Financial Power Shifting Through The Mobile Screen

Jan 11, 2011

Peter-Paul Koch reports that mobile phones are poised to become the new medium for financial transactions, bringing the ease of electronic funds transfer to nearly everybody on earth. It’s been headed our way for awhile, and the impact it’s going to have can’t be overstated. It creates a window for new players in the world financial markets and it’s a democratizing force of tectonic proportions.

In case you’re not aware of it – the growth and popularity of mobile phones worldwide is staggering. Personal computers look lame in comparison. For many people in poorer countries, a mobile phone is way more than just a phone, it’s participation in the modern world; it’s ambition; it’s hope.

Follow The Money

What’s coming is a modern-day replay of the revolution in banking that started at a time when banking was only for the rich. In 1904, a fellow named Amadeo Giannini, angry because the existing banks refused to service working class immigrants like himself, founded the Bank Of Italy in San Francisco. Giannini did rather well with the “rabble” that his competitors turned away. So well in fact, that some years later Bank of Italy merged with another and changed its name.
You might have heard of it: Bank Of America.
By assets, it’s the largest bank holding company in the United States. And the second largest bank by market capitalization.

It seems a little indignation can go a long, long way.

At that time, the driver of change was demographic. To Giannini, a hundred customers, each with ten cents to deposit, was just as big an opportunity as ten dollars from a well-heeled one. He simply saw the world differently than his rivals. Today, the change is driven by technology. The SIM cards in mobile phones have built into them, for other technical reasons, the solution to the central problem in funds transfer: authentication. You see, every device on the network must have a unique identifying number. Just like, ummmm…, like a credit card!

I can hear it now: “Hello? Hey, could you phone me fifty dollars until Tuesday? I swear I’ll phone it back to you then. Promise!”

Note: Peter-Paul Koch – aka PPK – is well known for his writings on web development, especially JavaScript. His recent article, Smartphone Browser Landscape is a must-read for anyone wading into the morass of mobile web development. Kudos to him for stretching out and writing about the social and economic side of mobile. Inspired, I’ve done the same.

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