Profile: mHITS Makes Money Mobile
Not many exporters can say they have a potential market of 5.3 billion people, but Harold Dimpel can. That’s the number of people in the world who are ‘unbanked’ or ‘underbanked’ and therefore potential customers for Dimpel’s mobile payment technology.
Developer mHITS found its SMS payment technology had limited traction in Australia, as the market is well serviced by credit and debit cards. So Dimpel turned to export markets where traditional banking products don’t work.
“The majority of people in the world don’t have a bank account and probably never will,” Dimpel says. “The Western banking system is based on a lot of assumptions: that you have a permanent address, identification, a birth certificate, a job, credit ratings.” But in the developing world most citizens don’t. “It’s another world. Banks have a very tough time getting into this area.”
But where banks have failed, cheap prepaid mobile phones are taking off. “It’s all scaled down so phones are affordable.” Dimpel set out to capitalise on the available technology to solve simple payment problems in the developing world. mHITS was approached by a Papua New Guinean phone company to build a mobile payment service.
“We built a system that meant people could use prepaid credit on their phone to pay for electricity. In developing countries people don’t pay their bills. So everything is prepaid.” Where previously villagers had to walk to another village and stand in line at a shop they can now send a text message to get electricity credit.
After just 18 months, the service accounts for 60 percent of prepaid electricity in PNG. “It’s a good example of how this sort of technology is working better in developing countries than in the West,” Dimpel says. “And that uptake is only using one of two carriers so there’s still room for growth.”
In PNG Dimpel is also developing point-of-sale mobile technology. “Traditionally that has been the domain of the banks and pretty well guarded. We’ve developed a technology that lets us plug point-of-sale technology into mobile payment systems.” The system uses similar technology to SMS payment, allowing a customer to use a mobile wallet in shops. “These are small amounts but in these developing economies $10 is a lot of money.”
In the Pacific, the technology allows city workers to remit money home to their village families, without taking days out of their working week to make a dangerous trek home. Each village has a “de facto human ATM”, who can dispense cash once paid by mobile wallet. It’s banking but “scaled down, lightweight and simple”.
While mHITS is new at the export game, Dimpel is keen to move into markets across Asia-Pacific and Africa. “We have competitors, but we’re a newer, smaller player, which gives us the advantage of being a bit more flexible and nimble. A lot of our competition doesn’t tailor to an economy.”
For the moment, mHITS operates as a vendor, selling the technology to an end client who takes control of the marketing. “A lot of them take off on their own through word of mouth. In PNG you have a very strong clan and tribal culture. Once a family gets word of something being convenient they’ll tell everyone. It’s like analogue social media.”
While banks are still working out how to get into the market, mobile payments are gaining popularity because the system facilitates financial inclusion. “That’s the dream. If people have access to modern payment systems they’re not forced to pay all their bills face to face in cash, which holds back economies because you can only do that at a certain rate. So moving towards electronic payments enables more commerce in a market.”
Dimpel says his biggest challenge has been finding help. “We’re a technology innovation, knowledge that gets sold overseas. How do you map that into government grants?” It’s not trade shows and presentations, Dimpel says. Researching is visiting “terrifying” markets like Nigeria.
“What’s the path to export? There’s no one we can really replicate. That’s something to look at as a country and an industry and say how can we help these trailblazers in some way?”