Bill Gates asks telcoms standards boffins to define future of money Two-and-a-half billion adults in the world don't have bank accounts, and the the Bill and Melinda Gates Foundation thinks it's got the answer: deliver financial services to mobile phones. And the International Telecommunications Union (ITU) agrees: late in June, it established a focus group to look at Digital Financial …
Every time you make a mobile online transaction, it'll pass through a clearing house; let's call that a gate. Then all goods and services paid through mobile transactions are billed by these institutions. So that all future mobile transactions will pass throug bill gates!
Hm, OK - maybe try a different flavour next.
Incidentally, I think it's rather a good idea to enable mobile banking for the poor - although you need to be careful with it. The many Grameen-bank-like microcredit projects of recent years had a rather mixed record apparently. It's probably best to limit your target group first (I think people who can actually afford a mobile phone might qualify) and try payment first in regions where the rest of a transaction - the actual delivery of goods as ordered - can reasonably be relied upon.
> Did you read the fucking article?
This is all about getting an edge into developing markets to milk financial transactions through charges.
Worse off? Depends on your perspective.
Mr Gates is a business man and he knows a good thing when he sees it.
Cash is what we should be all returning back to especially for more local business transactions.
It's cheap, anonymous and can be lost only through inflation.
Relying on the banks is cowtowing to the "man". As far as I'm concerned, the "man" can go f*ck himself.
Because many things can be currencies in different contexts. E.G. air miles, my supermarket's points, the balance I have with my local LETS, prepaid credits I have with Oyster or on my PAYG phone. And if physical cash is insecure, having to manage many physical kinds of cash in my wallet is worse. Pushing the idea that the whole world transacts using a single currency suits those interested in preventing competition so the usual suspects can get their rake offs.
> Or tied to nothing at all, unless you count the governments word as something that has value.
And as we have seen for years in the US, the answer to that is resoundingly no.
Basing the currency on something "hard" like gold or silver puts a limit on the amount of money that can be created by government thereby stopping them printing it ad infinitum like the fed is doing day after day.
The inflationary effect of that is basically making everyone poorer, but of course that has a disproportionate effect on the middle class and the poor as their wages and savings get devalued faster than their wage can grow to keep up.
If I was a cynical man (and I am), I would say that is was deliberate.
I'm sure you know that Bill Gates and his foundation are not responsible for coming up with the idea, but your opening paragraph makes it sound like that's what they did.
You eventually mention M-Pesa on your very last paragraph, but in fact that's where it all comes from. Unfortunately, you make another misleading statement in describing M-Pesa as "Vodafone-derived". Vodafone bore most of the responsibility for designing and implementing the system, but the concept was presented to them by economic development researchers working for Gamos, a sui-generis sort of company (not quite a charity, nor a QUANGO, nor a lobby group). The original idea however, was not from them either, they simply observed what people were already doing and tried to find a way to do it more efficiently. They are one of the very few examples where development aid actually does contribute to empower people and make their lives better by building onto what they're already doing, rather than trying to impose a "we know better" sort of attitude with the arrogance that characterises us Westerners (I've seen this up close while I was in Africa doing things I'm not proud of).
In spite of the lack of clarity of your article, well done to Mr. Gates for giving M-Pesa the recognition and support it deserves.
Here in Australia we have four major banks and a smattering of small ones. The four majors between them rack up over a $1,000.00 profit per annum for every man woman and child in the country.
Governments currently provide money as a service which is paid for through our tax dollars. They also guarantee that the money that they print is legal tender for goods and services throughout the nation. Thus you can go to the local milk bar and buy a litre of milk with cash. At that point the people who earn cents from the transaction are the farmer, the processors, the drivers and the milk bar proprietor. (Granted the banks will be in there somewhere as loans to the farmer, custodians of some of the money at various points along the chain) Unless you pay with a credit or debit card, a bank or credit agency does not take anything from that specific transaction.
As more and more money is virtualised there are more and more fingers in the pie skimming off a point here, a few points there, meaning that there are simply more costs to each transaction and therefore you require more of those $ to buy the same thing.
I know that money is going to be entirely virtual. You won't walk into a bank to rob it because realistically, if there is no cash there is no requirement for a shop front and nowhere to rob anything physical from.
Like most of the freedoms we give up in the name of simplicity or supposed creature comfort, the freedom to just keep a wad of cash against a rainy day will be gone.
The Internet as an aggregate is the largest and most reliable machine humans have built. But that is in aggregate. As Barclays's and RBS customers know, lumps of it can fall off and make your life very very difficult if you rely entirely on virtual money.
As I say, cash will be done away with entirely. Other systems for black/shady grey market system will come into being but will not have the versatility of cash.
I will miss the Free aspect to cash. I will miss the satisfying heft of a thousand dollars in fifties sitting in my wallet, being able to root around in my socks and jocks drawer for gold and larger denomination silver coins to buy milk and bread when the virtual cash well is dry. Kids will grow up without the notion of a money box, of the visible and physical notion of adding small amounts to a vessel and watching it grow into something heavy and exciting, something tactile. Of course none of this really means anything, I am just being an old fart grizzling about change.
But I am not pleased about having every single transaction I make available for scrutiny nor am I pleased that like real estate agents adding nothing to a transaction but removing a large slice from it, banks or the virtual cash agents will take a slice from all of the things that they are currently not able to.
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