Banking the unbanked using prepaid platforms and mobile telephones in the United States

The rapid growth of mobile phone usage and the continuous rise in wireless coverage fuel the expectations that access to financial services trough mobile phones could transform the way financial services are provided. The emergence of new and more efficient business models, can potentially resolve supply inefficiencies that explain the large unbanked population that exists in the USA, much larger than in most developed countries. Nearly 40 million US households (approximately 73 million people) are financially underserved (CFSI, 2007), of which 15 million households (approximately 28 million people) are totally unbanked. This problem is explained by the non adequacy of the value proposals offered by financial institutions to the demands of the US customers. The areas of poor alignment refer mostly to the design of products and the marketing and distribution networks used. To resolve these misalignments, this paper will argue that business models based on prepaid cards as products and mobile phones as transactional and distribution channels could be used in order to close the supply gap. We will call the business model proposed based on prepaid products and mobile phones mobile banking, since these two elements are the basis of the business model used companies such as Smart Money and G-Cash in the Phillipines, Wizzit in South Africa and M-Pesa in Kenya.prepaid platform; unbanked; financial services; mobile phones; prepaid cards;

A Formal Framework for Concrete Reputation Systems

In a reputation-based trust-management system, agents maintain information about the past behaviour of other agents. This information is used to guide future trust-based decisions about interaction. However, while trust management is a component in security decision-making, many existing reputation-based trust-management systems provide no formal security-guarantees. In this extended abstract, we describe a mathematical framework for a class of simple reputation-based systems. In these systems, decisions about interaction are taken based on policies that are exact requirements on agents’ past histories. We present a basic declarative language, based on pure-past linear temporal logic, intended for writing simple policies. While the basic language is reasonably expressive (encoding e.g. Chinese Wall policies) we show how one can extend it with quantification and parameterized events. This allows us to encode other policies known from the literature, e.g., ‘one-out-of-k’. The problem of checking a history with respect to a policy is efficient for the basic language, and tractable for the quantified language when policies do not have too many variables

Mobile Money: Implications for Emerging Markets

Developing countries lack effective infrastructure: transportation, telecommunications, financial systems, etc. The positive economic impact of the improved telecommunications infrastructure has been demonstrated. The ability of microfinance has been shown to stimulate and enhance economic activity. Now a hybrid of the technologies has begun to emerge: mobile money. The ubiquity of cell phone service, coupled with the notion of microfinance offers the possibility of service in remote areas of a country where it would be otherwise economically unsustainable to provide banking services. Mobile money has all of the attributes of money including store of value and medium of exchange. This paper addresses the economics and policy issues of mobile money: What are the economics of mobile money? What policy issues does it raise? Is it a threat to the traditional banking system? How should it be regulated? What can we learn from the microfinance literature? Do we have empirical evidence of its impact on growth and development?Competition, economic dynamics, neoclassical economics, pricing policy, regulation.

The future of exchanging value: uncovering new ways of spending

The explosion of new technology and virtual currencies is changing where, when and how people and business exchange value. The report also demonstrates that while the future of payments is uncertain, the availability of internet connectivity and the mass adoption of mobile devices will impact the payments industry and incumbent payments providers. The phenomenal uptake and usage of mobile devices – and the easy accessibility of mobile payments technology – means today’s consumers are more mobile in their transactions and have a wealth of options available regarding where, when and how they make purchasing decisions. The future of exchanging value – Uncovering new ways of spending explores how the emergence of a new generation of payment solutions and business models is changing the payments landscape. Organisations that look beyond traditional payments platforms and simplify the purchasing process by having the right payments solutions available at the right place and at the right time can gain a competitive advantage. The report also demonstrates that while the future of payments is uncertain, the availability of internet connectivity and the mass adoption of mobile devices will impact the payments industry and incumbent payments providers