Global Mobile

The Future of Mobile Banking, Part II

Following on my earlier reflections on the growth of mobile banking in the developing world, two more hits on the future of mobile money:

- Gartner tells us that in 2012, the most popular consumer mobile application will be mobile money transfers. Number six will be mobile payments. I, for one, cant wait until I can pay for lunch with the press of a button on my phone, and have my friends immediately reimburse me for their meals using their mobiles. Yum.

- In a similar vein, Juniper Research anticipates that, by 2014, the mobile money transfer market will be worth $65 billion-- and it will be driven primarily by remittances sent by migrant workers sending money from developed countries home to developing countries.

The Future of Mobile Banking

CGAP and DFID teamed up on a brand new report peering into the future of "branchless banking," which they define as the delivery of financial services in essentially any way other than through the traditional brick and mortar bank branch.  A big component of branchless banking is, of course, mBanking-- banking with your mobile phone.

Mobile MoneyThe paper asks what governments and the private sector can do to affect the development and uptake of branchless banking in the next ten years, looking at the forces and uncertainties that will most strongly affect this progress. Then they conduct an interesting thought experiment, laying out four scenarios, in four imaginary countries, exploring the ways varying actions taken by the government and the private sector affect the growth of branchless banking.  It makes for pretty interesting reading.

The basic conclusion of the paper is that there is massive, latent, underserved demand for mobile/branchless banking, and if mobile operators, banks, and governments can work harmoniously to create a legal regime that is clear and stable, a policy environment that supports innovation and experimentation, and products that are  functional and secure, we'll see widespread adoption of mobile and branchless banking in the coming decade. It may not happen immediately, so mobile operators and banks will have to be patient with their investments, but it's hard to imagine it not happening.

I think they're right about this. Because, here's what I'm thinking: Four billion people on earth have mobile phones, and four billion people are "unbanked." That means, roughly, that two billion people have a mobile phone and no bank.  The market is there, the demand is there-- who's going to figure it out?

Mobile Phones: The Best Outcome of the Iraq War?

There was a short but remarkable piece in last week's Economist, about the amazing spread of cell phones in Iraq since the US invasion-- many Iraqis list the arrival of mobile technology as the single best outcome of the American invasion. During the war, the phones were used in all sorts of novel ways by people put in a pinch:

“I love my mobile phone like a baby,” says Umm Basm, a mother of two. During recent years of civil strife, when many stayed indoors, mobile phones were the lifeline. They also became a tool of commerce. Reluctant to risk their lives by visiting a bank, many subscribers transferred money to each other by passing on the serial numbers of scratch cards charged with credit, like gift vouchers.

Mobile IraqMobile networks were also used by the more nefarious parts of society.  Beyond the cell-detonated bombs that got considerable press in the US, mobile phone access has changed the way every seedy operator does business:

Criminal rings are among the parallel currency’s busiest users. Kidnap gangs ask for ransom to be paid by text messages listing a hundred or more numbers of high-value phone cards. Prostitutes get regular customers to send monthly retainers to their phones, earning them the nickname “scratch-card concubines”, while corrupt government officials ask citizens for $50 in phone credit to perform minor tasks.

Just goes to show that this technology is just a tool-- not inherently good or bad, and not an end goal in itself.

Obama's Shanghai Town Hall and The Question of Censorship

Despite rumors it was destined to die on the negotiating table, President Obama's town hall discussion with Chinese students went off in Shanghai on Monday. He spoke before a select group of university students, and took questions both from the audience and online. When the discussion turned to internet censorship, Obama's language was restrained-- the most controversial he got was a claim to be a "supporter of non-censorship."

Obama Hu?There has been considerable harrumphing in the blogosphere that Obama was too soft. At least, they grumble, he could have called himself an "opponent" of censorship. I think this complaint is misplaced. The point of this event was not to loudly denounce censorship with the goal of changing policy in Beijing-- that would be a rather ineffective tack. I think (as does James Fallows) that his language was as confrontational as it could have been without crossing the line andoffending Beijing (which, given the litany of other issues we need their help on, is not something we want to do). 

For an average Chinese person-- or even for the educated elites who were inevitably populating the audience of this event-- having a government official take their questions and listen to their comments is an uncommon experience indeed. The goal of this event, as I saw it, was to give a display of open, democratic dialogue, and let the audience make of it what they will. Our example, I believe, is powerful.

Which is why certain other complaints about the event are spot-on. Several questioners in the audience were seemingly planted by the Chinese government-- an affront to the intended democratic nature of the event-- and the webcast, which should have brought the proceedings to millions more around the country, was reportedly choppy and hard to watch.

All things considered, the town hall was worth the political capital we spent on it, but it could have gone better. I'll give it a B-.

Calling on Chinese Bloggers

The President is in Tokyo today, and will be in China for the first half of next week.  In advance of the trip, our State Department hosted simultaneous press conferences in Beijing, Shanghai, and Guangzhou for audiences composed primarily of bloggers-- a first for the U.S. in China. The attendees-- a mix of English- and Chinese-language bloggers-- were able to openly ask questions and comment on China's internet restrictions, and several bloggers live-Tweeted the proceedings.

Obama Air Force OneThis is yet another example of the very smart 21st Century Statecraft being plied by the Clinton Department of State. Rather than limiting ourselves to interacting strictly with the governments of foreign countries, we can engage directly with people around the world. By lending credence to China's bloggers, we help them in their effort to become a respected and efficacious voice for change in their own country. Even in cases in which our own objectives don't quite line up with the ideals of the bloggers themselves, empowering a multitude of voices is a big step in the right direction.

We do, naturally, seem to be getting a bit of pushback from Beijing. When he stops in Shanghai next week, President Obama is hoping to hold a town hall meeting with Chinese youth in his typical free-flowing, agenda-free format.  Rumors abound that the Chinese and U.S. officials are having some trouble agreeing on the terms for the event, and it may be scuttled as a result. Fine. I, for one, would rather see the town hall ditched than see a phony compromise event in which the attendees have no freedom to speak their mind.

Tom Kalil on the Mobile Revolution and Innovation

I was over at the Newseum last week for a conversation hosted by our friends at Mobile Future. The discussion centered around how we can support innovation and investment in the mobile industry with smart policy. The key talk came from Tom Kalil, Deputy Director of the White House Office on Science and Technology Policy, who, as I'm sure you recall, wrote a paper for our affiliate the New Policy Institute last year called Harnessing the Mobile Revolution.

In his talk, Kalil hit on many of the same arguments he made in his paper last year, about the power of mobile technology to improve health care, enhance economic development, and promote democracy-- particularly in the developing world. He also identifies a few of the biggest challenges we'll face in the coming years. A video of his talk is here-- well worth a watch:

India Bans Pre-Paid Mobiles in Kashmir - Security or Suppression?

For eight years, the Indian government dragged its feet until, in 2003, it finally permitted mobile phones in conflict-torn Kashmir. Intelligence officials had feared that Kashmiri and Pakistani militants would use the phones to plan attacks on Indian army outposts throughout the region, but in '03 they relaxed the ban, and the past six years have been the most peaceful since the conflict began in 1989. Causation? Probably not. But correlation, anyway.

Srinagar Cell PhoneLast week, the Indian government walked back on technological freedoms in Kashmir, banning pre-paid mobile connections. In Kashmir, as in much of the developing world, pre-paid is a popular option thanks to its known costs, and low commitment; the new ban will take phones out of the hands of 3.8 million Kashmiris. Unsurprisingly, hundreds of Kashmiris have taken to the streets of Srinagar, the capital city, to protest the law in recent days.

The stated reasons for the prohibition are that mobile vendors are not conducting proper background checks on new subscribers, and that militants are using mobile phones to detonate bombs-- a practice observed in Iraq and Afghanistan in recent years. I suspect the actual reasons are considerably more Machiavellian.

Srinagar is one of the most heavily-militarized cities in the world, and the dense presence of Indian troops has led to frequent clashes between Kashmiri civilians and the military. As the BBC documented earlier this year, young Kashmiris have been using their cell phones to bear witness to the disproportionate, often unprovoked violence of the Indian army. With a camera phone in every hand, every citizen is a journalist, and the explosion of photos, videos and other first-hand accounts of the violence in Kashmir has brought images of the violence to the world.

What's more, the Indian intelligence services have met with some success finding and killing militants by monitoring the cell phone conversations of Kashmiris. The consistency and higher background-check requirements for post-paid cell phone plans makes it much easier to monitor those subscribers.

It's my strong suspicion that the pre-paid ban in Kashmir has more to do with suppressing critical citizen media and monitoring civilian phone conversations than it does with preventing phone-bomb attacks. The ban consists of a suppression of basic freedoms and a violation of privacy in an already repressed state. Further, the government is denying citizens a valuable tool for economic development and access to the global ICT network-- increasingly a fundamental right in itself.

FD: I spent some time reporting in Kashmir. My views are certainly informed by that experience. My reporting is published here.

Global Mobile News: The Times is On It

Four highly relevant news hits from the Grey Lady in the past few days:

- The number of text messages Americans are sending is, well, a lot, and growing very quickly:  135 Billion in June '09 vs. 75 billion in June '08. We're catching up to the rest of the world in our love for SMS.

- The Business section on turning cell phone cameras into microscopes. Best of all is that these tools are relatively inexpensive. There's great potential here for community health workers in the developing world to take microscopic photographs of a blood sample or something else, send it to a laboratory thousands of miles away, and get results back almost immediately. True mobile health.

- An interesting column exploring the nature of Twitter, its searchability, and how "Proximity can be a proxy for relevance," in the words of Ryan Sarver of Twitter. Erik Hersman of Ushahidi, one of my favorite SMS-based social applications, is quoted talking about how his service maps information in both time and place.

- From the Bits blog, a wild new technology that could allow potential computer/smartphone users in the developing world to skip mice, keyboards and screens: A small projector and camera, hung around the neck, that can use any wall, hand, or other surfaces into touchable projection screens to navigate a user interface. The hardware is relatively cheap, at around $350, and the software, already running on Windows Mobile and Android, could be adapted to run on simple Nokia devices. (h/t Dan)

If you see something I should be writing about, send it my way! I offer you fame, glory, and huge cash prizes in return.

Droids Dropping

I'm sitting here watching Game 6 of the World Series (and feeling pretty good that my Yankees are going to take home the crown tonight), and saw yet another striking yet deeply menacing ad for the forthcoming Droid (I wrote about the first one last week). There's been an awful lot of mobile-related advertising throughout the series-- from HTC (my favorite ad), Motorola, Windows, RIM/Verizon, AT&T, T-Mobile, and others.  But these ads from the Verizon/Google/Motorola triumvirate for the forthcoming Droid have easily been the most eye-catching.

Like the "iDon't" ad, the new, minute-long "Stealth" ad is utterly sinister, showing the new smartphones encased in UFO-like shells, dropped from a fleet of stealth bombers, rocketing toward middle America like an apocalyptic meteor shower, terrifying horses and television audiences alike.  I mean, creepy, right?:

The sheer ominous-ness of the ad, combined with the fact that there's no real mention in the ad of what the Droid is or does, leads me to believe that they're targeting early-adopter types-- gadget junkies who know the Droid is coming and Cant. Freaking. Wait. (As opposed to folks more like the cowboy in the ad-- as he says: "What in the world is that?") The early reviews, as I said, have been good.  It releases on Friday.  We continue to wait...

Life Tools & Cheap Phones Come to Indonesia

Nokia PhonesNokia sells more handsets than any other manufacturer in the world, but they have never really caught on in the United States.  Rather, they make their bones selling simple, cheap, virtually indestructible phones in Europe and in much of the developing world. 

To avoid getting pigeonholed in this less-lucrative corner of the market, Nokia has increasingly been moving into offering services built into their handsets. A year ago, they launched Nokia Life Tools in India-- a suite of applications meant particularly for phone users in rural, disconnected areas, to give them access to agricultural information, educational services, and entertainment media. 

The services were evidently a hit, as Nokia is now rolling out the same Life Tools in Indonesia, starting later this year. The tools, which run off a graphically rich, multilingual interface, help users by enabling access to weather forecasts and market prices for their produce, test preparation and English-language training, and music, jokes, and movie reviews.

In addition, Nokia just announced five new low-cost phones intended for rural environments, including their cheapest model to date. The $30 Nokia 1280 has a slightly shorter battery life than its predecessor-- 8.5 instead of 9 hours-- but it has other built-in features that make it a useful tool for a typical villager, including a flashlight and an FM radio. My favorite aspect is that the new phone enables five separate phone books; in many poorer areas, phone-sharing is an increasingly common way for people to stay connected, and the separation of phone books is a feature that-- irrelevant in the US-- makes the phone more valuable, and more functional for a user in rural Indonesia. Another great insight from Jan Chipchase and his colleagues at Nokia.

Syndicate content