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October 30, 2017


Jim Glue

Correct me if I'm wrong, but the Starbucks app connects to your existing bank or credit card. I don't buy Starbucks, but I do use a few other merchant apps that have built in purchasing....and they all tie to my bank and/or credit card.

AOL IM had no reason to be killed by more than Skype, FB messenger, twitter or any other web service. AOL had numerous problems transitioning from their private content, and dial up service to the open internet. They were dead before mobile.

Take BBM as the counter example to AOL IM. BBM was born on mobile, and died (ok, it still lives) due to being slow to make the decision to not be a "reason to buy a Blackberry" but rather "the world's best and most secure MOBILE messaging" platform. But it was ALWAYS a mobile platform.

Jim Glue

Help me understand something....stupid American that I am. Here in the backwaters of the USA, we have many options for mobile payments. Even person to person. Many options. However, all of them tie to your bank because....THAT's where your money is, backwards that we are.

I have an app I use to buy a train ticket, and then use that app when on the train. It's "mobile" but it simple takes money from my bank.

With a service like Paypal....I put money into my Paypal account -- FROM -- my bank. So yes, when I use Paypal, I'm not using a bank. (being so backwards, we've only had paypal since...well...before smartphones).

Are your "bankless" mobile money just another form of "Paypal"? Or Ebay...where I can also "store" money (taken from my bank)...and then use without my bank?

Is it that around the real advanced economies like Kenya where people are skipping "banks" and paying with the very secure texting protocol....are they using a "store and forward" money system analogous to Paypal/Ebay?


Most of the discussion and confusion comes from mixing up "money" and "payment method". Most solutions alluded to (credit cards, NFC, Apple Pay, Starbucks, PayPal, etc) are payment methods -- they are not money.

Money to be money must fulfil the following conditions:

1) Be universally accepted.

Hence, those rewards from various firms or casino tokens do not count -- they are not universally accepted. The generally correct rule is that if you can pay taxes with it, then it is money.

2) Be fungible. If you consider money as tokens, then they must interchangeable.

Hence, IOUs (in whatever form) are not money, because neither IOU with different dates, nor signed by different debtors can be seamlessly interchanged.

3) Not be embodied in any artefact with an intrinsic use-value, separate from the pure exchange-value.

Thus, soap bars, cigarette packs, silver, gold or any other metal are not money -- because they have an intrinsic use-value, and can be used for something else than settling transactions. This is something many of us have experienced in those countries where coins suddenly disappear because their metallic value is higher than their facial denomination.

4) Assuming it is legal (e.g. not trading in stolen goods), executing a transaction with money completely and irrevocably settles it; no further operation is needed thereafter between any of the two parties and any other party.

When you transfer cash, or wire from your bank account, that's it. The transaction is completely and irrevocably concluded. Neither the one paying, nor the one receiving need do anything else -- they are free to go other businesses.

When you pay with a card, the transaction is _not_ completed: there are several parties that must _still_ perform a variety of operations, and the transaction can be aborted at several points. Thus, you, the buyer with a credit card, must _still_ effect a payment from your bank account to the credit card company. "Plastic money" is actually not money. Same with IOUs: the receiver of an IOU must _still_ collect the money from the debtor.

Is Bitcoin money? Obviously, it fulfils (3), but fails (1). Not understanding its most arcane details, I cannot vouch for (2) (there are those theoretical issues about a large enough player being able to cancel some bitcoins, for instance). As for (4), I doubt it is true, since one must enter or leave the Bitcoin market by acquiring or selling them with...real money.

Is M-Pesa money? Most probably yes (again, one would have to delve deep, deep into its technical implementation to be 100% sure): operators responsible for the system had to be granted a banking license. This is a strong sign that M-Pesa is actual money.

A useful heuristic to determine whether any fancy Internet scheme is money or not is to answer the following question: can I transfer an amount to another private person directly, without involving any other intermediary in the transaction, except perhaps a bank (i.e. no credit card company, no Internet platform corporation, no Apple, no Google, no PayPal)? If not, then it is not money, but a payment mechanism.

Despite some dismissive comments about "Ugandan peasants", systems like M-Pesa are probably the closest to being real mobile money. I wish we had that in our "advanced" Western countries. Apple Pay, Google Pay, Samsung Pay, Paypal & co are only payment infrastructures built upon several layers of interconnected intermediaries, i.e. complicated and costly solutions.

And all this means that, sorry Tomi, banks (commercial and central) will play a central role in whatever mobile money scheme in the future, for they are the ones directly creating, storing and transferring it. Even if it means that Google, Apple or Amazon have to get an official banking license from the government, and their own clearing accounts at the central banks. On the other hand, credit card companies, Internet platform companies (think Paypal) and all associated network entities may well meet their demise.


"1) Be universally accepted."
Nope, money has to be accepted in a certain community. Most currencies are not accepted legal tender. I cannot pay using rubbles or yuen.

"2) Be fungible. "
Sounds reasonable

"3) Not be embodied in any artefact with an intrinsic use-value, separate from the pure exchange-value."

That is a difficult one. Both gold and silver do have use values outside of money.

The official "definition" is functional. Money is:
1. Medium of exchange: Money can be used for buying and selling goods and services.

2. Unit of account: Money is the common standard for measuring relative worth of goods and service.

3. Store of value: Money is the most liquid asset (Liquidity measures how easily assets can be spent to buy goods and services). Money’s value can be retained over time. It is a convenient way to store wealth.

Bitcoin can fulfill all three functions. I agree that the use in direct purchases is limited at the moment. Starbucks tokens have very limited use in any of these functions.

But you are right that the discussion here is mixing up "money" and "payment". I do not think the "money" part will be changed very much in the near future (btw, all money is virtual). All these new types of "money" are not yet up to the task of serving the needs of even a small country. The Bitcoin blockchain size is already close to the breaking point.

The real innovation is in payment methods and financing. Direct micro payments, savings, and investments is what will be the real breakthroughs. Many countries already have a very efficient and well functioning banking and payment system. In these markets, streamlining payments would be of value. However, in much of the rest of the world, banking services are underwhelming and underserving the people. I see a market for mobile banking here.

Jim Glue

Thanks for the explanation and combined with Wikipedia....I'm not sure M-Pesa is all that different than Paypal or any "store and forward" money system. If I were able to connect Apple Pay to PayPal, I would pretty much have the M-Pesa concept. ApplePay instead of the texting mechanism and Paypay instead of Vodophone for the "store and forward".

Everything else about M-Pesa is just about adoption.



"Nope, money has to be accepted in a certain community."

All right, I forgot that precision -- universal within a certain community (usually a country).

"Both gold and silver do have use values outside of money."

That is why they are not very good vectors for money. Tokens with no utilization other than serving as money (and not to manufacture jewellery, reflecting layers, electronic connectors, or disinfection products) are the right medium.

Number (4) is crucial and can usually serve to distinguish between a payment mechanism (IOU, credit card, etc) and actual, underlying money.

The traditional trinity (exchange, store, account) is of course correct, but operationally, when looking at how to implement one (banknotes, coins, cowries, ledger entries, blockchains, whatever), a currency must fulfil the four conditions I listed.

We agree about a possible important role for mobile in streamlining payments, but this will have to take another form than all the "XYZ Pay" schemes being pushed at present. Basically, at the cost of a complicated infrastructure, they only support commercial transactions between customers and merchants from which they buy goods or services. Direct transfers from person to person, or drawing cash are generally impossible or cumbersome. I understand that all those scenarios are actually possible and simple with M-Pesa -- which means that such a scheme is much closer to what mobile money/payments should ultimately look like than what we have in 1st world countries.

This also answers Glue's question about the difference with Paypal. Amounts stored in Paypal accounts are not really money. First, not that many parties accept Paypal transfers (I cannot pay my taxes, rent, utility bills or groceries with them). I cannot draw cash against a Paypal account. I must first transfer from Paypal to a bank account, and then I can freely use the money. Paypal thus fails criteria (1) and (4). The legal status of Paypal reflects this not-quite-money situation. Although it has a banking license in the EU, it does not have one in the USA, and in many other countries its status for transferring amounts is extremely restricted. It's just another layer of infrastructure over existing payment networks -- whose justification I never quite understood, living in a country with an excellent banking system.

Jim Glue

You have to first deposit money into M-Pesa as well. I don't know whether you can pay Kenyan taxes with M-Pesa or not, but the money IN your Paypal account is as real as the money you put in your M-Pesa account (ran but the Telco's).

Paypal money is US currency. I'm sure the money in M-Pesa is Kenayn currency in the same way.

M-Pesa may have caught on broadly in a handful of 3rd world nations, more so than Paypal...but it's still just "store and forward" of the underlying "real" national currency.

If I connected my Paypal account to ApplePay, then I'd be able to use it broadly inside the US. But who'd pay the microtransaction fee?

I don't think the three of us are disagreeing much. Mobile money isn't really about "money" as it is about "low friction, low cost transaction of money".

I don't think banks are threatened by mobile in the developed world. However, I do think credit cards stranglehold as the means of simple money transfer is indeed threatened.

How long before Apple can do what so many stores/gas stations do in choosing to use a bank debit instead of a cc transaction automatically? You'll still have the notion of using a CC to pay for something you don't have the money borrow money for a time.

But I think the "I have the money, but I don't like to carry cash around, so I use credit cards" portion of their business is being jeopardized.

Take Walmart's battle over ApplePay. I think they were just fine with the Apple part of ApplePay but want to get out from under the burden of the CC fee's.

Apple teamed up with the CC companies to get broad support quickly, but the day will come when ApplePay will be established enough to cut out the middlemen of CC companies just like Walmart and other Merchants want to do.


@Jim Glue

No, you do not get it.

To summarize: for all practical purposes, Vodafone in an M-Pesa country (or whatever operator runs the scheme) is a bank -- not a store-and-forward-paypal-like organization; a bank.

Almost all people using M-Pesa do not use any other banking services, they do not have banking accounts, and do not use credit cards, debit cards, or ATM.

Yes, you deposit money first. Bring cash to a Vodafone retailer -- who will credit your M-Pesa account. Or wire from a bank account. Or, if you really want to, from a Paypal account.

Want to withdraw cash? Go to a Vodafone retailer and perform the reverse operation. You do not need to wire to a bank, then visit a bank branch to withdraw money. Vodafone _is_ a bank -- and had to get a specific license (to the displeasure of actual banks in Africa).

You cannot do that with Paypal. You cannot do that with Apple/Google/Samsung Pay. Whether depositing or withdrawing money, cash or electronic, you always have to go through a bank -- that is where the real money is. As I explained, you can do very little with a Paypal account -- you basically must wire to/from a real bank account (remember point (4)? Money in a bank account is real money; money in a Paypal account is money in the middle of a transfer).

Transfer from person to person? It happens directly in M-Pesa. With Paypal? First wire from bank to Paypal. Transfer from Paypal to Paypal. Wire from Paypal to bank. Again, see criteria (4) above.

As for paying Kenyan taxes with M-Pesa, guess what: yes, you can, the Kenya Revenue Authority is organized to receive payments via M-Pesa...

Remember, Vodafone acts just like a bank.

What you are suggesting is a contraption to simulate M-Pesa that stacks banks (which levy their fees), credit card corporations (that levy their fees), PayPal (that levy its fees) and something like Apple Pay (which levy its fees). It is complicated and costly. It won't do.

I disagree that banks are safe in developed countries. If they understood the coming mobile payment disruption as Tomi points out, they would meet together and set up a universal scheme (within a banking union, that is) to enable payments at the point of sales (NFC and QR), wirings for bill payments (manually enter particulars, or scan them from invoices), and direct person-to-person transfers (NFC or BT if face-to-face, manual entry of particulars if not) via mobile phones.

They would completely bypass credit card companies, Google, Apple and Paypal in those areas, and only leave the (riskier) credit aspect for grabs. As you suggest, this would basically kill the "use a credit card instead of cash" business of Visa, Mastercard, Diners, Amex and others.

I do not see them progressing in that direction, which makes me think they will soon see Internet companies developing such schemes and becoming competing banking institutions -- to the detriment of traditional banks.

Jim Glue

I'm still not seeing the HUGE difference. You bring cash to your phone company. And that's different than bringing cash to a bank?

The phone company is a bank in the scenario you describe. The shortcoming of Paypal is that you can't go to your local Verizon store and put cash into your Paypal account.

I'm not seeing the HUGE breakthrough more so than the plethora of AMT that you have in the US that area everywhere, in gas stations, in supermarkets, on street corners...and yes, in banks.

Once you've loaded up the money in your M-Pesa account, it appears greatly like any other store and forward. Or any other bank for that matter. You have to establish an account with the phone company.

Is the big deal that phone companies are able to compete with banks?


@Jim Glue

No there is basically no difference between an M-Pesa account and one at the Consolidated Bank of Kenya. Except that the former is geared to be managed via a mobile phone, and not via debit cards, ATM and PC like the latter.

The fundamental difference though is that M-Pesa operators, unlike banks, do not provide general commercial credit. Operators do provide some credit that is strictly limited to postpaid contracts, but there is no question of mortgages or letters of credit in trade, for instance. Credit is the big sensitive issue that central banks and governments must supervise because it can easily wreak havoc on an economy.

Nevertheless, having a telecom operator being a bank is a _huge_ deal. If Google, or Amazon, or anybody else were to become a bank, it would be a _huge_ affair as well. Huge, as in "eating banks' lunch".

The difference with Paypal is also vast. Let me repeat: with Paypal the only thing you can really do is transfer between Paypal accounts. That's it.

Want to "load" a Paypal account? You must go through a bank first. Want to withdraw from a Paypal account? You must go through a bank first. Want to deposit cash? You cannot go to an operator shop. Or a bank teller. Or any place at all (Paypal has no retail outlets). Want to withdraw cash? Same issue. Want to pay bills or taxes? You must first transfer to a bank account. You cannot have a Paypal account without a bank account.

Want to do all that with M-Pesa? No issue at all. All is done directly. You do not need to have a bank account in addition to M-Pesa.

Paypal is a store-and-forward system (as you call it). Money kept in a Paypal account is not real money until it re-enters the banking system. Banks are currently the place where money is actually created, stored and used (most of it); M-Pesa belongs to that universe -- and that is why African banks are a bit miffed by operators entering their club with such a successful scheme -- that does not require cards with chips or magnetic strips, POS terminals or ATMs. But hey, those traditional banks have no offering for people with no credit history, no permanent income stream, possibly not even a permanent address, and who cannot afford all the fees and commissions that they levy.

As for Paypal, Apple, Google, they are just intermediaries living off the financial streams -- besides convenience at the POS, they do not provide any fundamental financial service (contrarily to credit card companies, which at least provide credit).

If anybody else repeats M-Pesa or provides something similar in the rest of the world, then we are in for a massive disruption in basic financial services.

I am not an enthusiastic fanboy of M-Pesa -- as I hinted above, we can probably do something more elaborate in advanced countries. But the current hodge-podge of credit/debit cards, Paypal, Apple/Google/Samsung Pay is just useless overhead that must go and be replaced with a streamlined, pared-down, integrated scheme.

Chris Vail

One of the earliest commenters mentioned a crucial technology that made mobile possible: cheap digital memory. This sticks in my mind because, decades ago, when I was starting out in software engineering, an interviewer from IBM told me that humans would never have enough memory to do all the computing they wanted to do. The real restriction on cameras was that film was expensive. 'Automating film' created the camera golden age.

As for money, we are in the midst of a transition from the American model (laissez faire) to the Chinese model (the government directs the market). This will be hastened by the next economic crash (the financial changes made since 2008 have not fundamentally fixed the problems with the American model). Hopefully another world war will not be included. But the Chinese approach to markets is a difference that will make a difference in the future.


"If they understood the coming mobile payment disruption as Tomi points out, they would meet together and set up a universal scheme (within a banking union, that is) to enable payments at the point of sales (NFC and QR), wirings for bill payments (manually enter particulars, or scan them from invoices), and direct person-to-person transfers (NFC or BT if face-to-face, manual entry of particulars if not) via mobile phones"

I can already do all that on my phone with my bank. There are ATM everywhere and many shops allow to withdraw cash at point of sale. I can buy stuff on the internet and pay directly from my bank account. My salary is paid into my account and all my bills and transfers are paid out of it. I only use my CC when I travel and to buy stuff in foreign countries. I really do not see what else should be added?

What worries our banks are crowd funded loans and other services. They make their money from loans and managing investments. That is where the competition is comming in.


"But the camera industry is the first case study of an 'outside' industry being hit by the mobile revolution."
I would argue that calculators were the first industry to disappear thanks to phones.


"I would argue that calculators were the first industry to disappear thanks to phones."

Not sure about that. Calculators are still very much used in schools.

Dictaphones perhaps?

Abdul Muis

I think Watch, alarm clock, dictionary.

Tomi T Ahonen

Hi all

Just posted the updated Nokia forecast number and first-ever regional footprint by anyone of where Nokia is selling smartphones..

Tomi Ahonen :-)

Tomi T Ahonen

Hi E

FABULOUS comments, gosh, very smart stuff, thanks!

I'll read the thread and digest and come back with comments (now gotta go eat, I was working on the Nokia numbers for past gosh, 36 hours..)

Tomi Ahonen :-)

Abdul Muis

I just rethink about this...
actually... portable music player (walkman/discman) is the one that dead by mobile phone.

Tomi T Ahonen

Hi Everybody & E

(Great comments E!!)

So first the 'disclaimer'. You guys know I am not an expert on the music industry or gaming or healthcare or education or advertising or messaging or indeed, money/finance/banking etc. I am a mobile guy, it's all I know. I have LEARNED absolutely immense tons of insights into music, gaming, healthcare, education, advertising, messaging and yes, money industries - THROUGH their disruption by mobile. Plus countless others like social media (Communities Dominate) and newsmedia and mapping/navigation and virtual reality and augmented reality and on and on and on. This WHILE our OWN industry went from 2G to 3G to 4G (and onto 5G) and the phones went from voice to text to media phones and camera phones to web-enabled phones to smartphones. Just trying to keep abreast of the smartphone 'bloodbath' wars was more than a full-time job for many years, when the smartphone industry was literally the world's most competitive global industry - and far far less fiercely contested industries like say automobiles and airplanes had ARMIES of journalists tracking their market shares haha...

So I am NOT an expert on 'money'. I am NOT an expert on the 'banking industry' or the financial services industry or even 'digital money' (while I do write about it, had a whole chapter on digital money in my fifth book already, literally ten years ago). I tell everybody that when I need 'guru' advice on digital money, I turn to Dave Birch the British author who is a good friend and has helped me understand that industry a lot.

What I have accidentally become, is somewhat the world's topmost expert on MOBILE money because I was into mobile money well before M-Pesa (I knew some of the creators of that service) and I had seen most of the truly innovative mobile payments players from literally the start of the mobile money industry going before M-Pesa to Smart Money in the Philippines, the Osaifu Keitai (mobile wallet) of NTT DoCoMo in Japan and of course the whole mobile payment idea was invented in Finland by Coca Cola. So I then wrote the world's first book on mobile payments and I probably have the widest knowledge of any published 'expert' on the breadth of global mobile money/payments industry and its true pioneers. Most other 'experts' would have a very murky picture of the years before M-Pesa and many Western experts would not know the heritage of Japan to mobile payments where almost every m-money innovation was first commercially deployed in Japan from NFC payments to the mobile wallet.

That all said. I still am 'only' a mobile expert and I do not pretend to know the money/finance/payments/banking industry ANYWHERE near well enough, to consider myself an expert in it. Exactly same relationship as I have with advertising, music, gaming, healthcare, social media, messaging, etc. I always make it VERY clear whenever I speak to any such group, that I am not an expert of THEIR industry, I am a mobile guy.

With all that, to E's wonderful comments. I do not have a 'methodology' to distinguish how 'money' is different from say 'banking' or 'payments systems' but we all 'know' that money is somehow different and have some gut feelings about it. So E's four points are FABULOUS (and E, I will be using these in future discussions with my clients, these are VERY good). Let me first just copy from E's comment:

Money to be money must fulfill the following conditions:

1) Be universally accepted.

Hence, those rewards from various firms or casino tokens do not count -- they are not universally accepted. The generally correct rule is that if you can pay taxes with it, then it is money.

2) Be fungible. If you consider money as tokens, then they must interchangeable.

Hence, IOUs (in whatever form) are not money, because neither IOU with different dates, nor signed by different debtors can be seamlessly interchanged.

3) Not be embodied in any artefact with an intrinsic use-value, separate from the pure exchange-value.

Thus, soap bars, cigarette packs, silver, gold or any other metal are not money -- because they have an intrinsic use-value, and can be used for something else than settling transactions. This is something many of us have experienced in those countries where coins suddenly disappear because their metallic value is higher than their facial denomination.

4) Assuming it is legal (e.g. not trading in stolen goods), executing a transaction with money completely and irrevocably settles it; no further operation is needed thereafter between any of the two parties and any other party.

Absolutely fabulous listing of 4 explicit clear distinctive characteristics of 'money' that separates it from other payments-related mechanisms.

Now, lets take one recent 'new money' invention from outside of mobile and digital. Airline miles. When airline miles were only rewards programs for airlines, they were 'loyalty' schemes with some value. Those miles were not 'money'. BUT when airline miles became available to be used in very wide range of purchases (hotels, restaurants, various physical goods payments/purchases) beyond the services of the airlines - that is when airline miles (of the most popular systems at least) became a 'currency'. A virtual, unregulated currency but one that is (somewhat) convertible and you could even transfer that money to another person (outside your family, eventually) who could then use the miles equally in whatever way they wanted. You might THINK you were giving them a gift of a free flight but they could theoretically go and buy something else with those miles, similar to if you gave someone a gift of cash.

I am not saying airline miles are AS convertible as cash, so they are perhaps an 'inferior' form of currency but airline miles (of the big programs) ARE a money instrument. I hadn't thought of this even as I was amassing lots of miles, until the Economist made this argument elegantly about a decade ago in their big article where they measured the value of this, the then-newest international payments currency type. They concluded it is a new currency. So to fit E's definition, not perfectly, but close enough, airline miles are a new type of MONEY (as distinct from say in-game payments tokens or whatnot).

Now virtual gaming currencies CAN be sometimes converted to real dollars (such conversions are usually VERY strictly forbidden but tend to be relatively easy to achieve) but if the gaming currency - as its own currency - cannot be used outside its own game/s then its not 'yet' money. But imagine inter-operability of virtual currencies? Why couldn't you have an exchange-rate between the virtual money of one gaming world vs another? I do think this will come relatively soon and that would move in-game virtual currencies into something closer to real money.

BUT we HAVE one newer international currency already after airline miles. It came from mobile. It is air time. In MANY emerging world markets, airtime can be used as a pseudo-currency, so you can pay for you haircut by minutes of airtime, or pay for the taxi ride by minutes of airtime etc. They often are conducted by the physical means of SIM card transfer (that SIM card has a balance, you hand the SIM card over as payment and the person receiving the payment can stick the SIM card in the phone, do the value-check and verify it does have the amount that was agreed).

In many emerging world markets you can OFFLOAD airtime at local resellers and 'take out cash' instead. This is done at resellers of air time (local small merchants) who prefer to get rid of their cash this way, rather than walking it to the bank - and because airtime is convertible, the merchant can then sell the airtime to the next customer who needs a top-up. There is a cost of course, and an inconvenience level (modest inconvenience) but it does mean that airtime IS a new monetary instrument and in many countries far more 'like money' fitting E's rules than airline miles are even in their best markets. But airtime has a further fascinating dimension - INTERNATIONAL TRANSFER. You can send airtime minutes across international borders - and make MONEY payments this way, bypassing the heavy fees of say Western Union international money transfers. This newest form of currency was of course first discovered in Africa and it was discussed at Forum Oxford where the revellation of the world's newest currency was disclosed. And that was, gosh, nearly 10 years ago by now, I think it was still at the end of the previous decade so say year 2009 or so...

So apart from what you know about Apple Pay, and Starbucks's mobile wallet and say M-Pesa; and perhaps some insights from current Japan and China (and Northern Europe?) there are MASSIVE new changes going on, and one of them is, that a 'truly only mobile' payment method - airtime minutes - has emerged as a MOBILE MONEY. Fits E's definitions perfectly (in some countries, not of course all, yet)

I will now go to individual comments but this listing of 4 attributes is brilliant, lets use that to distinguish what is mobile payment, mobile banking, mobile money.

Tomi Ahonen :-)

Tomi T Ahonen

First comment

EVERYBODY please RE-READ E Casais's answer to Jim Glue which starts 'No you do not get it'. It was posted by E on 31 Oct (in case this thread gets to be very long haha, it well might)

If you do not understand WHY M-Pesa is DIFFERENT from Paypal or Apple Pay or Starbucks Mobile Wallet - re-read E's excellent response. M-Pesa in Kenya applied for a BANKING LICENCE (years after they had been in operation, claiming 'we are not a bank, we are not a bank' then they 'noticed' they actually had 'become a bank' and went to regulator saying, oops, we think we may have become a bank, should we apply for a banking licence).

You can WITHDRAW cash from your mobile wallet on M-Pesa WITHOUT putting that money to a BANK first (which is why Paypal is a payment method, NOT a bank). In many areas of mobile money (Philippines, Kenya, Somalia, Tanzania etc) you can withdraw from your 'mobile wallet' (like M-Pesa or its equivalents) and pull out CASH at THOUSANDS of merchants (who usually also sell air time, so the local prepaid mobile SIM card vendors, who also sell air time, become the 'virtual ATM cash machines' in those societies).

There is no 'bank teller' or 'bank building' or 'bank office' but M-Pesa the telco, IS A BANK. They take banking deposits (in Kenya in Kenyan Pesos the local currency) and you can have you rent paid, yes your taxes paid, your salary arrives on M-Pesa. EVERY local merchant today accepts M-Pesa in Kenya.

So please re-read E's excellent answer that started 'No you do not get it'. And this is no criticism of Jim Glue of course, the questions and comments and debate are excellent. We are ALL learning tons from this debate. Don't worry if you had a misconception. We will be all better for this debate, and understand the mobile money disruption FAR better after this discussion (including me...)

Tomi Ahonen :-)

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Available for Consulting and Speakerships

  • Available for Consulting & Speaking
    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Helsinki but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

Tomi's eBooks on Mobile Pearls

  • Pearls Vol 1: Mobile Advertising
    Tomi's first eBook is 171 pages with 50 case studies of real cases of mobile advertising and marketing in 19 countries on four continents. See this link for the only place where you can order the eBook for download

Tomi Ahonen Almanac 2009

  • Tomi Ahonen Almanac 2009
    A comprehensive statistical review of the total mobile industry, in 171 pages, has 70 tables and charts, and fits on your smartphone to carry in your pocket every day.

Alan's Third Book: No Straight Lines

Tomi's Fave Twitterati