I think some of the so-called emerging markets are going to lead the way in some of the payments and technology advancements, because they’re going to skip the existing infrastructures that have been in place. They’re going to leapfrog them.[From Transcript: Captains of the Industry – Ken Chenault on What’s Next with American Express – pymnts.com]
Most people would agree, but I think that there is more going on here. It isn’t just a question of new technologies (mobile, biometrics, e-ink and so on) being used to leapfrog what we regards as “traditional” infrastructures. The impact of the potentially disruptive technologies coming from the developing markets will not be limited to those developing markets. This week’s New Scientist magazine has a double-page spread concerning M-PESA, the mobile payment system in Kenya. Consult Hyperion’s role as Vodafone’s consultants on the fantastically interesting project is well-known, and I won’t bore you all by repeating it. Oh, OK then.
For the last couple of years, Consult Hyperion has been working on a mobile payments and microfinance project for Vodafone. It’s called M-PESA, and it highlights the way in which digital money can really make a difference.[From Digital Money Forum: Mobile Payments and Microfinance]
The article is well worth reading. It notes that Kenya is approaching a significant point.
According to the Central Bank of Kenya, payments worth around 1 billion Kenyan shillings ($13 million) per day were transferred through Kenya’s mobile money systems in 2009, equalling the country’s credit card transactions. The bank expects mobile money transfers to overtake credit cards in 2010.[From Who needs banks if you have a mobile phone? – tech – 19 February 2010 – New Scientist]
So this year, more money will move through new payment schemes created specifically for the mobile channel than through the payment card networks. That’s an interesting cusp. Is this phenomenon only of interest to the developing world? Some people think not.
Mobile money could also have a future in richer nations, though it faces competition from the established network of ATMs, bank branches and internet banking. “I see mobile banking as a key way that people will bank in five years’ time,” says Christopher Brearley, who investigates innovative banking technologies at the UK-based bank HSBC. “There is the potential for small transactions and person-to-person payments to move through the kind of mobile banking systems we see in East Africa.”[From Who needs banks if you have a mobile phone? – tech – 19 February 2010 – New Scientist]
I think Christopher is right (which is why I think it puzzling and disappointing that mobile appears to have vanished from the Payments Council’s agenda). The markets in developing countries are obviously different from the markets in developed countries, but those of us working on strategies for organisations in developed countries might still find a lot to learn from the way in which new technology is being used to deliver payments.
I thought it might be interesting to explore this idea further, so I jumped at the chance to organise a special CSFI roundtable combining “my” Innovation in Payment Programme (which is kindly sponsored by Visa Europe) with the Development Programme. Therefore…
The ninth of the lunchtime round tables in the Innovation in Payment series will be a special joint roundtable shared with the Development series and will be held at Baker’s Hall, Harp Lane, London EC3R 6DP from 12.30pm-2.15pm on 4th March 2009. Rachel Bale from Visa Central Europe, Middle East and Africa, Prateek Shrivastava from Monitise and Paul Makin from Consult Hyperion will be on the panel and we will be discussing whether we can help the poor in developed countries by using the payment technologies being deployed in developing countries.[From Innovation in Payments: Lunchtime round table, 4th March 2010]
If you’re in London on Thursday and can spare some time between 12.30pm and 2.15pm and would like to join in this discussion, please do come along. Like all of the CSFI’s roundtables, the combination of genuinely expert speakers and an informed audience makes for a
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]