“While producing information costs money, information as such doesn’t necessarily carry monetary value; it mostly carries intellectual, social, artistic, practical value. And that’s why, historically, news has been commercially, publicly, politically and privately subsidized.
That information is not necessarily connected to a physical good (paper) or a concrete service (the delivery), or a limited quantity anymore, making it difficult to measure its price. We have difficulties spending money for digital information because at the end of the transaction we neither save time nor do we hold anything concrete or limited in our hands.”
Posts in category 'Financial'
From the Nokia press release:
“Nokia Money has been designed to be as simple and convenient as making a voice call or sending an SMS. It will enable consumers to send money to another person just by using the person’s mobile phone number, as well as to pay merchants for goods and services, pay their utility bills, or recharge their prepaid SIM cards (SIM top-up). The services can be accessed 24 hours a day from anywhere, meaning savings in travel costs and time. Nokia is building a wide network of Nokia Money agents, where consumers can deposit money in or withdraw cash from their accounts.” [...]
“Mobile payments will be the next step for delivering financial services to hundreds of millions of people, both urban and rural, who are underserved by existing payment means, especially in emerging economies.” [...]
“The Nokia Money service will be operated in cooperation with Obopay, a leader in developing global mobile payment solutions, which Nokia invested in earlier this year. The service is based on Obopay’s mobile payment platform, with unique and newly developed mobile elements. Nokia intends the service to be open and interoperable with other payment services as well.”
The announcement received a huge amount of press and blog play – a round up:
CGAP: “This alone isn’t enough to crack open internet banking for the poor: PayPal may claim to be in 190 markets, but its not terribly easy to access the service in all of those places.”
CNET News: “The new service may find a special niche in the U.S., which has lagged behind countries such as Japan in the ability to pay for items on the fly through a cell phone. “Rural consumers will particularly benefit from money transfers and, for urban consumers used to online services, we are enabling services such as payment of utility bills, purchase of train and movie tickets, top-ups, all through their mobile phones,” said Teppo Paavola, Nokia VP and head of corporate business development.”
Deals & More: “It sounds like it won’t just be for the owners of Nokia phones, though, since the company says it will work on ‘virtually any mobile phone.’”
Fast Company: “Nokia has already said it plans to become the world’s largest entertainment network through its vast share of the mobile handset market. Now it looks like the Finnish mobile device maker aims to become the world’s largest mobile bank as well.”
Financial Times: “The developing world will likely be Nokia’s first target as it seeks to roll the programme out. [...] Nokia sees a market opportunity here, and said there are 4bn mobile phone users today, compared with 1.6bn bank accounts.”
Kiwanja/Ken Banks: “Details remain a little sketchy, but Nokia Money appears to be operator-independent, meaning mobile owners on any network can send or receive payments to anyone else on any other network. This would be a direct challenge to many existing models which require users to switch networks, or to be on the same network as the mobile service they’re looking to use. In addition, it looks like Nokia Money users can sign-up without needing to swap out their SIM cards, making up-take of the service considerably more efficient logistically. If this thing were to grow, it could grow fast.”
Register Hardware: “Unimaginatively called Nokia Money, the service will enable you to send money to someone else using their mobile number.”
Reuters: “Mobile money is one of the hottest topics in the wireless world, but so far take-up of services has been limited mostly to a few emerging markets, as in developed countries, the popularity of online banking has been a brake on mobile money.”
Techcrunch: “Nokia will hardly be the only player in these emerging markets — other competitors include mChek and Paymate.”
The Register: “Nokia isn’t the first company to look at payments via SMS – your correspondent managed to pay for a meal by text back in 2002, just – but with Nokia’s brand behind it, and a focus on economies where traditional banks are hard to come by, it could be the one that makes it.”
Wall Street Journal: “‘This is absolutely what Nokia should do,’ as there will be big demand for mobile financial services and because the company has so far struggled to offer attractive, easy-to-use applications that rival those provided by the iPhone’s App Store, said Evli Bank analyst Michael Andersson, who has has an accumulate rating on the share.”
“Hyper-localized currencies have been popping ever since the economy went sour–not surprising, since local currencies also gained popularity during the Great Depression. Five local Massachusetts banks have developed Berkshares–there are 185,000 paper notes are already in circulation–each of which is designed by a local artist. California’s Humboldt County has distributed $130,000 in currency since 2005, and Canada’s Toronto Dollar moved $90,000 worth of currency in the past year.”
But there is work to be done: according to technology research company Gartner, only 3 percent of people in North America are expected to conduct mobile payments in 2012.
“Despite growing agreement on the potential of technology to expand access to finance, or branchless banking, there is surprisingly little data publicly available about low-income users. This Brief draws on some of the first ethnographic research on M-PESA, one of the earliest success stories in mobile phone-based delivery of financial services. The research offers insights into how poor people use M-PESA, its impact on their lives, and some unexpected consequences.
This Brief presents 10 observations on how poor people use M-PESA and how it has impacted their lives.”
(See also this news story on The Guardian)
“However, the mobile phone revolution continues to leave large parts of the continent behind.
While countries like Kenya, South Africa and much of North Africa are approaching 100% mobile penetration, in Burundi, the Central African Republic, Eritrea, and Rwanda it is less than 30%.
Low incomes, illiteracy and large signal black spots are all obstacles to the sale and use of mobile phones. Taxes, which can be as high as 30% in countries like Tanzania and Uganda, are also a disincentive.
Telecoms experts say that many African markets remain too risky for mobile phone companies, which have targeted more stable and wealthy countries first. “
In which contexts do alternative uses, e.g. savings, become popular and why?
The final report will be presented during autumn 2009 and made available at the project blog. Meanwhile, they sent a dispatch to the CGAP blog:
“While M-PESA in Tanzania has had a hard time competing with its sibling in Kenya in user uptake, there is one way of sending money via the mobile phone that is very popular in the country. That is by using airtime top-up vouchers. The most common way to do this is to buy an airtime voucher, scratch it in order to get the code and then text the code in an SMS to the person you want to send money to. It is then up to the recipient to go out and sell the code to people who want to buy airtime, or resellers and shops that in turn will sell it to people wanting airtime.”
He asserts that “user-centric identity, “the ability of individuals to carry their information from one site to another in a “cloud” of their own making, will become increasingly important.
Article on Future Banking in which John Clippinger describes some of the ways in which traditional information asymmetries between enterprises and their customers are being redressed to allow individuals more control over their personal information.
“There was also a smaller player that had a vitally important role in the conceptualization and development of the application. That is, Sagentia, a technology consultancy firm based out of Cambridge. The firm not only wrote the software for M-PESA, they also designed the business processes, and provided operational and technical support during the pilot and after launch.” [...]
“They assured me that M-PESA was just the beginning. Using the mobile as a platform, they plan to create developmental services that penetrate other spheres —m-health, agribusiness. They further predicted that the mobile will soon begin to revolutionize these other spaces as well.”
See also these earlier CGAP posts about her work (oldest posts listed first):
- Why has M-PESA become so popular in Kenya?
- The diary of an M-PESA user: the case of the shoemaker in Kibera
- Findings from the field: An observation on M-PESA usage during the post-election violence
- Findings from the field: An observation on M-PESA impact
Morawczynski is the author of a forthcoming CGAP brief on M-PESA and recently co-authored Designing Mobile Money Services: Lessons from M-PESA with Ignacio Mas.
A selection of articles relevant to the topics of this blog:
Vikram Akula: mobile banking could be the future of microfinance
In an interview with India Knowledge@Wharton, Vikram Akula, founder and CEO of SKS Microfinance, spoke about emerging trends in microfinance.
India’s rural poor: why housing isn’t enough to create sustainable communities
The real story of rural India must be told with more than five hundred million characters who live on less than a dollar a day, most of them in terrible living conditions.
The poor deserve world-class products and services
C.K. Prahalad has long championed the notion that business — rather than government handouts — represents the most effective solution to poverty.
Rural India Snaps Up Mobile Phones
India’s cellphone industry continues its steady growth, led by demand from rural consumers, and is showing no signs of slowing down.
Doing well by doing good?
The mobile phone is now one of the hottest development tools world-wide, with corporations eyeing untapped rural markets in the hope that new mobile-phone services can boost rural incomes and corporate revenue at the same time.
The series is sponsored in part by Neo.org, a non-profit he is working with. Because of Neo’s efforts toward defining and implementing a new digital currency, Boyd hopes that a series on the future of money might line up well, and draw some attention to Neo’s efforts.
Each interview comes with a video and a bulleted set of highlights.
Christian Nold and The Bijlmer Euro
In this interview Christian Nold, an artist, designer and educator working to develop new participatory models for communal representation, discusses his project in the Bijlmer area in South East Amsterdam, where he aimed to develop a prototype system for an alternative local currency that could support local development and work in conjunction with the Euro.
“When you are interested in magic, you might want to talk to a witch doctor, so when I started to think about the future of money, I thought I should talk to a science fiction author. Who better? As it so happens, I know one,” writes Boyd.
Bruce was kind enough to mention me [i.e. Mark Vanderbeeken], our company and the recent KashKlash project we did with Heather Moore and the Vodafone UE Group.
Alternative currencies: Is small the new big?
This third piece reflects on the value of alternative currencies, starting with the following two questions:
1. Does an alternative currency have to be in large scale use? Is it possible for it to be a ‘success’ at small scale?
2. Do alternative currencies have to stand for something? Do they have to represent a strong position on some issue or social cause?
Intangible Money + Cell Network Banks = Secure Money
Olga Morawczynski is a doctoral candidate at the University of Edinburgh, posting some of her work on mobile banking in Africa at the CGAP (Consultive Group to Assist the Poor) website. She noted that the normal flow of fund transfers in Kenya — from the cities to rural relatives — reversed during recent violence there.
Richard Smith and the Dollar ReDe$ign Project
Richard’s deep motivation was to help restart the economy, and the means? Redesigning our money, and rebranding it, to shift our thinking and to help the little bits of paper in our pockets act as a sort of social catalyst for change. He set up the project in the form of a contest, and received dozens of truly wonderful designs.
And there is more to come still…
Here are the feature articles (of which the last one, which is excellently written and directly dealing with the current state of user experience, is my top recommendation):
Education: Business is increasingly plugging the skills gaps of the world’s workforce
by Sarah Richardson and Paul Tyrrell
With skills shortages affecting both developed and developing countries, business is increasingly stepping in to help educate the workers of tomorrow – feature includes examples from the Fashion Retail Academy (UK), BP Angola, Intel Corporation. and more.
Small sums, big benefits: microfinance brings banking to untapped markets
by Sarah Murray
Across Africa, Barclays is giving fledgling entrepreneurs access to modern financial services for the first time.
Simplicity: new designs focus on making complex products easy to use
by Rob Tannen
Leading companies are realising that they need to refocus on what consumers actually want and need, rather than stuffing more into products and services than their rivals.
“A conversation turns to currency when people discover something meaningful in a “conversational” experience, they are prepared to spread the conversation as if it were their own. [...] Conversational currency is created by the propagation of a conversation by others that incorporate your conversation into their own narratives. The more valuable your conversation is the more likely they are to be propagated by others.”
Exploding Media: Exploding Story
This is the story of the extraordinary transformation of Media from all the creative and technological aspects… From traditional storytelling to the impact of gaming on education; from city interaction and augmented reality to the Metaverse, this narrative will feature all the latest innovations that the media industry is going through. We will also introduce creative geniuses pushing the envelope on these new developments, and their impact on personal creativity, brand marketing, learning and entertainment.
The Next Economy: Social, Sustainable, Creative
The attention economy, the experience economy, the sharing economy, the local economy… The economy is currently top of mind in every discussion. What emerging business models can we explore? Can print media be saved? How can communities create local currencies or micro-economies to create sustainable abundance? What is the future of money?
Life in Motion: Finding the Magic in Mobile
Mobile phones are the most personal devices in our lives. In certain parts of the world, mobile is the only media and mobile internet is the only internet. PICNIC ’09 will give mobile the attention it deserves. We will explore mobile lifestyles around the world, look at how creative brand managers are using mobile to establish brand loyalty and showcase the most innovative mobile applications.
“One of the issues that keeps cropping up when discussing mBanking (and branchless banking) is the challenge of agent reliability and customer service. How does one ensure the trustworthiness of a growing network of agents and simultaneously handle customer complaints?
A number of speakers at Fletcher’s recent conference highlighted these challenges and warned they would become more pressing with time. So this got me thinking about an Ushahidi-for-mBanking platform.
Since mBanking customers by definition own a mobile phone, a service like M-Pesa or Zap could provide customers with a dedicated short code which they could use to text in concerns or report complaints along with location information. These messages could then be mapped in quasi real-time on an Ushahidi platform. This would provide companies like Safaricom and Zain with a crowdsourced approach to monitoring their growing agent network.”
(See also this Reuters story)
The impact is to be felt most in developing world where access to banking is limited.
“Mobile payments, when used in developed countries such as the U.S., are usually an extension of an existing payment infrastructure, but in developing countries, users can combine mobile payments with mobile banking to pay bills more conveniently and to gain access to loans and other financial services that might not have been possible before, said Sandy Shen, a Gartner analyst. “It can greatly improve standards of living,” she said.”
For example, mobile phones help rural farmers gather information about crop prices, and bargain shoppers download coupons on the fly.
For this NPR Talk of the World program, guests and listeners from around the world discuss innovative ways they use their cellular phone.
- Natasha Elkington, journalist for Reuters. She uses her mobile phone to pay her farm manager in Kenya.
- Amy Webb, principal for Webbmedia Group
- Alieu Conteh, founder of Vodacom, a cell phone company in Congo
- Hiram Enriquez, independent consultant focusing on mobile technologies and digital media strategy
The process is based on one driving question: How can government and private sector most affect the uptake and usage of branchless banking among the unserved majority by 2020?
Jonathan Donner is a researcher in the Technology for Emerging Markets Group at Microsoft Research India. Previously, Jonathan was a Post-Doctoral Research Fellow at the Earth Institute at Columbia University, and worked for the consultancies Monitor Company and The OTF Group. He holds a Ph.D. from Stanford University in Communication Theory and Research.
Speaking on the side of a workshop that was held in Cape Town last month, Jonathan shared his views on how cash and electronic money aren’t so different when it comes to a question of trust, and how branchless banking is helping poor people spend less time and money to do simple financial transactions.
Listen to interview (mp3)
“Nobody stands to benefit quite like Africa’s increasingly powerful telecom companies, the conglomerates who built this continent’s cellular towers and enable its calls.
“These guys are going to be more powerful than Google, more powerful than Microsoft, within the locality in which they operate,” Amankwah said. “Already, telecoms move more money than the banks. And they have control over the channels — it’s their sim card. You’re using their network.”