Back in the mid to late 1990s, when cell phones started becoming widespread, as well as smaller and far more versatile in terms of network, an interesting financial social dynamic occurred. Unlike many other continents, a good amount of Africa remainder under-developed in the late 20th century. In terms of infrastructure, the fundamental framework of data channels, finance, government foundations and similar were still not widespread or commonplace outside of the heavy-urban areas, and even in the cities things could be spotty, depending on the neighborhood and economic class.
However, the above never stopped commerce from occurring. Market, buying and supplying have been age-old activities in Africa dating back centuries, and many of the coastal cities of the continent were the primary trade points that were already in full-swing before European colonists arrived. So, flash back to modern times, even without the amenities of credit cards and ATMs, many African communities were quite established with their own method of trade, barter, spending and earning. The problem was that banking as known in the developed west just hadn't made the inroads needed in outer and rural areas. However, cellphones definitely had penetrated deep and they provided a go-to tool for digital commerce well before the Internet was offering digital commerce on web pages.
The explosion of mobile commerce through cellphones not only drove the build of vast networks of cellular-finance, it also created a hungry market for recycling older cellphones as well. All those Blackberries, Androids and iPhones from the West didn't disappear; they simply got cleaned up and repurposed for cellular use in Africa instead. As a result, phone-banking in Africa became a standard and, more importantly, it taught industries a lesson - financial markets didn't need banks per se to thrive and grow. They could be established with the bare minimum of communications networks, just enough to support cellular usage and basic texting.
Since those early days at the turn of the century and millenium, African mobile finance has continued to skyrocket, matching or coming close to mobile usage in the U.S., but for very different reasons. Unlike the typical American, carrying three or four credit cards, funneling paychecks into a bank account, and handling cash, the average African may very well be doing everything by mobile and keeping his pockets free and clear. Income payments, transfers, purchasing at the local market and savings are all doable on African mobiles and their related phone accounts. It's also a steady goldmine for telcom companies as well, with plenty of opportunity add on services for additional income streams from users.
The question obviously implied back to fully-developed countries like the U.S. is, of course, why aren't we doing better with the most advanced form of mobile technology? Some of that resistance comes from our own architecture. The banking industry isn't a big fan of anything that could outright replace it, as seen with crypto. So, while mobile finance was easy to adopt in Africa, in the U.S. for example it needed to be diluted to fit within the schema of established banking business and regulation. Secondly, we're spoiled; we have too many options at our fingertips with easily accessible Internet, easy banking access, and credit cards. Adoption to fully-mobile financing isn't a necessity for us and is mainly a generational shift, with younger people who've grown up on the Internet being far more connected and reliant on mobile finance than those 40 or older. Finally, with the vapid amount of fraud and hacking, there is a latent fear of new technology handling personal finance. Many have been burned for large amounts of loss on credit cards alone, so we're all a bit hesitant to stick our toes into a new pond.
For all the crap floating politically about COVID and the pandemic, the virus' distancing requirements really were the social kick in the pants the developed world needed to free itself from 20th century financial institution models. Every platform had to adapt and embrace mobile or remote technology because it was no longer conveniently available. There is plenty of swingback right now, along with plastic straws, but fortunately the benefits of mobile access and strengthened data security are outweighing that luddite fear-mongering of change. But wow, it took use 20 years to get to where Africa already was by 2005.
