Digicel eying 1mn subscriptions for mobile banking service in 3 years

Mobile operator Digicel is optimistic that half of its customer base in Haiti, or over 1mn people, could sign up for its soon-to-be-launched mobile money service in the first three years, Digicel Haiti's CEO Maarten Boute told BNamericas. The company is due to launch the service in October and is currently awaiting regulation due to be approved on Friday (Sep 24) by the central bank which would help define the parameters of the service. Digicel is thinking of initially putting a daily transfer cap of US$200, which Boute believes is more than enough given that that amount is more than twice the average monthly wage in Haiti. Digicel has already launched a mobile banking service, which it refers to as "mobile wallet," in another of its markets, Fiji, where it saw a similar opportunity. STUDIES BACK PLANS According to the US Agency for International Development ( USAID), only 10% of Haiti's population used a commercial bank before the devastating January earthquake. So with a 35% mobile penetration, the mobile banking concept is sure to take off, Boute said. The operator looked to similar initiatives such as in Kenya, where, according to a study by Edinburgh University, three years after launch of the mobile wallet, 40% of the adult population was using it which has helped see average incomes rise 5-30% as a result. Boute said Digicel is concerned with providing a secure way for the average person to move money around in this highly cash-based economy. "A lot of people are moving to the urban areas and leave their families in the hills and need to send them money for basic necessities. Normally that happens through a very informal channel such as giving money to bus drivers. Now both sides - recipient and donor - will have a mobile wallet account and be able to transfer money from one account to the other," Boute said. Users will also be able to send cash to depots where it can be collected. REMITTANCE CONNECTIONS In addition, being one of the poorest countries in the western hemisphere, Haiti has a remittance market worth some US$1bn per year. By the second half of 2011, Digicel is planning to have a system in place whereby relatives in the US and Canada will be able to deposit money into the mobile wallet accounts of their families in Haiti. With Haiti's low or almost non-existent mobile internet penetration, the system will be SMS-based. These SMSs will be free of charge. "So rather than people having to go through a cash out point, people could get in on the mobile wallet and buy services directly from the wallet, whether it's just to merchants when they go shopping or whether it's to buy basic insurance services or content or air time, they'll be able to do it directly from their wallet and therefore reduce the cash they're carrying around," Boute said. Based on the success of the service in Fiji and Haiti, Digicel may consider similar services in other markets where it has operations that also receive large amounts of remittances, such as certain Central American countries. Digicel is not the only operator considering the mobile money initiative in Haiti. Haitian mobile operator Comcel, which operates under the brand name Voila and is owned by Trilogy International, announced back in 2008 the launch of an electronic recharge system for subscribers using solutions deployed by US mobile payments platform provider MoreMagic Solutions. According to Boute, Voila is also awaiting the central bank's regulatory ruling to offer extended mobile money transfer services.