Prepay versus Subscription

Jonathan Gosier from Appfrica is asking the question: Why is there no solid payment system available in Africa? Check out his recent blog post. He is picking up this interesting fact: Credit cards are normally not accepted in rural areas and in cities; most of the people rely on cash. In many African countries exist mobile payment solutions, e.g. M-Pesa in Kenya, but such a system does not help you out, when you want to order a book from amazon.com or when you have to do a check out with PayPal. The systems provided must be accepted by the developed world. So there has to be a hub from local mobile payment solutions to the internationally accepted credit card systems. Another fact is that mobile payment solutions are driven by cell phones with prepayed accounts. So there is money around. Why are the companies not issuing postpayed contracts? What are the barriers? Check out Jonathan’s analysis:

– excessive taxation of the private sector (discourages entrepreneurship)
– lack of city planning (no real addresses outside of P.O. Boxes makes it hard to track people)
– lack of enforcement (finding people in a place with no addresses is impossible)
– lack of foresight (by companies going for immediate cash versus continuous revenue)
– overwhelming poverty (the middle class is still largely dwarfed by the poor)
– lack of education (leads to ignorant conflicts related to tribe, ethnicity and religion)
– lack of government transparency (with the amount of corruption here it’s no wonder)
– lack of faith by foreign investors (leaving African institutions to fend for themselves)
[list taken based on here]

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Prepay versus Subscription
was published on 07.08.2008 by Martin Konzett. It files under global
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2 Responses to “Prepay versus Subscription”

  1. ICT4D.at / The Economist on the mobile web Says:

    […] of numbers about China and other LDCs. It is also mentioning M-Pesa, which we introduced before here and there. Apparently W3C founded a group which will provide models and standards for such […]

  2. ICT4D.at / Electricity prepaid Says:

    […] where prevously discussing prepay versus subscription in the cellular network business. Now we want to go into prepaid electricity supply. Niti Bhan is […]