October 25, 2008

Mobile Commerce Solutions

On October 23, 2008, CNET published an article, "Using a Mobile Phone as a Credit Card," about the growing use of "contactless payments" or near-field communications when making payments with their mobile phones. Another option to contactless payments are mobile commerce solutions such as PayPal Mobile. One of the biggest challenges entrepreneurs face in developing countries is a tight or nonexisting credit market or a shortage of hard currency. Mobile commerce solutions would serve as a viable tool for small and medium-sized enterprises in developing markets to facilitate sustainable growth and such services would promote currency transferability, improve business markets, and allow SMEs to grow and compete in a global market.

I encourage financial institutions to develop mobile commerce solutions for SMEs in developing markets, which will facilitate commercial transactions where credit markets are limited or hard currency is in short supply. Mobile phones has allowed people who were once isolated in their villages a portal to the outside world and the use of mobile phones is often the primary method of communications in the developing world and mobile banking is becoming more mainstream in many developed markets.

From my experiences working in Africa, Asia, and Latin America, I have yet to see mobile phones used as a means to conduct commercial transactions. We are just now seeing the vital role technology has in social and economic development, but with further development of applicable mobile applications, millions of people will have the necessary tools to overcome the challenges presented by a fragmented financial system often seen in the developing world.

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