PoPI: A benefit to the rich, a blight for the poor

06 Feb PoPI: A benefit to the rich, a blight for the poor

by Gareth Mountain

Those following the implementation of the Protection of Personal Information (PoPI) Act, know that a number of key benefits are being touted.

One of these is the fact that cellphone users will receive far fewer spam SMS messages. However, what seems to have been forgotten is that, when it comes to the legitimate marketing of services through SMS, those who often receive the most benefits hail from poor rural areas.

Engagement the highest in rural areas

By tracking Olico’s response data from personal loan marketing messages we’ve sent out over the past 12 months, a clear pattern has emerged: The likelihood of a response on a loan offer increases the further away the responded is to a major metro. The rate starts increasing around 15km to 20km from large metros, with those 100km to 200km away having the strongest response rate. One does not have to think long why this is the case.

People living in urban areas have so much more choice, and far easier access, to loan options. For those in poor rural areas, the options are often minimal. Loans offered via legitimate SMS campaigns, as presented by marketing platforms such as Leadify, are provided by banks and approved by the strict regulations of the National Credit Regulator (NCR).

The financing alternative for the rural poor? Loan sharks, who operate outside the NCR and are as unscrupulous as they are unethical.

What’s the financial alternative for the rural poor?

This is exactly the type of unforeseen consequence that PoPI has, leaving rural dwellers – the poorest of the poor – at a clear disadvantage when the act is fully implemented.

For them, their phone is their contact to the outside world. Imagine living an hour’s drive away from the nearest town, with only basic electricity. How do you even start to look for financial products that can help you through the year?

Marketing messages expose them to the outside world, and by taking away their ability to receive marketing on their phone, one really is taking away their choice.

PoPI is a law that will be good for the rich, and to me, it’s a first-world solution for a first-world problem. Based on similar acts from the EU, UK and Canada, PoPI is problematic in South Africa, since none of these regions have the diversity of population, and income inequality that South Africa has.

It can also be argued that all the proponents of the PoPI act are wealthy urban dwellers, who don’t have to deal with the same problems as those in rural areas.

Take for example the much-disputed Form 4 of the Act that deals with opting into marketing messages. The current standard to opt into a message, is to reply to an SMS with the word “yes”. Typically, the replies are free, and it’s easy to agree that this is something anyone with a cellphone and reception can do.

Form 4, however, requires one to print a lengthy document, complete the details with a pen, then scan and return the document via email. Many in urban areas might have the tools at hand to do this, albeit with a lot of effort. For those in rural areas, the process will be close to impossible, meaning they simply cannot consent to receiving marketing messages.

There must be a better way

For now, my hope is that those working on the PoPI legislation will also think about poorer South Africans (which are the vast majority), instead of just bowing to pressure from those in places of comfort. This, alongside the potential job losses faced by call centres across South Africa, makes me believe that parts of the PoPI act need serious reconsideration.

I hope that sanity prevails and that PoPI doesn’t turn out to be another example of legislation pushed through that ends up as a blight for the poor.

Original article posted on 10 August 2018, on City Press, News24