Om Malik has a very interesting article on how pre-paid mobile minutes are effectively becoming a currency across Africa. I visited South Africa three times late last year while helping a large African media conglomerate to develop its long-term strategy. At the time I wrote about how mobiles are allowing Africa to leapfrog the fixed internet, and also about the potential and challenges of South 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.
One of the greatest values of anything prepaid is that it can be exchanged. When local currencies have problems with inflation, availability of currency, institutional trust and so on, alternatives swiftly come to the fore. I certainly find it interesting that talk of e-cash, all the rage in the late 1990s, has now largely disappeared. One of the major uncertainties in the future is whether we ever finally get rid of the bits of paper and metal in our wallets that we exchange for goods and services. This is a major inefficiency in our lives. It would be so much easier to swipe or approve something. While there are potential privacy issues, it is possible to create completely untraceable e-cash. The primary reason e-cash went no further was that there were major vested interests stamping on the various alternative standards being proposed. It’s possible that something will emerge that people start using of their own accord, just as is happening with mobile airtime in Africa. Yet there are better ways of doing it. I think that within a decade e-cash will be firmly back on the agenda.