Mobile Money – Rich Vs. Poor

By Author: Jennifer Lewis
Total Articles: 304
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Ever since the dawn of civilization, there has been a social classification among the populace. Even in the cave men, the stronger males were treated differently (or forced the others to) than the physically weak. In the later, more organized communities, the classification was based on the gender (males better than females), color (lighter skin trumps darker one), or profession (blue collar, white collar / warriors vs. traders vs. the learned vs. the servants).

When we invented money to replace the barter system, we created the biggest divide of them all – rich vs. poor. The scope of classification grew from people to cover entire nations (rich country vs. poor country). Today, as we walk the path of modernization, there are newer classifications coming into the social structure. Don’t believe it, note the reaction on the faces of a group of smartphone toting girls when one of them pulls out a ‘feature’ phone. The unlucky one holding it would wish it had an invisibility ‘feature’. Just to rub salt in the wounds of the technologically impoverished, the ‘mobile money’ came into play.

Mobile money ...
... is what you put in your mobile wallet, which in turn is an application on your smartphone that allows you to use your device for payments. There are 2 kinds of mobile money transactions. The first is where you open a branded application, like Starbucks’ app; when you are ordering at their store, and when you need to pay, just wave the barcode at the scanner, and in a ‘blip’, all done! The second method is where the Near Field Communication (NFC) chip in your phone can be programmed to act like a card swipe when waved at an NFC enabled reader at the checkout counter in a sufficiently technologically advanced store.

Just to be clear, both the transactions above do require ‘real’ money. In the first situation, the app is linked to a Starbuck’s card or account, which is pre-filled with US $. In the second scenario, the NFC chip is associated with a physical credit/ debit card which gets charged every time you do your ‘thing’ with the mobile at the counter.

Back to the topic - the social divide. The challenge with mobile money is that it is available to a select few. Also, the current retail infrastructure is not ready to handle this technology. The cool, my – phone – can – do – that – and – your – phone – can’t act is a rarity at best. A more common scene at retail establishments is a frustrated customer arguing with a cashier near the end of her patience, who is trying to explain to him why his better – than – the – rest gadget won’t work in her store.

Some see this whole initiative as elitist. If you look at the numbers, three quarters of the world’s mobile subscribers do not use a device that could be classified as a smartphone. That makes four and a half billion users. Clearly, the organizations working towards creating and innovating the mobile money products were not going for the mass market. They were targeting the few with advanced devices that could support the functionality. The question is why create something as useful, but limit your user base to less than 10 % of what it could be?

In summary, mobile money is a good concept, and definitely has a convenience factor to it that would be appreciated by the users. However, it is targeted towards smartphone users with high-end devices, effectively limiting its potential market, and before it can ever be successful, the retail infrastructure needs to be upgraded in order to support it. Right now, it’s not much more than a fad.

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