You may recall the 'Capital One' TV adverts that asked what's in your wallet? And now we can see that the new Apple and Android smartphones will have eWallet capabilities built in. Just as technologies such as Google Search and eCommerce have transformed the media and retail sectors in the last 10 years, many folks are wondering will the ewallet transform financial services?
eWallet: an African story
The ewallet is banking through a phone. So who would have thought that the Kenya Posts and Telecommunications Corporation would be at the cutting edge of such technology.
In its incarnation as Safari.com (a Vodafone affiliate) the company serves millions of customers. They use a pin and password to access their banking, which lets them receive money, make transfers and get physical cash from agent outlets and ATMs within the network.
Transactions are all passed through the phone (not a cash card). The ewallet can make money transfers with a few text messages. To withdraw cash from an agent (usually a shop) the customer inputs an agent number, amount to withdraw, and PIN. A screen confirms the transaction then both the customer and the agent get an SMS recording it. The agent hands over the cash.
No plastic, no ATM
Essentially the phone is a cash card and cash machine in one. Banking this way grew up in Kenya because there was no money (and a high risk factor) for banks to set up branches.
Now the service in this third world country is cutting edge and has been expanded to Tanzinia, Afghanistan and South Africa.
Which begs the question of what a reasonable ewallet system would do to the developed world’s banks. As we know, half of them are already trendy wine bars.
A wave and you’re away
Western banks have good internet and telephone banking for customers to manage their existing bank accounts, but the e wallet isn’t yet prevalent. What people are getting excited about is Near Field Communication (NFC) through mobile phones, which will let us simply wave our wallet in a shop to pay for goods.
Apple will introduce ewallet soon
NFC payments are linked to credit cards. Google Wallet, for example, is working with Visa, American Express, Mastercard and Discover.
Will the big banks will keep up with the technology and ally themselves with the next wave of payment systems? Possibly. Just as media and retail businesses dismissed the game changing potential of eCommerce 10 years ago and have now gone bust or are on their last legs (eg Circuit City in retail, or newspapers and magazines around the world), the same could happen to banks in the next 10 years.
Still, It’s all good news for potential wine bar owners though.
Best wishes John.
John Corr
New Bond House
124 New Bond Street, London, W1S 1DX, UNITED KINGDOM
New Bond House
124 New Bond Street, London, W1S 1DX, UNITED KINGDOM
