Digital Money World

New Cell Phone Technology Offers Those Without Banks An Easy Way To Pay

by Mark on March 7th, 2007

Safaricom, this week launched M-Pesa, which is a super low cost money transfer system for cellular users. This is the first of its kind mobile money service not linked to a bank account or credit card. It is a ‘general-purpose’ cash replacement service. (digital money)

In the US, Visa and MasterCard are bankrolling the m-commerce expansion and the phones will be directly connected to the user’s bank account or credit card.

M-Pesa will allow millions of cellular users without a bank to make simple financial transactions via the hand held phones.

All that is required from the cell phone owner is the next generation SIM card, which is available from the mobile operator and its free. Users will be able to send money to other mobile phone users on the Safaricom network plus other competing networks. There are a few restrictions on receiving funds, users of the new system can only receive funds from other Safaricom users.

This technology will also arrive in North America, but the technology is not yet available. Why? That is an easy question. For a majority of North America, cell phone (m-commerce) will ONLY be an added convenience and not a necessity like in other parts of the world.

Most US people have bank accounts, credit cards, check books, and another method of payment at their disposal and cell phone would just be a faster or more convenient method to pay. Its like having two new cars in your garage already and buying that third vehicle only offers an added convenience. It does not change your life.

Now, if for the past twenty years all you owned was a bicycle, getting that first new car could be a life changing event. Especially if that first car was given to you at no charge. This ‘financial upgrade’ for Africans is free and available to all Safaricom customers.

That is exactly what mobile banking brings to Africa (Kenya). People who have lived their entire life without a bank or a plastic card can now store money, transfer funds, transact business and receive income all from their cell phone. No bank required. More than 80% of the Kenyan population does not have a bank account and will benefit from this new service.

According to Mr Paul Makin of Consult Hyperion, the British IT consultancy that worked on the product for Vodafone Plc.

“It involves replacing cash with electronic money, it is for the mass market, it radically reduces transaction costs (for the least well off), provides new functionality and, most of all, it provides an infrastructure that delivers capability and efficiency to the microfinance world.” *http://www.eastandard.net/

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POSTED IN: Emerging $ Tech, International, Mobile Payments