@Bill Gates is famous for kicking off the Fintech revolution way back in 1994 when he declared:
“Banking is necessary – banks are not.”
Ok, he was a bit early – like getting into PCs in 1975 – but right.
Since leaving Microsoft he has been spending his fortune and intellectual energy via the Bill and Melinda Gates Foundation on making the biggest story of the 21st century a reality – the emergence of billions out of poverty into a global middle class.
So when Bill Gates talks about mobile banking for the poor, we should listen. In this YouTube video he is engaging, passionate, geeky and brimming with data. It is really about how important banking is.
The M-Pesa numbers in Kenya alone are staggering:
- 17 million Kenyans (70% of the adult population) use M-Pesa
- They can convert into spending cash at 40,000 agents
- 25% of Kenya’s GDP product flows through M-Pesa.
That is why I was excited to spot Sendwave. This is the future of Remittances. Actually, huge as that is, it is also the future of cross border micro trade. Just halving remittances cost does more for poor people than all Government aid put together (according to the World Bank), but trade is what will lift billions out of poverty long term. If you want to buy something from somebody in Kenya, just send them the money via something like Sendwave.
SendWave is only one example of doing Remittances via M-Pesa. World Remit, a fast growing Remittances venture backed by Accel is sending to M-Pesa. Traditional Remittances vendor Moneygram is also doing this.
Sendwave is totally mobile and simple, as this video shows. I spotted Sendwave on Twitter where users were mentioning it casually, which is a good sign of traction.
Warning: I have not personally tested Sendwave (I do not live in America, which is where I would need to be to send money). From a read of the T&Cs I discovered that the service is from a company called PreCash that is licensed in Texas).
Like Bitcoin, the risk is on the sender. Once the money is gone, it is gone; there is no recourse. The simple way people can test this is to send a small sum of money to a friend and then ask via SMS if they got it.
Reality check – Sendwave is currently only working in one Remittance corridor – America to Kenya. For Remittances you need both the on ramp and off ramp. You need to be licensed in the on ramp country to send money. So Sendwave chose America first – it is a big market.
The beauty of MPesa is that it solves the off ramp problem via all those M-Pesa agents.
When 70% of Kenyans can cash in M-Pesa at 40,000 locations, it is as good as sending Fiat, but a lot easier.
They can easily expand to other countries where M-Pesa is working (currently 13 countries).
The big question is what will happen in countries where Vodafone does not dominate. Will it be some new model such as the Business Correspondents in India? Or some open variant of M-Pesa? Or Bitcoin? Or something yet to be invented?