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In the US, refugees find phones a basic necessity

For the 85,000 refugees who will resettle in the US this year, mobile phones have become as essential to their daily lives as a safe, clean place to live and a steady job.


This story is part of our Road Trip 2016 summer series "Life, Disrupted," about how technology is helping with the global refugee crisis -- if at all.

Omar Mohamed has helped dozens of African refugees resettle in the US. Among the first items he sets up for them: a mobile phone.

On a hot June day, the 28-year-old case manager at Church World Service in Lancaster, Pennsylvania, met with two Somali brothers to give them each a basic feature phone. The pair, 30-year-old Siyat and 41-year-old Adan Hassan, had arrived three days earlier, still in the dusty sandals they'd worn at the Kenyan refugee camp where they spent the last quarter of a century.

Part of Mohamed's role as a case manager with Church World Service, one of the groups working with the US State Department to resettle refugees, is helping new arrivals find a safe, affordable place to live and a job. He also makes sure utilities -- electricity, water and gas -- are turned on. Mobile and internet services are now on the list of necessities. They not only keep new immigrants in touch with their families back home, but they also provide an important gateway for managing finances and sending cash home to relatives.

Omar Mohamed (right), a case manager with Church World Service in Lancaster, Pennsylvania, shows newly arrived Somali refugees, Adan Hassan (left) and Siyat Hassan, how to operate the basic cell phones his group gave the brothers as part of its efforts to resettle them in the US.

CNET/Marguerite Reardon

On the way out of war-torn countries, smartphones and apps help refugees identify closed border crossings, locate smugglers and fight the inevitable boredom that comes with sitting in hot tents with nothing to do. Once relocated, these handheld computers and messaging apps like WhatsApp and Viber are a connection to family and friends. Even the most basic flip phone can tap into the internet and run social media services like Facebook and Twitter.

Now those phones and apps are taking on another role for refugees: anchoring their financial lives. Basic banking apps, like those offered by Bank of America and Wells Fargo, can be used to pay bills and check account balances. Mohamed, who came to the US as a refugee in 2009, uses an app called SendWave to transfer money to his homeland.

"You can send money from anywhere," Mohamed tells me, demonstrating how to use SendWave. "I can send it from my office, home, wherever."

Using these financial apps can be a huge challenge for those with little experience with formal banking. The Hassan brothers earned money in the refugee camp by delivering firewood by donkey. They never had bank accounts, let alone experience managing them through mobile apps.

But basic cell phones are now used in developing nations to help people like the Hassans store and send money. Vodafone's M-PESA service, which launched in Kenya in 2007, lets anyone with a mobile phone transfer funds via text messaging. When coupled with international money-transfer apps such as SendWave, PayPal's Xoom and Western Union, these programs help immigrants send money across borders.

How big a deal are these money transfer apps? In a June report, Juniper Research estimates international remittances via mobile phones will top $25 billion by 2018. That's up 67 percent from an estimated $15 billion in 2015.

Of course, immigrants also need internet access for daily life, for everything from locating public transportation to accessing government services. And those with school age children are increasingly being asked to use the internet to submit homework and communicate with teachers.

"Even making an appointment to get a drivers license in some states requires internet access," said Jill Bronfman, director of the Privacy and Technology Project at the University of California Hastings College of Law in San Francisco. "People without such access are considered to be on the fringes of society."

Royce Hutson, who teaches social work at Boise State University, said the benefits of tech aren't lost on refugees as they reestablish themselves in the US.

Nearly half of the 169 refugee families who resettled in the Boise, Idaho, area owned a computer within their first year of arriving in the US, according to data that Hutson collected in 2013. By the third year, nearly 93 percent did. Almost all had internet access. Many of the families earned less than $20,000 a year, he added.

The Obama administration expects 85,000 refugees will have entered the country by September 30, the end of the US 2016 fiscal year. Late last month, the administration said it had reached its goal of admitting 10,000 Syrian refugees. On Tuesday, President Barack Obama hosted a Leaders' Summit on the Global Refugee Crisis at the UN where he announced the US will accept 110,000 refugees in the next fiscal year.

The UN estimates that conflicts and persecution have "forcibly displaced" 65.3 million people worldwide, the biggest forced displacement since World War II. The UN considers 21.3 million of them to be refugees, defined as someone forced to flee a country because of persecution, war or violence. More than half are younger than 18 years old.

Many of the refugees reaching the US will get help with internet access through a three-decade-old telephone subsidy program known as Lifeline. Earlier this year, the Federal Communications Commission expanded the program to cover wireless and broadband services.

"Universal service has historically been about making sure people have basic access for survival -- connecting to friends and family, access to 911 emergency services," Bronfman said. "With the rise of high-speed internet, we see that idea being extended to broadband."

Tech on a budget

Buying computers and smartphones, which can cost anywhere between $200 and $800, may be a hardship for many immigrants.

That's why Alex Benenson, a retired Intel executive living in Salem, Oregon, organizes phone and computer donations for arriving refugees in his community.

Benenson got involved after learning that the state's Catholic Charities chapter this year would welcome at least a dozen refugees in Salem, a city of 160,000 people. Catholic Charities, one of the largest organizations the US government contracts to relocate refugees, asked the community to donate household items for arriving families. But Benenson wondered if they could also use tech gadgets.

For the past few months, he has worked with the charity to buy inexpensive Android phones and Google Chromebooks. His first purchases were devices he could get on clearance at retailers including Best Buy, where he snagged Motorola Moto E series smartphones. He also struck a group discount with the local T-Mobile store to give arriving refugees lower-priced wireless service for a few months.

It is a long and involved process for refugees to make their way to the United States. The White House has put together this infographic to show the many steps involved.

The White House

Benenson is starting to gather information on existing programs from companies like Comcast and CenturyLink, which offer broadband in the Salem region. These companies already offer subsidized broadband service for low-income families and individuals. He is also looking into the FCC's Lifeline program to help offset the cost of internet service.

Eventually, he'd like to help Catholic Charities develop a training program for immigrants to make sure they're getting the most out of their tech.

"Some arrive with their own cell phones, or they had one in their former country," Benenson said. "But others, like some refugees arriving from Africa, have never even used a computer."

Heli DelMoral, a spokesman for Catholic Charities in Oregon, said the organization would like to start a training program. But for now, it's relying on informal techniques to get newcomers connected.

"Some of the families who have come before may help the newer families with tips, or one of our volunteers may be able to show them how to use a device," DelMoral said. "Often the kids pick up on the technology very quickly and can help their parents."

Julianne Tzul, executive director at the International Rescue Committee (IRC) office in Boise agrees that access to devices and services may be a barrier for refugees. That's why Tzul wants more companies and people to contribute to their efforts. The US gives each refugee a one-time stipend of about $925, but that doesn't go very far. So the IRC, Church World Service and Catholic Charities supplement the figure with donations, including phones and laptops.

"Any time we can get something donated, it's one less expense our families need to dig into their pockets for," Tzul said. "It means they can start saving the little bit of money they have to pay for something else, like a car, which is often seen as a gateway toward stable employment."

It's also money they can send back home, where family members and friends are often struggling in war-torn countries.

Automated transfer

That's where SendWave and other apps come in. Like economic immigrants who come looking for a better life, refugees and asylum seekers lucky enough to make it to the US are expected to help pay for daily life -- food, housing and health care -- for those they left behind.

The World Bank estimates immigrants will send more than $601 billion home in 2016, with developing countries receiving more than $440 billion of that. That's nearly three times the amount of foreign aid delivered to developing countries.

Most of these payments are made via wire transfers, which often require a transaction fee between 5 percent and 10 percent. Increasingly apps, which cut out the middlemen at local transfer offices, are being used. These apps have significantly lower fees -- sometimes less than 1 percent-- and they're catching on.

Juniper found in its study that the use of smaller "pure-play" digital providers, like SendWave, Xoom and WorldRemit, will grow in the next two years as immigrants get more comfortable using these services.

WorldRemit, for instance, was created specifically with immigrants in mind. Company founder Ismail Ahmed first saw the opportunity to improve money transfers while studying at a university in London. Every time he sent money home to Africa, he had to travel across the city to an agent who charged a small fortune in fees. Through WorldRemit's app and website, people can make transfers online for a fraction of the price of traditional wire services.

"Previously dominated by Western Union and MoneyGram, the international mobile money transfer is becoming increasingly competitive with these new mobile remittance providers offering markedly lower prices than the established players," said Nitin Bhas, author of Juniper's report.

SendWave, the app used by Church World Service's Mohamed, was developed for Kenya and other East African countries. Unlike other money transfer services, it doesn't charge transfer fees, just exchange rate fees, because its process is automated.

The company, which didn't respond to requests for comment, says on its website it can save customers as much as $9 for every $100 sent.

Without SendWave, many would send money through a hawala system, a network of money transfer agents commonly used in East Africa and the Middle East. A hawala agent is paid a small amount -- transactions cost less than 5 percent and are often as low as 1 percent -- to transfer money to another person. The agent, in turn, contracts with another agent to deliver the funds.

The problem for refugees in Lancaster, Pennsylvania: The nearest hawaladar, or hawala agent, is in Virginia.

Mohamed said it's too early for Siyat and Adan Hassan to use SendWave. The brothers have yet to find jobs, and the flip phones his organization gave them don't support the app. But it won't be long before they upgrade to a smartphone.

"The minute they get a job, they buy a smartphone," Mohamed said. "It's a priority for them."

First published September 1 at 5:00 a.m. PT.
Updated September 19 at 5:00 a.m. PT: Added the US administration's goal of accepting 110,000 refugees in 2017, along with UN figures on the number of people worldwide forcibly displaced by "conflict and persecution."
Updated September 20, at 2:10 p.m. PT: Added President Obama's announcement.