Gates Foundation, Others See 'Mobile Wallets' Gaining Ground in Haiti

Gates Foundation, Others See 'Mobile Wallets' Gaining Ground in Haiti

Electronic cash is getting a second wind in Haiti, after efforts by the , , and to promote "mobile wallets" in the Western hemisphere's poorest country floundered in the aftermath of the earthquake that devastated the country five years ago, the reports.

In a country where only one out of five people has a bank account but more than six million, or 60 percent of the population, own cell phones, so-called mobile wallets — the use of cell phones to transfer money, make purchases, or safeguard savings — was expected to take off following the earthquake, much as they had in Kenya a few years earlier. To that end, Mercy Corps distributed e-cash via mobile wallets to a small community in central Haiti for purchases of specific items such as food and firewood from authorized merchants, while the Gates Foundation offered $10 million in incentives to cell phone companies to process five million transactions. The aim, said Claude Clodomir, whose project, (HIFIVE), spearheaded the effort, was to secure a million active users of the technology within two years. Yet as many of the emergency relief programs that had distributed e-cash to locals after the earthquake came to an end and the two main operators, Digicel and Voilà, scaled back their promotions, the use of mobile wallets petered out; today, only about sixty thousand Haitians use the technology.

While some blame the failure of the initial effort on the tough logistical challenges in Haiti, cautious regulators, and poorly designed incentives, digital cash and mobile wallets seem to be making a comeback, with new operators entering the space and Haitian regulators — who were more cautious than their Kenyan counterparts, in part because of the country's history of rampant corruption and money laundering — becoming more accepting of the technology. Rodger Voorhies, director of the Gates Foundation's program, told the Seattle Times that the foundation's experience in Haiti was both a "great success and a great lesson," noting that the incentives generated early traction for the effort — something the disrupted Haitian economy badly needed. Still, said Voorhies, the foundation is taking "a more holistic approach" to the technology, one that includes getting regulators and international organizations on board and making sure the infrastructure is in place to support a robust, user-friendly system.

Nonprofits are also delving back into e-cash. Mercy Corps is encouraging neighborhood savings clubs to adopt mobile money accounts. HIFIVE's Clodomir is now focusing on getting companies, including the large textile factories that are Haiti's top industrial employers, to link their payrolls to mobile wallets. Elsewhere, Digicel has created new incentives for its legions of street vendors to join the e-cash ecosystem, while entrepreneurs also are starting to see opportunities in the technology. One such project, Lajan Cash, allows people to link their mobile wallet to any mobile phone network and currently serves a third of the country's mobile wallet users.

While Lajan Cash manager Pascale Élie told the Times that mobile wallets are the best technology for bringing the many Haitians who lack addresses and formal jobs into the financial system, she acknowledges it will take time. "People are very attached to cash," said Élie. "When you tell people that their money is going to be deposited into their telephone, they freak out."

"." Seattle Times 01/06/2015.