of financial services in Haiti for the majority of poor residents: security, time and distance, and bureaucracy. Given that poor Haitians get by through sharing money and other resources, often across large distances, they find these obstacles to be very frustrating.

Knowing how woefully inadequate financial infrastructure is in Haiti, we were very optimistic when we heard about the new mobile money services. Dr. Baptiste and I have returned to Haiti to watch as mobile money unfolds, with the continuing input of Dr. Horst. We want to see how people are adopting the service, what they're using it for, and if it is helping them resolve problems they encountered when using transfer service providers such as Western Union or public transport. We are also interested in its long-term effects on Haiti's monetary ecologies. Does it provide economic stimulation for the country and development benefits for the poor? What are its effects on how Haitians form and maintain social relations?

While M-PESA has been very successful in Kenya, there is no guarantee that mobile money will work the same way in Haiti. Infrastructure–or lack of it–could propel mobile money to new heights of success, or render it unviable. Haitians may find creative ways of using the technology that its developers did not anticipate. Traditional pratik relationships between traders and clients might be altered, and demands for financial assistance might now extend to relatives who were previously considered to be too distant to have any obligations. It will be interesting to see whether mobile money will affect traditional face-to-face relationships or migration patterns between Port-au-Prince and the provinces.

One month in, there are two mobile money service providers in Haiti: Digicel with TchoTcho Mobile, and Voilá with T-Cash. Digicel operates almost exclusively in Port-au-Prince, and Voilá operate almost exclusively in the provinces. Both are trying to recruit agents and expand their coverage as quickly as possible. There are some differences in the services. TchoTcho Mobile is more difficult to sign up for as they require the aspiring client to visit an agent in person and provide a photocopy of their identification (if the business doesn't have a photocopier). T-Cash is easier: clients can register over the phone. Both currently allow money deposits and transfers, but you can't yet pay bills like with M-PESA in Kenya or G-Cash in the Philippines. Their pricing structures are fairly similar, and much cheaper than sending money by almost any other means.

It works like this: a client finds their nearest agent by calling a number and speaking with an operator. The client enters the agent's store and asks to top up their mobile money account. They hand over their personal identification and the money they want to deposit (from 25 gourde to 10,000 gourde) along with the fee – there is no visible fee for a deposit. Fees for transfers and checking one’s balance are taken out of the user’s account. The agent does the transaction with their own mobile phone, and the client receives a text message saying that their account has been credited.

When a client wants to transfer money or top up their mobile credit, they call the number provided and use their keypad to conduct the transaction. They don't have to talk to a person: they send free SMS messages from their phone to their service provider to conduct the transaction. A client can transfer money to any mobile phone in Haiti, and the receiver doesn't have to be registered with the mobile money service or even use the same mobile service network. Clients can also top up the credit of any Haitian mobile phone. To withdraw money from a mobile money account, the receiver can go to any agent and present their valid identification. The money doesn't have to be withdrawn – clients can use their mobile money accounts to store money (often safer than storing it in their homes) or save money (avoiding bank fees and slow lines).

In addition to understanding the continued efforts and challenges around moving money within Haiti, we have started talking to some of the first users of mobile money services in Port-au-Prince, most of whom are enthusiastic and excited about the new services. While there are some problems with infrastructure (such as the service being down), they don't seem to be significant compared with the many other infrastructure problems that Haitians face in their daily lives. We are hearing that the services save time and money, and help users overcome the bureaucratic hurdles involved in using banks and pre-existing money transfer service providers. Over the next few months we will be keeping watch as mobile money unfolds to take stock of its socioeconomic effects and see how it is being creatively adapted to the needs of different people in far-flung corners of the country.

--Erin B. Taylor

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--Photo #1: Winner of the Haiti Mobile Money Initiative: Digicel's TchoTcho Mobile, by Erin B. Taylor, 2011.

--Photo #2: Signing up for TchoTcho Mobile, by Erin B. Taylor, 2011