Mobile Money

Jan Chipchase has been investigating mobile mediums of exchange. I was introduced to him via his excellent TED talk, and he talks about using cell phones and money also on his blog.

Jan describes how people wire money to someone in a remote village. They call up the local (privately run) cell phone booth, recharge the operators card with minutes, and the operator converts those minutes into cash for the villager (with a surcharge). The cell phone booth operator gets their money back by renting out the minutes to local villagers.

Hmm, who said hot air was worthless? also reminds me of timebanks, where the unit of account can be measured in talk time. I digress.

Jan points out the economic actor's ID is the phone #. paypal started with email being the economic ID. They've recently added cell phone #s as the ID people can send money to.

anyhow, this illustration is being more fully explored in conferences such as
Mobile Financial Services. clearly, there's some momentum here with exploring this medium of exchange. clear enough to hear EF Hutton.

scanning the blogs on this subject, and digital money is a great one, they seem to be focused on self-regulation to heighten trust, and possibly to heighten the industries barrier's to entry. here's dave birch's economic take:

That's because while no regulation at all might minimise compliance costs for the provider, it does not minimise costs for society as a whole: consumers carry on using more inefficient forms of payment (cash, in the countries being discussed) because they have regulatory certainty.

with mobile money's nomenclature micro-payments, the concept hasnt taken off just yet. perhaps it's because people are aware that the real agenda isnt small-payments but more-payments? I suspect it's not worth the hassle to allow yourself to be nickeled and dimed with a medium that can burn a hole in your pocket. better to stick with nickels and dimes.

But the groundswell is there. as the more people associate their identity with their cell phone, and need this to jingle in their in their pocket, it's probably a matter of a generation or 2 where this will become the choice medium of exchange. I suspect when they stop footsieing around with this micro-payment framing and just make it better than other cash (rather than a way to milk people), it will take off like a rocket.