Need Funds? Dial M for Money

Need funds?  What are you doing and where do you live?  In some countries it's been common for years to pay a vending machine or a parking fee with funds transferred by cell phone although for some reason, this hasn't caught on as quickly in the US.  In  emerging  markets,  cell phones are hot cakes all over,  but mobile payments are syrup only in some.  In both the developed and developing world, mobile payment systems are poised for takeoff.

Pay Pal and now Mastercard have announced that software developers may use Pay Pal and Mastercard technology in their own on-line apps and mobile phones.  Besides just coming up with more convenient, simpler to use funds transfer systems, developers could use the technology to build a payment feature into a game or an e-commerce app – maybe I can buy a real cow on that farm thing - or alert a card holder by text just before clearing a purchase.  As we know from the PDA that suddenly became a must have device, once you turn the developers loose, the apps may surprise everyone, even the core players in mobile payment.

In the developed world mobile fund transfer technologies usually  make life a little easier, faster, more fun.  In the developing world they can make life possible.  Historically, poverty and small transactions have meant limited service from financial organizations.  The popularity of cell phones and the advance of mobile payment technologies can change all that.  Funds to pay salaries, reimburse suppliers, or send remittances home from abroad are all available as mobile banking allows people to conduct transactions with less cost and greater efficiency than physical transactions, particularly when bank branches are not readily accessible. In some cases, it reduces the cost of money transfers by 50 percent.   Think  iMicrofinance.   It also allows people to move out of cash-based informal systems and fully participate in the formal economy, making it a key way to improve livelihoods.

IFC, the private sector development oriented arm of the World Bank Group plays an active role in bringing mobile payment to the developing world, supporting the Mobile Money Summit in Rio today and tomorrow. According to materials released for the summit, “ the World Bank Group also offers an integrated set of products and services that help governments and the private leverage the mobile payments industry’s development potential.  These include:

·         Direct investments in payment processors, financial institutions and mobile operators involved in payments;

·         Advice and financing to governments for developing national payment systems and an enabling legal and regulatory environment;

·         Advice to banks, financial institutions and payment processors on strategies and products that reach the base of the pyramid;

·         Dissemination of global research and best practices from around the world; and

·         Initial work on developing globally-agreed upon standards for cross-border remittances.”

Maybe one of those magical apps of the future will be the electronic drivers license, then we can just ditch the wallet or purse and take the phone.

Photo credit: whiteafrican