NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, September 14, 2017

Half a dozen men crowd round one of the many small colourful wooden shacks off a main street in Hargeisa, Somaliland, shouting and arguing over the quality of khat – a mild narcotic that has been likened to both coffee and cocaine – that they’ve just been hastily handed by the vendor.

Customers quickly come and go, grabbing bundles of the green leafy, legal plant that they deem good enough before punching digits into phones and disappearing as quickly as they came.

“We need to do everything quickly, and paying with cash here is slow,” Omar, one of the khat sellers says as he chews on the green leafy plant himself. “It keeps people calm if they can get their khat quickly.”

No cash is transferred, and there’s not a credit card in sight. But customers haven’t got their daily khat fix for free; they’ve paid using their mobiles, transferring money on the sandy Somali street in seconds with little more than a mobile phone and a few numbers.

There are not many things tiny Somaliland can claim to be a world leader in, but cashless payments might be one.

Photo courtesy of Erik Hersman.