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Mobile Money and Mobile Health 2: Use Cases, Limitations and Ways Forward

MohiniBhavsar — Wed, 10 Nov 2010 15:38:02 +0000

In this two-part series, MobileActive.org explores how mobile money services can support health care in developing countries. In part one, we described the key ways in which mobile money services can be adopted by the health sector.

At the primary level of care, subscription-based mobile payment services can create two-way links between patients and health care providers, as summarized here.

Patients can pay service providers directly for health care services delivered.
Service providers can use mobile transfer platforms to reward patients with monetary or airtime incentives for treatment compliance.

At the district, regional, and national levels, governments and organizations can improve management of funds and introduce better checks and balances by using mobile money platforms. Some uses include:

Paying salaries or incentives to health care providers based on services delivered or work performance
In conjunction with voucher based systems, reimbursing health care providers for services delivered
Paying out conditional cash transfers allocated for health care directly to individuals’ mobile phones

Here, we describe how M-PESA in Kenya has been used for health care financing. We have found very few examples that link mobile financial services to health care, though there is much promise and potential. We also describe the challenges involved in implementing and scaling mobile financial services for health -- a complex endeavor that is complicated by the presence of multiple players. Finally, we outline what needs to happen to catalyze more collaborative innovation in mobile money and mobile health.

Direct Uses of M-PESA for Health Care Financing

Case 1: Prepaid cards topped with M-PESA credit for maternal health care

At Pumwani Maternity Hospital in Nairobi, Kenya, customers can top up prepaid cards with small amounts of money using M-PESA (documented here). Costs for maternal care are deducted from the savings on the card. According to Samuel Agutu, managing director of Changamka Microhealth Limited, this approach fosters a culture of savings for maternal health care needs and for emergencies that may arise in the future.

Case 2: Ad-hoc innovation in Kenya using M-PESA to pay hospital fees

A recent evaluation of community-level effects of M-PESA in Kenya described individual uses of M-PESA to pay for school fees and health services:

“Focus group participants frequently cited M-PESA as a means for helping them to pay school fees and get money for medical procedures. This appeared to help in school attendance and retention, and to seek medical consultation faster than they would have otherwise. Timely payment could also strengthen hospitals and schools, creating a more positive future for school and medical facilities and the potential for deeper outreach over time.”

Yet other than the example cited above, systems are not in place to facilitate direct transactions between M-PESA users and schools or clinics. The authors of the study found that M-PESA users still needed to withdraw cash to pay the health center or make deposits to the school’s bank account. In some isolated cases, when the payees knew the payers well, cashless mobile payments were accepted, “but principals actively discouraged this practice because of a lack of accountability and tracking ability.”

Case 3: M-PESA transfers to pay institutional fees (could be applied in hospitals)

Bridge International Academics is a for-profit primary school franchise that manages low-cost schools in Kenya -- enrollment costs for each pupil are about $4 per month. Bridge is well placed to leverage the ubiquitity of M-PESA in its work. Parents can pay school fees using M-PESA, and the administration pays staff and suppliers using the popular mobile money service as well.

Ignacio Mas, an expert in mobile payments, noted on the NextBillion blog that automation of payments address several problems including cash security, curbing unrecorded side payments, keeping financial records, minimizing errors, and accessing real-time business data.

From an organizational perspective, Bridge suggested it would like to see cheaper rates to transfer money using M-PESA, and would “also like the M-PESA interface to integrate more easily into accounting and operations software, so there is seamless handling of transaction records across the business.” Mas writes:

“Safaricom hasn't published Application Programming Interfaces (APIs) on M-PESA, so Bridge International Academies has had to develop its own interface to the M-PESA website. Electronic payments are indeed a natural entry-point for business management software.”

So, while there are challenges even with a more systematic integration of mobile money services, there are plenty of businesses that recognize the clear benefits of cashless transactions.

Case 4: M-PESA transfers cover the cost of transportation to distant surgeries (Tanzania)

A common barrier to accessing health services is the cost of transportation to health care facilities. Organizations in Tanzania and Kenya are exploring the use of mobile money services to reimburse transportation and lodging costs to increase access to surgical care.

Comprehensive Community Based Rehabilitation in Tanzania (CCBRT) is the second largest provider of obstetric fistula services in Tanzania. Obstetric fistula is a hole in the birth canal and it can occur during child birth when timely access to emergency obstetric care is not available. Obstetric fistula results in incontinence. Left untreated, the condition can lead to chronic medical, social, and psychological problems, including isolation from partners and family and exclusion from the community.

In 2009, CCBRT performed almost 200 surgeries for obstetric fistula. To reach more women, the provider turned to M-PESA in a pilot scheme to transfer money to pay for transport to the disability hospital in Dar es Salaam. At the hospital, women also receive free consultations, operations, and follow-up care. UNFPA’s Campaign to End Fistula reported on a collaboration with CCBRT:

“Money is sent from CCBRT’s mobile banking account to CCBRT ‘ambassadors’ across Tanzania, who help increase identification, notification and transportation of fistula patients. The ambassadors — usually doctors, nurses or NGO-workers — can retrieve the money at their local mobile company agency and buy the patient’s bus tickets. Upon the patient’s arrival at CCBRT the ambassadors receive a small incentive via the same mobile banking system, called M-PESA.”

In this scheme, payments are not necessarily being made directly to the patient, but to in-between representatives. Interestingly, this scheme includes monetary incentives to health care providers through the same mobile payment. Previously, CCBRT performed on average 14 surgeries per month. In March 2010, CCBRT counted a record high of 29 surgeries per month. The program was launched in 2009.

Case 5: M-PESA transfers cover cost of transportation to distant surgeries (Kenya)

Similarly, Freedom From Fistula Foundation (FFFF), based in Kenya, also used M-PESA to facilitate travel from rural homes to surgery centers in Nairobi. A mobile hotline is regularly advertised over the radio to help identify cases of fistula. Lucy Mwangi, Director of FFFF, briefly explained the process before transfers are made. "Whoever gets the number calls, flashes [beeps], or texts and we call them back and ask a couple of questions to establish if they are fistula patients."

Obstacles for Greater Uptake of Mobile Money in Health

The above examples demonstrate that on a small scale, there have been attempts to leverage mobile money for increasing access to health care. However, almost all of these examples are from Kenya -- "ground zero" of mobile money. We observe a number of obstacles to large-scale adoption:

Large-scale adoption of mobile money in the health sector will depend on how widely customers use mobile payment services.
Health organizations are reluctant to integrate new technology into their work.
Mobile health and mobile money are growing fields and are still trying to understand the complex patterns of use and impact within their own silos.
It is difficult to negotiate between stakeholders with profit margins and those with social interests.
Regulatory schemes and complex banking regulations limit fast growth.

To even consider large-scale mobile application to health, there must be a wide uptake of mobile money services by consumers. Ignacio Mas and Dan Radcliffe outline barriers for the scaling of mobile money (see their report) and recommend strategies to reach critical mass. They also note that, "while some deployments have gained early traction in the market, such as MTN MobileMoney in Uganda, Tameer Bank/Telenor's easypasia in Pakistan, and Vodacom's M-PESA in Tanzania, none have scaled at (or near) the level experienced by M-PESA in Kenya."

Mas and Radcliffe suggest that scaling of mobile money requires not incremental, but large early investments in marketing and development of agent networks. To reach critical mass quickly, operators should market "pain points" that mobile money services can meet. (In part one of this series, we identified some of these "pain points" for individuals, organizations, and governments in the health sector.) Operators should look beyond individuals as consumers, view governments as consumers of mobile money services, and negotiate reasonable service charges for transfers.

At the same time, the report suggests that operators should invest in a widespread agent network to deliver the services. To better integrate with the health sector, institutions will have to invest in compatible systems that can accept payments in hospitals. Mobile operators will have to dedicate an agent network to support the sending and receiving of payments. Until then, innovation by consumers themselves will remain ad-hoc, slow, and less likely to scale. From the MMU blog:

"... [I]t is important to build merchant relationships with entities such as schools and hospitals to accept mobile money. If customers could make incremental micro-payments to these institutions over the mobile, then they face less risk in keeping money on hand."

But selling any technology to the health sector can be a challenging feat. While tools on the finance side may be straightforward, systems on the health side are more complex to navigate and integrate. The health sector can be especially skeptical when the technology is still fairly new. Dr. Patricia Mechael, an expert interviewed in part one of this series, spoke about this issue:

“Mobile banking hasn’t evolved as quickly and ubiquitously as people think it has. We need to ask ourselves: how mature is mobile banking and if there is value in it for health.”

It can be overwhelming to attempt to navigate mobile money and mobile health as one sphere. Menekse Gencer, an expert in mobile money services, notes:

“Both m-health and mobile financial services (MFS) are service industries that converge with mobile, so they're fairly complicated. There are questions related to infrastructure, policy, operations and business models. When you consider the intersection of m-health with MFS, the level of complexity becomes even greater since this intersection encompasses three industries [mobile, mobile money and mobile health]."

Equally complicated are the multiple stakeholders, scattered pilots, and policies and regulations. Even when a system is established and enabled by mobile services, there remains an underlying challenge of negotiation with all the players. Melissa Ho described some of these challenges during the deployment of ClaimMobile in Uganda:

“We find that in projects with multiple stakeholders, the introduction of a system may disrupt balances of power, particularly around the flow of information and money. As a result, the design of this system, in order to secure positive support from all parties involved, must carefully balance stakeholder incentives.”

Ho explained how negotiations between stakeholders can impede the objectives of a working program:

“However, another source of delay is the administrative and political dynamics by which program administration halts, although health distributors continue to sell vouchers, and health clinics continue to see patients. During these times, payments are delayed unexpectedly for undetermined lengths of time, as can be observed from the early termination of our pre-pilot study."

Perspectives from Practitioners

Practitioners we interviewed noted that there are many benefits to "going mobile" with health payments at the practitioner level. At the same time, the practitioners were frank about the challenges of adding mobile money to their work.

Pesinet

We spoke to Anne Roos-Weil, founder of Pesinet, a non-profit micro health insurance organization based in Mali (see also MobileActive.org’s case study). Health workers for Pesinet make home visits to do routine health checks of children and collect basic health data on mobiles that is remotely sent to doctors. To ensure financial sustainability, families have to pay approximately 1 Euro each month to register for the service. This fee covers the cost of health visits, doctor fees, and medication.

Roos-Weil outlined several cash and bank transactions that take place in Pesinet’s work flow that could be enabled via mobiles.

Health workers (or agents) collect the monthly service fee in cash from each family every month.
If families fail to pay the health worker, the program coordinator is responsible for collecting the money.
This pool of money is then allocated to pay the salaries of health workers, the program coordinator, and the doctor. It is also used to pay the monthly fee to use resources at the health care center.
A different pool of money is used to pay for expenses at the health care center pharmacy.

Until Pesinet breaks even, funding from grants is used to supplement expenses. There are also operational and administrative costs.

Currently, Pesinet’s financial transactions are managed through banks and tracked through receipts. But cash flows can be complicated to manage especially in an environment where there is no bank. Mobile money services could be a viable option for programs running in rural areas. Traceability mechanisms can be automatically implemented with mobile money transfers. Roos-Weil said:

“There is an opportunity in mobile money transfers for better control over money exchanges that occur in [Pesinet’s] services. The coordinator could see easily how much money went from the family to the agent and monitor and track transactions. Having cash means you need to have a lot of control, to make sure nothing is leaked. This is resource intensive.”

Although Pesinet offers gains in efficiency and better financial management, Roos-Weil cautioned that the beneficiaries of the service may be different from the payers, and payers may be different from who is registering for the service. Mothers tend to be the main decision makers who register their children for Pesinet, but they often rely on the fathers to provide the cash.

At the primary level of care, Roos-Weil raised a number of important questions:

How is money being used in the family?
Do the family members who make decisions for health have a mobile phone? Do they have control over finances?
Who are the payers and who are the beneficiaries?
What is the degree of mobile penetration and usage of mobile money services in the region?

In Mali, Orange launched the mobile money service Orange Money in May 2010. Roos-Weil noted that its integration with Pesinet's workflow will largely be dependent on the level of adoption among local residents.

Incentives through M-PESA for vaccinations

There is a growing discussion about the use of community-level incentives to increase vaccinations in developing countries. The WHO estimated that if access to vaccines and vaccination coverage against childhood diseases was improved to at least 90%, two million deaths among children under five could be prevented.

Dr. Feikin, a researcher at John Hopkins Bloomberg School of Public Health who has lived in Kenya, is using M-PESA to increase vaccinations. This initiative is in the early phases of development. The idea is simple: use M-PESA to pay incentives to mothers who bring in their children to get vaccinations. Dr. Feikin said:

"In many areas of Kenya, there is low vaccination coverage and late vaccination. A lot of diseases can be prevented if there is no delay. If we can get the system running, we would then look at the impact and ask if we can actually improve vaccination rates and timeliness. The bottom line is the health impact."

In Kenya, the infrastructure already exists for such a system to work. The goal of this pilot is to see if it can actually be done, but there are lot of steps involved and logistical obstacles:

How do we obtain the phone numbers of mothers or members of their household who are registered for the M-PESA service?
If mothers or families are not registered, how do we encourage them to register for M-PESA to be able to receive payments?
Are there enough agents in the area to cash out money without having to travel too far? If the mother has to travel too far, she will not register a child for vaccinations.
Zain's Zap is a growing competitor of Safaricom's M-PESA service. Which system should be used to give out payments to maximize reach and health impact?
How can we keep track of payments associated with mobile phone numbers? Tracking this prevents a mother from taking advantage of the incentives by exposing the child to multiple vaccinations.

The opportunity to link mobile money services to such health initiatives may be attractive to mobile operators in terms of increasing service usage and revenue, but service charges can be a detriment to scale such programs.

"Service charges involved per transfer could be a disincentive for any program, government or donor that wants give funding, because a portion of each incentive will go to pay the system and not the patient. There has got to be a way of working with the operators to reduce fees per transfer. There is a need for creative solutions at that end."

The challenge lies in working in with mobile operators to negotiate service charges that align with health budgets and organizational and government capacities.

Moving Forward

In our conversations with experts, we noted a general consensus about how to move forward. There was agreement that it is necessary to:

Chart out how cash flows through the health sector, and highlight opportunities where mobile money can best be leveraged;
Design based on the needs of the health sector to maximize health impacts;
Engage mobile network operators to develop open systems that are compatible across different service providers and that integrate with existing technology in the health sector;
Understand how systems interact, identify shared and common components and requirements, and develop more open platforms; and
Support early trials, invest in the evaluation of pilots, and critically assess health impacts.

Many we spoke with cautioned that mobile money is not the answer for every transaction in health care. Our sources noted that there is a need to carefully assess the context to determine the most appropriate tool at any point in the work flow. Some technologies may already exist, such as reloadable debit cards. In some cases, adding mobiles may not improve a particular transaction, while in other cases, mobiles and SIM cards may be the way forward because existing methods are nonexistent.

Dr. Mechael recommended that solutions should be designed with a firm focus on the needs of the health sector, instead of haphazardly applying various financial products.

“In relation to introducing technological innovation within the health sector, when things come from the outside, the traction hasn’t been great. As soon as the health sector decides it wants to do something or embrace something, the demand is catalytic. When industry partners try to sell platforms and tools, when well-intentioned NGOs develop and deploy applications independent of the health sector, it doesn’t get very far. Many initiatives have come and gone with limited impact on health due to the lack of buy-in or demand from governments as well as health professionals, administrators, and consumers of health services.”

Mobile network operators are critical players to engage. Many we interviewed noted that there is a lack of interoperability between payment systems offered by different mobile network operators in the same county. If payment platforms are to be scaled for health services at national levels, interoperability is imperative.

Krugel urged that this is the best time to look at the cross-sections:

“Mobile money is new, mobile health is even newer. Mobile money people are trying to focus on making the money part work and the health people are focusing on what they’re doing, too. The opportune time is now before they reach matured products.”

Evidently, we should move away from mutually exclusive efforts and should consider a holistic approach. This is especially important to ensure compatibility of technology between the health and finance systems. There is a risk of incompatibility if collaboration does not happen sooner. On this issue, Brown said:

“The market is now taking over. If there’s not an intersection thought about early on as to how payments, financing, billing and reimbursement is going to happen under these systems, and how it might leverage the incoming infrastructure of mobile money, then you might end up with incompatible pieces that ends up costing a lot of money.”

In summary

Innovation is already happening. It is important to support early trials and be transparent about what has worked and what hasn’t worked. According to Krugel, the countries to intervene first are those with more than a million users of mobile money -- Philippines, Thailand, Kenya, and Uganda.

By bringing together the multiple players -- health, finance, mobile health, mobile money, governments, donors, NGOs, and mobile network operators -- and by attempting to shed more light on the area, we can start to think more about the connections that can be made, and how to best create the systems to support innovation.

Undoubtedly, there is room for mobile money services in health care. For active registered users of mobile financial services, adding mobile money to pay for their health care needs can be valuable. For mobile operators, this could be an opportunity to increase revenue from existing users as well as a way to attract new customers and reduce churn. For health care providers, a mobile payment scheme to pay for services delivered could guarantee revenue from patients and reimbursements from governments. Automation of transactions for salary payments and conditional cash transfers directly to mobile phones can reduce leakage and improve accountability.

Mobile money services are growing worldwide. While there are limited documented cases of mobile money services in the developing world for health care financing, it is likely innovation will happen.

Both governments (potential consumers of mobile money services) and mobile network operators (providers of mobile money services) can experience long-term benefits by adopting mobile payments for transactions in the health sector. But by waiting too long to have these substantive discussions, they run the risk of mobile money platforms becoming incompatible with existing systems in the health sector. Already, payment systems are not interoperable within countries.

This can make integration too costly or unfeasible to implement at a national scale. Both mobile money and mobile health care systems are complicated, new, and growing. Likewise, each field is still trying to understand customer usage, feasibility, financial models, and impact. Instead of focusing inward, the two industries need to collaborate to map the cross-sections. In doing so, programs, organizations, and governments can work with mobile network operators to create the infrastructure needed to take advantage of the possibilities.

Mobile Money For Health: A Two-Part MobileActive.org Series

MohiniBhavsar — Mon, 08 Nov 2010 15:48:40 +0000

Mobile phones are being tried and tested in myriad ways in health care. They are used for data collection and disease surveillance, for ensuring treatment compliance, for managing health information systems and point-of-care support, for health promotion and disease prevention, and for delivering emergency medical services. Clearly, m-health, as this growing field is dubbed, is here to stay.

At the same time, achieving scale and sustainability in most m-health projects has been a challenge. One of the key aspects of beginning to think about ways to integrate m-health into health systems in a sustainable way is to establish financial systems to pay for health services and to ensure financial accountability within programs.

As has been pointed out, at primary level of care there are tremendous challenges of ensuring financial sustainability [Mechael et al. 2010]. For most health projects implemented in the developing world, including those that use mobiles for health care delivery, funding tends to come primarily from external donors. Once the funding dries up, scaling a working program is exceedingly rare. Additionally, mismanagement, corruption, and the nature of informal payments in many countries can challenge efforts in m-health. [Lewis, 2006, World Bank, 2006].

What is the role of mobile money in increasing the financial sustainability of m-health efforts? In low to middle-income countries, where the majority of health care expenditures is out-of-pocket, mobile money services could provide consumers with a more secure and convenient means to pay. Additionally, to ensure that limited funds are used to deliver optimal health impact, governments and organizations could leverage mobile money services to better control financial flows.

As suggested in this discussion paper, m-payments and financial transfers in m-health can:

Offer a convenient and secure mode of payment for patients to pay for health services
Guarantee payment to providers for services delivered
Increase and secure payments throughout the supply chain
Reduce the opportunity for corruption
Improve reliability of health impact evaluations because expenses are clearly recorded
Increase financial transparency which, in turn, can attract donors

Additionally, mobile financial services allow for micro-insurance schemes so individuals can avoid financially catastrophic health care costs (such as those for birth or surgery). With mobile payments, more sustainable, secure, and efficient ways for financial transactions are within reach in the health sector.

In this two-part series, MobileActive.org looks at the linkages between mobile money services and health. We spoke to Dr. Patrica Mechael (Director of Strategic Application of Mobile Technology for Public Health and Development for The Earth Institute at Columbia University), Karl Brown (Associate Director of Applied Technology at the Rockefeller Foundation), Gavin Krugel (Director at the GSM Association and lead on the Mobile Money for the Unbanked initiative) and Menekse Gencer (Mobile Payments Consultant and founder of mPay Connect).

In part one of this series, we outline the possibilities for mobile money in mobile health in developing countries. We describe the advantages of mobile money services in health for individual patients, mobile network operators, and the health sector.

In part two, we highlight specific use cases. Though they are scattered and limited, innovation in leveraging mobile money services has come from users and organizations who see its potential. We describe the challenges and why some services have not yet taken off. We also outline what needs to happen to catalyze mobile money services in the health sector.

Mobile Money in Mobile Health - For What?

At the primary level of care, subscription-based mobile payment services can create two-way links between patients and health care providers. For example, patients can pay service providers for health care services delivered with mobile-based transactions, and service providers can pay patients with monetary or airtime incentives for treatment compliance.

At the management level, governments and organizations can improve efficiencies in the transfer of funds and introduce better checks and balances. Examples include:

Paying salaries of health care providers based on services delivered via mobile payments (programmatic level);
Paying incentives to health care workers based on performance (programmatic level);
Using voucher-based systems to reimburse health care providers for services delivered (national level);
Paying conditional cash transfers for health care directly to individuals’ mobile phones (national level); and
Using voucher-based systems for micro health insurance and claims reimbursements (national level).

Dr. Patricia Mechael explained that the financial link is often missing in m-health projects, hindering scalability and sustainability. Improving quality of care and increasing better health outcomes are key priorities in health care delivery. Mecheal noted, “Efficiencies and cost benefits are really going to start to come when we can link mobile finance to health in general and to m-health specifically.”

As noted, there are a number of areas where mobile financial services and payments make sense in mobile health, including the following.

Patients as Payers of Health Services

One of the most common ways of financing health for people in developing countries is out-of-pocket. Mobile money services can offer a means for these consumers to pay user fees at the hospital or clinic or pay for medication. Especially in rural areas, accessing a bank during a medical emergency can be challenging and mobile money can be an instant, secure, and convenient way to pay.

Though out-of-pocket expenses for health care can be devastating for poor individuals, the service could be a useful tool for those who can pay, or can collect via mobile transfers the funds to pay. Often the payers for health care costs are not the same as the beneficiaries. In fact, remittances via mobile payments make up a significant source of funding for poor families, and a report from the International Labor Organization suggested a large portion of remittances received in Kenya, for example, are spent on education and health care costs. Connecting remittances to directly pay for care received at the hospital or clinic could add value to a service already being used by base-of-the-pyramid customers.

Incentivised Compliance

There are a number of examples for incentivising treatment compliance. X out TB in Nicaragua, a discontinued pilot project, provided airtime rewards for patients who took their TB medication on a timely basis. In an interview in 2008, team members said that they had initially planned to use microfinance loans as incentives but changed their approach when they found that users preferred airtime as incentive.

In a related incentive program, albeit not focused on treatment compliance directly, we noted a program that gives airtime benefits to vendors in Tanzania for selling condoms in their shops. In our case study, we noted that the organization involved was able to partner with telecommunication companies and relevant public health partners to deliver these incentives. The program is now out of pilot phase and those involved plan to implement a larger-scale roll out.

Paying Salaries to Health Care Providers

While we did not come across any mobile salary disbursement scheme to pay health care providers, one use case in Afghanistan shows the potential for increasing financial accountability and transparency. In 2009, Roshan, an Afghani mobile operator, tested M-PAISA to pay salaries for a small group of Afghan National Police. The pilot found that approximately 10% of salaries paid were going to ghost police offers who did not exist, and by curbing corruption down the payment chain through mobile payments, officers received salaries that were a third higher than before. Similar issues could be addressed in the health sector of developing countries, but have yet to be tested.

Performance-Based Pay For Health Care Providers

Performance-based pay provides monetary incentives to health care workers who deliver on set targets. For instance, mobiles could be applied to similar programs like Rwanda’s performance-based initiative for traditional birth attendants. In the national program, attendants who bring pregnant women to hospitals for delivery or accurately refer emergency cases to hospitals receive cash payments as reward.

A policy paper published by the World Bank about this strategy, also known as Paying for Performance (P2P), explained how incentives can increase use of services and quality of care. In Rwanda, health workers who identified at-risk pregnancies and referred women to the hospital for delivery were given $1.83 (US) as compensation. For emergency transfers to hospitals if complications arose during delivery, health workers were compensated with $4.59 (US). Facilities received the money and on average, they shared 77% of the P2P funds with their personnel. Subsequently, this resulted in a 38% increase in staff salaries.

The hope is to explore the automation of these incentives using mobile payments to health care workers. According to Dr. Mechael, mobile payment incentives could be used to pay health care workers faster and more reliably.

Conditional Cash Transfers

There is evidence supporting the success of mobile automated conditional cash transfers for social services. These social transfer payments fall under the umbrella of Government-to-Person (G2P) payments. According to Gavin Krugel, who was with the Mobile Money for the UnBanked Initiative at the GSMA, there are already successful models of conditional cash transfers to build on.

Mobiles can counteract many problems that are inherent in cash payout schemes. Mobile payments can ensure that money reaches the correct recipients, reduce the risks for cash to be taken, and decrease travel and time costs for payment recipients. One report describes several country programs that have electronic payment arrangements using pre-paid smart cards or debit cards. As mobile phone penetration reaches more people in developing countries, it stands as the likely technology to enable social cash transfers.

In Kenya, Concern Worldwide tested the feasibility of mobiles to pay out social transfers. This 2008 review of the pilot found that the mobile transfers were “secure, enabled a quick response, were cost effective, respected people’s choices, and empowered communities,” but it also found that the process of swapping SIM cards in shared phones led to wear and tear and a number of SIM cards were lost.

Another report highlighted some of these challenges:

“…the proportions of people qualifying for social transfers who have secure access to their own phones is still likely to be very low; and swapping SIM cards on a common phone can cause difficulties as an early pilot has shown.”

To convince governments of the benefits of mobile payments for cash transfers, there needs to be a systematic look at where efficiencies and savings can be had. This analysis of three conditional cash transfer pilots based in Latin America compared the administrative costs with the program benefits. Clearly, there are opportunities where mobiles could reduce costs of delivery, verify conditionality, and monitor and evaluate administrative processes.

At the same time, the effectiveness of conditional cash transfer schemes and the means of payments, whether mobile or not, can vary from region to region and within countries. In some instances, reloadable cards could be a workable solution while in others, mobile payments can be used. Regardless, mobile phones are only cautiously being tested in this area.

Micro Health Insurance, Vouchers, Claims and Reimbursements

Recently, mobile operator Telenor Pakistan received a grant from the Bill and Melinda Gates Foundations’ Mobile Money for the Unbanked (MMU) Program to develop and launch a micro-insurance/savings product targeting low-income users. In particular, they aim to pilot the feasibility of using Easypaisa for a savings account for the purposes of covering health care costs.

According to Karl Brown of the Rockefeller Foundation, India is going to be at the forefront of innovation using mobiles for health insurance. An example is Rashtriya Swasthya Bima Yojana, launched in 2007 by ICICI Lombard, which uses smart cards with embedded technology to process cashless payments from the accounts of registered users. The scheme is not yet mobile, however.

Mobile voucher-based systems can also be used to pay for health care services. Vouchers are prepaid certificates either provided by the government to qualified individuals or sold at a subsidized price to individuals in order to pay for a pre-defined service.

The HealthyLife program is a voucher-based system that uses a platform called ClaimMobile to streamline the reimbursement of service providers for health services delivered. Patients purchase health vouchers at a heavily subsidized price and present them at the clinic to receive services. Using mobiles, hospitals submit the claim form with the voucher to the funding agency, in this case Mary Stopes International. Results of the pilot can be found here. There are now efforts under way to replicate the voucher program for antenatal care for pregnant women in a new program called HealthyBaby.

Menekse Gencer, an expert on mobile payments in emerging markets, pointed at the prevalence of food voucher systems and suggested to look further into how these could be adapted for the health care sector. In 2009, the World Food Programme coupled vouchers and mobiles to distribute food aid to Iraqi refugees in Syria. Mobile phone operator MTN donated SIM cards and refugees were trained on how to use the electronic voucher system. The refugees would receive a text message on their mobile phone showing a voucher code. They could then go to selected government shops to cash all or part of the cash in exchange for food. An updated balance is automatically sent via SMS after purchases. This reduced long queues and wait times and travel time to distribution sites.

The logistics of how mobiles are used to deliver food aid will be different from health applications, but there are similarities. Voucher-based systems put the power to manage transactions and purchases for a specified service or product in the hands of the consumers themselves. These could include payments for antenatal visits, children’s vaccinations, and medications.

For Mobile Operators, Mobile Money for Health is Promising

Considering the possibilities, it is hard not be optimistic about linking mobile money services to health. Gencer notes:

"Interestingly, both m-Health and mobile financial services (MSFs) act as catalysts for the other since MFS supports health care payments and since health care is a key use case to spur MFS adoption. In addition, they both rely on similar building blocks that, when viewed holistically, can lead to efficiency gains cross-sector. This catalyst phenomenon between MFS and m-Health is a great opportunity for the market to address moving forward to jump start both industries."

From a commercial perspective, multiple services are already being delivered to a user’s mobile phone. Although very few mobile money services for health currently exist, mobile money is emerging, with multiple markets reaching millions of users.

According to the MMU Deployment Tracker, there are 166 mobile money deployments worldwide (84 live, 82 planned - as of Sept. 29, 2010), with markets in Kenya, Uganda, Tanzania and Thailand reaching over a million users. In these countries, mobile money platforms are innovating beyond basic mobile money services, Krugel said.

As mobile penetration rapidly increases, operators are increasingly recognizing that they need to introduce new products to retain customers, reduce churn, and increase revenues. In a recent paper, Ignacio Mas and Dan Radcliffe from the Bill & Melinda Gates Foundation wrote about what it will take to scale mobile money. In the report, they recommended that mobile operators reach a critical mass of customers by "creating enough urgency in customer's minds to learn about, try and use the [mobile money] service."

Turning to health, consumers can be offered a means to pay for health care costs more efficiently, more timely, and more securely. This can be especially important during unforeseen health emergencies or in remote locations when accessing cash can be difficult. Adding health to the mix of existing mobile money services is now entirely feasible, according to Dr. Mechael.

To the disappointment of mobile operators, many customers are signing up for mobile money services, but are not necessarily using the service. Neil Davidson from the GSMA analyzed how inactive users can be a big problem for mobile operators. Registration for mobile money services is free, but mobile operators still have to pay commission to agents and technology providers, regardless of whether users generate revenue or not. As Davidson discussed on the MMU blog:

“When agents can earn a quick buck (or some fraction thereof) signing up new users, they may decide that that’s more lucrative than facilitating transactions, and focus on the former rather than the latter. (Agents whose only responsibility is signing up new customers don’t even have this trade-off to make; so long as their compensation is tied to registration itself, they’ll register anyone for the service, regardless of whether that person has any demonstrated need for mobile money.)”

For mobile network operators, jumping into the health sector can make for a viable business case with the potential to increase average revenue per user. Said Krugel:

“Mobile money services are reaching critical mass in country after country. Though they are not at a global adoption as yet, for the mobile money industry, health can be pitched as the next logical market to tap into.”

According to Krugel, if it is shown that health service transactions increase usage for mobile financial services, this can be a motivator for mobile operators.

For the Health Sectors: Reduced Costs and more Security

In general, mobile money services can reduce transaction costs and corruption and increase the safety of money transfers. The automation of financing could present significant savings for the health care systems by creating efficiencies that may not currently exist.

The Anti-Corruption Resource Centre reported, “In Ghana, only 20% of non-wage public health expenditures actually reach the service delivery points, with a large proportion of the leakage occurring between the line ministries and district levels.” In an earlier example, a Kenyan hospital saw a 50% increase in revenue within three months after replacing collection agents with cash registers. Within three years, revenues were 400% higher.

Mobile money services may be able to deliver similar gains in transparency, accountability, and savings in the health care system. In fact, several small-scale use cases have shown that mobile money services could be adapted for health care delivery in innovative ways. We will describe these examples in part two of this series.

Mobile health can draw from earlier experiences with policy barriers and multiple partners, suggested Karl Brown. The take off of mobile money services required negotiating regulatory hurdles and engagement with the private sector. To scale m-health pilots at the national level, discussions with multiple stakeholders, including policy makers and mobile network operators, will evidently need to happen.

A major concern in the health sector is maintaining confidentiality of patient information. Within m-health, there needs to be more investment in data security and encryption technology. Building on the expertise of mobile money, Dr. Mechael said the mobile health field could incorporate better security technologies to manage confidential patient information and manage the flow of sensitive information.

In the second part of this series, we will present a use case and delve into the challenges and ways forward for mobile money in health.

New Case Study: Mobile Layaway for Irrigation Pumps in Kenya

melissaulbricht — Wed, 06 Oct 2010 20:14:41 +0000

Check out the newest MobileActive.org case study on a pilot mobile layaway service in Kenya for small-scale farmers.

The service is referred to as Tone Kwa Tone Pata Pump, which is Swahili for Drop by Drop Gets the Pump.

The mobile layaway service allows farmers to make incremental payments over a mobile phone by leveraging M-PESA, a mobile banking platform that is popular in Kenya and elsewhere. Farmers work toward the purchase of KickStart irrigation pumps, which allow farmers to irrigate up to two acres of land.

Drop by Drop Gets the Pump: KickStart’s Mobile Layaway Service for Small-Scale Farmers

melissaulbricht — Wed, 06 Oct 2010 19:26:47 +0000

In September 2010, KickStart launched a pilot mobile layaway service to help small-scale farmers purchase irrigation pumps. KickStart is a non-profit organization that develops and markets new technologies to help local entrepreneurs establish new small businesses.The mobile layaway service allows farmers to make incremental payments over a mobile phone by leveraging M-PESA, a mobile banking platform that is popular in Kenya and elsewhere.

The mobile layaway service is referred to as Tone Kwa Tone Pata Pump, which is Swahili for "Drop by Drop Gets the Pump". Though only nine customers have signed up for the service since the pilot was launched one month ago, the experience has provided insight on future approaches for an expanded mobile layaway service.

Generally, KickStart’s mission is to help people out of poverty in Africa by promoting sustainable economic growth and employment creation. One outlet is a line of manually operated MoneyMaker Irrigation Pumps that allow farmers to irrigate up to two acres of land. As of August 31, KickStart has sold 156,000 pumps and 99,900 enterprises were created across many African countries, including Kenya, Tanzania, and Mali.

From Informal Layaway to a Formalized Service

There are no KickStart retail stores where farmers can buy pumps. Instead, MoneyMaker pumps are distributed to and sold at third-party hardware stores or agrovet dealers who are already selling other products like seeds and fertilizer to small-scale farmers.

One aspect of KickStart’s theory of change is the importance of engaging the private sector. Charlene Chen, product manager of services for KickStart, said that the goal is to alleviate poverty through income and wealth creation, which means providing tools like the MoneyMaker pumps, as they are called.

As KickStart sales reps visit farms, advertise, and demonstrate the irrigation pumps in front of retail shops, they also capture sales leads and customer information that is analyzed by KickStart.

From this, KickStart found two main barriers for farmers when it comes to buying irrigation pumps. One is lack of access to a water source. The second is lack of access to finance. For some farmers, the price was just too high. For others, it wasn't so much an inaccessible price point as it was difficult to gather that much cash at one time.

KickStart found that many rural farmers were interested in the pumps but lacked formal savings mechanisms and had difficulty saving up for larger purchases. Chen said there is a shortage of savings mechanisms that are geographically convenient for rural customers, inexpensive, and that do not require collateral or logistical requirements such as a national ID number.

Informal layaway was already happening at an individual level through trusted relationships between some farmers and dealers - in which farmers would pay little by little for pumps and other supplies and receive the products upon completion of payment. Chen said that a survey of the dealers involved with the mobile layaway pilot showed that all offered some sort of informal layaway, but almost all involved cash transactions and not all farmers had a trusted relationship with a dealer. So KickStart drew from their history of appropriate technology and developed a formalized layaway service by leveraging M-PESA and SMS-based mobile technology.

The formalized service “takes it to the next level by stamping it with the KickStart brand” and by leveraging M-PESA, a very trusted brand, Chen said. “It adds an element of convenience and helps mitigate the risk for the farmers, assuming they can learn to trust the KickStart brand in the same way.”

The goal of the mobile layaway service, Chen said, is to provide a safe, secure, and convenient savings mechanism for farmers to put away money for an irrigation pump.

How Mobile Layaway Works

For the pilot, KickStart worked with 16 dealers in three locations in Kenya: the Western Region, the Nyanza/Rift Valley Region, and the West Aberdares Region.

If a farmer decides on mobile layaway, they fill out a basic paper form and contract with a KickStart sales rep. The form asks for contact information, nearest town, and the specific product requested. The rep then sends an SMS message to the organization’s office including name of customer, the product they selected and their mobile number.

The message is recorded in the office and a confirmation SMS message is sent to the farmer that says, “Congratulations, you are now registered for Tone Kwa Tone. Please make an initial deposit of X shillings.”

For now, KickStart is asking for a deposit of about 30 percent of the total cost. Chen said this was in important distinction because the deposit was large enough to take the commitment seriously and practical enough to not be a burden to complete a full payment later. (A MoneyMaker hip pump runs $35 USD or 2749 Kenyan shillings and a Super MoneyMaker Pump is $95 USD or 7490 shillings.)

To use the layaway service, farmers have to be registered with M-PESA. Chen said that this requirement is not a barrier because of the prevalence of the mobile banking program in the area. (There are more than 9 million registered M-PESA users in Kenya.)

KickStart leverages a feature called “Pay Bill,” which is a built-in SIM service offered by Kenyan mobile provider Safaricom on the M-PESA platform.

Using Pay Bill, farmers enter a business number and their customer account number, which for the mobile layaway service is the farmer’s cell phone number -- something easy to remember and not particularly sensitive. The next prompt is to enter the amount to pay, which must be a minimum of 100 shillings or a little more than $1 (an M-PESA requirement.) Customers then enter an M-PESA PIN number.

Payments can be made in any frequency so long as the full amount is received by the end of third full month after registering. Based on customer surveys, the three months seemed “aspirational but not punitive,” Chen said. Customers also incur a one-time service fee that is charged up front and is non-refundable if, say, the farmer backs out of the plan at a later time.

After a deposit is made, the data is sent to two locations. One is the M-PESA administration tool, an online system provided by Safaricom to log in and see all received payments. The other is a USB modem with a SIM card that is located in the office and tied the KickStart M-PESA account. Every time a payment is made, KickStart receives a text message on the SIM card that says, “You received X shillings from user Y.”

The advantage to using this text message interface, Chen said, is that she is not sitting in front of a handheld mobile phone trying to type text messages. Rather, when the USB modem is plugged in, all the administration can be done on the computer. From here, Chen can then send a confirmation and update to the farmer via SMS.

Lessons from the Mobile Layaway Pilot

Though the USB modem and text message interface alleviates the need to administer data via a handset, it still requires significant manual input. For the pilot, received payments come in automatically from the M-PESA admin tool, but on the back-end, Chen and others are using an Excel spreadsheet to track customers and payments.

Notification via the USB modem is instantaneous and helpful, Chen said. As each payment comes in, she records it and adjusts the current balance. She is able to tell what the remaining balance is and send this information via SMS to the customer. Still, it must manually re-recorded and adjusted in Excel, and it is instantaneous assuming it comes in during a working hour.

KickStart is not alone in this regard to this challenge. Chen said that other entrepreneurs have complained that Safaricom has not yet provided a formal API between the online administration tool and back-end systems. “If you wanted to export the payments, you would have to export to Excel or PDF, but it’s completely static,” Chen said. Something that is especially significant when dealing with people’s money and secure transactions.

Whereas wealthier social enterprises can hire ICT consulting firms to parse the data and develop software and logic to keep track of SMS messages and outstanding balances, others may be restricted to a more manual, less secure system.

Leveraging a trusted brand like M-PESA is integral to the success of mobile layaway, but this relationship may produce a barrier to mobile layaway in countries where mobile banking is less established or trusted.

Chen wonders if the mobile layaway service would have as much success in other countries. In Tanzania, for example, M-PESA is offered through Vodafone, and mobile banking service ZAP is offered through provider Zain, but the overall uptake is less significant than in Kenya. “I think this is a special phenomenon we recognize which may make mobile layaway more successful here in Kenya than anywhere else,” Chen said.

Successes and Next Steps for Mobile Layaway

Though only nine customers have signed up, the mobile layaway service is successful in it’s approach: it offers a more secure, formalized service by building upon something already being done informally. And it leverages a trusted brand that users have access to and are comfortable with.

Chen said the pick-up is on the slower side, but offers a few reasons why. First, mobile layaway is “really innovative” for KickStart -- it is the first time they are offering a service and not a physical product.

Selling a service is new to many of the sales reps, too. “As we adapt as an organization, it’s also about transforming the way that our sales force interacts with the customer,” Chen said.

Finally, the pilot project follows KickStart’s theory of change and need to engage the private sector. KickStart’s belief is that self-motivated private entrepreneurs managing small-scale enterprises will play a dynamic role in the economies of developing countries.

"If we could figure out an even more effective, efficient way to help entrepreneurs and small-scale farmers create income, then that’s what we would do," Chen said.

KickStart plans to run the pilot for five months. The goal, Chen said, is not to get to scale but to understand customer demand, operational feasibility, and technical requirements. The next phase will include scaling out to more dealers in different regions in Kenya.

Note: As of October 15, KickStart has signed up 13 individuals for the mobile layaway service. The number stated in the story (nine) is now outdated.

Photos courtesy KickStart.

Branchless Banking Pricing Analysis

MohiniBhavsar — Wed, 06 Oct 2010 02:04:58 +0000

Electronic Delivery of Social Cash Transfers: Lessons Learned and Opportunities for Africa

Katharine_v — Thu, 16 Sep 2010 21:20:19 +0000

Mobile Payments Go Viral: M‐PESA in Kenya

MohiniBhavsar — Thu, 02 Sep 2010 18:20:45 +0000

Community-Level Economic Effects of M-PESA in Kenya: Initial Findings

MohiniBhavsar — Wed, 01 Sep 2010 21:21:26 +0000

The Mobile Minute: Mobile Maternal Health Insurance, M-PESA in Users' Own Words, Environmental Mobile Sensing

AnneryanHeatwole — Tue, 17 Aug 2010 13:10:58 +0000

The Mobile Minute is back with a video explaining the M-PESA mobile money service, news about maternal health insurance via mobiles, an app that helps users determine if a hybrid or plug-in car will be useful to their lives, a report on why you might want to turn off the geo-tagging system on your mobile, and FailFaire in The New York Times.

Through first-hand accounts from users, this short video offers a look at how the M-PESA mobile money transfer system works, and why it's been so successful in Kenya.

In Kenya, a maternal health insurance plan is gaining traction among users - and it's run entirely over mobile phones. Designed by Changamka MicrcoHealth Limited and piloted through the Pumwani Maternity Hospital in Nairobi, the system allows users to transfer money via M-PESA to a prepaid smart card; when pregnant women visit the hospital to give birth, the hospital fees are taken out of the card so they families aren't hit with a big fee all at once.

The beta version of an environmental sensing app that helps users determine how an environmentally-friendly car could have an impact on their commute is out. AltTransport reports, "The program [...] uses the embedded GPS feature on your smart phone to see all the routes you’ve traveled on through the past couple of days and gives you illustrations on how a plug-in vehicle would have performed on the same roads."

Curious about how much information your mobile photos reveal? This piece on geotagged photos shows why it might be a good idea to turn off the automatic geotagging feature on your phone.

The New York Times wrote a piece on FailFaire, the event that brings together M4D and M4C practitioners to talk about projects that have failed in order to learn from their mistakes. Read here to see how to host your own FailFaire.

[Mobile Minute Disclaimer: The Mobile Minute is a quick round-up of interesting stories that have come across our RSS and Twitter feeds to keep you informed of the rapid pace of innovation. Read them and enjoy them, but know that we have not deeply investigated these news items. For more in-depth information about the ever-growing field of mobile tech for social change, check out our blog posts, white papers and research, how-tos, and case studies.]

Image courtesy Flickr user QiFei

How Mobile Apps Are Shaking Up East Africa

MohiniBhavsar — Mon, 02 Aug 2010 21:34:54 +0000

The Swedish International Development and Cooperation Agency (Sida) recently published a report, The Innovative Use of Mobile Applications in East Africa, that provides an overview of the current state of mobile phone applications for social and economic developments in East Africa. The report seeks to answer “what hinders the take-off of m-applications for development in East Africa" and asks what role donors should play.

While mobile phones are the main channel for information in East Africa, with mobile penetration covering over 40% of the population, sustainable, scalable mobile services for social and economic development are limited. The report is supported by secondary data, statistics, and field work carried out in Kenya, Rwanda and Tanzania, along with numerous interviews, meetings and discussions with key stakeholders in East Africa. Major trends in mobile usage, barriers for increased use of m-applications, as well as opportunities for scaling are discussed.

Barriers: High Cost of Ownership.

The most significant barrier presented is the high total cost of ownership and use (including cost of device, airtime, charging etc.). In general, SMS is overpriced, along with voice and data traffic. There is poor marketing of available applications on the part of mobile operators. Lack of electricity and illiteracy also pose as major obstacles. One of the biggest critiques in the report is that many interventions are not designed with scale in mind.

To begin, the report profiles East Africa’s ICT sector and the mobile market. Although mobile cellular penetration is high - Kenya has the highest regional penetration with 42% – one needs to be cautious of data representing actual phone ownership and use. As Ewan Sutherland in his paper explains, operators use different techniques to account for their customer base. Some count the number of SIM cards sold, or the number of active customers, but may not account for multiple SIM ownership, SIM holders without handsets or phone sharing practices for example.

In East Africa, people tend to spend more or less half of their disposable income on mobile communications as has been pointed out by others such as Chasbossou et al. in 2009. Owning a phone is a luxury for the vast majority of users. In addition to affordability, electricity, and literacy, additional barriers identified include language, privacy issues, gender, and concerns about security (i.e. phone theft) in developing, implementing and sustaining mobile applications.

The Outlook for Mobiles in East Africa

In Kenya, M-PESA’s success paved the way for numerous mobile banking schemes. Increased competition drove down prices. Although the average revenue per user (ARPU) has declined, overall revenues are still high for mobile operators.

In Rwanda, ICT is heavily supported by the Rwandan government. Problems in this region are highlighted with respect to quality of service and lack of competition, leading to high prices. This has resulted in some of the lowest penetration rates (13%) in Rwanda compared to other countries in East Africa.

Tanzania’s mobile market has been growing more than 60% per year in the last five years, and passed the 17 million mark in 2009. Mobile services are delivered by six operators, and the market growth is set to continue.

Uganda’s mobile penetration is low and SIM cards and handsets remain beyond the reach of many. Interestingly, there is a policy on universal access that the Rural Communications Development Fund has set up, through which operators in Uganda have to pay a levy of 1% on revenues to support internet points of access and public pay phones in rural areas.

SMS or Voice? Is the Future of ICT in East Africa IP-Based?

A significant section of the report is devoted to discussing the major mobile operators in East Africa, including in-depth coverage of services, tariffs and network-network collaborations. Outlined are the obstacles and opportunities for SMS, Voice (specifically, interactive voice response systems), USSD and mobile broadband in East Africa. The culture of beeping in East Africa is quite popular; however, to the dismay of operators, this practice jams networks. SMS usage can significantly relieve the load on voice/data bandwidths, if operators zero-rated or priced SMS much closer to real costs. Per-second billing is a more appealing option for mobile subscribers with limited funds as is already the practice in India. Mobile broadband is identified as a fast growing market over the next few years in East Africa as well.

There is a fascinating discussion of mobile payments and banking. Based on the lessons learned from and success of M-PESA in Kenya and Tanzania, Sida predicts an exponential increase in mobile transactions in the future.

Avoiding The “Forever Pilot Syndrome”

Scalability is a key focus in the report. Sida offers a list of success factors in designing projects and recommends to shift away from pilots and move towards a comprehensive service delivery approach. This means focusing on usability, collaborating with other organizations, documenting lessons learned, and learning from failures as well as successes. In the implementation phase, Sida recommends involving end users in content creation, educating the users and investing in marketing to gain a critical mass of users.

The fuill report can be downloaded here from Sida’s publication database.

Photo Credit: Creative Commons/ Wayan Vota