Leapfrogging emerging markets into blockchain technology
Taking notes from Kenya’s M-Pesa mobile payments system
Arguably one of the best examples of leapfrogging in our generation is the implementation of M-Pesa in Kenya.
Leapfrogging — a strategy used by many developing countries to enable adoption of even the most advanced technological processes despite the lack of existing infrastructure.
Introduced in 2007, M-Pesa has grown to become a household terminology in less than a decade — now used by at least one member of 96% of all Kenyan households. It is a mobile payments system created by Vodafone’s subsidiary, Safaricom.
What was so groundbreaking about M-Pesa? It was the fact that, despite Kenya and Tanzania being markets where people had barely even grasped the concept of traditional banking, M-Pesa became their most widely used payment service, one more sophisticated and high tech than most financial products of that time.
Banking made simple
M-Pesa is a service that allows the unbanked poor easy access to a faster and safer way to send and receive payments using just the SMS functionality of their mobile phones. Before it was introduced in 2007, an average Kenyan had to travel several kilometres from his home just to get to the nearest bank. This archaic banking practice was slow, costly, and vulnerable to theft. When the government recognised that around 54% of the population at that time either owned a mobile phone or had access to one, it was a light bulb moment.
The M-Pesa system was immediately embraced by the Kenyan population. It also created more non-farming jobs by giving rise to a network of “M-Pesa Agents” who facilitated the conversion of fiat money to digital currency (and vice versa). According to research, M-Pesa led 185,000 women to work in business occupations more than farming.
Today, Kenya has hit a mobile penetration rate of 95%. As of last year, 93% of the population logged in a total of 1.7 billion M-Pesa transactions using a network that included of a few thousand ATMs and 120,000 M-Pesa Agents. This revolutionary system has managed to lift 194,000 Kenyans out of extreme poverty.
Leapfrogging into blockchain
XONIO believes that blockchain technology and its many use-cases can benefit emerging markets the same way the M-Pesa has helped Kenyans rise from extreme poverty.
Think of it: only 27% of Southeast Asia’s population has access to formal financial services. This is because most cannot afford to maintain a bank account, while others simply cannot produce the government documents and IDs required to open one.
XONIO believes that, if you give everyone access to life-changing products and services that can empower them to improve their financial standing — like microloans, micro-insurance, remittance, digital asset trading, etc. — you can help combat poverty.
XONIO’s vision is to leapfrog emerging market consumers into the token economy using nothing but their existing prepaid airtime credits. No need to setup a bank account, no need to understand what public and private keys mean. Why go through the lengths of teaching consumers the tedious and daunting process of opening a cryptocurrency wallet elsewhere when they can achieve the same end result in just a few clicks using their phone?
Visit www.xon.io for more information about how we plan to leapfrog emerging market consumers into blockchain technology using our financially inclusive solution.
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