Technology and Media

Africa beats the U.S. in banking technology

A recent article in the Globe and Mail on smart phone use in Africa -- highlighting Kenya -- was mindboggling!

Impoverished Africa is turning into banking heaven, making financial transactions from loans, pay deposits and withdrawals to buying groceries and a snack or drink from a street vendor both simple and instant.

By comparison, our North American system looks like Ford’s model-T!

Taking advantage of Africa’s widespread love of cheap smart phones and lack of local bank networks, African mobile cell phone companies  Safaricom and Vodacoms have gone into cloud banking and have turned Africa into the ultimate in payment transactions.

Africans with smart phones – whether rich or on a limited income/salary --  can sign up with them for M-Pesa, a wireless system to pay bills, buy meals, groceries and other purchases without needing bank tellers and ATMs for cash (which makes you a target for a mugging) or credit cards and debit cards.

People simply have an account in the cloud, use their special pin and the pin of the restaurant, storekeeper or even street vendor (normally posted in huge numbers above the vendor’s stall) for instant transactions which are confirmed to both parties by text message!

You can even take out a small cash loan at a preset interest rate to carry you over to your next paycheque – all from your smartphone!

And the people of Africa love it.  Even the illiterate are learning how.

It’s quick and instant and totally simple.  No extra travel to banks or ATMs, no need for risky cash, and no waste of the environment generating plastic credit or debit cards of one sort or another – which North American companies are constantly replacing and ‘updating’.

 

With smart phones ubiquitous across the U.S. and Canada, why are we not on this far superior payment system?

Why do we need ATMs at almost every major intersection and countless local bank branches?  Why do we need to carry a dozen or more credit and bank cards that balloon our wallets?  Why need store card readers to complete transactions which can handle only one customer at a time, and take forever to process?

Why, in this area of banking and payments, are Africa light years ahead of the supposed global technology leader – the United States?

 

Necessity was the mother of invention for Africa, and local companies saw the light and created a banking/payment revolution.

In February 2012,  Barclays introduced a variation to Britain called Pingit.

When – if ever –this simply brilliant payment system will come to North America is unclear.

Last year my banks and credit card companies finally sent me ‘new cards’ with security computer chip technology (invented in Europe over 4 decades ago and used since 1992 by French Carte Bleue  (Wikipedia, “Smart Card”)), and now my banks and credit card companies are starting to send me ‘improved’ cards that have ‘tap and go’ power, a technology the gasoline companies here have already been using for half a decade!

 

Put simply, North America, the world’s supposed technological leader, is moving at a snail’s pace in the payment/money transfer area, locked in a step-by-step plastic card model that Africa has already leapfrogged into the future.