Bitcoin – A Jack of All Trades is the Master of None

As cybercommerce begins it will lead inevitably to cyber-money.— James Davidson, The Sovereign Individual, 1996

The hype surrounding Bitcoin has gone off the charts in the past year.  For those of us who have been involved with digital currency systems since the 1990’s, it is interesting to see how people caught up in the hype think Bitcoin is wonderful but in many cases cannot clearly see the reason why.  Other enthusiasts think that Bitcoin is the ultimate solution for all payments.

Continue reading “Bitcoin – A Jack of All Trades is the Master of None”

Using M-Pesa to bring Bitcoin to Africa

The M-Pesa mobile payment system is huge in one of Africa’s biggest economies, Kenya. An estimated 31% of Kenya’s GDP travels through the person to person payment provider. The country has a large rural population making traditional branch banking an unattractive option. This is certainly one of the reasons that M-Pesa’s SMS based mobile payment system has caught on. But what is clear from the M-Pesa story is that the worlds ‘under-banked’ need better solutions.

Could Bitcoin be a solution for Africa’s under-banked? It’s certainly a possibility and why not start in Kenya with a population who both has a need for and a familiarity with digital money.

Continue reading “Using M-Pesa to bring Bitcoin to Africa”

Dinero MPS a new mobile payment system for the world's under-banked

After the success of services such as M-Pesa, Kenya’s mobile-phone based money transfer service, it is clear that there is a large under banked population in the non-western world. A population that is quick to adopt low cost mobile based solutions.

Dinero-LogoA new mobile payment system, Dinero MPS, aims to offer a wide variety of mobile payment services starting with the unserved markets in Africa, South America and Asia. Founded by financial cryptographer Ian Grigg and entrepreneur Ken Griffith, Dinero’s Ricardian-Contract based system is set to launch later this year with the release of an Android phone app.

Dinero’s co-founder Ken Griffith shared with DGC insight on the businesses’ plans and motivations.

Continue reading “Dinero MPS a new mobile payment system for the world's under-banked”

The world's ‘un-banked’ need payment innovation, but it won’t come from banks

M-PESA is a mobile money transfer service that has experienced “wild” success in Kenya. Yesterday the Freakonomics blog put up a post examining how M-PESA has achieved such success. The service is owned by Safaricom, a telecom with “monopoly power” and is “35% government-owned,” but perhaps it’s biggest advantage is that it is not a bank.

The post explains that prior to its launch “only 14% of Kenyans participated in the formal banking sector”, and due to regulation the country’s banks were unable to offer banking services to those in rural areas. Today roughly half of all adults in Kenya use M-PESA. However, because of their special situation and lack of competition, they have “sky-high prices, little incentive to innovate, and a limited range of services to customers.”

While it may be true that M-PESA’s success has been in large part due to a combination of regulation and monopoly power that is not necessarily going to be repeated elsewhere, this story illustrates the huge need for financial innovation in so many parts of the world and the willingness of the worlds ‘un-banked’ to use products that offer them even a semi-decent service. It is clear that there is a huge demand for financial innovation amongst the ‘un-banked’, and even more importantly, it is clear that this innovation will not come from banks.

Continue reading “The world's ‘un-banked’ need payment innovation, but it won’t come from banks”