The second part of a series of mobile payments posts I’m making to get ready for BarCampBankSF later on this month. The first part was a problem overview for the issues. This part is about the Fear Uncertainty and Doubt (FUD) that stand in the way of trying to get a global system going for moving money around.
I was going to hold off on this topic for a while, but then I ran across this gem of a report from our beloved US government explaining why mobile payments could destroy the world. The whole topic area right here just strikes me as backward, small minded, and at it’s base just really stupid. Here we have the potential for a fantastic system, uncoupling the concept of money from bits of paper and metal. Making it easy for people to do what they want with their money when they want. Being able to reach out and help friends and relatives in far away places instantly.
But instead of seeing the potential upside (not, potential upside, most of us don’t have the ability to do the things discussed in that report under the current set of services), instead what’s called out is the potential for abuse by a very small percentage of the population. I just don’t get that mentality at all. It’s like not allowing cars because people could get drunk and drive around in them. Or declaring that everyone has to walk around naked cause someone could hide weapons under their clothes. It’s just absurd. Why cripple everyone because you’re concerned about the behavior of a few? Apparently all you have to do is include the word “terrorism” and you can propose just about anything you want.
I personally don’t buy it at all. If you want to cut off the potential use of a system by terrorism, sure, by all means! I’m not going to stand in your way. But if you want to cripple a system that dictates what I can do with my money, how I can do it, and when I can do it, well then we have a bit of an issue. If you want to cut off terrorism do things that affect terrorists and money launderers. Inconveniencing everyone in order to do so is just lazy thinking. Unfortunately people have strong and irrational feelings about things like this cause they feel their safety is threatened (Surprise! You never really had safety, you’ve just become more aware of not having it), and any bit of absolutist thinking they can hold on to in order to make them feel better. Well darnit, that’s just going to have to do. Cutting off terrorism by cutting off their funding is one of those areas (Surprise! That’s not going to work either, probably won’t even slow it down).
Unfortunately what we’re working at here, at heart, is a fundamental change in the way people think about money. And like any major change, that really makes people nervous. Especially people who have a vested interest in the particular limitations, controls, and structures brought about by the incidental effects of the current system. People like governments and banks, who unfortunately are holding most of the cards in this game. In order to figure out a workable system we either need to work around the folks who would normally stand in our way, or convert them to our side. Most of the efforts that have come before are based around a third option of giving incentive to the existing folks and caving in to their restrictions. I don’t consider that option to be on the table, limiting a new system to make the players in the old system happy isn’t a path to progress in my opinion.
Converting the existing folks to our side seems like it could be pretty difficult. Hard to say though with the setup the way it is in mobile payments. With the carrier sitting in the middle of every significant transaction we might be able to play the banks against the carriers to come up with a system that works at scale to break open that market for the banks. But the banks have their own sets of issues. Working completely around the existing system might be the real option we have. Direct user to user payments with something only vaguely resembling a bank in the middle. Using alternative “payment” methods like trading prepaid minutes or prepaid messages. That gives us a bit of a foothold, but how does the regulation and legal arena look for schemes like that? For instance can I take $25 from someone in CA and at their request provide it to someone in NY for withdrawl? What needs to be reported and recorded in that case, and what base restrictions are there? If someone has good pointers please share them.