🌯Inclusive FinTech Knowledge Bites [Week #69]
Bitcoin hopes and risks in Kenya’s slums. Mobile wallets are reshaping finance from the edge in. Learn to spot hidden churn traps in agent networks.
Hey,
I’m Hugo Pacheco, and this is The Barefoot Economist, a newsletter where, every week, I break down three essential stories on last-mile technology, emerging market innovation, and financial inclusion. Consider it your bite-sized takeaway to stay informed, sharp, insightful, and easy to digest.
This week on The Barefoot Economist:
🧨 Bitcoin in Kenya Slums: Decentralized Hope, Centralized Risk
🌍 Why Mobile Wallets Are Eating Finance from the Edge In
🔥 Churn Trap: Spotting Hidden Barriers in Agent Channels
Enjoy your reading!
🧨 Bitcoin in Kenya Slums: Decentralized Hope, Centralized Risk
A garbage collector in Nairobi’s largest slum now holds 80% of his net worth in Bitcoin. A few street vendors accept it. A local fintech is calling it “financial freedom”.
Let’s cut the noise.
This isn’t a revolution. It’s a live experiment. In a community where people survive on a dollar a day, Bitcoin is showing up not as a tech upgrade, but as a workaround to a broken system.
No banks. Mobile money is too expensive. ID barriers everywhere. So, crypto slips in through the cracks. Cheap. Fast. Unregulated.
The problem? The same thing that makes it accessible also makes it dangerous. No protections. No plan B. No safety net when things go sideways.
Let’s break this down without the hype. No jargon. No evangelism. Just strategy. Ready for the takeaways?
🌯 The Barefoot Insight
M-PESA’s too expensive. Banks are too exclusive. So here comes Bitcoin, no fees, no ID… and no safety net.
This is not scale. It’s a test200 people using Bitcoin in a 250,000+ person slum isn't financial inclusion. It’s a pilot with PR.
Bitcoin’s selling point here? It's not M-PESAUsers like it because it's faster, cheaper, and doesn’t need ID or fees. That’s not a crypto revolution, it’s an indictment of mobile money gatekeepers.
Volatility kills the pitch.Garbage collectors putting 80% of their net worth into Bitcoin isn’t innovation, it’s risk transfer from fintech founders to the poor. This isn’t financial freedom. It’s exposure.
Crypto education is essential but also a fig leafFinancial literacy doesn’t fix the fact that Bitcoin swings 20 %+ in a week. It just makes people feel better about gambling.
Infrastructure ≠ IdeologyBitcoin here is infrastructure. Not ideology. It’s a rail, not a religion. Treat it like that, and you’ll build something. Preach it, and you’ll burn trust.
No regulation means no guardrailsAfriBit calls this a benefit. Kassim calls it reckless. He’s right. When things go wrong, there’s no recourse, only regret.
🧩 Strategy gaps cost more than subscriptions.
You’re not here to collect newsletters; you’re here to win.
The paid tier gets you into the real conversations: unit-economics intel, cross-market business models, and founder-focused growth GTM plays.
🌍 From Unbanked to Unstoppable: Why Mobile Wallets Are Eating Finance from the Edge In
Mobile wallets are no longer a "nice-to-have", they're a digital financial infrastructure layer rapidly replacing cash and cards. With over 4.3 billion users in 2024 and projected to hit 5.8 billion by 2029, wallets have become essential tools for managing money, accessing services, and enabling inclusion. The guide covers wallet types (closed, semi-closed, open-loop), key global players, core benefits, interoperability challenges, and the roadmap to seamless cross-border payments.
However, fragmentation of technological, regulatory, and cultural remains the biggest hurdle to achieving a truly borderless wallet experience.
🌯 The Barefoot Insight
Mobile Wallets = Infrastructure, Not ProductThe mobile wallet is no longer just a consumer-facing app, it’s the financial rail. With ~$17 trillion in projected transaction value by 2029 (Juniper Research), wallets are now essential infrastructure for payments, identity, and credit.
💡 “A mobile wallet is a digital wrapper for a financial identity, fluid, programmable, and increasingly borderless.”
Closed vs. Open vs. Semi-Closed = Ecosystem Power PlaysClosed-loop (e.g. Starbucks, Amazon Pay) = Merchant lock-in.
Semi-closed (e.g. M-Pesa, GCash) = Local network dominance.
Open-loop (e.g. Apple Pay, Google Pay) = Interfacing with banks and cards.
but…. If you're serious about financial inclusion, forget open-loop wallets. Semi-closed-loop wallets win where it matters: at the last mile.
They support agent networks and cash in/out and don’t rely on users having a bank account. That’s the reality in most of the Global South. Open-loop wallets are great if you already live inside a card-based ecosystem. But in markets where cash is still king and trust is built face-to-face, you need something that works offline, locally, and at scale.
M-PESA, Paytm, and Alipay didn’t win because they were elegant. They won because they were everywhere, accessible, and built with agents at the core.
🧠 Financial inclusion isn’t about tech stacks. It’s about distribution. Semi-closed-loop wallets are a distribution infrastructure in disguise.
Africa’s Telecom Wallets vs. Asia’s Super AppsIn markets like Kenya, Nigeria, and Ghana, telcos still reign (M-Pesa, MTN MoMo) by blending digital with cash on/off rails. In Asia, super apps like Alipay and Grab dominate by embedding financial services into everyday services.
🔄 Two models of inclusion: access through telecom-cash rails (Africa) vs. ecosystem lock-in via super apps (Asia).
Cross-Border Wallets Are the Next FrontierDigital wallets are streamlining B2B, P2P, C2B, and B2C transactions, especially for remittances and gig economy payouts. Players like Thunes offer API-layered interoperability across 130+ countries and 80+ currencies.
🌍 The rise of global wallet interoperability is quietly eating SWIFT’s lunch.
Fragmentation = FrictionWallet adoption is hampered by:
Regulatory differences (AML/KYC).
Non-standard technologies (QR vs. NFC, proprietary APIs).
Payment culture gaps (e.g., card-centric West vs. mobile-first Africa).
⚠️ Interoperability is not just a technical issue; it’s a trust and culture challenge.
Wallets Are Financial On-Ramps for the UnderbankedWith minimal onboarding and zero deposit barriers, wallets lower the threshold for financial access. In Southeast Asia and Africa, they’ve become digital onboarding engines for the unbanked and underbanked segments.
🚪 Mobile wallets are the “zero-friction” door into the digital economy.
Micropayments & the Creator Economy Are Driving Edge Use CasesDigital wallets are particularly suited for low-value, high-frequency transactions, ideal for freelancers, semi-formal hustlers, creators, and gig workers.
📈 The financial backend of the $500 billion creator economy will be wallet-native, not bank-native.
⚠️ If you're building in Africa and still guessing... you're already behind.
Fintech is local. Scale is not. Get inside field-proven systems that de-risk growth and cut months off your roadmap.
🔥 The Churn Trap: Spotting and Solving Hidden Barriers in Agent Channels
Social innovations don’t fail because people don’t care. They fail because people behave like… people. Messy, distracted, irrational. If you want your solution to work, stop designing for how people should act, and start designing for how they do act. That’s behavioural science. And it’s your cheat code to closing the gap between good intentions and actual outcomes.
🌯 The Barefoot Insight
Personas > UsersYou don’t serve “segments.” You serve people with names, fears, habits, and contradictions. Stop generalising. Start designing for specific realities.
Why it matters: In digital finance, personas aren’t “end users”, they’re “survivors.” A rural woman running a kiosk who mistrusts mobile savings isn’t the same as an urban gig worker using Buy Now, Pay Later.
Example: When segmenting agent networks, use archetypes like:
The Trust Anchor Agent: embedded in the community, often a shopkeeper
The Hustling Float Seeker: rotates SIMs and deals, seeks liquidity arbitrage
The Community Caregiver: SACCO-affiliated, cares about impact
Use case: Adapt onboarding and float incentives based on persona motivations, trust, profit, or social good.
Friction is the Silent KillerEvery extra step is a dropout point. If adoption is low, it’s probably not the user; it’s your design. Ruthlessly eliminate anything that makes action harder.
Why it matters: Adoption rates drop when agents or customers face barriers such as KYC multi-document paperwork, complex USSD flows, or unreliable SMS.
Design for:
Agent onboarding: Reduce KYA documentation with digital pre-checks.
Customer sign-up: Simplify account opening via agent-assisted onboarding or biometric eKYC.
Rebalancing: Pre-approve float top-ups during peak hours.
Track Behavior, Not VanityForget form completions and training headcounts. Measure what people actually do differently because of you. That’s real impact.
Why it matters: Donors love vanity metrics, downloads, transactions, and training sessions. But behavioural change is the real win.
Better metrics:
% of agents rebalancing consistently after 3 months
Drop-off rate in the onboarding journey
Net savings or business reinvestment by newly banked MSMEs
Example: Instead of “number of women trained”, track “% of women who opened and used a mobile wallet".
Culture Eats ProductYour team needs motivation, too. Meaning, ritual, and recognition matter more than KPIs. Want innovation? Build purpose from the inside out.
Why it matters: Field agents are often underpaid, under-supported, and isolated. Culture beats strategy, especially in dispersed agent models.
Tactics:
Start team meetings with “impact stories” from the field
Celebrate top agents monthly via WhatsApp broadcast
Create a peer-mentorship network among agents or agent managers
Free is Worthless (Sometimes)When people don’t pay, they often don’t pay attention. Use price to communicate value, not extract it. Small costs signal seriousness.
Why it matters: In cash-based economies, it often signals low value or a handout.
Use case: Charge a small onboarding or float request fee, and recycle it as airtime/data rewards later. Even a $0.10 commitment can increase engagement.
Model: “Pay what you can” for digital literacy tools or micro-loans, with visible tiered options to preserve dignity and signal value.
Reward Now, Win LaterHumans don’t think long-term. Don’t fight it, hack it. Give instant gratification for the right behaviour, then scale it into real change.
Why it matters: A new user won't save $100/month right away but might save $2/week if rewarded immediately.
Tools:
Savings streak badges
Instant airtime bonuses for daily app logins
Recognition board for agent performance
Use Tools That Nudge, Not ForcePeople don’t need more information. They need systems that make the right thing easy. Pre-commit. Show progress. Make it visible. Change the environment.
Tools
Ulysses Contracts: Auto-scheduled float replenishment to reduce liquidity stress during market days
Rituals: Monday-morning motivational SMS from the field team, or monthly “agent-of-the-community” recognition.
Peer Visibility: Agent leaderboard shared weekly with airtime rewards
Pre-commitment Tools: Pre-booked digital coaching sessions or float caps based on behaviour
Environmental Cues: Agent shops with signage “Save Here Daily – Win Weekly” improve uptake
See you next week.
Hugo Pacheco