- May 14, 2012
- Maurer on mobile money with Calit2's Anna Lynn Spitzer
While interactive technologies impact us all, perhaps nowhere has technology’s reach been more life-changing than in underdeveloped nations. In sub-Saharan Africa, for example, villagers are using mobile phones for personal banking. New services are being added to older technologies like text messaging with dramatic results.
Kenya, Tanzania and Afghanistan are three of the countries where mobile-phone based money-transfer services have taken off. These countries lack electronic payment infrastructures, taken for granted in much of the world but expensive to construct. Mobile services, however, require only cellular towers and access to the cloud, both of which are readily available. And mobile phones are abundant; almost everyone has access even if they don’t own one.
Now, instead of relying on bundles of currency, villagers trade their cash with a local money service provider, who loads monetary value into their cell phone accounts, allowing them to text payments to others as remittance or in exchange for goods and services.
Bill Maurer, a UCI cultural anthropologist, directs the university’s Institute for Money, Technology and Financial Inclusion. The institute, founded in 2008 and funded with $6.13 million from the Bill and Melinda Gates Foundation, supports research on mobile technology for providing banking and financial services to people in developing countries.
Maurer says that in Kenya, where a mobile money service named M-PESA was launched in 2008, nearly half the population now sends money by mobile phone. Kenyans used to transfer money by sending it to neighboring villages with bus drivers, who collected up to 20 percent for their services. M-PESA, by contrast, costs just pennies on the dollar.
A smiliar service is being embraced by dating couples in Afghanistan for other reasons. In a society where courtship can be difficult, mobile money transfer allows them to send monetary gifts to each other, easily and discreetly.
More developed nations, including Japan, Korea and Singapore, also are using smart phone payment systems. In 2011, consumers around the world spent $60 billion using mobile payment devices, according to a CBS News report. That figure is expected to increase to $170 billion by 2015.
In the U.S., Google has rolled out a mobile phone-based application called Google Wallet, a virtual “wallet” that stores payment cards and retail offers on the phone and online. The system utilizes a near-field communication chip in the phone that lets users pay by tapping the device against a store “reader.”
Another digital service called “Square” allows mobile merchants like food trucks and sidewalk vendors to accept credit card payments via a nickel-sized card reader that plugs into their cell phones. The application also offers a hands-free way for customers to pay using location-awareness technology and online bank accounts linked to their Square accounts.
Local currencies, a form of barter that replaces money and keeps trade within a specific community, have been around since the Great Depression. Born of economic downturns when people couldn’t afford basic goods and services, some are now going online, thanks to advances in technology.
Bernal Heights, an insular neighborhood in San Francisco, this year became the first to take barter one step further. Two technology-minded residents created a complementary currency system debit card that earns users credits for additional goods and services when they swipe it at local businesses.
Credit and debit cards allow users convenience and an instant record of their transactions. Most of us don’t stop to think, however, about who else has access to that transaction data. In the last 15-20 years, the payment industry has begun to capitalize on the inherent value of that information, giving rise to credit scoring and targeted marketing.
And our affinity for technology’s conveniences comes with a price. “People’s sense of intimate connection to the technology has mushroomed in a way that we didn’t predict or were ready for. But we need to think about these things and have a conversation about them,” Maurer says. “We need to stop and think a minute about what’s really free and what’s not free.”
For Maurer, these systems raise important questions about consumer protection. “We can contest a fraudulent credit card charge, but new payment systems are murkier on consumer protection,” he says. “The real challenge may not be the technology, but the willingness of stakeholders in industry and government to have a genuine conversation about consumer rights and the duties of private providers.”
Digital systems of all kinds are fast becoming commonplace. We “like” things on Facebook, buy groceries and clothing online and connect with our colleagues on LinkedIn. That convenience and sense of instant connection has other consequences as well.
Privacy, for example, and the value of the data. “Certainly the Googles and Facebooks of the world imagine they can make a whole lot of money selling data to advertisers,” Maurer says. “Every time Google makes money off of my click history, should I get something for that? I’d be happy to give up my privacy if I got a chunk of what these companies are making off me.”
-Anna Lynn Spitzer, Calit2 communications
Learn more about how how digital technologies and applications are enrich opportunities for learning, working, playing and conducting daily transactions at DIGITIZED: Life Transformed May 22, 2012, 5:00-8:30 p.m. Maurer will be a featured speaker; $30 registration payable at the door. Calit2 Building Auditorium at UCI.