Ideas & Updates

As MEDA joins Better Than Cash Alliance, Reflections on progress to a “Cash-lite Zambia”

While in Zambia last week, I was struck by the changes in the mobile money sector that have happened since my last trip in 2011, which admittedly is about 20 years ago in technology years. When MEDA first started our partnership that year with Zoona, a mobile transactions company, they were the new kid on the block in a market pretty unfamiliar with cashless payments. They were doing a fair number of transactions, but many of those were directed e-vouchers for subsidy recipients, and there was not a lot of competition for customers doing cashless transactions. Uptake was slow going, and it wasn’t yet clear: Would cashless payments ever take off in Zambia?

As MEDA joins Better Than Cash Alliance, Reflections on progress to a “Cash-lite Zambia”
Fast-forward to 2013 and the market seems like it is on the cusp of something big. In addition to the bright green branded Zoona booths that dot both urban and rural centers, the competition seems to have finally recognized the opportunity and yellow MTN Money and red Airtel Money signage is visible around the country. The banks have also gotten into the game, launching debit cards and mobile-based banking options and seeking to add in bank agents to expand their service locations.

Zoona has successfully expanded their agent network to over 150 locations, and has increased their transaction volumes year-on-year by astounding numbers, with an average of over 65,000 unique senders using the Zoona platform each month at the start of the year. Even ZamPost, perhaps seen as an old-school, state-owned money transfer player, is stepping up their marketing and promotional efforts in a bid to stem the customers moving to newer, faster platforms, as their market share has dropped to 70% from a virtual monopoly a few years ago. Could it be that we are entering into a competitive market situation, with players competing for the poor’s cashless transaction business?

The timing of the Zambia market development phase is indicative of a larger shift around the world, and one in which we hope to continue to support through collaborative efforts with others. For this reason, our new membership in the Better Than Cash Alliance couldn’t come at a better time. The Better Than Cash Alliance has been created to support and invigorate discussions around how to improve cashless environments for the poor, and has brought on board leading donors, national governments, and development organizations to encourage further research and learning around critical topics that can move the markets forward, faster.

Our hope is that as a member of the alliance, MEDA will be exposed to the latest successful policies and products for expanding cashless transactions, and be able to incorporate these findings into our work with partners like Zoona in Zambia. As a member, we’ll also have an opportunity to track our own progress in what impact we are having in our own operations and in those of our partners, in using cashless options for a variety of financial transactions.

Given the pace of change in markets like Zambia, we’ll need these lessons more than ever – in two more short years will we be able to point to a cashless or cash-lite market in Zambia? Stay tuned to find out…!

Author: Nicole Pasricha, Director of Inclusive Rural Finance, MEDA