The ATM of the Future is Viral

There are tens of thousands of bank branches in the world.

There are hundreds of thousands of ATM machines in the world

There are billions of mobile phones in use throughout the world today.

Decades ago someone decided that a plastic card with a mag-stripe was going to be the preferred means of identifying an account during an electronic payment transaction. It took decades for that ecosystem to take hold.

A few years ago someone decided that a mobile phone number would be used as the means for identifying an account during an electronic transaction. (Guess who!?)

The ATM of the future is a phone with an always on Internet connection or phone with text messaging. Think about this. If your friend has never used text messaging but you send them a text message, as soon as they read your text message they are now a text message user – that’s the purest example of viral distribution I can think of. Now consider money transfer via mobile phone. A migrant worker in the California farm belt sets up an account on their mobile phone to act as a prepaid wallet. They load the wallet by walking in to a convenience store and adding money to their mobile wallet at the cash register. If they “text money” from their wallet to a recipient in their family in Mexico that recipient will automatically get a new wallet account the first time they receive money – that’s as viral as text messaging itself. That recipient can “text money” to a yet another new recipient or an existing recipient and so on. At some point in this chain a consumer probably needs access to cash. They can request cash via text message, get a text receipt with a one time use code on it and get cash at a participating retailer bank or individual money agent using their cash code. This cash out code only works one time so it’s completely secure.

What this means is that the mobile phone as an ATM is just as viral as the mobile phone as a text messaging device. This simple process has the potential to help lift billions into the global banking system and out of poverty. The most powerful concepts don’t need to be complex.

Posted via email from The Blog of Bill Barhydt

GigaOM and TechCrunch Should Donate Ad Revenue from These Posts to Haiti

GigaOM and TechCrunch are tech blog sites that make serious money via advertising on their web sites. I enjoy reading both sites and I’m a fan of the leaders of both companies.  My companies have even spent money advertising on GigaOm in the past.

Yesterday, at the request of a friend, I spent a couple of hours -on my own dime since I don’t make money off of this measly blog site- researching the process by which mGive distributes funds donated via text message such as those funds being donated to victims of the tragedy in Haiti. That resulted in the post I made yesterday on this topic.  The gist of that post was that mGive doesn’t pay out donations to recipients until 60-120 days after the donations are made via text message which they ridiculously claim is due to carrier billing cycles.

After that mGive posted a public response to my blog:

GigaOm quoted this tweet leaving out the reference to @creditsms and @billbarhydt.  Simply clicking on @creditsms or @billbarhydt in the link above on Twitter would have shown the original tweet that mGive was responding to:

or 

The link in this tweet is to my blog posting on this topic of donations to Haiti.

However GigaOm never bothered mentioning this or even linking to the original blog entry before making this blog posting on the same topic.

I’m sure GigaOm makes a lot of money via advertising off of their web site.  It’s possible that they could have generated hundreds or thousands of dollars via ads on this specific web page.

TechCrunch also posted a similar story in which the first comment is a link back to the same GigaOm story.  I’m quite certain that both authors saw these tweets and should have given at least passing credit to my blog posting.  This has happened to me in the past by a few different blog sites.  I’m getting annoyed by it.  I don’t need the credit but at least the incremental traffic to my blog via their links would be nice.

The irony of this story is that both site owners, TechCrunch’s in particular, have complained about the traditional press not giving them credit for riding on their coat tails in creating news stories.

While this thread could have been about any topic it happens to be about the tragic events in Haiti.  So, rather than any public credit I would prefer that both sites donate any revenue that they generate from these blog postings to the American Red Cross.  I will match their donations if they let me know how much revenue these specific web pages generated and how much of that revenue they donate to the Red Cross.

Please come clean guys and gals.  I’ll follow-up with another entry if they decide to contact me about their donations.

Please donate now!

Posted via email from The Blog of Bill Barhydt

Is it Better to Donate via Web or Text Message?

I have been unable to focus today due to the incredibly horrific events in Haiti. It’s so tragic what is happening there. Unfortunately what’s happening with requests for donations is giving me some cause for concern. It turns out that money donated via text message may not get to the Red Cross for 60-120 days.

Until recently the easiest way for the average consumer to donate money to Unicef, the American Red Cross or International Committee of the Red Cross was via their web sites:
ICRC web site 
American Red Cross web site  
Unicef

Even more relief donation options are listed here:
http://www.google.com/relief/haitiearthquake

However the Twittersphere is also going crazy retweeting requests for donations using text messaging for payment: “You can text “HAITI” to 90999 to donate $10 to @RedCross relief efforts in #Haiti.”

This process is referred to as “premium SMS” billing and uses your wireless carrier’s phone bill to make a purchase. This process is great and is totally legitimate. It’s the same process you may have used to buy a ringtone or game on older cell phones.

I am really excited about the prospects for charitable giving and micro-loans via SMS and premium SMS. It’s quick, easy and gratifying. Seeing the line item on your phone bill can even be a great reminder of the good you’ve already done and remind you to do more when you can.

However, I did some checking with my carrier contacts and it appears that mGive, the organization that manages the transactions for these text based donation systems does not fund the transactions until they receive the money from the wireless carrier that is billing you for the money. The wireless carrier generally does not pay premium SMS billings out to partners until after the consumer has paid them. That process can take 60-120 days depending upon when in the billing cycle you make your donation.

This is corroborated via the mGive FAQ on their web site: “The distribution of funds is based on the quarterly carrier payout schedule. Every 90 days the carriers disburse the funds generated from your mobile donation campaign to The mGive Foundation which then passes those funds along to your organization along with a detailed remittance report for each donation campaign you have.”

Based on my experience in dealing with premium SMS, which is extensive, mGive is not giving us the real “worst case scenario” which is closer to 120 days.

What mGive should be doing is funding at least 50-75% of the donations in real-time in exchange for covering whatever interest they have to pay out of the remaining funds. This should more than cover any bank fees for pre-funding this float. The balance can be funded on collection (minus interest for pre-funding if necessary).

In the meantime I encourage people to donate any way the can (via web or via text). But if you can I encourage you to donate via the web site links above as money will get to the source faster than via text message, at least until mGive or someone else fixes this problem.

If mGive would like me to help them with this problem, please contact me and I’ll help you as I’m sure that there are many banks who would be willing to help.

My prayers go out to all the victims of this tragedy in Haiti. Please donate now to help them.

Posted via email from The Blog of Bill Barhydt

Thoughts on Risk, Passion and Fear

Great post today from Mark Suster (@msuster on Twitter) at GRP.  You need to follow him if you’e not.  His blog is: Both Sides of the Table. He has a true passion for entrepreneurship.  More importantly for you, he gives great advice.

He wrote a post today about Risk taking as a key success factor for entrepreneurs.  The post was appropriately called “cojones.”

Here is the comment I posted to Mark’s blog:

I think most people perceive risk incorrectly. My father died at 48. He didn’t take good care of himself (I try to) but his untimely death taught me a few things. In regards to risk it taught me that risk is not what we think it is. The only thing you can take with you when you go is a decaying corpse. Work backwards from that and all of a sudden working for stock or quitting a job seems trivial. Risk in this case is an excuse for trying to avoid the truth. The truth is usually about fear.

I think what Mark calls cojones is as much (or possibly more) about passion and fear than it is about risk or perceived risk.

The sad fact of life is that most people don’t know what their passion is. However for those that do many choose to follow their passion (or calling) and it shows in what they do. I believe that what keeps the rest of people from following their passion is fear. Fear on many levels. Fear of success, fear of failure, fear of how others perceive them, etc.

I’m not saying that everyone needs to start a company to follow their passion. We are full of passionate people at m-Via – it shows in our team meetings which can be fun to watch sometimes – who know why they want to be here.

Cojones to me means saying “fuck you fear” and following your passion.

Posted via email from The Blog of Bill Barhydt

Is Android the Mobile Money Future?

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Android and the Nexus One announcement are huge for four reasons.  The fourth reason is the most important to me:

1. Android is easily accessible to lots of hardware manufacturers who will iterate iterate iterate on creating lots of different devices.  There are so many Android devices out there already!

2. I believe Android devices will make their way into the low end of the wireless market in the US and Europe within 12 months.  I’m sure we’ll see at least one Android device offered by Metro PCS or Boost by the end of the year.  T-Mobile already has excellent prepaid plans that will support an unlocked Nexus One on 3G – although $500+ might be too expensive for your typical  My bet is on Boost as they have the network to support the device (i.e. Sprint).  As an aside to this point, Italy is a particularly interesting market to follow since mobile phones can only be sold unsubsidized and with no carrier locking.  Really expensive phones tend to struggle for sales in the Italian market.

3. Android runs like a real PC OS optimized for your mobile phone meaning applications can run in the background and there is a really slick notification window concept.  This plus no Soviet Union of Apple to deal with for application approval in the Android Market means developers will start flocking to Android in droves.  By the way I really hope Apple fixes these two issues soon.  I’m still a big iPhone fan and user (for now) although I may switch to the Nexus One on T-Mobile.

4. I believe Android will become the smartphone OS of choice in developing markets due to low cost hardware that will follow.  That means mobile money applications in developing markets will eventually find their way on to Android phones.  I’m certain that we’ll see one big example of this within 18 months.  Brazil, China, India, Russia and Mexico are going to be enormous Android markets.  As consumers in those countries become “banked” for the first time look for Android to play a big part.  I am certain m-Via will be supporting Android in a big way.

Maybe we’ll see an Android device with an embedded NFC transmitter and mobile wallet locker in 2010?

Posted via email from The Blog of Bill Barhydt

Mobile Money in 2010

Like George Carlin used to say, opinions are like asses, everybody has one and some of them really stink.  Well, here is mine.

Before I present my predictions for 2010, here is a recap of the biggest mobile money stories of 2009:

1. Gartner report: Gartner identified money transfer as the number one consumer application for mobile by 2012.  They pointed to over-regulation as a key potential risk factor.
2. Canadian wireless carriers launch Zoompass: While Zoompass may not have a huge following nor solve very big market problems (yet) the fact that it was launched by the biggest carriers in Canada is big news.  Zoompass is one reason why NFC phones my launch in Canada before they hit the US market. Of course Apple’s iPhone might beat them to it.
3. M-Pesa: (Pesa is Swahili for money) Kenya, Philippines and Tanzania have emerged as the true early adopters of branchless banking. Kenya alone accounts for over 2 million mobile money transactions per day. Tanzania now has over 1 million M-Pesa users.  The beauty of M-Pesa is not only does it solve traditional payment problems for rural users but it also enables low cost micro-finance transactions.
4. Philippines: Smart and Globe have emerged as telecom leaders in mobile payments.  Their SIM based solutions are secure, pervasive and really easy to use. Rural MFI has also emerged as a viable market for Filipino mobile money beyond traditional payments.  This article was, by far, the most viewed posting on my blog site in 2009.
5. Venture funding: Several companies either launched or announced venture capital funded services in 2009 including Square, m-Via, GoMobo, mCheck, and Boku which rolled up its competitors into a new company.  m-Via won the Under the Radar competition for best mobile payment company.  

Here are my predictions for the most important Mobile Money stories of 2010:

1. RFID/NFC phones: A major handset manufacturer will (finally) release a phone with embedded RFID/NFC, aka contact-less, capabilities (outside of Japan).  The first applications will be credit/debt card payment and mobile coupons.  This first market may be the US, UK or Canada.
2. Venture funding: look for a lot of venture capital to pour into the mobile payments space in 2010. Social mobile gaming, money transfer, gambling and retail payments will lead the way.
3. U.S.A.: The U.S. will finally emerge as a real market for mobile money.  The first real market within the US will be unbanked consumers integrating with prepaid cards and cross border money transfer services.  This may be followed in 2010 (possibly 2011) by NFC payment applications assuming point 1 above happens.  I believe that domestic micro-finance (MFI) will become a viable business in the US over the next 5 years and mobile money will be necessary to keep the costs of MFI down.
4. Latin America: Latin America, Mexico in particular, will emerge as a big market for mobile money.  As the largest recipient of cross border money transfers, Latin American countries like Mexico and Brazil and primed to take advantage of mobile money capabilities combined with branchless banking.  MFI growth in Latin America will create a further dependence on mobile branchless banking over the next 5 years.
5. Lookout Paypal: Several companies will set their sights on Paypal including at least one of Visa, Mastercard or American Express in combination with bank partners. Mobile payments and social network gaming will drive the first phase of their deployment.  I also expect Amazon and Google to make a much bigger push into online (and mobile) payments in 2010.
6. iPhone and Android phones as credit card terminals: following Apple’s retail changeover to iPhones as swipe terminals and announcements by Mophie and Square, look for a lot of companies to enter this space in 2010.

Posted via email from The Blog of Bill Barhydt