The future of money is mobile

Paul Raven @ 14-07-2011

Yet another post where I pretty much point you in the direction of a long-form piece elsewhere and say “go read”*; Wired UK is running an article on the imminent boom in mobile technologies in Africa.

Africa seems to be leapfrogging over the cable-infrastructure phase of internet adoption and going straight to the handset-centric model… and given the continent’s economy has continued to grow while the rest of the “developed” world has languished in recession, it’s not daft to imagine that the big developments in handset-as-platform will be happening there first. And given the causes of that afore-mentioned recession, peer-to-peer banking systems backed with a useable commodity (in this case airtime) are something we should surely be keeping a close eye on…

The devices have supplanted not just the country’s fixed-line telephony industry, but also the manner in which money is spent. Companies led by Vodafone’s mobile-payments giant M-PESA have filled the vacuum left by the moribund local banks in a country in which, according to the World Bank, around half the population live under the $1.25 (77p)-per-day poverty line. One such company is PesaPal, a web-and mobile-payment platform set up by Agosta Liko, 35, that integrates with Kenya’s main mobile-payment services.

M-PESA (M for mobile; “pesa” is Swahili for money) emerged from a joint project between the UK’s Department for International Development and local operator Safaricom. Its model was to use the existing network of mobile-credit sellers that had sprung up in petrol stations, general stores and bars across the country. People were already exchanging airtime as a way of transferring money. M-PESA formalised the value exchange, turning thousands of sales agents into micro bank branches and millions of mobile phones into wire-transfer services. Users can store up to 50,000 shillings (£350) in their account, with Safaricom taking a transaction fee of between 30 and 150 shillings whenever a user sends money. In 2010 there were 9.5 million M-PESA accounts, compared to 8 million traditional bank accounts in Kenya.

On a similar note, the Stateside version of Wired reports that PayPal are making their own move into the mobile payments sphere with an Android app that will let you transfer money by tapping two enabled phones together. Exactly what use that will be in countries where person to person transactions have become rare and inherently suspect, I have no idea – perhaps that situation will be reversed somewhat by these developments? – but it’s a sufficiently striking bit of symbolism that I want to buy something off some random phone-toting stranger right now, just so I can try it out.

[ * Oh, you want excuses? Well, I have a fuzzy head from what I suspect will be a festival-season plague caught from one or another of my friends who went to Sonisphere. And, um, I may be reading a lot of stuff about EVE, which is pretty fascinating down-the-rabbithole stuff. So, yeah. There you go. ]

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2 Responses to “The future of money is mobile”

  1. Khannea Suntzu says:

    These financial transactors are terrified of (anything such as) BitCoin. They move fast now they still can. I like to thing this outdated scum of the earth ‘financial institutions’ are behind the curve but I am undecided. I’d love to see value management in the hands of the people. Maybe not even money –

    a system that attributes value separate from money, attributed by normal people. Democratic money, that by virtue of its nature cannot be controlled by governments or financial institutions or inflatory scams. Or leave large masses out in the cold.

  2. gmoke says:

    Jan Chipchase on mobile money in Afghanistan
    http://janchipchase.com/2011/02/mobile-money-afghanistan-2/