Out of Africa

[Dave Birch] The news that M-PESA in Kenya now has more than 2.7 million users — with 50,000 more joining every week — reminds me that sometimes new technology can not only make payment systems more efficient, more effective or more profitable, but also genuinely life-changing. But with ATMs getting more expensive, bank branches thinning out, petrol prices making it expensive to get to towns, Post Offices closing left and right… how long will it be before the successful non-bank mobile-based transaction-oriented pre-paid services being launched in developing countries find their way back to the U.K.? After all,

Any new rival to Visa and Mastercard should seriously consider ditching the card concept altogether and utilising customer’s mobile phones.

[From Rival to Visa and Mastercard without cards? – Mobilisation]

Now, it may seem far-fetched to imagine that G-Cash, M-PESA, Cellpay and others might have Europe in their sites, but it must be surely be a line of thinking that as SEPA has failed to deliver the (Commission’s) desired result — in that it has led to low-cost national debit schemes being abandoned and replaced by international schemes — perhaps another approach might be considered? What if the so-called “third scheme” were not some boring old-fashioned hello-1949 thing with accounts, cards, statements and the like but M-PESA? Any financial institution could provide the line of credit used to fund the pre-paid account at the heart of the scheme. Now, obviously I’m not the only person to be thinking this way…

A new dedicated mCommerce account may be the way to go. Remember that when credit cards (a new payment system) were launched in the 1970’s, it came with its own dedicated account management system. Why should that not be the case for mobile payments?

[From Mobile Banking: Where is the money?]

I wonder if we aren’t heading for more change than the Commission and the banking industry could possibly have imagined when setting off on the SEPA path. Anyway, let’s stop for a moment and celebrate M-PESA’s achievement: a win-win-win for consumers, Safaricom and microfinance. Payments really can change peoples’ lives.

This is the sort of thing that will be discussed at Mobile Banking & Financial Services Africa in Johannesburg on 14th-16th July 2008. I’m certainly looking forward to going: I’m going to be running a workshop on contactless/NFC payments and I’m really looking forward to learning from the African delegates as I think the opportunities there are fantastic. In an act of generosity guaranteed to shame less enlightened conference organisers, the wonderful people at IIR have given me a three-day delegate pass for this event — worth an astounding ONE THOUSAND FOUR HUNDRED AND NINETY FIVE ENGLISH POUNDS — to give away on this blog as a competition prize. So if you are going to be in Johannesburg on those dates and you’d like to come along to hear some of the leaders in the field discussing mobile banking and mobile financial services, then all you have to do is be the first person to respond to this post with the name of the chemical process, invented by three Scottish scientists in 1887, that improved the efficiency of gold extraction in South African mines many years ago and indirectly led to the end of U.S. debate on bimetallism…

In the traditional fashion, this competition is open to all except for employees of Consult Hyperion and members of my immediate family, is void where prohibited and is 100% fat-free. The prize must be claimed within one month. Oh, and no-one can win more than one of the Digital Money Blog prizes per calendar.

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