Banking By Mobile Phone Unleashes Third World Entrepreneurial Wave
photo credit: whiteafrican
The Power of Mobile Money at the Economist website discusses how banking via mobile phone is unleashing entrepreneurship in the Third World.
These phones compensate for inadequate infrastructure, such as bad roads and slow postal services, allowing information to move more freely, making markets more efficient and unleashing entrepreneurship…With such phones now so commonplace, a new opportunity beckons: mobile money, which allows cash to travel as quickly as a text message.
Now the very same corner vendors who sell produce, groceries, or clothing can act as the corner “Bank Branch” by allowing people to purchase mobile money credits. North American users will probably think about “PayPal” as soon as they hear how the service operates. Except unlike PayPal, which got it’s start via the Internet and Personal Computer, this system is built around the wireless cell phone network.
It provides liquidity in a society without credit cards and other infrastructure. It does so by providing the trust that cash is available along with third party verification and by making the speed of the transaction nearly instantaneous. It likewise reduces the dangers inherent in carrying large amounts of cash.
One such service, M-PESA. In Kenya with a population of 38 million, there are 7 million users after launching in 2007!
Here’s a video on this form of payment in emerging markets:
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