The Future of Money

A “mobile money” revolution has swept Kenya, where people can send and receive money on their cell phones. It’s improved commerce and brought basic necessities to poorer areas

Sourced through Scoop.it from: www.cbsnews.com

You may be surprised to learn there’s one country that adopted mobile money years ago: Kenya. Here in the U.S., we can use smartphones to pay for things, but you typically need to be linked to a bank account or credit card. In Kenya, you don’t need a bank account, you don’t need a credit history, or very much money for that matter, making this country in East Africa a giant experimental laboratory defining the future of money.    Bob Collymore, the CEO of Kenya’s largest cell phone provider, Safaricom, says his company sought to solve the problem. While a majority of Kenyans don’t have a bank account, eight in 10 have access to a cell phone. So in 2007, Safaricom started offering a way to use that cell phone to send and receive cash. They call it M-PESA: m stands for “mobile;” “pesa” is money in Swahili.  It is often referred to as Kenya’s alternative currency. But safer and more secure.  It’s the cheapest phone you can have. It was designed to work at the lowest level of technology.

To get this currency you go to an M-PESA kiosk. I give the agent 3,000 shillings — about $30 in cash, and she converts it to virtual currency on my account.  Lesley Stahl: This is pretty easy. It’s not like opening a bank account.  There are 85,000 agents like her across Kenya, creating a giant grid of human ATMs. For most this is a side business: so a pharmacy will sell M-PESA or a roadside spice shop; this barber will give you a shave and M-PESA. And, yes, you can even buy M-PESA here.  This is bankless banking.

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