Religion / The Cellphone: Means Of Communicating And Banking?

The Cellphone: Means Of Communicating And Banking?

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Autor:  anton  04 November 2010
Tags:  Cellphone,  Communicating,  Banking
Words: 804   |   Pages: 4
Views: 216

The Cellphone: Means of Communicating and Banking?

Who in America or around the world does not have a cell phone to communicate with nowadays? Cell phones are used to communicate internationally and locally. Cell phones are already used to download music, text messaging, taking pictures, short videos and video games. In South Africa, they are use to perform another simple function- personal banking or one would say-personal piggy banking. In many parts of the world, mobile phones aren’t a convenient alternative to landlines but the only means of communication.

A mother or sister in a rural area can receive money from her son or brother, working several hundred miles away, with the beep of a cell phone. A young child can buy groceries with a few punches of keys, not a coin need change hands. Cngo is a very poor place, yet it is heading towards two million mobile users: one network alone has 850,000 subscribers. Subscriber growth in several sub-Saharan African countries exceeded one hundred fifty over the past few years.

The cell phone is creating niches that Africa’s poor businesses are able to exploit in new ways. A man with a cell phone can make a living hanging around a market and providing a service linking market traders with their suppliers by allowing them to place orders in advance, based on that particular day’s sales. The supplier can choose which market to go to, using one of the increasing numbers of SMS-based market price information services.

Living in rural Africa, payment options are pretty limited. If you do not live within a hundred or so miles of a bank branch, don’t have a check book and have never even seen a credit card, debit card or any form of a bank card or a computer- then how do you send money (for anything) to someone else?

In Africa and other place such as this, mobile phones provide an easy and convenient mechanism: for example, you might buy a $5 scratch card, scratch off the panel to get the voucher number and then text that number to your counter party. Voila! You've now sent $5 a few hundred miles across the country for the price of a text message. And the person you sent it to can start using it right away.

Indeed, the scratch card solution has proved so popular that it has now spread to cross-border transfers. Africans and others are able to buy scratch cards to send home in a number of small convenience stores, and are using this mechanism to remit money back home. Simple, but very effective.

A number of mobile operators in Africa have developed electronic versions of this mechanism by allowing the direct transfer airtime from one person to another, thus hugely improving the liquidity of this 'currency'. In places where the grey economy flourishes, 'filling in' for missing services, there is no shortage of people willing to buy that airtime, so it can be easily converted back to cash (at a price, of course). There are initiatives in countries such as Kenya and South Africa working to capitalize on this gap in the market by providing payment services matched to the needs of the poor and unbanked. Developing a secure SIM toolkit-based service to implement P2P (phone to phone!) transfers for one of them, and it works well, so it is not surprising that many African operators are looking at future possibilities in this area

What's going on in Africa may have wider implications for how people and governments view money and payments. One of the definitions of a currency, for example, is that it can be used to pay debts to the government. In some parts of Africa, mobile phone scratch cards have become a perfectly acceptable means of exchange for paying officials. That makes scratch cards or, more particularly, the prepaid airtime that they are a proxy for, an interesting new form of currency -- and, in many cases, a fungible currency, since it can readily be converted back into conventional cash.

References

1. Engardio, P. A New World Economy in Business Week. (3948) (22nd Aug. 2005).

2. Pringle, D. and R. May. Slower Growth Hits Cellphone Services Overseas in The Wall Street Journal. p. A1 (23rd May 2005).

3. Duff, O. The 'other' Africa in the spotlight in The Zimbabwean (29th Apr. 2005).

4. Calling across the divide in The Economist (10th Mar. 2005).

5. Phishing slows online banking in BBC News (21st May 2005).

6. Vasager, J. Mobile mania grips Africa in Dawn: Sci-Tech World (24th Sep. 2005).

7. Itani, N. Africa's cellphone boom creates a base for low-cost banking in USA Today. (28th Aug. 2005).

8. Africa's unmended heart in The Economist. 375(8430): p. 20-22 (11th Jun. 2005).

9. Barclaycard Focusing On An E-Cash Future in VNUNet (28th Nov. 2002).



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