Making an Impact: One Mobile Payment, One Human Connection at a time

The Story of Jean D
My story begins 14 years ago after a 6-week overland truck tour in Sub-Saharan Africa. I had caught the adventure travel bug which subsequently brought me back to Africa many times since. On my bucket list was a trip to Rwanda to see the gorillas. It was a dream I had for quite some time. So, when I had the chance opportunity to do a one week project in Uganda for mobile money, I jumped at the opportunity to take it and then to tack on a short trip to see the gorillas in Rwanda.
When planning a trip to Rwanda, the question, “Will you visit the genocide memorial?” invariably arises. I had heard it was a profoundly moving and disturbing memorial to see. I had decided that I did not want that to be my final memory of Rwanda, so I opted out. I wanted to remember the happy moments of seeing the gorillas.
I’m writing this on my way back to Kigali for my 48 hours of travel back home. The gorillas were amazing. It was a dream that I feel fortunate to have done. It was expensive… very expensive, but well worth the money. The trekking ended up being a bit more difficult than I had expected. The mountains where the gorillas are located are a chain of 7 volcanoes called the Virungas. The tallest is 4,500 meters. Others are around 3,000 meters. The mountains, or volcanoes, are thick with bamboo vegetation which becomes alpine forest as you gain altitude. The ascent can be quite demanding at times, depending on which gorilla family you visit. The closest town is in Kinigi, about 18km from the Volcanoes/mountains.
Interestingly, as I look back on my past four days in Rwanda, I suspect the gorillas aren’t the only memory I will take home with me… which brings me to today…
This morning, I went into the lovely breakfast area to have my last breakfast at the upscale lodge near the gorilla mountains, I was greeted by the friendly 20-something Rwandan staff with big smiles and perfect white teeth. Today, Jean D was at the breakfast area helping the guests. Actually, he was just helping me as the other two guests from the lodge were on their trek tour. We had friendly chat, and I asked where he was from. He told me the town nearby. As we chatted some more, I heard him say,” After the genocide…,” in a hushed tone.
When I landed in Rwanda 4 days ago, I saw billboards all along the road in Kingali that were memorializing the 18th anniversary of the genocide that lasted from April 7 for three months during which time 1 million Rwandans were killed out of a population of 8 million. There is no one in the country above the age of 17 who was not affected by this genocide. What was I doing during that time? I was one year out of college and working in Northern Virginia. I was probably working, partying, and definitely oblivious to the atrocities that were happening half way across the world.
While I conceptually knew and had read about the genocide in preparation for the trip, I guess I hadn’t really realized that EVERYONE, including this gentleman in front of me, was affected by it. I wasn’t sure whether to broach the subject with the Rwandans I was meeting, but I thought that since he brought it up, I would ask him about it.
“Do Rwandans speak to their children about the genocide?” I asked.
He was not fluent in English. French was the major language in Rwandauntil2007 when it was decided to switch everyone to English for ease of trade and business with neighboring English-speaking countries. He misunderstood me. He said softly, “Many, many children died.”
I decided to switch the subject, “Do you live nearby?”
“Yes, in a town near the lodge.”
“Ah, is your family there?”
He got quiet and shook his head. “No, they were all killed in the genocide.”
My light chit-chat took on a sudden weightiness I had not prepared for.
“How old are you?”
He said, “I am 28.”
“So, you were only 10 when it all happened?”
“Yes. My brother was 4. He is the only other one who survived. My mother, my father, and my sister died. My brother and I fled into the mountains.”
“You fled into the mountains? How long did you stay there?”

All of a sudden, I thought about the mountains which had nothing. No shelter, no food. No humans. I also remembered that the guidebook had said that the genocide and killings threatened the gorillas in the mountains and that they escaped into the Congo at that time. I didn’t quite understand how that was since there were no humans living in the mountains. Now I realized, people were fleeing for their lives in the forest. What kind of terror would children of the ages of 4 and 10 witness to be orphaned and fleeing in a forest, on the run from killers for two months, alone?

“We lived there for 2 months. We would climb down the mountain to find food in the farms and steal avocados… whatever we could find.”
When he returned, his family was gone. He heard later about how they were killed. I will spare you those details.
I couldn’t help myself. I suddenly began to cry. What a life this man has had. And he was only 1 of 8 million people with a story. He gave me a tissue. All I could say was, “I’m so sorry. This is so sad.”
He mentioned earlier that he wanted to go to university someday and is trying to save money working at the lodge to afford the yearly tuition. He told me this as chit chat, not because he was looking for money. I was embarrassed by the opulence in which I found myself there, now recognizing what his life had been. I thought about the fact that my four days stay at the lodge would have paid for his entire college education.
Suddenly, my head was spinning. Could I find money to send to him? Western Union? PayPal? For God’s sake, I’m in the mobile money industry, I should be able to send him money easily! Then I thought about whether the money would be used properly for college. Could I send the money directly to a University? Should I start a scholarship fund? What about the other people working at the lodge? What about everyone else in Rwanda?! I would start small. Help Jean D get a college education.
So, now here I am, putting on my entrepreneurial hat. I will figure this one out. Jean D deserves a college education after the life he has been through. And so do the others. I will start out small and see how things go from there. If any of you have ideas or would like to help, I’m all ears.
Stay tuned…

May 17, 2012
After I had heard his story, I requested his email and gave him mine. I did not tell him why, but at that moment, I knew that I was going to help him in some way. As if by fate, I had received an email from Jean during my journey home to let me know that the email he had provided to me had a few letters missing and to give me the proper email address. Had he not sent me that email, none of the rest of this would have been able to transpire…
When I returned home, I began thinking through how to remit the money safely to his University. I remembered that one of the companies I advise Willstream had set up a program exactly for this type of remittance to Senegal, the home country of the CEO. I reached out to him to see if he could do this for me in Rwanda. He set to work. Within a week, he had called the University and had verified the credentials. He called Jean and verified that he had the high school diploma and ID necessary to enroll. He set up the University as a merchant and confirmed the exact amount needed for registration, 4-year education, and living expenses. He contracted with a local bank to move the funds. We are now finalizing everything and will begin to send the money soon.
When I think about the connections that occurred to make something like this happen, I am amazed. The powerful combination of human connection, the Internet, and mobile has reduced all distances and obstacles to make things happen.

Once we successfully complete this remittance, I am also seeking to expand this into a larger scholarship program for orphaned genocide survivors of Rwanda and will be speaking to a few non-profit organizations to see who can assist with choosing recipients of such a scholarship fund. More to come…

June 25, 2012

Today I received confirmation from CEO of www.willstream.com, the company that I used to remit the payments to the university, that Jean D. is officially now enrolled this semester into college!  Thank you to Toffene, CEO of Willstream for his dedication in making this a reality!!!

Where there’s a Will(stream), there’s a way!!!!

PayPal at Home Depot – How does it Work and Does it Make Money?

3/1/2012
As an ex-PayPal Mobile exec, I was pleased to find that PayPal has finally made strides into retail with their recent announcement around their partnership with Home Depot.

Since the internal pilot had completed and the ability to pay using PayPal was open to all PayPal users, I wanted to test the system out and understand how it worked (and what the business model looked like), so I signed up for the service and went to Home Depot to try it out. (By the way, I couldn’t find anything on the site to get me to the registration area for this, so I finally had to reach out to a PayPal mobile employee to find out where I could sign up!)
Here’s what my big question was.. (and this relates to the business model)… Is PayPal in the red or in the black on these transactions? This was the constant struggle we had 5 years ago while I was at PayPal when we were first contemplating retail payments using mobile.
What does this mean?
PayPal enables people to fund their accounts in several ways. You can have balances from selling goods or receiving money from others (or now depositing from a check.) You can link your bank account. You can get PayPal credit. Or you can link your credit/debit cards to fund your PayPal account. The cost to PayPal is in order of this priority. Balances are near zero cost. ACH pulls from bank accounts are pennies. Providing PayPal credit is cheap, but funding using cards is expensive because PayPal has to pay Visa, MC, or Amex for card-not-present transactions (although they get volume discounts.)
The difficulty is this: Card present interchange fees are SIGNIFICANTLY lower than card-not-present fees. This means that if you fund an account with a card-not-present card for a card-present transaction, you lose a MINIMUM of 100 basis points. So… on to my test.
Would PayPal allow me to pay for something at Home Depot using cards? (And note that American Express cards are even more expensive than Visa or MC)
So, I unlinked my bank account. I drained my PayPal balance (note: PayPal always pulls from the least costly sources first, so it was necessary to do this.) I unlinked my Visa/MC cards, and kept only the Amex card as the funding source. Would PayPal allow me to do the transaction?
1. Went to Home Depot Self Checkout Kiosk. To see pictures, visit my PINTEREST site
2. Chose PayPal as the method to pay on the self checkout kiosk
3. When prompted by the POS, I entered my mobile number and PIN
4. “Declined” = PayPal does not let you pay using American Express
5. So, I then added a Visa/MC card
6. Went through the flow again
7. This time, it was accepted. I got a paper receipt and a text message with a link to a digital receipt from PayPal
Bottom line – PayPal is losing money on transactions that are funded by cards, but I’m assuming they are assuming that they will either make it up with users who fund with balances, ACH pulls, and credit, or they will make it up in value-added offerings that they will later launch that compliments retail payments.
For any PayPal folks reading this blog, here’s a suggestion on better user experience:
1. Make it easy for people to register for this by making the registration page easy to find
2. The checkout is confusing because on the POS, there’s a button that says “Pay with PayPal” but if you hit that button, it prompts you for the PayPal card. Users don’t know that they have to choose the PayPal option on the kiosk rather than the POS
3. Let consumers know AHEAD of time during registration that AMEX-only funded accounts won’t work
Stay tuned to see how this all pans out…

Battle of the Mobile Wallets – Who will Win?

A few days ago, Isis announced they inked deals with Visa, MC, and Amex in addition to their previous deal with Discover. This announcement could finally break the impasse in the U.S. market.

So, now we have essentially 4 major plays at stake here…

1. Mobile wallets controlled by the device makers/disrupters: Apple, Google
2. Mobile wallets controlled by the MNOs/ISIS + Sprint
3. Mobile wallets controlled by the retailers / stored value (CorFire + Incomm)
4. Mobile wallets controlled by the banks/networks

I’ll make a few assumptions here… First, I am discounting bar codes as a viable long term alternative to NFC since NFC is a much more secure technology. Second, I don’t believe that micro-SD is a commercially viable alternative for distribution of the Secure Element as the consumer experience doesn’t work. Assuming both of these points, without partnerships with the MNOs or device manufacturers, the banks/networks and the retailers will not be able to control the secure element.

So the next question is: will the device manufacturers or the MNOs be more bank-friendly?

Apple – no one knows much. Whoever is working on the wallet must be locked up in the basement somewhere.
Google – Google has said they don’t care about the transaction revenues anymore (This is not too generous since neither do the payments providers with the Durbin Act.) Everyone knows that the money will be in the ads/offers/promotions, etc. so now the question is… Will Google play ball with the banks in this area? If not, they may be out of luck.
ISIS / Sprint – After much ado and many years of tribulations, the MNOs have finally realized they will not create a new network, but will leverage the existing rails and bank infrastructure. This is a smart move. With the latest announcement regarding Amex, MC, Visa in addition to Discover, their strategy finally sounds like it’s a sound one to pull the right ecosystem together.

So, now the big question now is… who will ultimately control the secure element in the U.S.? …the device manufacturers or the mobile network operators? Given the changing power dynamics in the US market, the answer to this question is not as obvious as it once was.

One thing is for certain, however — without thinking about the perspective of your partner sitting across the table, this ecosystem is not going to come together. Those who learn this quickly, will get the critical mass of players to be successful. Those who take a hard stance in the market will likely be left in the dust.

ISIS Retrenches Efforts in Mobile Payments

On May 4, 2011, news articles indicated that the JV that was started by AT&T (NYSE:T), Verizon (NYSE:VZ), and T-Mobile will be scaling back their efforts around mobile payments with a less aggressive approach to the market. This should not be a surprise given customer behaviors and market dynamics.

ISIS (NASDAQ:ISIS)’s strategy to date has not been well-defined publicly. Many believed that the three MNOs were teaming up to create a new mobile payments rail, but their announcements with Discover and Barclays (NYSE:BCS) suggested that they would be riding the “4th” rail in the US market and teaming with Barclays for issuance. While this approach made sense for trailing Discover to try to gain some market share, the question remained how the least adopted rail by merchants would overcome adoption hurdles it has had in the past and what additional value the MNOs would bring to the table… both for the merchants and the consumers.

Given all this, today’s announcement of the “scale back” to be simply a mobile wallet that holds existing cards of the consumers is not a surprise. However, the question still remains what additional value add ISIS will bring to merchants and consumers. Meanwhile, other very disruptive partnerships are being put into place. It will not be surprising if new announcements are made in the very near future that could create a further setback for the ISIS efforts.

-Menekse Gencer
Former Director of Mobile Payments, PayPal
CEO, mPay Connect – a mobile payments consulting service
http://www.mpayconnect.com

“The REAL Ladies of CTIA/Wireless”

I haven’t written in a while, but today I was inspired to do so. As I was skimming my daily tweets, I ran into a blog entitled “The Ladies of CTIA 2011.” I was there this year and, as always, women were extremely under-represented, as always. I knew there was a women’s professional meet up at the conference, so I clicked on the article to see who may have been highlighted. Instead, the article was about the “Booth Babes” with a series of sexy pictures.
I’ve worked specifically in mobile financial services field now for six years and have been asked increasingly to discuss the role mobile plays in closing the gender gap in emerging markets by The Government, The World Economic Forum, the UN, universities, The Inter-American Development Bank, and other development agencies. Meanwhile here, in the US, it is sad and ironic that the most prominent “Ladies of CTIA” highlighted in an article revolves around objectification. Really?
Marc, I’m sure it’s easier to get eyeballs to your site by posting scantily clad pictures of women. If, however, you want to provide real news on a subject, I would suggest that you begin researching what women are actually involved in wireless and what they’re doing…. and perhaps, why these women aren’t attending CTIA?
I belong to a global women’s network of wireless professionals who work on the use of mobile worldwide to increase access to communications, education, healthcare, financial services, and disaster relief. Most of the women in this group have multiple degrees and PhDs. They hold senior positions at worldwide organizations and they are making a difference in the lives of those who need it the most. Perhaps they are the “REAL” women of Wireless? But then again, I guess it’s easier to go your route than to do the research. Bravo.

 

And the degrading practices lives on…. See BBC’s latest video on the degrading Booth Babe phenomenon at CES:  http://www.bbc.co.uk/news/technology-20957848

If you feel strongly that this practice needs to stop, please tweet about this, link to this article and add @CES2013.

The Mobile Money Movement(TM): Catalyst to Jumpstart Emerging Markets

In the spring of 2010, I was asked to speak at Columbia’s Center for Tele-Information on the economic impact that Mobile Money will have in emerging markets. This presentation was the genesis for a whitepaper which I recently published with The Innovations Journal by the MIT Press.
To download the whitepaper
If you are interested in hearing the original presentation that was given at Columbia University, fast forward to 22:30 on this video.

Latest Blog posted by UN Foundation’s mHealth Alliance

For a preview of the upcoming whitepaper to be published by The World Economic Forum, please click here.