The topic of mobile money is a somewhat anachronistic addition to a conference called MoneyLab: Coining Alternatives.
In some ways, its inclusion in the conference makes total sense: mobile money is an alternative way to transact, and is providing new options to millions of people around the world who previously had to depend upon informal financial services or expensive remittance agents.
Mobile money's actual and potential global impact is so large that excluding it from a money conference would be a major oversight.
An advertisement for M-Pesa in Kenya shows money flying though the air.
However, one could argue that mobile money is not an alternative in the sense that many of MoneyLab's attendees perceive it. Unlike the digital currencies or non-money systems discussed by other presenters, mobile money is not a way for people to opt out dominant financial systems. Instead, it brings people into the global financial system, often for the first time.
Our session on mobile money teased out some aspects of this apparent contradiction. Bill Maurer introduced the session, pointing out that mobile money did in fact begin as an informal alternative of the kind that proponents of non-fiat currencies imagine.
Before mobile money was officially offered by any telecommunications company, people were using airtime as money (in fact, they still are). Rather than go to the trouble and expense of sending cash, they would transfer call credit, which would circulate within the system. Telcos realized this and capitalized on it to create the formal mobile money services we know today.
Once formalized, the users of mobile money services diversified. In my paper, I demonstrated how the supply and demand of mobile money in Haiti have been driven by non-profits as well as by customers and companies.
I argue that any assessment of the social benefits of mobile money needs to look at the incentives that different stakeholders have to use mobile money, as well as how it fits into a macroeconomic picture.
Next up, Gawain Lynch discussed some issues regarding mobile money security. He alluded to his previous writing on security through obscurity and described two things that the word "security" might mean when applied to mobile money.
The first of these is as a means of providing "social" security that can help users evade crisis and avoid problems such as loss and deterioration of currency. The second is more of an "antisocial" security, given that mobile money is used to protect people from society, such as securing cash from theft. Lynch pointed out that mobile money has significant potential to enhance both of these kinds of securities, but like any service involving money, runs the risk of fraud.
Finally, Taylor Nelms reviewed some of the research by IMTFI researchers. To date, the IMTFI has funded 125 researchers in 38 countries. Nelms reinforced the point that not all mobile money users are like the rural individuals depicted in MPESA's advertisements–in fact, not all "peers" in P2P transactions are individuals at all. Sometimes they are groups.
But this doesn't mean that alternatives aren't being exploited. In some countries, mobile money is used by women as a way of avoiding male-dominated cash flows. It can be used to keep personal savings or send money to kin, increasing independence and reinforcing relationships.
To what extent, then, can we say that mobile money provides alternatives? In the context of the conference's dominant themes of bypassing state and market, it probably doesn't present much of one.
However, if we run with Taylor's suggestion that mobile money should be seen as an infrastructure, then the question of alternatives tends to fall by the wayside. Few people would argue that infrastructure such as roads and telecommunications networks should not be built because they will expose people to the dangers of globalization.
Financial infrastructure is no different. It is up to individuals to choose whether they buy in, and the responsibility of their governments to provide sufficient regulation for consumer protection.