Updated: Mobile Airtime As Currency

















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+