Depends what you mean by…

[Dave Birch] Over at the GSMA's Mobile Money Exchange they've created a wiki for mobile money in an attempt to facilitate communication by pulling together a common set of definitions for the space, which is a laudable goal. If you're interested in the topic, it's definitely worth popping in and adding to the sum total of human knowledge. I'm sure that won't mind a little vigorous debate either! If their efforts go any way to stopping people from talking about mobile banking when they mean mobile money transfer or mobile money transfer when they mean mobile payments, it will be a job well done.

These businesses are especially important in emerging markets, where mobile might provide an infrastructure for financial inclusion that banking cannot. I've just been looking at the BRIC markets in connection with a project we're working on at Consult Hyperion, and it's noticeable just how different the situation is — and therefore the mobile money, mobile payments and mobile banking mix is — in each of these markets.

70 per cent of the BRIC population don’t have bank accounts. But what many of them – and an estimated billion people in all emerging markets – do have are mobile phones. Now Arthur D Little is forecasting the market in mobile payments will be worth $60bn by 2015. It predicts that, within five years, the number of people using mobile banking will rise from 32m people today to 290m. That’s more than a million new users each week… Ambitious, yes, but the basic premise of mobile payments is solid.

[From Why mobile phones can transform banking | beyondbrics | FT.com]

Once again, having just interviewed Safaricom CEO Michael Joseph for our Tomorrow's Transactions podcast series, I can't resist turning to M-PESA to illustrate how mobile money is driving innovation and social change.

By the end of 2008, half of Kenya’s population had mobile phones. By the end of 2009, over one-fifth of the population had mobile phone e-money accounts (over 9 million from zero three years ago). Surprisingly, banks have responded competitively by increasing branch offices and becoming mobile phone payment agents.

As a result, the use of cash in Kenya has fallen rapidly. In less than three years, the share of the central bank’s monetary liabilities held as cash by the public fell sharply from 64 percent to 56 percent.

[From In Kenya, new banking technology is paying dividends | The Daily Caller – Breaking News, Opinion, Research, and Entertainment]

This is an important statistic. It shows that mobile money is displacing cash, and it shows how quickly it can happen with the right product in the right market and the right time. Meanwhile, M-PESA is causing ripples far beyond Kenya. As I mentioned before, one of the roundtables that I organised as part of the CSFI Fellowship in Payment Innovation was to investigate whether payment developments coming from emerging markets might find a home in the developed world to help the less well-off get access to financial services and thus reduce financial exclusion. It's not only us digital money fanboys who are starting to pay attention to the potential.

US Under Secretary of State for Public Diplomacy and Public Affairs Judith McHale said her country's economy could benefit by importing the revolutionary mobile money transfer system from Kenya. "We do not have such a system in America and we could import it to make it part of our national payment system," said Ms McHale.

[From allAfrica.com: Kenya: We Could Adopt Use of M-Pesa, Says U.S.]

Actually, as a correspondent pointed out, in the official transcript she didn't actually say this, but nevertheless I thought it was a good hook to start the discussion again: to what extent can systems developed for poor countries help the poor in rich countries? A crucial point that came out of the roundtable discussion was that once a mobile money infrastructure is in place, then financial services providers find it possible to provide financial services for the poor, not out of charity but because the reduced costs associated with the mobile infrastructure. Thus, they can provide bank accounts for the poor where they could not before, which I think proves that there is no need for banks to be the providers of payment services in order to make a living and that "narrow banking" need not include the utility payments infrastructure itself.

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