What is Tech@State Mobile Money?

Tech @ State

link to video of Carol’s talk at the Department of State http://www.ustream.tv/recorded/8676237

The US State Department‘s mission is to “Create a more secure, democratic, and prosperous world for the benefit of the American people and the international community”. It reports to Secretary of State Hillary Clinton, as does the Foreign Service. It is the arm of the government focused on foreign affairs.

Tech@state are conferences to give state department staff an opportunity to learn about important technology trends. On August 2, 2010, the State Department will host a Tech@State focused on Mobile Money. They will address the following key questions,

  • How do we scale the mobile frontier, leveraging technology and partnership for sustainable development and financial inclusion?
  • What do case studies reveal about success and failure?
  • What are the applications of mobile money and its implications for U.S. foreign policy?

They expect around 250 people to attend in Washington DC and then more through remote participation (embassies around the world). The sessions will also be web broadcasted.

I am co-presenting the opening talk entitled “Scaling the Mobile Frontier: How do we leverage technology and partnerships for sustainable development and financial inclusion?” My co-presenter is Jan Chipchase, Director, Frog Design.Obopay’s perspective is unique since we are delivering mobile money on three continents, in four countries, and our service operates in diverse banking and payment market conditions from the US to India.


People and organizations working on foreign policy are keenly interested in anything that has the potential to create a more secure and more prosperous world. Although it is a very new area, we already know that mobile money has been shown to contribute to increased economic opportunity, improved quality of life, and enhanced security.

Most of the world still is heavily dependent on cash for personal, business, and government use of money. In India, for example, 91% of all payments are in cash. Cash can be lost or stolen; is expensive to handle; is difficult to trace activity and detect illegal usage; and can dramatically increase the time and resources needed to make a business or personal payment. Mobile money changes people’s lives by bringing mobile banking and electronic payment to people and small businesses who have traditionally had limited or no access to these services.

The State Department sees the potential of mobile money from many angles: economic growth; political security; the empowerment of women; health care payments; enabling commerce, especially for rural markets for supplier payments; and ,of course, the big goal of financial inclusion (bringing full range of banking services to underserved people). There are five billion mobile users but only 1.5 billion people with good access to banking. Mobile money has the potential to bring banking to everyone with a mobile phone.


Mobile phone adoption is unprecedented – reaching over 80% of people in a fifth of the time it took for landlines to reach similar penetration. The initial successes with mobile money are demonstrating the same unprecedented growth. Early indicators are showing that the same breakthrough in adoption will happen with Mobile Money.

In two years in Kenya – two years since the start of mobile money – over 38% of households have at least one mobile money account according to William Jack of Georgetown University and Tavneet Suri at MIT. In contrast, after five decades of traditional banking, only 22% of adults have bank accounts.

Financial Inclusion

In Africa, only 5% of the population of most countries in banked. There are now approximately 18 million mobile money users in Africa. It is climbing by approximately 35 thousand per day. In India, 41% of people are unbanked and traditional banking is struggling just to reach 500 million people. Yet India now has over 600 million mobile phone subscribers and a strong retail network to service those users. The potential for mobile money in these markets is huge – and the impact it will have on the people, the businesses and the economies will be significant. India has been slower to rollout mobile money for two reasons; first it is a bigger country and more complex implementation by the nature of the market; and second, regulators have been slow to establish the necessary guidelines–although that has recently changed.

At Obopay we are working with Nokia in India. We have started our rollout after a successful pilot in Pune. We believe that in India, although it will take longer to get started than in Kenya, once established we will see the same rapid adoption that was experienced in Kenya.Because we also have an implementation with the fastest growing mobile operator in Kenya (YU), we see firsthand the similarities between the two markets.

Scale this around the world, and you can understand the full potential. GSMA estimates that around 2 billion people who have no access to bank accounts already have mobile phones. That number is expected to rise as mobile phones continue to grow in emerging markets.


We are seeing tangible savings for mobile money users around the world. This comes from reducing transaction fees, and lowering transport and time to transactions– sometimes dramatically. In Senegal, paying the water bill took three days (two for travel and one standing in a Queue). Now the rural people can load money in their village and pay electronically. In India, rural businesses can now send payments to suppliers in the city. This reduces travel time, speeds deliver of supplies, and increases safety because they don’t have to carry cash when they are traveling. And in the US, we are helping families and small businesses to save time and money with a better way to pay and get paid.

We are also seeing it start with one use – money transfer in Kenya, remote top up in India, pay your water bill in Senegal. But once it starts, consumers begin to expand their use, and the benefits they receive. GSMA calls this moving to more sophisticated payments, creating stronger financial literacy that empowers life and work. We encourage this by adding more uses for the service – although we always focus on driving adoption with a simple value proposition.

Ironically, the number of unbanked consumers taking traditional bank accounts increases after exposure to mobile money. Therefore, this promises to be a good standalone business but also will drive people to other traditional bank products.
For many, Mobile Money is the first time they have created any tangible financial history. This allows a user to build up a documented history of good behavior. That financial identity will be useful in assessing their qualifications to receive microcredit and other financial products.


Mobile money clearly will bring better affordable access to financial services for people who need it. But it also provides benefits to banked people, providing more convenience, ways to connect better to family members and young people And for small businesses, it gives them a better way to get paid. It also allows for the elimination of checks and cash – which helps the environment by using less paper and gas for transport. In the US most people have bank accounts, but there is a growing number of families considered underserved by traditional banking. Both groups can benefit


I am meeting with Congressional staff members “on the Hill”. I have requested introductory meetings with people involved in the following committees. My goal is to make sure they understand the full potential of Mobile Money.

House Committee on Financial Services

Subcommittee on Domestic Monetary Policy and Technology

House Committee On Foreign Affairs

Subcommittee on Africa and Global Health
Subcommittee on the Middle East and South Asia

House Committee on Financial Services

Subcommittee on International Monetary Policy and Trade

Senate Committee on Financial Services

Banking and Financial Issues

State Department
International Communications and Information Policy


About Carol Realini

Serial Entrepreneur, Mobile Payments and Banking Pioneer, Author, Board Member Carol Realini is a successful Silicon Valley executive and expert in financial service innovation. She has worked with leading financial institutions including MasterCard and Citi, as well as numerous multinational and regional banks, to change the way banking is conducted. In 2011, as a Technology Pioneer attending the World Economic Forum, she led discussions on alternative banking at their meeting in Davos. A serial entrepreneur, she has been recognized as one of the 50 Top Women in Technology by Corporate Board Member magazine. Carol is a huge believer in the potential of mobile banking and payments to create financial inclusion - where everyone with a mobile phone has access to affordable financial services that empower their life and work. To understand Carol's vision please watch the WEF video (click on the weforum.org link below). Carol also mentors entrepreneurs providing wisdom and lessons learned from her four successful startup experiences.
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