A Matter of Life and Tech features a range of voices from people involved in Africa’s tech future. This week, technology analyst Tony Burkson argues that for phones to replace wallets in Africa – and elsewhere – there needs to be a rethink of how they are used.

If you type “mobile money” into Google you will be served reams of articles about its runaway success in Africa. That’s great PR for a continent used to bad press, but there is a problem. Mobile money has only really taken off in one country out of 55 on the continent.

Thanks to M-Pesa in Kenya, the poster child of mobile money in Africa, there is a mistaken belief among some that it is the norm across Africa. The service allows people to use their phones like a bank account – depositing, withdrawing and transferring money with their handset. People can also pay utility bills and – less commonly – pay for goods in a limited number of shops.  It currently has around 20 million subscribers – around half the population of the East African nation.

There are various reasons for this– a receptive regulatory environment, the dominant position of Safaricom, Kenya’s biggest mobile operator and the owner of M-Pesa, as well as a clear demand for its “send money” function, due to high numbers of domestic migrants transferring funds back home.

But in other countries, the quest to replicate Kenya’s success remains a difficult and uphill struggle. Attempts to roll out M-Pesa in countries like Tanzania and South Africa have faced a range of obstacles and have failed to emulate Kenya’s success. While in countries like Nigeria, Uganda and Ghana, other mobile money projects are beginning to pay off, but there is still a long way to go.

It seems mobile money as a stand-alone offering does not excite most consumers who operate in economies where cash is still king. In fact research suggests that even if consumers know their network has a mobile money proposition, very few find any use for it.

But I believe that could change. In particular, I believe mobile-commerce (m-commerce) offers an opportunity to boost mobile money use and give economies across Africa a shot in the arm.

Push button

Take an incident that happened to me in Ghana a few weeks ago. After dinner, I pulled out my debit card to pay only to be told by the waitress that it was a cash-only service. Yet, this was at one of the best restaurants in the country. For a continent supposed to be at the forefront of mobile money it was beyond belief.

Now, imagine if I were able to make that payment with my phone. With a simple tap I could have paid for the meal and been on my way. It is this kind of service – already offered in a limited way by M-Pesa - that I believe will allow mobile money to really take off. By allowing small and medium businesses to easily accept payments, it will create an environment where goods and services can be offered and bought via mobiles as easily as someone buying a book on Amazon or paying for a coffee in Starbucks with their debit card. In short, we need mobile payment systems that allow easy payments between companies and customers online and in the real world.  

M-commerce, powered by smart mobile payment systems, would radically change the way business is done.  Most of sub-Saharan Africa remains a rurally driven agri-economy, with farmers and businessmen having to rely on their local market days to do business. Successful m-commerce would allow the farmers, businessmen and entrepreneurs of Africa to reach a wider range of possible buyers at a relatively low cost.

It would open the door for many online businesses to emerge, and the ease of purchase that will follow will spur consumption, create new jobs and help African companies to develop markets beyond their existing borders and the borders of the continent.

It would not only benefit rural dwellers but also their fellow countrymen who live in urban areas. From micro transactions such as purchasing a cinema ticket to those on a larger scale such as paying for white goods, m-commerce will enable people living in African cities to make the transactions and payments necessary for everyday living at the push of a button, without the need for cash.

In recent months a couple of forward thinking African start-ups have launched services looking to disrupt the way people currently pay for products. With banks and mobile networks spending huge sums to secure a piece of the mobile money action, these technology companies are already thinking of the future, building online shopping cart plug-ins that are accessible via mobiles and have the capability to process mobile payments. The key factor driving this innovation is payment -  how to make it easier for people to pay for goods and services in markets, restaurants and cinemas as well as online without the need to resort to cash.

As with mobile banking, Kenya is leading the way. For example, KopoKopo operates a platform that builds on top of M-Pesa to allow small and medium businesses move to accept mobile money payments at the shop till. Others like Kenya’s Mpayer, take the process one step further, allowing real world transactions as well as payments on the web and via web-enabled phones. It is not difficult to imagine the impact of such technology on small businesses, farmers, craftsmen, and food or beverage retailers.

But Kenya isn’t the only place where mobile money is trying to hit critical mass. In Nigeria, established firms likes the UK’s Monitise are beginning to make inroads, while one of the recent success stories is a relatively new upstart, Paga, backed by Silicon Valley money and well known investment funds.

The core business for Paga is its mobile money transfer service; however those behind it realise the importance of using their platform to facilitate payment for goods and services, and are signing up merchants across Nigeria to use the platform to receive payments. As with the Kenyan start-ups, the suspicion is that the company will pivot to focus more on consumer-to- merchant payments as opposed to peer-to-peer transfers.   

Intel-backed Ghanaian technology firm Rancard Solutions and mobile operator Bharti Airtel also recently launched a mobile platform that allows their customers to buy and sell products via their phones. Furthermore, Airtel customers can also pay for purchases using their mobile wallet. Whether this will take off or not remains to be seen, but it is a welcome step in the right direction.

I believe these kinds of innovations are just the beginning. In the coming years, we will see all kinds of new services being built and even more piggy-backing on them to create new businesses and value in Africa.

Then Africa will truly deserve the title of the home of mobile money.

If you would like to comment on this article or anything else you have seen on Future, head over to our Facebook page or message us on Twitter.