Libya Becomes Major New Front in Mobile Payments Use
While when most people think about a cash crisis these days, the first place they think is India, it’s not the only place that’s been having such a crunch. Libya had one of its own recently, and the country is increasingly looking to mobile payments as a means to help alleviate the shortfalls of spendable cash in the country.
The cash crisis that hit Libya left citizens waiting in lines for days to withdraw savings from banks, but some instead turned to mobile payments. With grocery stores offering access to such systems, among others, some found that waiting in the lines for cash at the bank was a fool’s errand, and instead turned to these new measures.
What those users are finding is that mobile payments can actually be more convenient and better-run than many state-owned institutions like Libya’s central bank, which has at last report been tottering since the death of Muammar Gaddafi back in 2011.
The bank split in two parts in 2014, with one branch overseen by western Libyan elements and the other by elements in the east. This unexpected bifurcation meant issues getting cash to banks, and ultimately, banks using mobile payments systems to offer a way to get cash to customers without having to fork over bills.
The transition hasn’t been seamless, reports note, as some have reported substantial price increases associated with the mobile payments systems. One customer reported that 40 percent price hikes were involved when using Edfali, one mobile payment system.
It’s a novel approach to the concept of cash crunches, and one that’s already been seen working to great effect in India. It almost puts me in mind of the Depression-era concept of bank scrip, where small town banks would issue their own cash, good for goods and services in that area, to serve as a cash replacement in a time when government issues of cash were just not reaching some places.
That may not have been the intended use of such tools, but sometimes, needs must, and in a case like this it looks like a worthwhile means to bridge the gap when the central bank’s falling down on the job to get cash to its customers.