New Orleans For so many smartphones have only meant an even bigger time suck on Facebook, an easier way to play games while waiting for the bus, and a chance to watch YouTube videos of cats or people tripping on sidewalks or whatever. For those people who still think the whole world is only their personal oyster, there might have been some head scratching as they heard that a must-have tool for migrants, fleeing conflicts in the Middle East and trying to navigate their way across Europe to promised lands, is a smartphone. Smartphones? They don’t hardly have two cents and the shirts on their backs, but they have a smartphone? What’s up?
Well, the migrants fleeing for their lives is a huge issue and a humanitarian crisis, but maybe there’s a way to see a silver lining in the increased ubiquity and the obvious affordability of smartphones, especially when it comes to the drum that ACORN International and its affiliates continue to beat about the vital necessity as well to lower the cost of money transfers or remittances from these same migrants and other immigrants to each other and their home communities. Cheap smartphones flying off the shelf from China are part of the clue here, but there are also hopeful signs in Africa as some companies finally are making it easier – and cheaper – to use mobile phones to make bi-national money transfers. Google’s entry into the market in Africa and other developing countries could – and should – accelerate this as well.
London-based Vodafone and South Africa’s MTN, the largest telecom in Africa, are moving forward to facilitate mobile payments between their two huge networks. Vodafone’s Safaricom subsidiary in Kenya through its 14 million customer M-Pesa network already facilitates mobile phone payments for a huge number of purchases and services. Finally central government banks in Uganda and Rwanda have approved telecom transfers. The network of partnerships these companies are building in East Africa is expected to lower the transfer costs of remittances from the current 20% to only 3% or less. The ACORN International demand to the companies has been 5%, so this would be huge. The toothless World Bank even says that reducing prices for the $48 billion worth of remittances in Africa by even 5% say from 20% to 15% would save desperate families $16 billion!
Small, old school “burner” type mobile phones with dual SIM card slots are all over Kenya to allow transfers across networks, but new market entries in large, developing countries could also make a difference. Google’s Android One phone, using its software and Chinese and other manufactures came out last year in India and ten other countries including Pakistan, Indonesia, Turkey, and Philippines. An upgraded model of Android One was announced by Google a couple of weeks ago for Nigeria with all the features needed from dual SIM slots to software lengthening battery life and speeding internet access where connections are weak. The phone is also available on-line in Egypt, Ghana, Ivory Coast, Kenya, and Morocco.
For smartphones to become the handsets of choice and tools for forcing the cost of remittances down and the predatory costs to plummet, pricing is still an issue. Many of the Chinese phones, that also use older versions of Android software, sell for $50, and African and other developing country customers, not unlike many of us non-I-Phone people, purchase on price. Google’s phone is now set at $89 in Nigeria and almost $100 in India. MTN offers $62 smartphones in South Africa and various models between $47 and $57 in Nigeria. Google is likely going to need to get the price down to $30 to $50 to play head-to-head. But, that’s their problem.
Ours continues to be how to put billions of more dollars into communities for their own development and to families to improve their living standards. Moving closer to a system that gets rid of the bankers, Western Union’s, and MoneyGram’s, and lets money move hand to hand through your phone at a fraction of the cost, is our big problem, and smartphones and even the Googles and almost equally predatory telecoms may help us get there, whether that was their intention or not.