Mobile Money: Will A Cell Phone "Bump" Replace Cash?
http://thekojonnamdishow.org/shows/2012-03-20/mobile-money-will-cell-phone-bump-replace-cash
Handing cash to your babysitter or swiping a credit card at the store may soon be obsolete, as QR codes and digital readers make it possible for individuals to transfer money to each other by "bumping" cell phones. The potential for this new payment system is huge and the race is on to define the technology and dominate the market. Tech Tuesday examines the players and the dueling devices in the emerging realm of mobile payments.
Guests
Joseph Bailey
Research Associate Professor, Decision, Operations and Information Technologies at the Robert Smith School of Business, University of Maryland
Andy Schmidt
Research Director, CEB TowerGroup
Frank Gruber
CEO and Executive Editor, Tech Cocktail
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Comments
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Dear Kojo,
I'm delighted you're addressing this topic. It would be great if your guests could also talk about the potential of mobile money for making financial services more accessible to the poor. More than 2.7 billion people (mostly in the developing world) do not have bank accounts and existing mobile financial services aren't designed to meet their specific needs. While there are a few services (e.g. M-Pesa in Kenya) more needs to be done. Grameen Foundation is joining with CGAP and MTN Uganda to help spur greater innovation in that space through its new AppLab Money initiative.
Liselle Yorke
Grameen Foundation
I use square that attaches to my android phone. Works great!
About a year back I heard a lot about Square which is a cool concept where you can swipe your credit card on your android or iphone/ipad device. I bought one of those and thought it would have great use in fundraising or just casual business such as lawn mowing for neighbors or selling girls scout cookies outside the metro station. However, I am yet to find anyone even using this technology. It would be great if your guests can comment on the established system and if people would be willing to switch to these new concepts. I sense a great deal of sketicism citing security concerns. Also please comment on iCache's Geode technology, I personally think this might have an answer to everyone citing security issues. Thanks!
Eastern Market, many vendor use it to process their sales.
I have been in the credit card processing business for almost 25 years. I've done a lot of research re: SQUARE and it scares me to death. Personally, I would NEVER let someone use the square with my own credit card because of the skimming issue. I also work with artists and craftspeople all over the country. I have advised them NOT to use SQUARE.
Re: who makes the money that merchants pay to process credit cards - banks that issue the cardholder their cards are making the bulk of those costs.
Hello Mr. Nnamdi,
I appreciate this wonderful conversation about the up and coming cell phone technologies. On a recent trip to the developing world I was astonished that people even in the countryside that do not have cars or many of contemporary modern conveniences of today were equipped with a cell phone! Everyone from the banker to the farmer had a mobile unit.
Do your panelists believe that these applications will have any application to these communities in advancing their development?
Can you give more information about the credit union in Iowa that was mentioned? It sounded like the name was "Dualla" or something similar, but I have tried Googling it with no luck. I would like to get more information on that, please. Thanks -
botch
They were referring to a service called: Dwolla
They're doing some pretty interesting things in the mobile payment arena. Check it out: https://www.dwolla.com/
Much of the innovation being talked about here takes the old credit card model and just extends it to a new format.
A better solution will use the technology available today to disrupt the status quo, change the cost basis for transactions, and deliver a much better value to merchants and individuals. Solutions like this will also deliver the changes Liselle Yorke is talking about above and bring relevant financial services to a global mass market. OpenRevolution, is building a payment network to meet these needs. The first deployment is in the country of Georgia where it works through any handset, doesn't require any expensive infrastructure like NFC, delivers secure processing, has more merchant locations than credit cards, and is working with the microfinance company FINCA.
If you are interested, read more here: openrev.com mobipay.ge
http://www.finca.org/site/apps/nlnet/content2.aspx?c=6fIGIXMFJnJ0H&b=608...
Increasingly, mobile wallets are becoming unbanked-friendly, allowing users to enroll prepaid cards in their mobile wallets, as well as fund their wallets with cash deposited with local agents. The move towards enabling the unbanked to make digital payments isn’t limited to mobile wallets. Just this week, Western Union announced that their eBillme platform will enable users to pay for online purchases using cash. While this is limited to bank customers for now, it is foreseeable that a service like this could be adapted to provide payment services to the un- and underbanked populations, especially in areas where there is a lack of infrastructure.
Andy Schmidt, CEB TowerGroup