Everyday Digital Money

Digital Money in a Digitally Divided World: Nature, Challenges and Prospects of ePayment Systems in Africa

Charles Bassey, Central Bank of Nigeria

Manuscript: bassey-digitally-divided-world.pdf

Modern society is characterized by a new economy, engendered by convergence of globalization and information and communication technology (ICT), riding on the backbone of the Internet. An important aspect of this convergence is that information has become codified in a manner that makes it possible for quick and cheap processing and distribution. In effect, information has become a dematerialized economic entity and a measure of wealth. Sadly, this new economy encompasses the vicissitudes of the old, magnifying extant “object gaps” with new and stringent forms of “ideas gaps”. The consequence is that developing countries (like those of sub-Saharan Africa) have to confront the twin challenges of technology inequality and income inequality with the uncanny option of devoting attention to fighting the former as a means to addressing the latter.

Introducing money as a dematerialized entity into the discourse of new economy, this paper discusses modern society as an autopoietic system, a lá Luhmann, and how the digitalization of its engine – money – strengthens extant inequalities as manifested in the observed disparities between developed and developing countries. This is premised upon the use of distance and space as tools to condition the dynamics of access and control which vast segments of human population are drawn into as they interact within modern economic system. In this wise, we see money as a specific form of value, around which institutions and markets have evolved. In exploring the evolution of institutions and markets around money, we also see how the place of money in human interaction has become strengthened within the contexts of exchange, ownership, greed, extravagance, etc.

Given the prevalence of digital money as an economic exchange, it is imperative to assess the effect of convergence of globalization and ICT on sub-Saharan Africa and how this convergence challenges, as well as holds prospects, for the development of an effective payment system. Except for South Africa, much of sub-Saharan Africa is faced with either a history of lack of information infrastructure or lack of large and functional domestic market for ICT, or both.  There is path dependence to the penetration of digital money into the payment systems of Africa. At national and regional levels, efforts are being made to work in concert with other countries within monetary zones to bridge obvious gaps. However certain roadblocks abound, bordering on political and financial governance, infrastructure, altruism and the gift system, money spraying, visibility, trust, among others. Added to these are issues of ideological disposition and enforcement of operational rules. Understanding these roadblocks and their dynamic nature is critical in developing effective payment system globally. It is the thesis of this paper that unlike the old economy, the functioning of new economy is dependent on existence of functional infrastructure upon which modern money institutions ride, given the power of time and space distanciation and its potential consequences on money relationships.

About the author

Charles Bassey (PhD, Sociology) is Assistant Manager, Security Research and Development, Central Bank of Nigeria. His job role involves security risk management, fraud investigation, security research and policy development. He has consulted for several organizations and evaluated projects on ICT, rural telephony, governance, etc, published in the areas of leadership and food security and participated in training of security personnel. He is a member of American Society for Industrial Security (ASIS) Association of Certified Fraud Examiners and International Sociological Association.

Ways of Sharing: The Mobile Phone and Money Transfers in Rural Uganda

Jenna Burrell, UC Berkeley

Resources that accrue to one person may become shared with others.  This is true of money and its true of material goods.  How this is accomplished has something to do with the material form of the thing shared.  Money can be subdivided and redistributed.  Much has been written of money as a force for abstraction and of its capacity for measurement.  In rural Uganda mobile phones have been successfully repurposed to facilitate money transfers.  This is accomplished by sending air-time codes via text message.  In this way, users have extended and improved the utility of the mobile phone in keeping with local needs and practices.  The informality of the current approach is especially notable, a compelling new materialization and extension of an important social practice.  While in Kenya and South Africa formalized systems exist (the m-Pesa and Wizzit systems respectively) this is not yet the case in Uganda.  The local logic of money transfer is part of efforts to cope with resource-constraints and reflects low-cost, lightweight solutions for daily living, insurance, survival, and risk management.

It is interesting to contrast the transfer of money with the ways in which the mobile phone itself is transferred and circulates in rural Uganda.  Unlike money the mobile phone cannot be subdivided and distributed.  Alternate ways of sharing are employed.  The phone is given as a gift where the whole object is transferred permanently into the possession of another.  Time-sharing and simultaneous use are other ways of sharing material goods like mobile phones that cannot be subdivided.  There are some notable patterns of gifting and sharing that have emerged with mobile phone appropriation in rural Uganda.  Mobile phone owners may formally or informally provide access to their phones to neighbors who load up their own air-time credit to pay for calls.  Owners sometimes generate a small commission in the form of leftover air-time credit.  Another observed pattern of mobile phone circulation is illustrated by public service announcements on billboards along the main roads in Uganda that warn young women against the dangers of ‘Sugar Daddys.’  These older men entice young women into sexual relationships with the gift of luxurious non-essentials like nice clothes and perfume.  The mobile phone is depicted as one of these gifts on the billboard.  “You might *want *these material things…but do you *need HIV?*” it warns suggesting the dramatic risks that may be involved in acquiring such gifts.  In exploring practices of sharing money and mobile phones my presentation will address questions of equity in the way the benefits of the mobile phone are distributed and what is exchanged for such access.  In particular, my larger purpose is to work towards refining a model of the ‘shared use’ of technologies that will be useful to other researchers.  While ‘shared use’ is already identified as the most economically viable option in developing regions of the world the dimensions of shared use practices and variety of ways of configuring this have not been fully explored.

About the author

Jenna Burrell is an assistant professor in the School of Information, University of California-Berkeley.  She is currently studying patterns of mobile phone appropriation in rural Uganda.  For her PhD thesis she conducted an ethnographic examination of internet cafe use in Accra. Previously she worked with a group of engineers, anthropologists, psychologists and designers in the People and Practices Research group, Intel Corporation.

Examining the Adoption and Usage of m-banking: The Case of M-PESA in Kenya

Olga Morawczynski, University of Edinburgh

This presentation will discuss an ongoing ethnographic study of M-PESA, a Kenyan m-banking application.  The purpose of this study is to analyze how the application is being used, and to explain why it is being used in these ways. The ethnography is being deployed in two locations: (1) Kibera, an informal settlement on the outskirts of Nairobi; (2) Bukura, a small village in Western province. Several interesting findings are emerging from this multi-sited ethnography: that the M-PESA application is helping urban migrants to maintain relations with their rural relatives; that the money sent via M-PESA constitutes a substantial part of the household income for the rural poor; that remittance and savings patterns are beginning to change as Kenyans adopt M-PESA; and that during the post-election violence, M-PESA facilitated a substantial change to remittance patterns.

The presentation will begin by providing a brief overview of M-PESA, and the two research sites. It will thereafter delineate patterns of adoption and usage, and discuss the aforementioned findings. The presentation will conclude with a short discussion of the socio-economic impact of M-PESA. 

About the author

Olga Morawczynski is a PhD candidate in the discipline of Science and Technology Studies (STS) at the University of Edinburgh. She has a bachelor’s degree in Information Technology Management and a first class Master’s degree in International Political Economy. Olga's research focuses on the diffusion and impact of information and communication technologies (ICTs) on emerging economies in Latin America and East Africa. Currently, she is using ethnographic methods to examine the adoption and usage of M-PESA, an m-banking application in Kenya. Her research has been published in several peer-reviewed journals and has been presented at numerous international conferences.

Digital Remittances and Salvadoran Modernity

 David Pedersen, UC San Diego

This paper examines the phenomenon of migrant remittances, focusing on the transfer of money to El Salvador by Salvadorans living and working for extended periods of time in several major US cities.  Over the past three decades, El Salvador has shifted dramatically from a country organized around agro-exports (coffee, cotton) to one now hugely reliant on remittances sent by a quarter of its population in the USA.  As part of this transformation, remittance transfer from the USA to El Salvador has become more formalized and regimented, with major banks, government agencies and commercial transfer services in both countries gradually increasing their direct role in the process. In particular, a variety of electronic accounting and transfer methods have replaced the technique of physically carrying the money across borders and holding it for recipients. This paper examines the relationship between these new technologies and modalities of remittance transfer and the way that remittance transfer has shifted from being understood popularly as a regressive crisis-driven informal activity of poorer rural migrants to become widely recognized as the central pillar of a financially sophisticated and "globalized" Salvadoran modernity.