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Mobile social money, the final frontier?

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In the final part of discussions of social networks,
media, banking and money, I thought I would turn attention to the use of mobile
devices as access media to these networks.

Mobile usage in banking has grown
to a crescendo in the past year, after bubbling away nicely since the turn of
this century.

This is in part down to the fact that the latest smartphones allow a
bank to deploy fully functional internet banking services to mobile devices
using the same platform as their main websites.
In other words, it is now cost-effective and appropriate to do this.

However, the challenge with mobile finance is that
we tend to discuss mobiles as one homogenous group of devices when:

(a) there
are many devices; and
(b) the use of mobile devices to access financial
services are not homogenous.

Let’s look at (a) first.

This is important because the fully functional services, such as those from BBVA
that allow mobile banking access using web browsers, are only available
on smartphones. The first smartphones to offer full mobile web devices
were not released until after 2004, and so this means that some users
are unable to access the service.

Even if they can access, the challenge then is that there are many
operating systems to choose from and handsets, and the services must be
available and compatible with all of them.

On the operating system side, you have BlackBerry, Windows Mobile,
iPhone, Nokia’s N Series, Symbian, Maemo (Linus), the Palm OS and more.

Each of these systems provides different levels of internet access and
usability, as do the handsets which also cover a multitude of providers
and structures.

Is your service designed for a flip phone (Motorola), a slide phone (Nokia N95), a rectangular phone (iPhone)?

Is it for a phone with a full QWERTY keyboard, a touch-screen or both?

As can be seen, the devices can seriously inhibit the usage of a
service. Equally, some users may not be able to access the services at
all if their phone is pre-2004. This is certainly true for many
emerging economies and hence, when we discuss new payment systems such
as m-Pesa in Kenya, the focus is on text messaging payments using SMS rather than mobile web-based banking services.

This leads on to point (b): there is a wide range of mobile financial services.

The basic service is the person-to-person (P2P) payments using SMS.

This is how most remittance services work because the service is
available on any telephone using GSM standards that date back to 1985.
Therefore most senders and receivers will be able to use the payments
service, regardless of the mobile device they use for access.

This is also how PayPal Mobile started, although you can see from their website today that they also offer mobile web payments.

This leads to adding layers of financial services onto mobile access, which may include mobile billing presentment and payment (MBPP), account balances, alerts for payments or budgetary limits, and more.

I have described these in depth in the past, so will leave it there for the moment.

The real point is to make it clear that mobile finance goes far further
than just payments or a single class of financial activity. Today, it
goes from everything from basic text message services to fully fledged
banking services over the internet.

Equally, social money goes further than just the internet and may
encompass anything from P2P payments between contactless devices, which
are not necessarily mobile-based, and prepaid services on mobile, as
well as Gift Cards.

In other words, social money is not just internet-based or mobile
based, but can be any form of transaction between individuals that
enables people to exchange value directly and immediately between each
other, as easily as a cash exchange.

Historically that has been a challenge, but now it is easy and can be
anything from a mobile text message to the touch of a contactless card;
from an email to a telephone call; and from a Linden Dollar to a Totnes Pound.

Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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