Mobile Ubiquitous Banking and the Future of Money :: SXSW '09
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Mobile Ubiquitous Banking and the Future of Money :: SXSW '09

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Nearly half the world's population now has a mobile device and more than a thousand cell phones are being activated every minute. The ubiquity of mobile devices will make new services available to ...

Nearly half the world's population now has a mobile device and more than a thousand cell phones are being activated every minute. The ubiquity of mobile devices will make new services available to billions of people worldwide who have not had access to traditional banks or credit cards. In developing countries such as Kenya - where nearly 80% of the population is excluded from the formal financial sector - text messaging is being used to transfer money to friends and family living in other countries. Moreover, new forms of currency are being created - trading cell phone minutes for goods and services, for example. This panel will explore the challenges and opportunities as banks go mobile, and how the revolution in mobile financial services will change the way we think about money.

Guillaume Lebleu (lebleu.org/blog), Tom Limongello (Crisp Wireless), Kyle Outlaw, moderator (Razorfish), Ajay Revels (politemachines.com), Katherine Maher (Unicef), Sacha Tueni (Vodafone)

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  • Welcome to our panel, Mobile Ubiquitous Computing and the Future of Money. I would first like to thank Hugh Forrest and the organizers of SXSW Interactive for having us today. [Cover slide]- - - -TUMA PESA is a financial service offered by Babawatoto TUMA-PESA (e-money) is an innovative mobile payment solution that enables customers to complete transactions including person to person PESA transfer. It is aimed at millions of Kenyan mobile phone customers. Send TUMA-PESA to anyone who has a Mobile phone on any Kenyan phone network. TUMA PESA can be collected immediately at any of the hundreds of shops and Agents that include banks, petrol station chains, supermarkets, cybercafs, and many more independent retailers country wide in Kenya. More information: http://www.babawatoto.com/index.php?option=com_content&view=article&id=85:tuma-pesa-&catid=1:latest-news&Itemid=75Image source: textually.org / Tuma Pesa
  • [Slide of panelists, one line bio] My name is Kyle Outlaw, and I work at Razorfish in New York. I'm in the User Experience group, and I specialize in interaction design for mobile applications and have also worked for several years with clients in the financial services industry. With me today is Ajay Revels, design researcher at Politemachines, Katherine Maher, Communications Officer at Unicef, Sacha Tueni, Social Media Mgr at Vodafone, and Tom Limongello, Director of new business at Crisp Wireless. Thank you all for joining today.
  • So first off I'd like to briefly talk about how this panel came to be. A couple of years ago while we researching mobile applications (this was pre-iPhone), we were interested in how and when mobile was going to catch on the US. At the time, clients really had a tough time envisioning their website or services on mobile. As everyone's very aware, mobile was really just being used for voice and some email here in the US. [Early phone banking UI]
  • Whereas in Japan, they were some really interesting things such as what you'd read about in a William Gibson novel, such as Near-field communications, using that technology for example in place of a subway card for example. In the area of contact-less payments, Japan and Korea are well ahead of the game, to the point where it seemed the US was never going to be able to catch up. [Slide: 2-3 examples of mobile money apps Japan, Korea]
  • Meanwhile some even radical uses of mobile were happening in Kenya. This example is fairly well known by now, I'll touch on it briefly here. In Kenya safarcom, the national phone company and Vodafone teamed up to offer banking services to customers that for various reasons did not have access to formal banking services. M-Pesa enabled customers to transfer money to friends and family, pay for goods and services, [water payment image], get money out of an ATM and so on, effectively doing an end-run around the system. But even more interesting was that these customers were beginning use other forms of currency, such as using airtime to pay for goods and services. [Slide - M-Pesa Vodafone]
  • So I found this case study particularly compelling for a few reasons. [Slide: three takeaways from M-Pesa] First we normally think of technologies having a trickle-down effect in other words advances in technology happen in developed countries and than can be used in so-called underdeveloped countries to leapfrog, in theory. But what is starting happen is that the most radical innovations are actually coming out third-world countries like Kenya (and by the way there are numerous other examples of these that I hope to touch upon later). So that's one thing.Secondly this initiative was not started by banks, it was created by telecoms, one local and one global.And third: we are starting to see the emergence of virtual currencies such as airtime being created that are enabled by new technologies such as mobile devices. Fourth: technologies, is this mobile phones (and there are some examples to of P2P lending networks which I hope to get into as well) are enabling customers to get access to money services that they previously didn't have access to, whether it was because there wasn't any bank available locally OR they simply didn't trust the bank. But also these services enable individuals to effectively BECOME banks, as services such as M-Pesa enable them to store money in virtual accounts and transfer or lend money to friends and family easily.
  • So out of this comes three premises that I'd like to probe with the panelists today:
  • 1. TrustTrust, the lubricant of the global economy, has been severly compromised. However, echnologies such as social media and mobile devices will lead to the creation of micro-economies (friends, family, close associates)
  • 2. TransformationOur concept of money is about to be radically reformed and the innovation will not come from the banks.
  • 3. Trickle UpInnovation will happen bottom up, in the case of global finance and payments underdeveloped countries will offer a path for the rebuilding of financial services in the largest economies.
  • Katherine, you have a very impressive background in development in third world nations and financial services as well. I'd like to know what you think of this idea of trickle-up: are countries like Kenya learning from countries like or is the case that we are learning more from them? [Katherine's Slides] CGAP - the World Bank’s consultative group to assist the poor.
  • Mobile banking implies access to accounts in a bank. Mobile banking is what happens where infrastructure supports accounts and traditional banking services, including savings and current accounts and accumulated interest. Mobile payments are transactional encounters using mobiles.
  • Think of what is in your wallet right now. $100? I always take out $100 when I visit the ATM. It’s a small amount for frequent, immediate transactions. It’s not a large balance. It doesn’t stay there long. It doesn’t give me time to earn interest on it - in fact, that’s why it’s in my wallet. My real money is earning interest by staying in the bank.
  • I have a map that makes it pretty clear.
  • Population density
  • 66% of africa’s population is now reached by mobile phone signal
  • how does the mobile payment system work in developing nations?
  • Agents provide cash-in, cash out. Agents keep the system running. Agents can be any local retailer, ranging from a cigarette stand to an bank-authorized dealer.Operators provide the infrastructure for the mobile payments.Customers utilize the system.
  • Remember, mobile payments are not mobile banking. Nonetheless, it’s caught on - what’s the reason?
  • Remittances between families and individuals. head of household working in cities with househould in the countryside, transfer payments for immediate needs.Consumers can pay merchants or service providers, like taxis, grocers, or! airtime dealersEntreprenuers can pay for services or labor - allowing for better transfer of capital in the informal economy
  • - is currency the same? will currency remain based in money? or will it become airtime? what is the next step?- economic opportunities - how are mobile transactions spreading economic opportunities to people in teh developing world? for example, texteagle- incentivizing and supporting development - using airtime, small payments to facilitate uptake of behaviors and infrastructure- the expansion of microfinance and microcredit through agents and remote operators.
  • I'd like to turn it over to Guillaume. Guillaume I understand that by day you are a software architect working with financial services clients, at night you run a well renowned blog about sustainable currency and the future of money. Could you tell us a little bit about your thoughts on how our conception of money will be transformed? [Guillaume's Slides]Let's turn it over to Tom Limongello. So Tom, on the subject of transformation, we often hear that the U.S. is kind of slack in the area of mobile, and in the area of mobile finance and payments in particular. So I'd like to know if you think this is the case, and also if you where you think innovation will come from, will it be the banks, telecoms, or startups? Do you think the US will have a leadership role in this?[Tom's Slides]
  • Ajay I'd like to ask you about the concept of trust. As a design researcher, you have substantial experience in user experience and financial services and I'd like to know your take on this concept of trust...[Ajay's Slides]
  • Got questions? I’m all ears!
  • Sacha, you have intimate knowledge in this area, given your expertise in social media and mobile telecommunications. I'd like you to share some of your thoughts on this...[Sacha's Slides]
  • TUMA PESA is a financial service offered by Babawatoto TUMA-PESA (e-money) is an innovative mobile payment solution that enables customers to complete transactions including person to person PESA transfer. It is aimed at millions of Kenyan mobile phone customers. Send TUMA-PESA to anyone who has a Mobile phone on any Kenyan phone network. TUMA PESA can be collected immediately at any of the hundreds of shops and Agents that include banks, petrol station chains, supermarkets, cybercafs, and many more independent retailers country wide in Kenya. http://www.babawatoto.com/index.php?option=com_content&view=article&id=85:tuma-pesa-&catid=1:latest-news&Itemid=75

Mobile Ubiquitous Banking and the Future of Money :: SXSW '09 Mobile Ubiquitous Banking and the Future of Money :: SXSW '09 Document Transcript

  • Mobile Ubiquitous Banking and the Future of Money Image source: textually.org / Tuma Pesa Welcome to our panel, Mobile Ubiquitous Computing and the Future of Money. I would first like to thank Hugh Forrest and the organizers of SXSW Interactive for having us today. [Cover slide] ---- TUMA PESA is a financial service offered by Babawatoto TUMA-PESA (e-money) is an innovative mobile payment solution that enables customers to complete transactions including person to person PESA transfer. It is aimed at millions of Kenyan mobile phone customers. Send TUMA-PESA to anyone who has a Mobile phone on any Kenyan phone network. TUMA PESA can be collected immediately at any of the hundreds of shops and Agents that include banks, petrol station chains, supermarkets, cybercafés, and many more independent retailers country wide in Kenya. More information: http://www.babawatoto.com/index.php?option=com_content&view=article&id=85:tu ma-pesa-&catid=1:latest-news&Itemid=75 Image source: textually.org / Tuma Pesa 1
  • Introductions [Slide of panelists, one line bio] My name is Kyle Outlaw, and I work at Razorfish in New York. I'm in the User Experience group, and I specialize in interaction design for mobile applications and have also worked for several years with clients in the financial services industry. With me today is Ajay Revels, design researcher at Politemachines, Katherine Maher, Communications Officer at Unicef, Sacha Tueni, Social Media Mgr at Vodafone, and Tom Limongello, Director of new business at Crisp Wireless. Thank you all for joining today. 2
  • Kyle Outlaw Moderator • Sr. Information Architect, Razorfish, NY • Specialize in RIAs and mobile user experience • FS Clients include: Citi, Morgan Stanley, Prudential, T. Rowe Price • NYU Interactive Telecommunications Program (ITP) • Previously at WorldNow (startup venture), Modem Media 3
  • Ajay Revels Panelist • Design Researcher and Strategist • User experience and design strategy web-based applications • Ethnographic studies, workflow analysis, process mapping and usability testing • Financial Services Research at Razorfish • Educated in biology, psychology and product design 4
  • Katherine Maher Panelist • Partnerships and projects coordination for UNICEF's Division of Communication • Technology, advocacy and social interaction in the developing world • Previously International Manager for HSBC Bank in the UK, Germany, and Canada • Background in geopolitical regional research 5
  • Sacha Tueni Panelist • Partnership manager and social network strategy for Vodafone Group • Social Network enthusiast and telecom addict • Previously T-Mobile Austria and Red Bull in Turkey • “Social Media is bigger than porn.” 6
  • Guillaume LeBleu Panelist • Senior Systems Architect, Diebold Inc • Co-founder in 2002 of Brixlogic (Banking middleware) • Open Money advocate • Writing about the Future of Money at http://lebleu.org 7
  • Tom Limongello Panelist • Sr Dir Business Dev, Crisp Wireless • Advises media clients on mobile channel strategies for content delivery, advertising and mobile commerce • CNN, People.com, The Huffington Post, Perez Hilton and Discovery • Meme Creator: Twitter's Failwhale • TNS in Shanghai, Unilever China • MBA from the University of Chicago 8
  • Prologue 9
  • Way back in 2007 (Pre-iPhone), U.S. was a relative newcomer to mobile banking… U.S. mobile customers used mobile mostly for voice, only recently beginning to utilize full data capabilities of their phones • Some banks tried it during the late ’90s, wap frustrated users, dot com meltdown • Banks and wireless companies were having difficulty agreeing on how to charge customers • Consumer had concerns about security Image source: Bofa.mobi So first off I'd like to briefly talk about how this panel came to be. A couple of years ago while we researching mobile applications (this was pre-iPhone), we were interested in how and when mobile was going to catch on the US. At the time, clients really had a tough time envisioning their website or services on mobile. As everyone's very aware, mobile was really just being used for voice and some email here in the US. [Early phone banking UI] 10
  • Meanwhile in Korea and Japan mobile customers were • Accessing their checking and savings accounts, pay bills, transfer money, etc. • Making payments in place of cash or credit cards • Sending money • Using NFC-enabled Phones Whereas in Japan, they were some really interesting things such as what you'd read about in a William Gibson novel, such as Near-field communications, using that technology for example in place of a subway card for example. In the area of contact-less payments, Japan and Korea are well ahead of the game, to the point where it seemed the US was never going to be able to catch up. [Slide: 2-3 examples of mobile money apps Japan, Korea] 11
  • The most radical use of mobile technologies, however, was happening in Africa… • Safaricom and Vodafone launched M-PESA • Customers (the “Unbanked”) were bypassing the banking system altogether using text messages to transfer money • Virtual accounts could hold up to $700 • Customers could pay for goods and services with airtime minutes Source: The Guardian Meanwhile some even radical uses of mobile were happening in Kenya. This example is fairly well known by now, I'll touch on it briefly here. In Kenya safarcom, the national phone company and Vodafone teamed up to offer banking services to customers that for various reasons did not have access to formal banking services. M-Pesa enabled customers to transfer money to friends and family, pay for goods and services, [water payment image], get money out of an ATM and so on, effectively doing an end-run around the system. But even more interesting was that these customers were beginning use other forms of currency, such as using airtime to pay for goods and services. [Slide - M-Pesa Vodafone] 12
  • Kenya’s M-Pesa case study: key takeaways • Rather than merely “leapfrogging”, countries like Kenya were innovating • This initiative was not started by the banks • These technologies were spawning virtual currencies • Mobile technologies are enabling individuals to become Banks (P2P lending, virtual accounts) So I found this case study particularly compelling for a few reasons. [Slide: three takeaways from M-Pesa] First we normally think of technologies having a trickle- down effect in other words advances in technology happen in developed countries and than can be used in so-called underdeveloped countries to leapfrog, in theory. But what is starting happen is that the most radical innovations are actually coming out third-world countries like Kenya (and by the way there are numerous other examples of these that I hope to touch upon later). So that's one thing. Secondly this initiative was not started by banks, it was created by telecoms, one local and one global. And third: we are starting to see the emergence of virtual currencies such as airtime being created that are enabled by new technologies such as mobile devices. Fourth: technologies, is this mobile phones (and there are some examples to of P2P lending networks which I hope to get into as well) are enabling customers to get access to money services that they previously didn't have access to, whether it was because there wasn't any bank available locally OR they simply didn't trust the bank. But also these services enable individuals to effectively BECOME banks, as services such as M-Pesa enable them to store money in virtual accounts and transfer or lend money to friends and family easily. 13
  • Three Themes for today’s discussion: So out of this comes three premises that I'd like to probe with the panelists today: 14
  • Three Themes for today’s discussion: 1. Trust Trust, the lubricant of the global economy, has been severely compromised (think bailouts). However, technologies such as social media and mobile devices will lead to the creation of micro-economies (friends, family, close associates) based on trust. 1. Trust Trust, the lubricant of the global economy, has been severly compromised. However, echnologies such as social media and mobile devices will lead to the creation of micro-economies (friends, family, close associates) 15
  • Three Themes for today’s discussion: 1. Trust Trust, the lubricant of the global economy, has been severely compromised (think bailouts). However, technologies such as social media and mobile devices will lead to the creation of micro-economies (friends, family, close associates) based on trust. 2. Transformation Our concept of money is about to be radically reformed and the innovation will not come from the banks. 2. Transformation Our concept of money is about to be radically reformed and the innovation will not come from the banks. 16
  • Three Themes for today’s discussion: 1. Trust Trust, the lubricant of the global economy, has been severely compromised (think bailouts). However, technologies such as social media and mobile devices will lead to the creation of micro-economies (friends, family, close associates) based on trust. 2. Transformation Our concept of money is about to be radically reformed and the innovation will not come from the banks. 3. Trickle Up Innovation will happen bottom up, in the case of global finance and payments underdeveloped countries will offer a path for the rebuilding of financial services in the largest economies. 3. Trickle Up Innovation will happen bottom up, in the case of global finance and payments underdeveloped countries will offer a path for the rebuilding of financial services in the largest economies. 17
  • 2 billion unbanked individuals 1 billion have a mobile phone 50% have access to services Katherine, you have a very impressive background in development in third world nations and financial services as well. I'd like to know what you think of this idea of trickle-up: are countries like Kenya learning from countries like or is the case that we are learning more from them? [Katherine's Slides] CGAP - the World Bank’s consultative group to assist the poor.
  • any expense (x) the “ African population is a big expense. ” - clay shirky
  • “ expense (x) the is a any unbanked population big expense. ”
  • mobile payments are NOT mobile banking Mobile banking implies access to accounts in a bank. Mobile banking is what happens where infrastructure supports accounts and traditional banking services, including savings and current accounts and accumulated interest. Mobile payments are transactional encounters using mobiles.
  • mobile payments are your mobile wallet Think of what is in your wallet right now. $100? I always take out $100 when I visit the ATM. It’s a small amount for frequent, immediate transactions. It’s not a large balance. It doesn’t stay there long. It doesn’t give me time to earn interest on it - in fact, that’s why it’s in my wallet. My real money is earning interest by staying in the bank.
  • why are mobile payments so important? I have a map that makes it pretty clear.
  • Population density
  • 66% of africa’s population is now reached by mobile phone signal
  • how does the mobile payment system work? how does the mobile payment system work in developing nations?
  • Agents Operators Customers Agents provide cash-in, cash out. Agents keep the system running. Agents can be any local retailer, ranging from a cigarette stand to an bank-authorized dealer. Operators provide the infrastructure for the mobile payments. Customers utilize the system.
  • what can the unbanked do with mobile payments? Remember, mobile payments are not mobile banking. Nonetheless, it’s caught on - what’s the reason?
  • individuals transfer money. consumers pay merchants. entrepreneurs pay labor. Remittances between families and individuals. head of household working in cities with househould in the countryside, transfer payments for immediate needs. Consumers can pay merchants or service providers, like taxis, grocers, or! airtime dealers Entreprenuers can pay for services or labor - allowing for better transfer of capital in the informal economy
  • what’s next? - is currency the same? will currency remain based in money? or will it become airtime? what is the next step? - economic opportunities - how are mobile transactions spreading economic opportunities to people in teh developing world? for example, texteagle - incentivizing and supporting development - using airtime, small payments to facilitate uptake of behaviors and infrastructure - the expansion of microfinance and microcredit through agents and remote operators.
  • Three Themes for today’s discussion: 1. Trust Trust, the lubricant of the global economy, has been severely compromised (think bailouts). However, technologies such as social media and mobile devices will lead to the creation of micro-economies (friends, family, close associates) based on trust. 2. Transformation Our concept of money is about to be radically reformed and the innovation will not come from the banks. 3. Trickle Up Innovation will happen bottom up, in the case of global finance and payments underdeveloped countries will offer a path for the rebuilding of financial services in the largest economies. I'd like to turn it over to Guillaume. Guillaume I understand that by day you are a software architect working with financial services clients, at night you run a well renowned blog about sustainable currency and the future of money. Could you tell us a little bit about your thoughts on how our conception of money will be transformed? [Guillaume's Slides] Let's turn it over to Tom Limongello. So Tom, on the subject of transformation, we often hear that the U.S. is kind of slack in the area of mobile, and in the area of mobile finance and payments in particular. So I'd like to know if you think this is the case, and also if you where you think innovation will come from, will it be the banks, telecoms, or startups? Do you think the US will have a leadership role in this? [Tom's Slides] 32
  • Boom & Bust Ajay I'd like to ask you about the concept of trust. As a design researcher, you have substantial experience in user experience and financial services and I'd like to know your take on this concept of trust... [Ajay's Slides]
  • craft surplus goods services skills
  • trade cargo relationships loans
  • FX bank trust bond credit
  • greed expensive mistrust destructive
  • fear devalue relationships future
  • shut houses insurance stock
  • pain skills relationships surplus
  • hope airdrop new start share
  • now? what
  • credo local trust tangible
  • cell jobs FX security
  • craft new skills new services new surplus
  • Ajay Revels Research & Strategy Politemachines ajay@politemachines.com Got questions? I’m all ears!
  • Sacha, you have intimate knowledge in this area, given your expertise in social media and mobile telecommunications. I'd like you to share some of your thoughts on this... [Sacha's Slides]
  • safeguarded moved
  • bank x bn $ vodafone >60 bn $ 10% 6bn $
  • safeguarded moved
  • citibank .account # .name .address .branch .swif/bic sacha
  • Imagine a world, where today’s aging, less useful and even dangerous financial systems are replaced by (or mixed with) more disruptive innovations and exchanges. Imagine yourself deprived of all of today’s financial resources. Maybe you’re a refugee or stateless. Yet you still have your handset and laptop and Internet and a broadband cellphone connection…. KashKlash.net, an open forum and web project focusing on alternative economies in a post-money future. What will such a world look like? How will the concept of value be measured? What concepts will shape the formal and informal economies
  • Hypothetical question – what should bill do? • The Bill & Melinda Gates Foundation has donated $12.5 toward the Mobile Money for the Unbanked (MMU) • Initiative to allowing citizens of third world countries to bank with their mobile phones • 20 individual projects in Africa, Asia, and Latin America Source: Ars Technica 61
  • Resources • Textually – a blog about texting, SMS and MMS http://textually.org • Ars Technica: Bill Gates donates $12.5 million towards mobile banking http://arstechnica.com/microsoft/news/2009/02/bill-gates-donates-125-million- towards-mobile-banking.arsMoney • The Guardian: Kenya sets world first with money transfers by mobile http://www.guardian.co.uk/money/2007/mar/20/kenya.mobilephones • Payment News http://paymentnews.com 62
  • Special Thanks • SXSW: Hugh Forrest and Dinah Sanders (metagrrrl) • Razorfish: Shiv Singh, David Deal, Marcelo Marer 63
  • Connect Twitter: @unbanked 64
  • Thank You! Image source: textually.org / Tuma Pesa TUMA PESA is a financial service offered by Babawatoto TUMA-PESA (e-money) is an innovative mobile payment solution that enables customers to complete transactions including person to person PESA transfer. It is aimed at millions of Kenyan mobile phone customers. Send TUMA-PESA to anyone who has a Mobile phone on any Kenyan phone network. TUMA PESA can be collected immediately at any of the hundreds of shops and Agents that include banks, petrol station chains, supermarkets, cybercafés, and many more independent retailers country wide in Kenya. http://www.babawatoto.com/index.php?option=com_content&view=article&id=85:tu ma-pesa-&catid=1:latest-news&Itemid=75 65