London — M-money services are making steady inroads into how cash is transacted in countries across the continent. Far less progress has been made in enabling low transaction cost payments from the diaspora to individuals and families. Russell Southwood talked to Toffene Kama, Willstream Labs about the service it is pioneering in Senegal.
Toffene Kama's international mobile money transfer service started from a clear understanding of how money from diaspora Africans is used back home: "Diaspora migrants wanted to connect with local businesses to send what their families need. When you send it direct to the person, it doesn't always go where you want. Younger people take the money and use it for something else. There are challenges explaining this publicly but migrants know this."
So the service Willstream Labs devised a payment service that can deliver directly to the merchant or organization that needs payment. The customer signs up online and registers the businesses the he or she needs to make payments to.
According to Kama, it's usually 7-8 companies or organisations: a grocery store; a clinic; a pharmacy; a school; or whatever. So for example, the person whose grocery bill you've paid gets an SMS and they can go and pick up the groceries in person using the transaction details they've received. Willstream makes the payment arrangements with the businesses or organisations indicated by the customer.
The service has attracted 30,000 users from amongst the Senegalese diaspora but is currently in "semi-public mode" as they work with mobile carriers to enable the payments to some local businesses:"A lot of them don't have bank accounts". It has also created a local version of Willstream and is looking to expand out of Senegal into other francophone territories:"We are not yet as automated as we'd like but people are super loyal."
So what's the difference between its local service and say Orange Money?:"It provides an intelligent voucher which is a completely new instrument. It's like a one-time credit/debit card and Orange Money serves as the e-wallet. In this way, it enables merchants to take money using Orange Money."
"These are the kinds of businesses in Africa nobody cares about: the guy who launches and runs his own pharmacy, clinic or food store. Some are highly educated but don't use a bank account. So they need some kind of banking service and we can do that and connect them to high-end migrants in the diaspora."
"The Visa model doesn't work for them whereas cash pretty much does. With Visa, you've got the cost of the equipment plus the percentage payment on the transaction." So Willstream Labs has sought to keep fees low for the user to make it attractive (7% up to 500 euros) and not have to charge a percentage to the merchant:"We do not charge them because we want to ensure fast enrollment".
Also the percentage it charges users is aimed at attracting regular payments up to US$100. Kama believes that anything over US$1,000 will be done by banking transfer or via Western Union.
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