More than half of citizens living in developing countries survive on less than a euro a day, according to the World Bank. For them, emigrating to countries like France could multiply their income 20 times and means they can send money back to their countries of origin that can help support the families they left behind. The last World Bank report about remittances estimates that more than 30,000 million euros in capital flow is sent to Sub-Saharan Africa, which is more than the region receives in aid.
Jérémy Stoss has been selected as a prize winner of MIT Technology Review Innovators Under35 France, for creating a system that allows these remittances to be more economical for the emigrant, and furthermore, allow them to control where the sent money is used. “70% of African migrants want to know how money they send home is being spent”, states Stoss. To make this reality, he has created a type of ‘digital coupon’ that allows the payment of goods and services in African businesses without the intervention of banks or other intermediaries.
The business co-founded by Stoss, Afrimarket, has developed a technology that allows the payer to create an electronic wallet with a certain amount of money and decide what the recipient can spend that money on. The recipient does not need a device or a special application as a simple mobile allows them to use the wallet through phone calls. The affiliated businesses provide a device that can verify a transaction by communicating with the mobile of the client.
Stoss has worked in Africa and on subjects related to the continent since he finished his Economics and Finance studies in 2007, which made him realise “the business of transfers is as enormous as it difficult for people to carry them out.” The average commission that intermediaries charge is 12.5%, the highest of all intercontinental transfer tariffs. This means that for every 20 euros sent, 2.5 are lost on route.
Afrimarket however, offers a 5% commission and the advantage of not having to collect money from the bank or an intermediary’s office, but instead it can be directly spent in a shop or on another service, taking advantage of the extraordinary penetration that mobiles have had on the African continent. To compensate for the reduced tariff, the company also gives a percentage of every transaction to each affiliated business. “Facilitating this type of payment attracts clients, which incentivises businesses to use Afrimarket’s system”, states Ross.
For the time being, after 3 years in action, the service is available in five African countries but Stoss soon plans to expand their markets thanks to the economic support they recently received from a multinational telecommunications company. “The system is however independent from the telephone operator”, clarifies the young innovator.
For the co-founder of m-Spark.org and international digital innovation strategist, Ferhan Cook, Stoss “provides a successful system convenient for those that pay remittances”. According to this member of the prize jury for MIT Technology Review Innovators under 35 France 2016, Afrimarket could have a “hugely positive impact.”