Cell phone minutes: the next currency
It might just be my old nature mind, but I still find it a daily miracle: being able to walk into the bakery around the corner and trade a piece of paper – called money – for a loaf of bread. We tend to associate virtuality with video games, but when we think further we realize it has penetrated our lives ages ago. Take money; it is as virtual as the Matrix, but as long as we all believe in it its value it works fine.
Back to Africa. We’re not used to Africa taking lead in new technology. Necessity, they say, is the mother of invention and it couldn’t be more true in case of Africa, where pre-paid airtime is fast becoming the ‘virtual’ currency, overcoming conventional currency exchange and lack of banking infrastructure.
There are over 100 million mobile phones in Africa, and it is one of the fastest growing mobile regions. This number will increase to 378 million by 2011, according to Portio Research. Cell phones are already used for music downloads, text messaging, video games and personal piggy banking. Kenya is home to an impressive cutting-edge mobile tool: M-PESA, the world’s only system for sending both minutes and money via SMS. (The “m” stands for mobile. Pesa is Swahili for money.) Airtime minutes automatically load onto the phone of their recipient. The cash is collected from one of the many M-PESA shops dotting the country.
Recently when the violence in Kenya flared up, pre-paid cell phone cards became the most valuable good around. Most people don’t have monthly cell phone usage plans – they just buy pre-paid cards as they need them. But when the stores and kiosks that sell the phone cards were closed due to the violence, they became really hard to come by and soon, cell phone credit became more valuable than cash. Charities have even begun distributing the phone cards which recipients then use to buy food and other essentials.