Blockchain for Migrants Is Waiting for Its WhatsApp Moment
A common infrastructure is required to amplify the impact of blockchain on the lives of migrants.
The United Nations is again warning of a fresh wave of North African migrants into Europe. ISIS militants, displaced by losses on the battlegrounds of Syria and Iraq, have moved into North Africa in an attempt to destabilize several countries in the Sahel region. With aid agencies struggling to meet the demands of growing migrant and refugee populations around the world, some investors and programmers are approaching the problem from a different vantage point altogether. Instead of trying fix the problem of migration or stop it at the source, they are using tech-based solutions to streamline aid delivery and make the lives of migrants easier. And some want to overcome the challenges with free smartphones and data packages.
In Jordan’s sprawling Azraq refugee camp, for example, a blockchain-enabled aid delivery program called Building Blocks is helping the UN World Food Program distribute aid. Profiled in Fast Company last year, Building Blocks uses blockchain technology to keep track of and distribute aid to refugees. Its proponents claim blockchain technology is tamper-proof and much cheaper for aid organizations than traditional means of aid distribution.
Blockchain technology could arguably have a much greater effect by lowering the cost of migrant remittance payments. Economic migrants, in particular, are hit by extremely high remittance fees due to the dominance of legacy corporations in the sector such as Western Union. With blockchain-enabled platforms, migrants can send money to family or receive money from an aid organisation for a fraction of the cost of standard remittances. Since the platforms are open source, the role of a middleman to guarantee transactions and keep everything above board is reduced. The cost of moving money is therefore cheaper. All you really need is a smartphone, a good internet connection, and access to the right blockchain-enabled platform.
But before these innovations can be rolled out on a large scale, the right infrastructure has to be in place. For Emad Mostaque, a hedge fund manager with experience in emerging markets, that infrastructure is a free smartphone and data package. Symmitree, the organization he co-founded with Aneela Qureshi, is working to distribute free smartphones to refugees around the world. On average, a third of the disposable income of a migrant goes to purchasing data, so Symmitree includes free data packages with the phones.
“Low-cost phones and data will drive financial inclusion. This is the missing point, because many expect financial inclusion initiatives to grow organically but it is almost like we lack the roads to do it,” Mostaque told me in a telephone interview. “So let’s give people that infrastructure by providing free phones and data to remove any friction. The value is there. There are going to be 2bn incremental smartphone users over the next few years. If you give them our phones preloaded with value-added applications, then they will do better if they have an old Android phone.”
What’s more is that the phones run on a standardized platform. So if you give away the same phones running on the same operating systems in Jordan, Bangladesh, and Kenya, local developers and creators can start building applications that have universal appeal and can be easily shared across markets.
This has the potential to disrupt the lives of millions of vulnerable migrants. We have written extensively about the positive effects of secure and cheap remittance platforms. Migrants that are able to store money digitally are more likely to sign up for a financial product like a savings account. Digital money is akin to a gateway into the world of financial products and services.
As it stands, the product offering in this space is tailored closely to local needs. In sub-Saharan Africa, boutique startups offer bespoke financial remittance products, while refugees communities in Jordan use different applications to those in Lebanon. Even in the blockchain space, there is no single cryptocurrency or blockchain-enabled platform that has united the global migrant space in the way that WhatsApp has revolutionized global text communications. People around the world moved to WhatsApp because it was cheaper than text messages and worked across all platforms. It is now a global standard that has enabled business to flourish across the globe.
A similar global standard is on the cards when it comes to blockchain for migrants as startups like Symmitree demonstrate. Mojaloop, another financial inclusion startup working towards a common infrastructure, is focused solely on interoperationablity of digital payment services. This sector has not had its WhatsApp moment yet, but the prospect of a truly global blockchain-enabled financial service product designed for migrant and refugee communities will revolutionize the industry and, more importantly, the lives of millions of people.
