The scene is a crowded Nairobi marketplace. A customer is buying goods from a shopkeeper. When the shopkeeper gives the customer change, it is on a mobile minutes card. 

In developing countries people like shopkeepers and crime syndicates trade in airtime minutes. In fact the world at large is witnessing a plethora of new, high-tech value transfer systems that can be abused to launder money and finance terror. The Financial Action Task Force (FATF), a global anti-money laundering policy making body, calls them “new payment methods” or NPMs

"Thousands of street-corner shops in Kenya sell mobile-phone airtime, usually in the form of scratch cards. More than 60,000 of them have also registered as M-Pesa agents, far outnumbering Kenya’s 840 bank branches. Annual transactions on M-Pesa are equivalent to over 20% of the country’s GDP. Customers exchange cash for virtual value that goes into their phone, which becomes an electronic wallet or stored value card. They can then pay bills, buy things, transfer money and, importantly, receive credit on the card."

- QZ.com

Fraudulent Mobile Airtime Transfers Report
One of the best examples of airtime transfers, NPM's or M-Payments is an operation found in Kenya. In 2007, Kenya’s Safaricom launched its pioneering mobile payment program called “M-Pesa.” (Pesa means ‘money’ in Swahili). Today M-Pesa transfers more than $1 billion monthly in East Africa.

In 2007, futurist and entrepreneur Ross Dawson wrote after a business visit to Africa, "The majority of services in Africa are shifting to mobile phone interfaces, as close to a majority of people now have mobile phones – these are no longer luxuries for most people – while there are few other interfaces available for commerce. Even landline phones are often not available, let alone fixed internet or other interactive devices. As a result, mobile banking and a vast array of mobile services are taking off fast."

A few months ago I met with an Atlanta VC who has developed a proprietary payment software base on SWIFT. In my opinion, an eCash system of some sorts, whether Bitcoin dominated or sponsored programs will become more and more common in subsequent years.

Connect with Chad on Google+

YT counts on the US market for 75% of sales...
That's crazy.

Read about the debacle here - http://blogs.wsj.com/corporate-intelligence/2013/01/14/yellow-tail-has-a-currency-problem-aussie-wine-has-a-yellow-tail-problem/

All Hail Mighty Europe!!

As the EU strengthens ties and moves towards an even closer union, recent talk about a Financial Transaction Tax (FTT) has been heralded as the all new EU revenue generator. And while taxation of financial transactions seems logical, where does all the activity take place? Most in the City of London, The Square Mile. Is the City being punished? Most of Europe's opinion is that the City allows little regulation, but close to 80pc of Europe's financial services are based there. As you can image the UK opposes the proposal, which was passed by EU Parliament in December 2012.

To a degree there's financial tax on most transactions....but this is unique.
Regardless, so far 11 countries have pushed forward with the small tax.

(from wikipedia) The European Commission itself expects the EU FTT to have the following impact on financial markets and the real economy:
- Up to a 90 per cent reduction in derivatives transactions (based on the Swedish experience)
- Slightly negative or positive effect on economic growth depending on the design of the EU FTT.A long-run (20 year) reduction in gross domestic product in the EU by 0.53% if "mitigating effects" take hold, or up to 1.76% if they don't. In May 2012 the EU Commission corrected its analysis and now predicts a slightly smaller negative impact on economic growth of 0.3%, and even a positive impact of at least 0,1% or €15bn if the generated tax revenues are spent on growth enhancing public investments. Algirdas Semeta, European Commissioner for taxation, customs, audit and anti-fraud argues that "if the projected €57bn (£47.7bn) per year is put towards consolidating national budgets, reducing other taxes or investing in public services and infrastructure, the direct economic effect of the FTT should be positive for growth and employment in Europe".
- An effective curb on automated high-frequency trading and highly leveraged derivatives
- An increase in capital costs, which could be mitigated by excluding primary markets for bonds and shares from the tax
- The real economy could be protected by ensuring the tax is levied only on secondary financial products, thus not affecting transactions such as salary payments, corporate and household loans. In its latest study from May 2012 the European Commission also dismissed the belief that financial institutions could avoid the tax by moving their transactions offshore, saying they could only do so by giving up all their European customers.

Business Insider
Here is an infographic from The Economist showing `where to be born in 2013.` It takes into effect different variables like GDP, divorce rates and life expectancy. According to the graphic the US doesn't even crack the top ten.