Payment Systems
by Gerald Trites, FCA

For years cell phone payment systems have existed, but in North America, they have been slow to take off - perhaps grounded is a better word. There are reasons for this. Lack of technology is not one of them. Likely, the reasons are more cultural than technological. Also, it is noteworthy that in North America, we have numerous options for payment systems already in place, and a good financial system (current breakdown notwithstanding) to support payments by debit card, credit card and, yes, cash.

Some countries lack this financial infrastructure, even down to lacking bank accounts and strong currencies. But in many developing areas in the world, amazingly, cell phones abound. Thus their appeal as payment systems. Nokia is investing $70 million in this potential of cell phones in the developing world. Others are doing the same.

It's an interesting scenario and one that is fairly typical of the developing world. they often lack the infrastructure we developed during the industrial age. But now they have an opportunity to adopt the technologies available in the post industrial age, and in effect skip the mess of industrialization. Another good example is the lack of a communications structure. Since they often lack phone lines, for example, traditional communications can be all but impossible. Indeed this is one of the reasons why cell phones are so popular. They don't need the infrastructure. The capabilities of wireless technologies present an interesting opportunity with potential long term benefits for developing countries.