Cell phones as currency

A very interesting article by Dave Birch in The Guardian this morning, on cell phones used as currency.

"If you live in rural Africa, your payment options are pretty limited and so, therefore, is your participation in the wider economy. If you don't live within a hundred miles of a bank, don't have a cheque book and have never even seen a credit card or a PC, then how do you send money (perhaps for goods you want from a market) to someone else?

In that environment, mobile phones provide an easy and convenient mechanism: you buy a scratch card, scratch off the panel to get the voucher number and then text that number to your counterparty. Voila! You've now sent $20, or whatever, a few hundred miles across the country for the price of a text message. And the person you sent it to can start using it right away.

In some parts of Africa, mobile phone scratch cards have become an acceptable means of exchange for bribing officials. That makes scratch cards or, more particularly, the pre-paid airtime that they give access to, a kind of currency.

According to the Economist, not only can you use pre-paid airtime to pay bribes but you can use it to pay bribes remotely. It gives the example of an office worker whose daughter had been detained in immigration. She bought a scratch card and sent the voucher number to the relevant official, avoiding the trouble of having to collect up the cash and go to the airport: thereby saving time and money."

emily | 9:33 AM | SMS and Micro Payments |
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