Wednesday, August 6, 2014

Will Africa Develop the Next Generation Retail Payment Hubs

The nations of Africa quickly adopted the use of mobile phones to initiate retail payments. Is it just a matter of time before they recognize that the rest of the world still uses an archaic system that:

  • Costs too much
  • Places payer data at too much risk
  • Limits retailer’s choice of payment acceptance types
  • Plans to adopt an old technology that aggravates the 3 prior bullet points

I think the 50+ independent nations beginning to thrive already recognize western point of sale methodology does not work well in rural communities with limited access to western infrastructure and prone to attack from organized groups.

The African conference under way in DC underlines the dramatic need for an African Central Bank, not in some pie-in-the sky future, but ASAP. It really will not be that difficult to build if participants realize that two systems supported by a central bank will not require consolidation of national currencies, will allow the creation of a small value gross real time payment system, a regular gross real time payment system, and support for all currencies with a demand vs. demand currency exchange.

The benefits are great, the stakes are huge, and the stabilizing effects of a secure central financial system for the entire continent (and beyond) so important, it just amazes me that there seems to be little political will to complete the project by mid 2015. When the delegates return home, presumably with pockets full of promises, and the squabbles of nationalism preventing rapid trade movement with agreements in place, perhaps we will see a stirring of the nations in the continent and a focused plan to architect a payment system far more advanced than any currently existent. I am confident this will happen; it is just a matter of time.  I am confident because South Africa destroyed its nuclear weapons regardless of the fears of Western hawks. I am confident because Kenya has more mobile payment platforms than most. I am confident because the growing realization that western approaches benefit western firms and have terrible unintended consequences for developing social structures.

Next Blog: Will an international mobile payment initiation standard begin in Africa and take over the retail payment platform in a few years?

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