tatewatkins:

Cross-posted at Haiti Rewired

Mobile money has been trumpeted as a means to transform financial transactions in Haiti, where only about 10 percent of people use traditional banks but 85 percent of households have access to a mobile phone.

About a year after the earthquake, USAID and the Bill & Melinda Gates Foundation announced plans to fund a mobile money initiative in Haiti that would allow customers to send and receive payments via cell phone. USAID contributed $5 million toward the project while the Gates Foundation donated $10 million. Both have hyped mobile money’s effect in Haiti, USAID using its blog to imply that the service could “transform” the country. Fast Company reported that it’s “taking off and allowing commerce to flourish.” Together, the country’s two major mobile operators recently surpassed the one millionth mobile money transaction.

But as the AP reported yesterday, mobile money in Haiti may be as much about hype—or at least potential—as substance:

As yet, though, few Haitians are buying the idea, which has become one of many post-quake projects to fall short of expectations and a reminder of how hard it is to change a society that has been repeatedly set back by political upheaval and natural disasters.

While there are nearly 800,000 registered mobile money users and more than 800 agent locations—places where customers can deposit or withdraw mobile funds—the AP reports that the services have only 22,000 regular users. The main reasons for slow uptake seem to lack of familiarity or fear of the unknown.

“I’m not going to invest my money in something I don’t see,” James Alexis, a 33-year-old truck driver in Port-au-Prince, told the AP.

Literacy rates can proxy for technological literacy, and in Haiti only about half of the adult population is literate. Unsurprisingly, more than 60 percent of early mobile money adopters had at least a secondary education.

The AP quotes Marteen Boute, former CEO of Digicel-Haiti, the country’s largest cell company, talking about obstacles to uptake:

“Our main lesson learned is how difficult it is to educate customers,” said Boute, who is now a senior adviser to the Jamaica-based company. “When we launched the service we assumed it would be something like selling a mobile phone, where you stick a mobile phone into someone’s hand and almost anyone can start using it quite quickly because it’s very easy to understand. With a mobile banking service or a mobile money service it’s not quite that easy.”

One of the first and most successful mobile money services, known as M-Pesa and also funded by the Gates Foundation, started in Kenya in 2007. Seventy-three percent of Kenyans use mobile money, which has eased transferring and storing of money for millions there. Yet in stark contrast to Haiti, almost 90 percent of Kenyan adults are literate. And reporting on M-Pesa in 2010, The Economist noted a few of the disparate elements required for mobile money success: “the right technology, simple marketing, partnerships with banks, support from regulators.”

Still, there may be opportunities to foster adoption of the services in Haiti by marketing to companies, non-profits, and the government in lieu of individual mobile users. A recently announced conditional cash transfer program through which the Haitian Government will pay mothers who keep their children in school will use mobile money. World Vision and UNDP have both used the services to pay staff or to transfer funds to aid recipients.

If your employer or an aid program pays you with mobile money reliably and regularly for months, you might be more inclined to trust and adopt the service for personal transactions.

But at least for now, most Haitians have yet to be convinced to trade in their tangible cash for e-money.

Photo via flickr user Todd Huffman

A good reminder that what works in one place might not work (or might need serious adjustments) in another place.