Global Report

Why Haiti is beating Canada and the U.S. at digital money

Mobile banking is turning a profit

(Antonio Bolfo/Getty)

(Antonio Bolfo/Getty)

Haiti is best known for being the poorest nation in the Western Hemisphere, having suffered dictatorships, military coups and natural disasters.

It’s not known as an early adopter of new technology—which is why it’s surprising to learn that this Caribbean nation of 10 million has enthusiastically embraced digital, mobile payment services. A far higher percentage of Haitians pay with their phones than their more prosperous Canadian or American counterparts, with a far greater variety of services available.

“Haiti has the most successful implementation of a mobile wallet in all the Americas,” says Jeff Hindle, vice-president of emerging businesses and payments at Toronto’s Scotiabank.

The service is known as TchoTcho, and was jointly launched by Kingston, Jamaica–based Digicel Group and Scotiabank following Haiti’s devastating 2011 earthquake. Since then, TchoTcho ( Creole slang for “money”) has steadily grown.)

Today more than one million Haitians do their everyday banking—from deposits and withdrawals to payroll and shopping—using their mobile phone. They are also able to transfer money between phones anywhere in the country with a few simple commands, avoiding bank queues and high service fees. It’s a huge feat in a country where illiteracy is high and fewer than 10% of the population has a bank account.

“Saving money was unknown in Haiti before TchoTcho,” says David Sharpe, general manager of Digicel’s mobile-wallet service, based in Port-au-Prince. “People lived day to day. Now people are saving for emergencies.”

But what is perhaps most surprising about the Digicel-Scotiabank partnership in one of the world’s poorest countries is that it makes money—a lot of it. Digicel, owned by Irish billionaire Denis O’Brien, with operations across the Caribbean, made $86 million in profit on revenue of $439 million in Haiti in 2012. Digicel doesn’t break out profits from TchoTcho, but Sharpe says the mobile wallet is an important business driver. Scotiabank’s primary contribution is the white-label bank account that is invisible to subscribers but underpins each transaction.

Is Scotiabank preparing to launch a mobile wallet in partnership with Digicel in some of the 29 other Caribbean and Latin American countries in which it does business? Though a spokesperson for Scotiabank demurs, it seems likely, not only because the mobile wallet is the future of retail banking around the world, but also profitable.

“It’s a viable business,” says Hindle, “not just a humanitarian mission.”