Pierre Omidyar in partnership with microfinance firm ACCION International has just invested $3.2 million in Mobile Transactions International, a Zambian mobile money startup that leverages mobile technology and an agent network to enable financial transactions across the country.
Founded in 2009 by Mike Quinn, a Canadian social entrepreneur, Mobile Transactions is a mobile money startup which aims to achieve a “Cashless Africa” by facilitating easy, quick and safe money transfer via mobile phones by utilizing its solid proprietary technology platform and growing countrywide agent network.
It’s a model that’s fast gaining ground across the continent, and it’s quite simple to understand. A vivid description of how the model works is available on Mobile Transactions International’s website. According to the site, a money sender typically goes to a local Mobile Transactions International agent and the agent enters the sender’s details and those of the receiver into the system using a mobile phone, including a secret pin for the transfer selected by the Sender.
The sender and receiver receive SMSs contained a Reference number to confirm that the transfer has been done. The agent collects cash for the value of the transfer plus the fee. At the same time, their account is debited for the value of the transfer and fee less their commission.
The sender communicates the secret pin to the receiver, and the receiver goes to an agent within their jurisdiction. The agent enters the receiver’s reference number. The receiver enters the secret pin into the system and shows their National Registration Card as proof of identification.
When the identity of the receiver is validated, the Agent’s account is credited with the value of the transfer plus a commission, and the Agent pays cash out to the Receiver.
This is the first time in history a Zambian-based tech startup is attracting significant venture capital from a foreign investor, thereby reinforcing the commercial viability of mobile financial services across Africa. Perhaps, inspired by M-Pesa’s raving success in Kenya, an increasing number of foreign investors are beginning to take ample notice of the opportunities that abound in Africa’s mobile money space. Just last year, fabled Silicon Valley venture capitalist Tim Draper invested in Pagatech, a Nigerian mobile money company that currently boasts over 32,000 active users.