Olson’s Observations

Technology. Innovation. Science. VC. Media. :: by Eric Olson

Developing Nations and Tech: Cell Phone Minutes as Currency

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I read about an interesting idea the other day centered around microfinance and developing Third World nations (yes, I forgot where I read about this and trying to remember is killing me). The idea was that cell phone minutes could be used as currency in developing nations.

The thesis behind the idea goes something like this: while banks, banking services, credit cards and ATMs are basically non-existent in the rural parts of developing nations cell phones are becoming more and more prevalent. Therefore, since the cell phone minutes hold a value of some sort they could be used as currency. All one would have to do is create a system that would allow people exchange those minutes easily, preferably via the cell phone itself, and an instant “banking” system would be born.

I find that idea fascinating for a couple reasons:

1. It is so easy to implement (relatively).
2. The impact would be huge (especially as more and more folks get cell phones).

Of course this idea makes a lot of sense in developing nations but I wonder if it makes a lot of sense in developed countries like the U.S. I can see one domestic use for a system like this already. Kids.

As a parent it could be pretty compelling to allow your kids x number of cell minutes a month that they can either use to call/text their friends and/or use as currency at the local mall.

Of course I generally think getting them one of the fixed credit cards (i.e. they can only spend the amount that their parents put on it) makes a lot more sense in terms of teaching kids about the value of money and how to manage it but nonetheless the cell phone minutes as currency idea is still interesting.

Can you think of any other domestic uses of the cell phone minutes as currency idea?

Written by Eric Olson

June 13th, 2007 at 11:15 am

Posted in Business, Microfinance

One Response to 'Developing Nations and Tech: Cell Phone Minutes as Currency'

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  1. Hey Eric - good post. I don’t know if you’ve checked out the book “You Can Hear Me Now” regarding the use of cell phones and microfinance.

    The author’s blog is youcanhearmenow.com

    Hope all is going well at FB (GOOG).

    Kevin

    15 Jun 07 at 9:08 am

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