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  1. Analysis
November 1, 2010

A payment revolution for Haiti?

Companies seem to be falling over themselves to bring mobile money services to Haiti after its economic infrastructure suffered a huge blow following the devastating earthquake in January The devastating earthquake that ripped through Haitis capital of Port-au-Prince on 12 January, killing thousands of people, left the country in economic devastation.

By Verdict Staff

Companies seem to be falling over themselves to bring mobile money services to Haiti after its economic infrastructure suffered a huge blow following the devastating earthquake in January. Louise Naughton looks at how important it is to the Haitian population and any obstacles that threaten its success.


Photograph of Carlos Moreira, WISeKey CEOThe devastating earthquake that ripped through Haiti’s capital of Port-au-Prince on 12 January, killing thousands of people, left the country in economic devastation.

Companies are now becoming involved in developing mobile money services for the country, claiming it to be a necessary tool to bring Haiti financial inclusion. The cynical minded among us however, will realise that incentive funds provided by the Bill and Melinda Gates Foundation, and US Agency for International Development (USAID), serve to make the project that bit more interesting for organisations looking to get on board.

The first mobile money platform to be unveiled in Haiti was t-cash, the result of a partnership between Haitian telecom operator Voila, the country’s largest financial services provider Unibank and international relief agency Mercy Corps.


Cash for work

Pierre Liautaud, vice-president of product development at Voila, said the platform has been in development for the past 18 months and was on the verge of its internal pilot phase when the earthquake hit. While Voila were able to get its network back up and running within a week of the disaster, it became apparent that Unibank had sustained serious damage to its IT infrastructure and lost 30% of its branches.

“The focus of t-cash changed after the earthquake,” said Liautaud. “We realised an immediate need to facilitate the outpouring of help from NGOs. All the NGOs were running Cash for Work programmes and the logistics of physically distributing 20,000 envelopes of cash to the Haitian people was a little heavy for them to handle.”

This led to a partnership with Mercy Corps. A pilot scheme of t-cash followed, which spanned seven months between February and August this year.

Lisa Hoashi, Haiti’s public information officer for Mercy Corp, told CI its Cash for Work scheme centred on paying those affected by the earthquake to carry out temporary jobs, which in turn contributes to the rebuilding of the country and jump starts its economy as a result of their spending.

The pilot was made up of gradual stages and evolved slowly. People were initially paid on a token basis and received an SMS message advising them to visit an agent to cash out their wages. Development of the product ensued and people were then able to hold a mobile wallet, allowing them to hold funds on their handsets. The last stage was to add merchants to the network so Haitians could use mobile money to pay for goods and services.

“Eight-five percent of Haitians have access to a mobile phone but hardly any of them have access to a bank account or any kind of financial services,” said Hoashi.

“The mobile wallet will act as the first step in what will be a wider range of financial services for the people of Haiti. Bank accounts lead to people having more income and increased security as they begin to improve their lives over the long term.”

Mercy Corps is currently looking to extend the t-cash platform to include a food aid programme in the rural areas of Central Plateau and the Lower Artibonite Valley.

Voila is also looking to extend the mobile platform to introduce a broader range of mobile financial services. This will allow Haitians to load, offload and transfer funds, perform payroll services for NGOs, and pay for goods and services. For this to become a reality, however, Haiti’s Central Bank’s approval is required, a process that is not appearing to be quite as straightforward as first envisaged.

Photograph of Nadege Dorgervil receiving a payment via mobile for her participation in Mercy Corps' Cash for Work scheme


Tensions rising

Last month the Central Bank released guidelines that included regulatory conditions that must be upheld if t-cash is to be rolled out in Haiti. While Liautaud said Voila is “fairly confident” it will receive authorisation to go ahead and roll the platform out country-wide this month, tensions have arisen between the two parties.

Voila has fought back on a number of the guidelines imposed by the Central Bank; an example is the demand for issuance of physical receipts.

Liautaud claims physical receipts for e-payments would destroy a country like Haiti as it would mean investment in GPRS, 3G or POS terminals out in rural areas which is very expensive.

The Central Bank has also demanded interconnectivity between mobile money platforms – a process Liautaud believes the country is simply not ready for.

“We took the position that we can commit to doing this but it cannot be a prerequisite to launch, because we are then at the mercy of a lot of different things before people can receive a much needed service,” he said.

Stéphane Bruno is a senior technology advisor of the USAID funded project HiFive (Haiti Integrated Finance for Value Chains and Enterprises), which partners the Bill and Melinda Gates Foundation on the mobile money incentive scheme in Haiti. Brumo said he was aware of issues that have arisen with the Central Bank.

He claims the mobile money projects took the Central Bank by surprise and its Governor was initially opposed to the idea of having a mobile wallet that was not linked to a bank account.

“With the Central Bank it is never an easy process but it is one we respect and one we give a lot of focus to,” said Liautaud.

“We are working very diligently and closely with the Central Bank to allow mobile money services to take up very rapidly in the Haitian market and offer security to the consumers that are using it.”


Mobile P2P

Three years ago, information security and identity management company WISeKey announced its commitment at a Clinton Global Initiative (CGI) conference to create a mobile payment infrastructure that would allow disadvantaged people to send money person-to-person (P2P) without the need to belong to a financial institution.

WISeKey’s CEO Carlos Moreira told CI he plans to bring its WISePay mobile payments platform to Haiti.

Moreira said WISeKey will be teaming up with Haitian telecom operator Digicel, and a number of other players that the CGI will bring into the project. As Moreira hasn’t formally announced his intention to bring the platform to Haiti, he wasn’t able to name the organisations involved. Moreira said details will be finalised and revealed during a Reconstruction Committee meeting in Haiti this month.

Once this has been done, Moreira anticipates it will be little more than a month before the mobile money services will be rolled out country-wide.

WISeKey plans to provide people in Haiti with a digital ID, allowing them to send e-money from one ID to another using their mobile phones.

The WISePay mobile money platform has already been rolled out in countries such as Spain, Morocco and India, but this is the first time it will be deployed in a post-disaster environment.

“The difference with deploying this platform in Haiti rather than other countries is that you have to start from scratch and there is nothing to hang on,” said Moreira.

“In other countries, problems may centre around improving existing infrastructure that may be obsolete or expensive but it is still easier to deploy than in a strange situation like Haiti. However, there is a huge opportunity to create a blueprint on how you cope with post-disaster activities in a very rapid and effective way, which may save lives.”

The WISePay mobile platform aims to encourage people to send donations without an intermediary and without compromising security – funds Moreira is not convinced is currently reaching the Haitian people.

“The focus of the commitment with the CGI is that during the next year 500,000 to 1m people in Haiti will have received in excess of $100m through their WISePay mobile application,” he said.

WISeKey acknowledges that while it may run into regulatory constraints from the Central Bank when it formally announces its intention to launch in Haiti, it also claims to be one layer lower than most mobile payment platforms.

Moreira said this prevents the Central Bank from creating too much of an obstacle for WISePay, as stopping mobile P2P transfers would be “disruptive”.


Mobile money initiative

Voila became the first telecom operator to submit its ‘Letter of Intent to Compete’ for the Haiti mobile money initiative at the end of September.

The $10m incentive scheme, launched in June, promises $2.5m to the first company to launch a mobile money service that meets certain criteria by 10 December. The second operator to launch and achieve the same criteria within 12 months will receive $1.5m. Depending on the outcome of further talks with the Central Bank, Bruno said the 10 December deadline may be pushed back to allow companies more time to comply.

In order for a company to become eligible for the funding it must:

  • Receive authorisation from the Central Bank;
  • Publicly launch the mobile money service;
  • Generate at least 100 new agent locations; and
  • At least 100 transactions in each agent location must take place.

Most people involved with mobile money services in Haiti agreed the incentive scheme positively encouraged the progress of electronic payments in the country, but Liautaud is concerned that by actively promoting a race for investments, the industry has to be mindful of those companies looking to cut corners.

“We have seen a bunch of individuals turning up in Haiti wanting to get involved with mobile money who lack experience but want to find out how much of the $10m they can get,” he said.

The feedback from the t-cash mobile money service has proved popular. While no statistical evidence was gathered, both Voila and Mercy Corps claim people in Haiti have fully embraced their mobile wallets and are showing an interest in further financial services. They are no longer just looking to cash out the funds stored on their mobiles; they are using the money to pay for goods and services and transfer to their families around the country.

Mobile money in Haiti will set an economic foundation that is inclusive and accessible for the majority of the population. It has eased aid during a traumatic period in Haiti’s history, and people’s readiness for the technology has surprised both telecom operators and NGOs alike.

The roll out of mobile money, however, is not as clear cut. As the concept of the mobile wallet is so new to Haiti, the Central Bank is demanding control. The expected public launch of t-cash this month may be optimistic as tensions over regulation seem a long way from becoming resolved. When harmony finally breaks out between the two parties, mobile money services in Haiti look set to flourish.

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