Payments Watch

I was watching a presentation by Jan Chipchase that was given at TED. This talk was about how we interact with technology, specifically what happens when people share cells phones, an object that is actually designed for personal use. In describing how kiosks are popping up on the streets of Africa with little more than a mobile phone and a sign advertising call rates, he outlines an ingenious method of money transfer.

Jan talks about Sente - the practice of sending and receiving money that exploits public phone kiosks and trusted networks.  We are told that in Uganda, the word Sente has two meanings: (1) ‘money’ and (2) ‘the sending of money as airtime’.  As described on his site:

It works like this: Joe lives in Kampala and wants to send his sister Vicky 10,000 Ugandan Shillings - about 4 Euros. He buys a pre-paid top up card for that amount but instead of topping up his own phone calls the local phone kiosk operator in Vicky’s village. The phone kiosk operator uses the credit to top up his own phone, takes a commission of anywhere between 10 and 30% and passes the rest onto Vicky in cash. The kiosk operator then resells the airtime at a profit (it is after all his business).

Source: Jan Chipchase

You can watch the video below, and read the essay here.

What are the implications to payments? One can see how mobile phone air-time can be used as a currency to enable person to person payments, and by extension, that in many respects, a pre-paid mobile phone is the same as a bank account. What kind of payments innovation can be built around these concepts, not just for the under-banked in Africa, but for anyone?