Monday, June 04, 2012

Drastic innovation is possble in a framework of digital payments

I have often said that mobile payments is probably not a good name for what is happening. One should rather think of it as digitising cash payments. As we know the majority of payments today in the world is carried out by the exchange of something physical: cash. The mobile payment revolution is about turning this into a digital exchange. This in itself can add significant value to the world of many.

However it is the fact that systems can now access the digital nature of payments that will really lead to drastic innovation. The fact that individuals can now be charged for something (immediately, directly and in small quantities) will trigger more and more innovation.

We are already seeing this in countries where mobile payments have taken root. Innovative solutions to distribute money, to pay for diverse things like solar power, to distribute grants and to collect small contributions are already being deployed by small companies with great plans and exciting visions. Some of these companies are tackling important issues like health and unemployment, while others are working on social media solutions. Much is happening, but this is just the beginning.

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