All of us are well aware of the mobile revolution. During the past eighteen months, Mobile Network Operators have added another half a billion subscribers, with projections expecting that the planet will have three and a half billion connected cellphones by 2012. That is a lot of mobile phones.By far the majority of these new connections are happening in developing economies: India, China, Indonesia and large parts of South America and Africa. This is great, because more and more people will get connected and will have all the benefits associated with the free market and being able to participate in economic transactions. This is the vision that every-one gets excited about and a lot of effort is being invested to make this a reality.
The irony for me is that most of the solutions that is being presented is based on the assumption that transactions will flow from the cellphone holders credit card. And if this person do not have a credit card, then maybe their debit card (if we can figure out how to accept a PIN on the phone securely). This is where I loose the argument...
Where will we get all the credit cards from (three and a half billion to be precise)?
It is obvious that one should be looking for another solution that is much easier to execute on, is legal and conform to banking rules and regulations, yet can be executed with much less effort and overhead. In order to provide these masses with a transacting account, one will have to think different and develop new solutions that will enable transacting capabilities to grow at the same rate as mobile phones do.
My take on this is that we will see the development of a new kind of mobile wallet associated with a mobile phone (preferably identified by the mobile number), but low cost to open and to operate. This wallet will have to be able to initiate and terminate payment transactions in a secure, easy way, that is both intuitive and rigorous. Payment transactions should be possible across networks and must also cater for multi-currency transactions (like making local and international calls). Furthermore, the only way that this will be possible, would be if Mobile Operators and Banks start to collaborate (rather than fighting each other).
If this starts happening, we will truely make this world a better place.
1 comment:
Hey Hannes
I've learnt that the mechanisms for commerce (an account and the ability to make transactions) are necessary requirements to allow the poor to overcome their poverty, and as you say, there is no requirement for that ability to be tied to the credit card. In fact the credit card is a much less suitable instrument of change than, say, Vodafone's M-Pesa system in Kenya (I'm totally independent of Vodafone) which uses mobile phones.
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