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October 30, 2017


Tomi T Ahonen

Ok, have read thoughtfully through all comments

Lets first be clear, there are several types of financial transactions and financial tools or methods, that may experience digital and possibly also mobile disruption SEPARATELY.

So we mostly do now see, why 'mobile money' (a payment currency) should be considered separately from a 'banking institution' that has deposits and arranges payments and makes loans and pays perhaps some interest etc. This then is different from a 'payment provider' like a Paypal that doesn't take cash inputs or make cash outputs but 'facilitates' the payment part, where you have to have a credit card or bank to DEPOSIT money into the Paypal account and if you receive Paypal payment, there is no 'ATM cash machine' where you can withdraw the money - you have to first have the Paypal money transferred to your bank account - and THAT bank account can then be converted to cash. Separately we have the 'hardware' involved. ATM cash machines, point-of-sales terminals in retail stores that perhaps accept plastic payments/credit cards/debit cards and perhaps NFC payments or other types of payment system interfaces.

Here is my first point: ALL the above are SUBJECT to the SAME TOTAL disruption of mobile, but they probably happen at a DIFFERENT TIME SCHEDULE.

CASH ITSELF will be replaced by mobile (I mean cash as in physical coins and banknotes).

COMMERCIAL BANKING INSTITUTIONS like Citibank or HSBC or Deutsche Bank or Bank of China - can be (and mostly will be) disrupted by 'telco banks' like M-Pesa/Vodafone and the various clones all over the Emerging World.

PAYPAL type of payments providers and stored-value systems that allow money to be moved from one 'member' to another - will be (and are) disrupted by mobile. Paypal is of course exploring their role in the future and may end up surviving the transition but I doubt they'll be anywhere as predominant on mobile as they were in the internet payments era.

CREDIT CARD PROVIDERS like Visa MC Amex will need to understand the PHYSICAL evolution past the plastic. I thought it funny at a mobile payments conference a couple of years ago, when a European VP of a major credit card company said something like 'plastic will live forever' and didn't know his colleague, a VP in Asia, had said mobile will destroy plastic. SAME credit card company similar level regional VP and they had PUBLIC statements that were diametrically opposed to each other.

NATIONAL BANKS that issue currency - are likely to be more sustainable (as long as their currency is maintained, haha, Eurozone etc) but they will sooner or later have to deploy ever more mobile systems to their area of the financial world.

LOANS AND DEBT - the modern economy needs loans (car loans, home mortgages etc) and this is the natural domain of banks. That has very little to do with mobile - but if the METHOD of how money is moved between loan provider and loan recepient, shifts away from 'banknotes' haha from paper money to mobile money - then why need the huge expensive stone-building massive steel fortresses of banks built to prevent bank robbers from stealing all the money? That is ridiculously expensive and utterly outdated in a digital money world. If everybody already makes regular daily payments using only mobile phones as their payment methods - then SLIM MODERN NEW banks will be FAR more cost-effective who don't BUILD a big banking office infrastructure that used to belong to every 'main street' and 'high street' of everytown.

ATM cash machines. Haha, I am SEEING the revolution (sad state of it) when I visit Finland. Finland was among the first four countries that had inter-operable INTERNATIONAL cash machines (again, typical Scandinavian cooperation already in the 1970s, ATMs worked across borders in Finland, Denmark, Norway and Sweden). And there was a huge surge in ATM organizations across Scandinavia and by far the largest density of ATM cash machines by early 1980s when most other countries were only teaching their consumers about this evolution to how cash might be available 24 hours a day..

Now what happened next? It was too expensive for all banks to have their own ATM networks. So the industry evolved so that there is only one ATM provider (am not sure about Finland, there MIGHT be a second, parallel ATM network that has maybe like 4 ATM machines in all of Finland but one of those is apparently at the airport). And what happens then? the NUMBER of ATM cash machines is REDUCED.

So those of you who were writing that there are ATMs at every corner... enjoy this moment but remember it was Tomi who told you, in the future that ATM won't be at that corner anymore. We have SEEN this film before. Remember telephone boxes? Payphones? Used to be at every corner also haha. No, the time of the 'ubiquitous' ATM is gone. We are at PAST PEAK ATM. Total global ATM cash machine network is IN DECLINE not growth. And eventually most of them will be gone.

Replaced by what? Read E's excellent point about M-Pesa. EVERY merchant of M-Pesa will act as an ATM. This is FAR FAR FAR cheaper for any wannabe 'bank' where they don't have to build burglar-proof ATMs and then STOCK THEM WITH CASH daily, by armored guards. No, rather have the mobile phone airtime merchants do top-ups of voice minute charges - AND allow deposits to the mobile banking accounts - at any merchant! The merchant carries the risk of being burglarized (for a trivial amount vs how much cash is sitting inside an ATM haha) and the clever merchant will LOVE to pay out the money, so he/she doesn't have to carry all that cash and take it to the BANK at night... So the NET amount of cash by any one mobile phone airtime vendor is modest but you the consumer have TENS OF THOUSANDS of ATMs nearby, rather than a few hundred or a few dozen if we're thinking of say Africa.

EVERY aspect of the financial industry will see the disruption of mobile. Exactly like in marketing. It was not 'only advertising' that was disrupted by mobile. Not every PART of the financial industry will be TOTALLY demolished by mobile and many of the FUNCTIONS we have today, will still continue in the mobile future. But some parts of the financial industry will be TOTALLY replaced by mobile - such as cash as a payment method (coins and banknotes) plastic cards as credit card mechanisms and debit card mechanisms (totally replaced by mobile phone solutions) etc.

What is future of a commercial bank? A credit card company? A payments provider? Those are all jeopardized if their very 'reason to exist' ie cash money, 'banknotes', credit cards, etc are replaced and handled directly and better on mobile phones.

What is the EXACT model that wins gosh, nobody knows that. But we have some good case studies from South Korea, Japan, Philippines, Kenya, China etc. I do think that the smartest way is to have the industry cooperate (like in South Korea) do the national ID based on SIM card on mobile phone, that can be activated for any banking features by various registered banking and financial institutions (say Visa or Citibank or Paypal) and if that phone runs out of battery, you swap the SIM card to your wife's phone and you can still do all payments as conveniently etc...

Now generally when I say 'mobile money' I do mean the 'money' side and I tend to use the term 'mobile banking' or credit card companies etc when I want to distinguish between other types of financial providers and services. But in my use I am often sloppy and don't even think too clearly about the distinctions of a mobile PAYMENT method or an actual mobile CURRENCY or the mobile PHYSICAL instrument of 'cash' going to mobile phones, etc. I could be far more precise and I will try to be in the future.

I do think I should write a blog just about mobile money and discuss these things but for now, lets continue this dialogue here in these comments

I'll do specific comments next

Tomi Ahonen :-)

Jim Glue

This has been one of the more enlightening conversations on this forum. Well done everyone.

FYI - I was exploring the concepts trying to tease out just what will and will not be destroyed by mobile.

M-Pesa is a clear example that national CURRENCY isn't destroyed by mobile. Currency may be threatened by Bitcoin and the like, but that's a whole different discussion.

Vodaphone becoming a bank doesn't seem to me that mobile is destroying banks. That's where my ATM thoughts sprang from. The value of M-Pesa (appears to me) to come from the penetration of mobile stores all over those poor countries...combined with "air time" becoming a trade able commodity.

Putting money into Vodaphone and spending it with your cell phone does not seem to me to be all that radically different than putting money into your bank and spending it with your Starbuks app, ApplePay, AndroidPay, Paypal etc.

My daily routine includes buying breakfast at Mcdonald's, using my McDonald's app (qr-code enabled) to get a discount, and using ApplePay on my Phone (or watch) to pay. Then back to the office where I grab a soda out of the cooler, and walk over to a machine where I scan the barcode, and pay again with Apple Pay (there are several other payment options, and more than just soda are offered for sale).

Mobile is more convenient than plastic for sure. But I'm not sure that mobile is killing the underlying infrastructure. Mobile didn't kill plastic or banks in Kenya (from my shallow understanding). Mobile stepped in where payment infrastructure wasn't available to the poor who at least had mobile phones and easy access to mobile stores.

Where I see disruption in the developed economies is for the "convenient use of money" portion of the credit card business. And that's a large business for sure.

Example: Walmart does NOT want you to buy their products with a credit card. They do NOT want to pay the CC fee. They do want your business and will accept CC as the better option of not losing your business.

WalmartPay (or whatever that consortium was called) was all about having a form of payment that would withdraw directly from your bank and not via CC companies (like using a bank debit card). That's why Walmart set itself in opposition to ApplePay.

Apple, for it's part, figured there would be no advantage to them to disrupt the CC players (for now). So ApplePay is tied to CC and thus opened them up to pretty much everywhere in CC are accepted (which is Apple's target market).

But, once Apple pay is truly established...accepted by 80 to 90% of places that accept CC. How small a step would it be for Apple to develop the direct relationships to banks, PayPal, Vodaphone or any other bank and completely cut out the CC transaction fees?

And of course, SamsungPay, GooglePay and every other mobile player will be able to do the same thing.

There will still be banks...there will still be CC. But a chunk of the "CC transaction fee" business will evaporate.

And by "banks", I am including the Vodaphone new style bank.


"How small a step would it be for Apple to develop the direct relationships to banks"

I suspect a big step actually. Behind the obvious POS credit card swiping/NFC terminals, there is a whole infrastructure to query merchant and issuer banks, confirm transactions, manage accounts, clearing settlements, etc. Far from trivial.

Regarding "the Vodaphone new style bank", it occurs to me that M-Pesa plays exactly the same role as something very well-known and popular in Europe: postal banks.

The services are identical: you can pay (cash at the post office, or via Internet, or via debit card), withdraw cash, transfer funds from one account to another. Unlike commercial banks, and just like M-Pesa, no loans.

Historically, postal banks originated because there was a need to provide financial services to a population that was (a) not wealthy; or (b) in the countryside; or (c) dealt essentially with small transactions.

Commercial banks were located in cities, had no branches in the countryside, were not interested in small fry, and were too expensive. Savings banks were local, geared towards savings and loans and not transactions, and lacked country-wide connectivity. Post offices were everywhere, already dealt with cash, processed small amounts (postage), and formed a dense mesh over a whole country.

In Africa, the same need arose, banks exhibited the same "expensive, uninterested" characteristics, but there was no comparative postal network. On the other hand, there was another densely meshed communication organisation, used to manage small transactions and to deal with cash: mobile network operators...

Postal banks are very popular -- where I live, firms, utilities, tax offices, etc, send their invoices and payment slips assuming that people will settle via the postal bank -- which they mostly do. M-Pesa plays exactly the same role -- but instead of the post office, the mobile telecom operator is the financial service provider.

I understand that there is no such postal banking system in the USA, and that commercial banks there are ferociously opposed to one, so it is perhaps difficult for Americans who never lived in Europe to grasp the idea.

I do not know much about the mobile schemes of the Far East (especially Japan, South Korea), unfortunately, so I do cannot figure out how they compare to that.

I find it interesting though that the postal system and the telecom operators are both _communication_ organizations (paper resp. radio waves) which eventually provided cheap, ubiquitous financial services.


In Finland I so far haven't been able to find a single place where I could NOT pay with Apple Pay - every place accepts it UNLESS they don't have NFC-enabled card terminal (almost every place currently do, though). As most latest thing I paid my car maintenance with Apple Pay. I was at the cashier, already holding my phone and did not want to dig my wallet from my pocket so...

Jim Glue

Hi E,

In the USA, pretty much every bank has a debit card. They use the same infrastructure as credit cards. When I use ApplePay at places that can differentiate between CC and debit, they do...defaulting to debit (you have to enter pin, or cancel to proceed as a CC).

It's already built in, it's just that Apple isn't changing the dc/cc equation or promoting one over the other.

Imagine that Apple set up a relationship with Paypal...or Apple set up it's own bank. It's just like Apple sneaking up on the Telco's with digital sims...and just like how Apple took control of the customer relationship with the Telco's.

Being consumer's just a matter of time IMHO.

The CC companies prevent stores from making it obvious how much it costs to use a CC. They are not allowed (by contract, not US law) to charge a higher price for CC purchases vs cash. So many consumers don't see the link between "rewards points" from their cc and higher prices at the grocery store (who have to build the cc price into the product). It seems like free money.

I foresee Apple switching from the CC side to the consumer/merchant side of the equation in time.


@Jim Glue

The situation is similar in Europe: all banks provide a debit card, pretty much standardized across banks and countries as the Maestro card; and shops are now allowed to differentiate prices based on cash vs. CC (although in some you can negotiate).

What I increasingly see though are Internet shops offering a variety of payment choices, and levying a fee for the expensive ones (above all credit cards, Paypal) while not levying anything for direct bank or postal bank transfers.

Apple Pay provides convenience -- it rides over the existing debit / credit card infrastructure, and does not make transactions any cheaper.

Apple becoming a bank would be a _huge_ deal, make commercial banks apoplectic, and introduce some significant changes in the whole payment infrastructure -- just like it happened with telecom operators in some African countries.



shops are _not_ allowed.

Abdul Muis


I wonder if apple become bank, will it become the microsoft-skype situation for apple?


Some comments:

I absolutely do not think that the banking infrastructure is in any kind of danger. Services like M-Pesa only stand a chance where the banking infrastructure is sufficiently weak and cannot support the population. Moreover, any kind of financial services provider will require a banking license in Europe, so high obstacles are in place to get into this business. Seriously, I absolutely cannot see any way how an upstart in this business can have a chance against a huge and established industry with decades of experience and a huge list of regulations that ensure the safety of the money in the system.

Considering the current forms of payment, the biggest issue is not that paying cash-free is impossible but that the existing infrastructure has a share of (mostly minor) problems that need to be overcome - for me the biggest issue is simply that with most payment options authentication takes too long. The end result here should really be that one can swipe the card/phone/whatever (and most definitely not use the phone as the sole means to authorize payment!) in front of a scanner and then authenticate with a fingerprint or some other unique thing. Another big issue is that some participants are hard at work to prevent a much needed consolidation here. Apple is one of those with their insular payment system and similar ideas like SamsungPay and related are not helping either. I guess in the end government regulators will have to step in here and keep a levelled playing field. What this really needs is the elimination of all those middlemen and letting the banks handle this directly - especially for micro payments where the current system simply costs too much to make this economical.
And sorry to say, these are problems that go much, much deeper than a mobile phone can solve. Much of what's going on here is going in the entirely wrong direction - we do not need a fundamental reinvention of how payment works with more and more service providers cooking up their own system but an optimization of the existing methods. Nothing more, nothing less. And what we definitely do not need is a chain of middlemen that all try to get a share of the pie. ApplePay with at least two such middlemen (Customer -> Apple -> CC company -> bank) sounds like a stupid approach from start to finish because it will ultimately drain too much money - especially if the second middleman aside from the CC company does not merely use such a system as a means to bind some customers to their product but to make some actual profit. (And all that doesn't even start to consider privacy considerations. How much of this are you willing to reveal to companies like Apple, Google etc.?)

Jim Glue

Hi Tester,

Your bank and/or CC already know everything about how you spend money. Is Chase or JP/Morgan more careful of your data than Apple? (more so than Google for sure, ;)

CC aren't just mere middlemen. They provide fraud protection and other services as well. I'm just suggesting that the "exchange of money" part of their service is open to disruption.


"and shops are not allowed to differentiate prices based on cash vs. CC "

Many (most) shops overhere (NL) simply do not accept CC. Supermarkets and groceries almost never accept CC. Online stores always ask a fee when you pay by CC.



Very nice to see comments to be that stimulative!

Regarding airline miles and airtime: do they have an expiration date?

Because if they do, they fail criterion (2); they are not fungible and hence inadequate support for a currency in any form.

Yes, the criteria for "money" are apparently innocuous, reasonable, basic -- but they are actually quite stringent, and it is not trivial to make something work as money. Which is why I can honestly not say whether Bitcoin & co really work as money or not. It is tricky.


Yes, I already alluded to the many intermediaries trying to get their cut. Stacking banks, credit cards, Paypal, Apple/Google/Samsung is just overly complicated and costly. The beauty of M-Pesa is that there is exactly one service provider taking care of everything. It is something equivalent (not a copy thereof) that 1st world countries should strive for -- even if it kills businesses of Visa, Apple and Paypal.


The situation in the Netherlands resembles a bit the one in Austria, but you could inverse all your qualifiers to get the one in Switzerland (except for e-commerce, where extra fees to pay via CC/Paypal is increasingly frequent). Many countries, different situations.

Per "wertigon" Ekström

Very nice discussion on what money is! Just got one small nitpick, and that is - money has to evolve, it's not created from nothing. :)


I do believe Bitcoin does fullfill three of the four criteria you have listed, and the fourth is slowly coming along. So while it may right now be counted as an asset, like real estate, obligations or yes, gold, it's starting to become money.

Your criteria listed:

1) Be universally accepted.

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

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

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.

Now, as for bitcoin itself, we first need to delve under the hood a bit. The basic, nitty gritty details of bitcoin is that there is a public ledger, and this ledger keeps track of your account, and how many bitcoins you currently possess in that account. The blockchain is like the accounting trail - it keeps track of every transaction done since the dawn of time. Who controls the ledger? That is the job of the bitcoin miners. They register the transactions and get paid in bitcoins as thanks. It is possible to trace every bitcoin transaction ever made, and this is all public knowledge.

Bitcoin, like the internet, is also a pseudonomous network - there is no such thing as true anonymity, because everything you do can be traced back to your wallet. To retain true anonymity you must make sure that no-one knows that your particular wallet belongs to you, just like you are not your IP-address but the IP-address can be traced back to you.

Now for your four points, I feel bitcoin pass 2, 3 and 4 but fail at point 1 - for now atleast. But the snowball is still rolling and gathering momentum... :)

For number 2, since bitcoin is an account in a ledger, yes you can supplant any bitcoin numbers for any other numbers.

For number 3, we both agree the bitcoin network in and of itself has little value.

As for number 4, you can aqcuire bitcoins in another way than purchase, and that is to perform some service or product that another person is willing to pay bitcoins for. Transactions are atomic - happen once and are irreversible. I therefore think you confused the first and fourth point in your explanation.

As for the first point, well, some people have already gotten paid in bitcoins for some services or products, but since bitcoin is not universally accepted yet, it's like getting paid in Euro when you are in the U.S. - Still gotta exchange the money, yet both are valid currency..

So, in closing, I think bitcoin might not yet be money, but it will be soon, and the same thing is true for M-pesa or any other wannabe currency. Gotta make it accepted before you can call it a currency, right?



I fully agree with you on Bitcoin regarding (1) and (3). At first sight, (2) and (4) are fulfilled, so Bitcoin seems to be a purely electronic currency emerging.

However, in articles I read references that, without violating any of the Bitcoin algorithms and procedures, there are ways for a powerful enough miner to either create duplicate Bitcoins, or to unwind some Bitcoin transactions and replace them with his own. The mathematics must be hairy and are surely completely beyond me, but it seems to be a real issue with the way Bitcoin is defined at present; it came to the fore because of the pre-eminence of Chinese miners.

If this is true, then either (2) or (4) is not satisfied, and Bitcoin is inadequate as money. I have no idea if other bitcoin-like schemes have the same chink in their armour. Yes, setting up real money is damn hard -- it is normal for pioneers like Bitcoin to make mistakes.

The major problem why Bitcoin will not take hold is the insane energy costs associated to its mining. It simply is not sustainable.

As for M-Pesa, it is not a wannabe money, it deals with real money.

Any way, interesting developments all around.


Actually, a second deadly flaw with Bitcoin is that the total number of Bitcoins is limited -- this means that as a currency it is deflationary.

To grow, an economy must have a growing supply of money (in practice, the velocity of money cannot be increased arbitrarily and actually tends to decrease, so the total amount of money must grow).

What it means is that Bitcoins will become too expensive (intrinsically, as money, and practically, because they require too much energy to mine) to be used in normal transactions.


"The major problem why Bitcoin will not take hold is the insane energy costs associated to its mining."

This is associated with the issue of "there are ways for a powerful enough miner to either create duplicate Bitcoins, ...". Bitcoin is a "proof of work" system. You cannot change the blockchain unless you can outwork all other miners. There seem to be ways that an attacker with 1/3rd the capacity of the mining pool could succeed. This immediately shows us why the energy expenditure cannot be lowered, as that would make the blockchain vulnerable,as well as why an attack would be difficult to pull off, the combined processing power of the miners is truly huge.

The deflationary aspect of bitcoin is indeed a problem. Deflationary currencies, e.g., like gold, are really bad for growth. They punish investments and reward hoarding them.

There are other problems. The blockchain does not scale well. Checking transactions is taking too much time.
Furthermore, the original contributors could have siphoned off an enormous amount of bitcoins (~1.5 million mined before 2010 were never spend). For instance, in 2010, there was a single largest transaction of 90,000 bitcoins that have been distributed over the network.

Some of these problems can be solved. Blockchain scaling is addressed by the current forks. The proof of work could be changed from burning CPU cycles into doing something useful. Dormant old bitcoin addresses from before a cutoff date could be blocked from trading or somehow "freed" to miners. Etc. If people want to change the currency, they can do so.

Tomi T Ahonen

Ok I'll start with indiv comments. I'll try to get to all in the thread, over the next days

Hi Winter, Tester, Phil (Oct 30)

Winter - on blockchains ok, will be growth area, I'll agree with that. Their future invariably tied to mobile, I also agree with that. Their actual role in future of digital money, am not sold but it could be. I am looking primarily at bitcoin and thinking that it is primarily a gambling instrument...

Tester - haha, I vaguely remember that you wrote in the past and we had that debate back then too. There certainly are 'issues' with mobile as a tech and certainly there will be many who will be wary of using mobile because of those (or other) issues. So yeah, battery life, what if you run out of battery life and can't pay for your bus fare home. Its a fair point (should carry two phones, should have bigger battery on the phone, or replacable battery or etc etc etc). BUT those will be delaying factors only for SOME users. MANY others will find the convenience and speed of mobile utterly overwhelmingly superior to anything else they used and will rush to mobile. That is before we consider any level of say "you can't use cash" (or credit cards etc) and any INCENTIVES for using mobile - like say in a fast food restaurant or coffee shop where you may get ahead of the line, if you pay by mobile - similar to how in many cases those who use mobile check-in at airports can get through the hassles faster than dealing with the human interfaces that usually have very long lines...

But I'm not dismissing the point. There will be MANY who will worry and fear (haha, perhaps especially among those who work INSIDE the industry like you).. but consider the alternatives. If you have plastic - a credit card - and lose that. It will take you 3 days before you have a new credit card if you're lucky, can be a week if you're unlucky. A lost or stolen mobile payment solution can be re-activated within minutes on the next phone. Consider cash. One of the problems in Africa for example is that paper money is not durable. If you hide it inside the mattress of your bed (poor person, doesn't have a bank account) then the rats might eat it or if there is a fire the money is burned, not to mention stolen. But having your 'wealth' stored in a 'semi' bank type of system like a mobile operator account - gives you security and safety - that we Westerners take for granted because we HAVE banks and have ID cards and addresses that we can GET a bank account (very many in Africa are 'addressless' still, how can you register such a person as a bank customer haha, who doesn't even have an address, far less a 'valid ID card')

So there are swings and roundabouts. For some people there are reasons to delay or not even get onboard - we saw the same movie with SMS, with mobile music, with mobile gaming, with mobile news, with mobile social networking, etc etc etc. And VERY fast (just 16 years for cameras) the industry shifts where most don't use the old way, and use the new 'mobile' way. I am not talking about this change happening in the next 2 years. I am more looking at the next decade (or two). But the trend is towards mobile used as a payment method, banking going to mobile, credit cards going to mobile, money itself, going to mobile.

On hacking, sure. I'll accept that. They'll be hacked too, like anything. BUT the mobile cellular phone based payment system is MORE secure than online eg Paypal or plastic credit card that can be swiped by a belt-worn card-reader haha. Nothing is unhackable but a mobile phone based payment solution can incorporate ALL security means of OTHER systems but can ADD more security due to the mobile tech element (cellular, positioning, fingerprint, face recognition, voice recognition whatnot).

On camera vs other industries. You said camera was different because of the hardware side of it. Maybe so. But we have too many perfect case studies in SERVICES and SOFTWARE too, for Cameras to be the outlier. That is why I am using the camera industry as my case study in my workshops - because so much of what happened there, IS happening in other industries too. Look at the newsmedia industry. How many of the 'giants' of newsmedia - first newspapers of course - are dying because of MOBILE. Even the big news industry associations now say that the internet is not the future of news, tablets are not the future of news - mobile is. We could take gaming, music, advertising, social media, whatever and the case is the same. It is not 'just' affecting hardware. Mobile always wins!

Winter (reply to Tester) haha good point about youth and mobile banking.

Phil - I hear you and at first it doesn't seem there would be any real 'gain'. But we have a PERFECT case study of plastic vs mobile from Japan. The Felica and Suica systems. They are both NFC based and interchangable. So for example the Tokyo subway system. You can use a Suica card to pay for your fare, exactly like an Octopus card or Oyster card or whatever NFC based payment platform where you preload your money and the system automatically deducts the payment as you travel. Then some Japanese consumers started to use RUBBER BANDS to tie the Suica plastic card to the back of their mobile phones. NTT DoCoMo looked at that, and said, wait a moment... and they put the same NFC chip onto their phones and created the Felica system - exact same payment terminals accept the payment exactly the same way - but now the money doesn't go via the Suica payment 'wallet' but rather NTT DoCoMo (the biggest Japanese mobile operator/carrier with half of Japan as market share) own mobile wallet. And in a really short amount of time the vast majority of NFC payments rushed to Felica. Suica still works! It just is a tiny slice of the NFC payments because most phones do Felica. And NTT DoCoMo was very smart about it, they licenced the tech to their rivals so there are not 3 competing systems in Japan by each carrier but one which works on all places that accept Suica. So for example all 7-Eleven stores accept mobile payment by Felica. NTT DoCoMo's mobile wallet of course then was built to take advantage of this..

The UTILITY and convenience. YES you can have a separate plastic debit card or credit card or a whole slew of them. But WHY? If all payment places accept payment via your mobile phone, and the credit card companies all deploy their system onto your phone - and the phone is always with you, why not pay by phone. Simpler, faster, easier, and suddenly you don't need that bulging wallet anymore with all that plastic. As I reported a decade ago already from South Korea - the local credit card companies will literally ask you when you sign up for their credit card 'do you want plastic with your credit'. Do you want an old-fashioned plastic card mailed to your home next week, because the credit card FUNCTIONALITY is instantly enabled onto your phone now, while they are on the phone. Most Koreans say they don't need the plastic card mailed to them at all.....

(more replies coming)

Tomi Ahonen :-)



Bitcoin is a pioneer. I am confident that future electronic currencies will be based on some form of blockchain algorithms that solve all the problems with current e-coins of all kinds. It will be probably supported with mobility in some form.

Bitcoin itself has become essentially a speculative tool. What can anybody really do with a money whose unit corresponds to USD 7260.60 (I just checked)? I certainly do not buy cars or antique Persian rugs every day.

Tomi T Ahonen

Hi Jim, Winter, Michael, Phil (Oct 30)

Jim (thanks we agree, cameras overall)

Jim the second part. So you don't see the pattern yet? Lets go from the start. Voice calls. As of 1978, all voice calls were on fixed landlines until NTT in Japan introduced world's first cellular/mobile service. Today more than 90% of all voice calls are on mobile phones. Then messaging? In 1993 all messaging was on the internet (or separate messaging platforms like 'dinging machines' used in the Finance industry etc) but along came Radiolinja in 1994 that launched commercial SMS and today, about 80% of all messaging is on mobile phones (includes obviously more recent messaging services like Whatsapp and of course most emails sent or read on mobile phones rather than PCs). Music came next, in 1998 first downloadable music (=ringing tone) introduced by Saunalahti in Finland and today the vast majority of all music is consumed on mobile phones. Gaming? That is on the same path, nearly half of gaming is now on mobile phones and by FAR the most GAMERS as in consumers who play any kind of videogame, do so always or part of the time, on their mobile phones (vs gaming consoles, PCs and the PC-based legacy internet). Then came the internet. Year 1998 all internet consumption was on PCs. Today the vast majority of internet users are on mobile and we're at the point where shortly half of all traffic will be on mobile too, the total TIME spent on the internet is already more on mobile than PCs of any kind including tablets.

Do I need to go on? Maps? News? Advertising? Social Media? Calendars? Clocks and alarms? The list is only growing. There is not ONE case where something could be done on mobile, that mobile didn't win or isn't currently growing where the legacy way is declining. Mobile ALWAYS wins. Same is true of mobile money and mobile payments. Countries like Kenya or Turkey or Estonia or Philippines or South Korea or Japan or Finland or Romania or Sweden are all well on the way to mobile payments and mobile money world. The rest of the world lags. In Europe already more than half of all adults use mobile in some way to make payments. This is THE SAME MOVIE. It is ONLY a question of TIME. How long will the transition take. There is NOTHING even on the HORIZON that could 'win over mobile' haha. But mobile is CRUSHING all other forms of payments and even demolishing the need for PHYSICAL CASH MONEY, banknotes and coins. A lot of smaller industries have moved beyond accepting cash from the very first such instances of parking payments in Estonia and bus fares in Sweden. But how different is the world? Norway introduced mobile parking in 1999. Las Vegas just this WEEK started mobile payments for parking. Gosh some countries are SO SO SO far behind!!!

When you look at the early services - not hardware - on mobile, from voice calls to messaging to gaming to music to internet browsing - it is OBVIOUS that there was NO WAY any of those had ANY chance against mobile. Now, do we want to consider VR? I was right here on this blog from the start telling you, don't think VR will be big. It won't be. "But Oculus, Oculus". No. VR will not be big, the 'mobile version of VR' will be big - that is AR. And where do we stand today? Most 'VR/AR' experts already agree that AR will be the big thing and VR will only be a niche for gaming and maybe some education uses etc. Who told you so? Mobile always wins!

Lets get to the meat of your comment:

"Banking? I don't think so. Mobile will be a "new face" for banking. Mobile will ride atop credit cards. Mobile is already doing to ATM's what ATM's did to tellers. But there is still a bank. Digital currency is a issue in it's own right and THAT could play a role in diminishing some aspects of banking. Or not, depending on whether countries will follow China's lead. But no matter, it won't be mobile that makes digital currency happen. No more than mobile makes EBay happen, or FB happen. I think services will all ALSO be served on mobile...and this won't destroy the services, but enhance them. This is FB, Ebay, Banking, etc."

Fair points and I get that a lot. Mobile CAN be the enabler of credit cards (see Korea example in the above) And you can see mobile is disrupting ATMs the way ATMs disrupted banking (human) tellers. Then you say 'but there is still a bank'. Ok. I would concede that the SERVICES provided by banks - providing loans, providing safe heaven for money, paying perhaps some interest, and enabling payments from one source to another, and international money transactions etc - those will yes, be needed. But banks? No. Banks are VERY inefficient and outdated in their ways of handling these things. There are disruptive solutions to all of those needs by far more swift and nimble players. Even crowd-sourced loans, that truly displace the bank. SOME banks will survive (probably). Most will die. Some banks will be able to change and live in the new world - like Google in the internet space or Apple in the PC space or Samsung in the home electronics space. But for every Google, Apple and Samsung there are plenty of Yahoos, Dells, Panasonics who fail and another batch of the Sonys who try to adjust. Some fail like Microsoft, some show promise like Lenovo. But most of the players in mobile are new brands we never heard of before, in that industry, like Nokia, Apple and Huawei in cameras; like Google (Android) in software OS platforms, like Xiaomi, Oppo etc in handsets, like Whatsapp in messaging, like Spotify in music, like Rovio and Supercell in gaming, etc etc etc. This is typical disruption.

Like we've discussed later in the thread already, M-Pesa and thus Vodafone IS a bank, with a proper banking licence in Kenya. They got there, for years declaring 'we are not a bank, we are not a bank' and they still don't have any banking OFFICES with tellers taking in money and issuing bank deposit slips and having loan officers, etc. Yet they are a massive bank in Kenya handling a huge part of the total economy's financial transactions.

So if we want to say 'there is still a need to get a loan' ok, and banks have that competence to consider who is a good or bad loan risk etc. I'll accept the need to process loans is real and a genuine massive 'banking' industry is needed just to process the loans needed for modern economy to run, like home mortgages, like car loans, student loans, all that. Fine. That is certainly needed. What of the current 'bank' is actually NEEDED to handle that? Not anywhere most of what banks current are and what they do. That service could be handled by other entities but yes, I'll accept that some banks will evolve and this 'core' part of banking will remain and even if others take part of it, probably those banks that 'survive the mobile revolution' - will still be doing much of their 'profit' out of the loans lending business. However, that business does NOT sustain their current structure. Utterly crumbles. The number of bank branches is ridiculous the number of ATM cash machines is outrageous and the amount of money wasted to maintain those is stupendous. That will all be disrupted by the far more streamlined future 'mobile banks'.

Will this be smooth? No. Will the banking industry try to lay all sorts of roadblocks to prevent their industry collapse? Of course. Will there be regulators etc that will be doing bizarre decisions in many countries, of course. But 20 years from now, will the Top 20 biggest global banks still be there? No they won't. We'll be lucky if 5 of the current 20 biggest banks remain. In their place will be TOTALLY NEW players like cameras today, Minolta, Konica, etc gone and Nikon firing staff and telling its investors, next year sales will be down 28%. Not because human beings have stopped buying cameras. No, CAMERA sales will be up by at least 5% next year but just that the old-fashioned legacy industry of cameras is not sustainable and will need to shrink to the very hard-core pro and semi-pro segments. That may sustain one of Nikon, Canon, Olympus, etc, in 'DSLR' form (profitably, perhaps a second one desperately struggling and making perennial losses) and MOST of their surviving rivals will support their own camera biz by the smartphone side like Samsung, Sony, Panasonic etc.

On 'services will also be on mobile, it will not destroy them' and you mention eBay and Facebook. I totally disagree here. Mobile always wins. ALL of the major digital providers HAVE to migrate to mobile. As they learn about mobile, they will first replicate what they did on the legacy PC internet, then they learn that mobile has unique aspects that you cannot do on the PC internet - and that is when mobile becomes BETTER. THAT IS THE SIGN OF THE END. This is why Google is the perfect example, how they now DISCOURAGE PC/legacy internet forms and PRIORITIZE mobile, for example in search. This is now the end game and there will be SOME providers who cater to the old fogies with a PC/legacy internet type of service - but MOST will be ONLY MOBILE. You CAN of course use your PC to access that site but go to Japanese websites, they are almost all pre-formated for mobile screens and many do NOT HAVE a PC-oriented service anymore. The legacy PC internet will diminish and eventually die. We are now seeing the start of that stage. It will not be 'a few years' - it will most definitely take a decade or two more, but it is INEVITABLE. Go look at internet web pages in India. All are pre-formated for mobile now and many don't have PC web versions anymore. Look at how many games are now released ONLY for mobile. The world championships of videogaming no longer support any games on PCs, only on mobile etc.

Winter - thanks for the answer to Jim about credit cards vs debit cards. It invariably surprises Americans that the rest of the world does not live by credit cards haha.

Michael - good point about GPS, thanks.

Phil - on battery. good point but I addressed it in the above. There will be many who will not care (or are 'too ignorant' to notice this problem). The convenience often trumps the 'sensible worry' in this case and we can always swap in our SIM card to our friend's phone for a moment if we had that need... (or carry two phones! haha)

BTW I am increasingly seeing everywhere the free electrical recharging stations.

(more replies coming)

Tomi Ahonen :-)


"What can anybody really do with a money whose unit corresponds to USD 7260.60 (I just checked)?"

Smuggle money out of the country. That is why the Chinese and Russian are so fond of bitcoin.

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