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January 12, 2015

Comments

charly

@Tomi T Ahonen

If you include a totally unimportant sector like watches than i think you should also include keys (car, office access card and home) and telephones used on land lines (use an app which uses the cable-modem) or even the flash light (greatest Nokia invention)

AndThisWillBeToo

@Maggan
The news article is wrong. I think this is the original tweet which has eventually evolved into "Sweden is on plans to abolish cash":
https://twitter.com/tomiahonen/status/283272241024745473

Winter

@Boron95
"But getting government services, filing paying taxes, voting, getting your pension/social-security payments, signing up for health insurance (Obamacare et al), national security (spy agencies, satellite monitoring, evesdropping, data analysis, etc is now primarily digital, and accelerating."

Eh, that has already happened. At least in developed countries.

Every contact I have with local and national government is over the internet, including payments. I have filled my tax forms online for more than a decade. My real persona has to turn up only to collect my passport or drivers license (once every 5/10 years). And I do not even remember when the last time was I actually payed cash to my government.

Winter

@KPOM
"Apple Pay likely is coming to Canada and the UK next. NFC payments are more common in both those markets, so we'll see what uptake looks like in more mature markets soon. "

I am curious whether we will ever see Apple Pay here in the Netherlands.

We have a very solid electronic payment system using debit cards. I think everyone already has a debit card, including high school kids (and many primary school children). NFC is already incorporated and field tests with (standard) mobile phones are running. As was remarked, the costs of such payments are low.

Obviously, Apple can simply latch on to the system. Any phone with NFC can be used. But I am afraid they will have difficulty getting people to switch banks.

Maggan

@AndThisWillBeToo

An interesting link. That initiative didn't go anywhere as far as I know. Didn't see antthing about it last time I was in Uppsala. It felt more like a Mastercard puff piece, to be honest.

There are drives to reduce amount of cash circulating at merchants, for sure. Mostly led by the banks. But no wide spread "plan" is being implemented. Unless the inevitable march of technology constitutes a plan.

Cash is used less and less, pin and chip replacing it. NFC and cash cards were tried but didn't go anywhere. Might be a different uptake if it was tried now.

I think Sweden will reduce reliance on cash in the long run, as the banks make it more convenient to use alternatives.

Cheers

/Maggan

Winter

@Maggan
"There are drives to reduce amount of cash circulating at merchants, for sure. Mostly led by the banks."

Cash is expensive. Not only the trucking around of cash is very expensive, the costs of robberies to businesses are high. I know of shops that closed because the owners could not bear another armed robbery.

Winter

"They are clueless about this looming disaster on their horizon. Bankers are still trying to get their heads around the types of threats from new digital currencies and don't yet even fully understand why BItcoin is merely an obscure gambling instrument but mobile money will demolish cash."

Tomi, I think you do not understand the role of banks in the economy. Cash transactions are not really the point. Banks are there to connect the people, businesses, and governments using money. I am used to do all my payments electronically and I never enter a bank branch. But I really need banks to store and manage my money.

AndThisWillBeToo

Get the popcorn, guys and gals! Samsung Z1 Tizen phone is coming this week!
http://m.gadgets.ndtv.com/mobiles/news/samsung-z1-tizen-smartphone-to-reportedly-launch-this-week-at-rs-5700-648147

Wayne Borean


Heh. Read the article on the Samsung Z1 Tizren phone. Saw the phone name was a link, clicked on it, and newer article says it has launched.

http://m.gadgets.ndtv.com/mobiles/news/samsung-z1-with-dual-core-soc-and-tizen-23-launched-at-rs-5700-648492

While it looks interesting, the camera sucks. That could hurt sales.

Still, if it was available in Canada I'd take a look at it.

Wayne

AndThisWillBeToo

4GB internal storage, 3mpix camera. I wouldn't buy phone with so bad specs even to my kids.
But I guess 4GB is plenty when you don't have any apps to install. ;)

Tomi T Ahonen

A few comments:

Otto - haha seriously? This was 9,000 words just on the 17 industries that are inside the deathmatch and I did mention that every industry can benefit from mobile. Do you want me to expand the article to discuss the recent developments outside that circle? That would boost the article to 20,000 words or more, at least, to do that topic any justice. No, I think it best we leave that to another blog posting.

Maggan - Sweden is proceeding in an, ahem, typical Swedish way, working to achieve consensus before the decision is made. The first news several years ago was the Parliament started the discussions. Since then we've had news that the Abba boys Bjorn and whatshiname, Benny are joining the push to abolish cash. Their reasoning is that cash is filthy. So then the Swedish medical associations etc joined in and contributed. Then there was news that merchants want to get rid of cash because its handling is expensive. This is similar to other merchants in other nations in Europe like Netherlands and the UK. Meanwhile several labor unions of laborers working in cash-intense industries like for example bus drivers, joined in because cash is a crime opportunity that threatens their members. So that is about where I've last seen the developments in Sweden but that was spring of last year, havn't heard where it is now. This is not happening this year or this decade but the process is ongoing and we may see Sweden decide to abolish cash towards the end of this decade for the action to happen in the next decade. That is the kind of time intervals we are looking at. But Sweden already abolished cash from one small industry, that is bus tickets :-)

PS thanks to AndThis - no, my thinking was not based on that Tweet, it started earlier and is far broader than the city of Uppsala but thanks that is yes one further piece in the pie. (I had totally forgotten about that, I tend not to focus on city-initiatives, only national ones haha)

charly - yeah, keys is on the horizon and may be added soon. We only now are seeing Americans accept that mobile phones could be keys. The world's largest lockmaker, Assa-Abloy of Sweden (haha and the Abloy part used to be Finnish) has been providing NFC based home door locks for years already, we even see them here in Hong Kong. Japan and South Korea were first to go there but only now we are starting to see for example rental car companies talk about introducing NFC locks to their cars that renters could use their smartphones. I am willing to add locks when it is accepted by that industry that it is headed there (or the numbers are overwhelmingly obvious) but at the moment keys is only a prospect.

Baron95 - that is definitely on the radar. Government (and education) are strong candidates to join the 17 industries already in the race. I am waiting for acceptance of voting through digital means in more than Estonia, and government official documents in mobile like we now see the state of Iowa with its Driver's Licence. Can all or essentially most of government services be delivered via digital? I think yes. Singapore declared its intention that everything other than passports and driver's licences will be delivered via their eGovernment service. Kenya is attempting an even more ambitious project where all of eGovernment would be made available via USSD so it works on the simplest of dumbphones. But we are still a way out on it. Even if we take police forces out (arguably an integral part of government) and military, as separate industries that could be (and in some cases are) farmed out to the private sector - we do see the adoption of early drones to help police work (and the miliatry obviously) so we can also remove many of the humans in that process and automate it more. Yeah, its a strong contender to join the 17 but Government is not there yet haha.

Tomi Ahonen :-)

Winter

Rs 5,700 comes down to around US $92

It is about the price of an HTC Explorer or LG Optimus L5 II E450 in India

http://www.mysmartprice.com/m/custom_list.php?company=&subcategory=mobile&property=|200030-200158&start=25&sortby=price-asc

RottenApple

@Baron95:

Your quasi-religious belief in Apple magic is stunning.
I really wonder how much they'll be able to sustain without another magician to produce it all.

This would also necessitate for an entire generation to be haunted by that magic, aside from the current iCult.

I think the biggest asset Apple has is that under Steve Jobs they somehow managed to truly monopolize some customers. But to sustain that they cannot afford to stumble, they are doomed to release one miracle success after another, and that's never going to work endlessly.

And the last word about the smartphone market hasn't been spoken yet. Apple's biggest reason for their high sales is still that for most customers the true price of the phones gets hidden in convoluted contracts. Look at every market where they are strong and you see the same picture. Look into most markets where they are weaker and you see a more open pricing scheme. So Apple's fate depends on the carriers, if that turns sour somehow (e.g. by Apple trying to take over some of their profitable business) or if the subsidising goes back, things may change quite drastically, especially if they don't constantly give the impression of innovation.

So whatever happens, the one thing I strongly disagree with is that Apple magic will last forever. And since it won't last forever so won't Apple's profits. Like every market leader, at some point they will inevitably be outpaced by a younger, fresher competitor. This has always happened and will always happen, unless you got some kind of government-sanctioned special treatment. It will especially happen in a highly competetive and by necessity innovative environment. Look no further than Microsoft for a company that relied too much on their past achievements. They ultimately descended into a downward spiral because they became too complacent, too arrogant and maybe just too big to act as quickly as needed.

Tomi T Ahonen

More replies

Winter - haha, good argument. Note, I didn't say Banks will die. I said they are in the death-match and they must adopt to digital AND mobile or else they will disappear. Nokia didn't kill cameras or photographs. The cameraphone revolutionized the camera industry and the digital change crippled the giants especially those living on film (Kodak, Polaroid) and then the MOBILE boost to the digital camera, ie cameraphones rather than stand-alone digital cameras, wiped out the stand-alone camera industry killing off Minolta's and Konica's camera businesses and forcing Canon and Nikon to retreat. By the camera analogy, 'banking' will not disappear but 'Banks' might. Its very possible that other ways - microfinance as one early step - can replace parts of what banks do. Then other rivals - mobile operators like Safaricom in Kenya (ie part of Vodafone group) with m-Pesa is BY FAR the biggest bank of Kenya by number of customers even if other major banks handle more total volume of the transactions. Its like what OTT is doing to messaging and Skype doing to voice calls. Exactly the same disruption to the banking industry.

But that brings an interesting angle - do we NEED 'banking' services like we had in the past? The banks grew very rich and powerful by acting as the go-between where people wanted to 'park' their money into something safe to earn some interest, and banks then were able to lend that to businesses who needed loans etc. That was very useful and valuable service in the time before digital connectedness. But do we need that now? I bet I could get a loan through my Twitter followers. I explain what I want, I post the link to my blog on Twitter, and promise a return better than banks and I get a loan cheaper than what I'd get from a bank. Why do we need the middlemen anymore? So if you like these kinds of thoughts, go read Dave Birch's book the Digital Money Reader, its a very eye-opening book about where money and banking is headed. We do need those services yes, but the institutions of 'Banks' they are an optional extra. They have to discover value-add roles to remain relevant. Or they will become the next Minoltas, Polaroids and Konicas among the casualties of the mobile revolution.

Now one last thought, Winter, if you really want to consider what is the BIG tsunami coming to the money industry beyond just mobile payments and mobile wallets... its the concept Jonathan JMac MacDonald introduced a couple of years ago, called 'Advocurrency'. Today every city has numerous locations where you can exchange currency. This is a totally standard process in all countries, I give you Hong Kong Dollars, you give me back Euros or UK Pounds or US Dollars etc. With a standard 'exchange rate'. That concept, exchange rate, can be expanded. Imagine a future when our digital footprint and our reputation is relatively accurately measured and is relatively stable, ie we can't manipulate it with one popular blog article about Nokia or Apple, and suddenly I have a much higher Klout or Kred score haha. But over time yes, our value as an advocate will be easily quantified and as easy to check as we can today check the exchange rate of the Thai Baht to the Japanese Yen.

Then consider advertising. A coupon is an advertisement. Come buy my product, with this coupon you get 25% off. Or this coupon is good for 25 cents discount on my product, etc. A coupon is both an advertisement and a kind of currency. Very limited, obviously, only works with one specific product (or brand or store etc). But paper coupons like in our Sunday newspapers were the first case of advertising becoming money. Now take JMac's theory of Advocurrency. Jonathan imagines a future where there is a clear 'exchange rate' mechanism between our real cash/money/currency, and our online reputation, ie our 'advocacy' and that of advertising. So, in the future, say 5-10 years from now, it may be possible to go to Pizza Hut, and pay in dollars. Or the same cash register at Pizza Hut can accept my payment through my Advocurrency Wallet. That advocurrency wallet could have a balance already and it is partly based on my reputation. But I could recharge that wallet by watching ads. And because its a whole system and reputation and value, I don't have to 'watch the ad now' before I eat Pizza. A brand that is interested in me, like say Audi, could have offers waiting for me, Tomi if you agree to watch two of my new ads about the S8 within the next week, I will top up your Advocurrency Wallet now with 25 dollars.

So Advocurrency would utterly devastate both the advertising industry and the money industry (by merging them with the social media industry). Is this a bizarre scenario? In London there are cookie shops that you can pay for the cookies just by posting Tweets. In Spain the world's first Advocurrency based company has already launched, called Qustodian. They have over 100,000 happy users and they've recently expanded to the UK.

So yeah. Banking will continue. Money will continue. Banks may go the way of telegraph stations. But some Banks will survive and they may adapt radically and change in their trip to digital and mobile. Look at Eastern Telegraph Company. That company was born in the early days of the telegraph. It then morphed into Cable and Wireless. C&W expanded and split and morphed further as radio services and telephone services replace most but not all of telegraph business. Pars of C&W in Asia then evolved into PCCW which is now one of the big mobile operators/carriers in Hong Kong. It still offers telecommunications services in the same country now, here in Hong Kong as the Eastern Telegraph Company 100 years ago and has gone total changes many times but it adapted to the technology changes and still provides a service that would be recognizable as long distance communications as telegraph operators did a century ago. Now today the rate of change is far faster but definitely some banks will embark on this journey and will discover some money-related opportunities in the digital space and will survive. But most of their staff will not be bank tellers just like PCCW doesn't have any telegraph operators in its employ which were the bulk of the labor force a decade ago in its grandparent company.

Some food for thought, eh Winter? This is EXACTLY what the Grand Convergence is all about.

Tomi Ahonen :-)

Winter

@Tomi
" I give you Hong Kong Dollars, you give me back Euros or UK Pounds or US Dollars etc."

Actually, I go to the shop and pay using my debit card and PIN. That worked everywhere in Europe and in the USA. I can also go to a bank and withdraw cash if I need to (that even worked in China and Indonesia).

But I agree, some of the functions a bank performs can be done peer-to-peer. But the fate of Mount Gok and bitcoin have shown that there is something to say for banking regulations. Note also that bank loans "prints money". Every institution that can handle overdrafts and loans can lend more money than it has. That destabilizes the financial market and without oversight (and even with oversight) this can lead to horrible crises like the 2008 financial melt-down (or the Mississippi/South Sea bubbles in the 18th century).

I think that whenever some corporation will assume banking function using mobile, the central bankers will come pay a visit. The same happened with PayPal. That will happen to Facebook and Twitter if they step into this field (as they really want to).

In short, you are right, new banking services and new financial institutions will emerge. But they will be brought under banking regulations. If this will bring down established institutions, great, but there will be national and international oversight on anyone who tries to handle large streams of money.

Peer-to-peer money transfer? That is peanuts and the sooner we can get rid of the banking overhead for clearances, the better.

Tomi T Ahonen

Winter

Ok, and again, nowhere in the blog did I say that regulations will disappear haha. So yeah, valid point, I totally agree that banking regulations are needed also in an era of purely digital money but that was never in doubt and I never said that would not be the case. We agree. In fact we have a good case study, Kenya. M-Pesa launched into a wilderness where mobile money transfers were not part of the financial institution rules in Kenya. After a few years of M-Pesa growth, the operator Safaricom approached the govermment that new mobile money/mobile banking regulations were needed because the M-Pesa uses were starting to resemble banking business (and because Safaricom wanted to expand its banking services into 'full' banking business but without setting old-fashioned banks with tellers and ATM/cash machines etc). Today Kenya under those rules there are already 7 mobile payments providers.

So yeah, 'banking' regulations are needed. Bitcoin is not mobile money and many say its not even a proper digital currency its a gambling instrument (like for example Dave Birch argues and I totally agree). There will be fraudsters in any new technology. That has nothing to do with MOBILE money. Look at Smart Money in the Philippines or Osaifu Keitai in Japan, look at mobile payments in Finland or Tanzania or Brazil and you start to understand what is possible with MOBILE money. Bitcoins are a joke.

Tomi Ahonen :-)

Winter

@Tomi
"We agree."

Yes indeed we do.

Do not be fooled by my remarks, I like your examples a lot. One thing that is keeping poor people poor is lack of access to banking services. Be it money transactions, be it saving accounts, be it cheap loans.

And you are right, mobile will be a watershed in this respect.

Maggan

"But Sweden already abolished cash from one small industry, that is bus tickets :-)"

Sweden didn't abolish cash payments of bus tickets, but _some_ Swedish cities are using NFC cards for public transport. Not _all_ of Sweden, but the biggest cities and some geographical regions. You can still use cash to top up the cards at a cashier, but you can't use cash on the bus itself.

So it's a slow process, and not much of it is coordinated. Swish has made a small impact, the most important step has been chip and pin on the credit cards, coupled with easily accessible terminals for accepting payment.

/Maggan

Yan

Why not talking about Alibaba and its Alipay, Tencent with its Tenpay integrated into Wechat? Those guys are already offering payment, banking and financial services within their platform. They have already blurred the border between banking, social networks, e-commerce platform, etc.
For innovation and your convergence battle, look at China too :)

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    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 www.tomiahonen.com 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

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