[Dave Birch] The microfinance story continues with the new that eBay has launched MicroPlace, a website that enables US customers to invest in microfinance projects. The site acts as a broker, allowing customers to buy microfinance investments for a minimum of $100 from microfinance security issuers. How fun. Investors can choose the country and microfinance institution that their money goes to. At launch the site will allow people to direct investments to Africa, Eurasia, Latin America and Southeast Asia. As soon as the scheme is extended to the U.K., we will make a Digital Money blog investment in Africa on behalf of all of our readers. I know just how worthwhile microfinance is because of Consult Hyperion’s work for Vodafone in Kenya. Kenya continues to provide a fascinating case study on the evolving competition and cooperation between banks and mobile operators in the world of payments. Safaricom’s m-payment scheme M-PESA has been signing up 2,500 customers per day. Just to put this in context, Barclaycard in Kenya issued 7,000 cards last year. Kenya has about 70,000 credit card users, up from 10,000 in the eighties, and nine million mobile phone subscribers. As an aside, there is an obvious corollary to this kind of development: whereas phishers in the U.K. target banks, in Africa they have started targeting mobile. Bad guys have conducted fraudulent transactions on ABSA accounts by swapping the customers’ SIM cards. It was actually quite a complicated fraud, defeating a security measure implemented by ABSA where a one-time password is sent to a customer’s mobile phone. By swapping SIM cards (an accomplice inside the phone company moves the mobile number to the new SIM), the fraudsters could intercept that password and move money. Repeat after me: one factor bad, two factor better…

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The volume of mobile payments in the developing world is steadily increasing. Take a look at G-Cash as an example: more than a million customers and more than $100 million per day in payments. Now Western Union and the GSMA are going to develop a commercial and technical framework that mobile operators can use to deploy services that enable consumers to send and receive low-denomination, high-frequency money transfers using their mobile phones. The first commercial services that make use of the framework are anticipated to be rolled out beginning in the second quarter of 2008. The idea, essentially, is to allow mobile operators to connect to the Western Union network (which handled 17 percent of the global remittance market last year) so that the operators can offer mobile-to-cash and cash-to-mobile services. It’s undoubtedly worth a look from their point of view: according to ABI Research, the mobile fund transfer market will see a near $8 billion revenue opportunity for mobile operators by 2012 (up from just over $10 million in 2006).

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

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