tag:theconversation.com,2011:/uk/topics/digital-wallet-3835/articlesDigital wallet – The Conversation2021-12-07T10:30:35Ztag:theconversation.com,2011:article/1733312021-12-07T10:30:35Z2021-12-07T10:30:35ZOverhaul of payments system to cover digital wallets, buy now pay later, cryptocurrency<figure><img src="https://images.theconversation.com/files/436059/original/file-20211207-19-16ru9y9.jpg?ixlib=rb-1.1.0&rect=49%2C27%2C2851%2C1609&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">shutterstock</span></span></figcaption></figure><p>Treasurer Josh Frydenberg will announce on Wednesday a comprehensive reform of regulations governing the payments system, to bring it up to date with innovations such as digital wallets and cryptocurrency.</p>
<p>The government says without the changes – the biggest in 25 years – Australians businesses and consumers could increasingly be making transactions in spaces beyond the full reach of Australian law, where rules were determined by foreign governments and multinationals.</p>
<p>It points out that in three decades payment methods have gone from cash to cheques, cheques to credit cards, credit cards to debit cards and now to “tap and go” via digital wallets on phones or watches.</p>
<p>Around a decade ago, cryptocurrency was a concept. Currently, there are more than 220 million participants in the worldwide crypto market, including many in Australia.</p>
<p>The planned reforms will centralise oversight of the payment system by ensuring government plays a greater leadership role. The treasurer will be given more power to intervene in certain circumstances.</p>
<p>Consumer protection will be strengthened, and more competition and innovation will be promoted.</p>
<p>The reform program will be in two phases. There will be consultations in the first half of next year on those that are most urgent and easy to implement. Consultations on the rest will be done by the end of the year.</p>
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Read more:
<a href="https://theconversation.com/the-paradox-of-going-contactless-is-were-more-in-love-with-cash-than-ever-158383">The paradox of going contactless is we're more in love with cash than ever</a>
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<p>The government says the present one-size-fits-all licensing framework for payment service providers will be replaced graduated, risk-based regulatory requirements.</p>
<p>There will be consideration of the feasibility of a retail central bank digital currency, and an examination of “de-banking” (where a bank declines to offer a service to a business or individual).</p>
<p>Frydenberg says the comprehensive payments and crypto asset reform program would “firmly place Australia among a handful of lead countries in the world.</p>
<p>"It is how we will capitalise on the opportunity for Australia to lead the world in this emerging and fast-growing area which has almost endless potential applications across the economy,” he says.</p>
<p>“For businesses, these reforms will address the ambiguity that can exist about the regulatory and tax treatment of crypto assets and new payment methods.</p>
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Read more:
<a href="https://theconversation.com/can-bitcoin-be-a-real-currency-whats-wrong-with-el-salvadors-plan-162348">Can Bitcoin be a real currency? What's wrong with El Salvador's plan</a>
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<p>"In doing so, it will drive even more consumer interest, facilitate even more new entrants and enable even more innovation to take place.</p>
<p>"For consumers, these changes will establish a regulatory framework to underpin their growing use of crypto assets and clarify the treatment of new payment methods.”</p><img src="https://counter.theconversation.com/content/173331/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Treasurer Josh Frydenberg will announce a comprehensive reform of regulations governing the payments system, to bring it up to date with innovations such as digital wallets and cryptocurrency.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1196252019-07-07T18:41:29Z2019-07-07T18:41:29ZHow Ghana is acing its transition to mobile financial services<figure><img src="https://images.theconversation.com/files/281865/original/file-20190629-94716-oac4iu.png?ixlib=rb-1.1.0&rect=0%2C8%2C1200%2C788&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The USAID's Feed the Future program encourages farmers to use mobile money technology to enhance their farming activities.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/usaidafrica/33630316101">USAID/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p><em>This article was co-written by Charlotte Beck of the Agence française de développement (AFD).</em></p>
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<p>In recent years, the unprecedented growth of mobile financial services in sub-Saharan Africa has defied expectations. While Kenya is often cited as a leading example of digital transformation, Ghana has recently become the <a href="https://www.worldbank.org/en/country/ghana/publication/ghana-economic-update-enhancing-financial-inclusion">fastest-growing mobile money market in Africa</a>, with registered accounts increasing six-fold between 2012 and 2017. The country’s experience provides a fresh perspective on its digital transformation and demonstrates that technology can help modernise the financial system as well as also support greater financial inclusion.</p>
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<img alt="" src="https://images.theconversation.com/files/282713/original/file-20190704-51273-1z0sa4w.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/282713/original/file-20190704-51273-1z0sa4w.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=480&fit=crop&dpr=1 600w, https://images.theconversation.com/files/282713/original/file-20190704-51273-1z0sa4w.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=480&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/282713/original/file-20190704-51273-1z0sa4w.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=480&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/282713/original/file-20190704-51273-1z0sa4w.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=603&fit=crop&dpr=1 754w, https://images.theconversation.com/files/282713/original/file-20190704-51273-1z0sa4w.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=603&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/282713/original/file-20190704-51273-1z0sa4w.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=603&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="attribution"><a class="source" href="https://www.cgap.org/sites/default/files/researches/documents/Focus-Note-Building-Inclusive-Payment-Ecosystems-June-2018.pdf">CGAP Focus Note 110 2018</a>, <span class="license">Author provided</span></span>
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<p>In <a href="https://www.afd.fr/en/ghana-what-economic-challenges">Ghana</a>, mobile financial services are mostly used by those poorly served by the traditional financial sector. The <a href="https://globalfindex.worldbank.org/sites/globalfindex/files/chapters/2017Findex%20full%20report_chapter1.pdf">2017 Global Findex database</a> indicates that access to formal financial services rose from <a href="https://globalfindex.worldbank.org/sites/globalfindex/files/chapters/2017Findex%20full%20report_chapter1.pdf">41% of adults in 2014 to 58% in 2017</a>. This is largely attributable to mobile accounts, with 20% of digital-wallet users being previously unbanked. These now represent about <a href="https://globalfindex.worldbank.org/sites/globalfindex/files/chapters/2017Findex%20full%20report_chapter2.pdf">40% of all account holders</a>, compared to 13% in 2014.</p>
<p>Furthermore, by reducing the lengths of transactions as well as the associated risks and costs, mobile-money solutions better meet the needs of vulnerable customers such as smallholder farmers. While rural access to formal financial accounts is still low, figures have almost doubled since 2011, from 26% to 51%. Today, approximately 40% of payments for the sale of agricultural products are made via a formal account, and in most cases into a mobile-money account.</p>
<h2>Mobile money on the rise</h2>
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<a href="https://images.theconversation.com/files/282714/original/file-20190704-51297-u17441.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/282714/original/file-20190704-51297-u17441.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/282714/original/file-20190704-51297-u17441.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=627&fit=crop&dpr=1 600w, https://images.theconversation.com/files/282714/original/file-20190704-51297-u17441.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=627&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/282714/original/file-20190704-51297-u17441.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=627&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/282714/original/file-20190704-51297-u17441.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=788&fit=crop&dpr=1 754w, https://images.theconversation.com/files/282714/original/file-20190704-51297-u17441.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=788&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/282714/original/file-20190704-51297-u17441.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=788&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><a class="source" href="https://www.cgap.org/sites/default/files/researches/documents/Focus-Note-Building-Inclusive-Payment-Ecosystems-June-2018.pdf">CGAP Focus Note 110 2018</a></span>
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<p>Many factors explain the rapid progress of mobile money use in Ghana. First, the strong penetration rate of mobile phones (about 128% of the population) make the widespread use of mobile-money services possible, particularly in rural areas. Second, and more importantly, the Ghanaian success is the product of a right mix of consumer-driven practices and a favourable regulatory environment for the industry, built on the back of early infrastructure investments.</p>
<p>If Ghana can boast about championing mobile money today, in the early years digital services struggled to gain traction. The initial 2008 regulation for branchless banking was highly restrictive, imposing rules and requirements that deterred most initiatives. The regulations reflected the perceived “high-risk gamble” of allowing non-bank actors such as mobile network operators to issue e-money and potential negative implications for the <a href="https://www.cgap.org/sites/default/files/researches/documents/Focus-Note-Building-Inclusive-Payment-Ecosystems-June-2018.pdf">stability of Ghana’s banking sector</a>.</p>
<p>When it became apparent that adoption was falling well below expectations, with the support of the <a href="https://www.cgap.org/">Consultative Group to Assist the Poor</a> (CGAP), the Bank of Ghana agreed to engage with all stakeholders and take a second look at the regulations to change the course of mobile money in the country. The revised <a href="https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.bog.gov.gh/privatecontent/Banking/E-MONEY%2520GUIDELINES-29-06-2015-UPDATED5.pdf">2015 e-Money Issuer Guidelines</a> shifted to a more flexible approach, allowing new players in the provision of financial services and more scope for experimentation.</p>
<h2>Key initiatives</h2>
<p>In addition to creating a regulatory framework adapted to the needs of users and operators, Ghanaian authorities took other key initiatives in supporting the development of innovative payment technologies. Underlined in the latest <a href="https://www.worldbank.org/en/country/ghana/publication/ghana-economic-update-enhancing-financial-inclusion">World Bank economic update</a>, the expansion of the agent distribution network – from around <a href="https://www.worldbank.org/en/country/ghana/publication/ghana-economic-update-enhancing-financial-inclusion">6,000 agents in 2012 to more than 150,000 in 2015</a> – was key to allow more cash-in and cash-out opportunities and overall convenience of using mobile money.</p>
<p>In May 2018 Ghana also launched one of the first interoperable systems in Africa, allowing transactions between the different service providers. Interoperability payments reached 308 million GHS (57 million US dollars) by the end of March 2019. Finally, the introduction of the <a href="https://ghipss.net/merchants/e-zwich-agent/18-e-zwich">E-zwich biometric card</a> should ease recognition and use of payments solutions for all cardholders.</p>
<p>User adoption of mobile banking is increasing, but has been limited by restricted merchant acceptance: 2.7 million cards have been issued and 7.7 million transactions handled, representing 2% of Ghana’s GDP. Although most payments are immediately cashed out, <a href="https://www.worldbank.org/en/country/ghana/publication/ghana-economic-update-enhancing-financial-inclusion">53% have residual value</a>.</p>
<p>Ghanaians have so far used mobile wallets principally for transferring money to a person (peer-to-peer, P2P). According to <a href="https://www.bog.gov.gh/privatecontent/Payment%20Systems/Payment%20Systems%20Annual%20Report%202017.pdf">Bank of Ghana data</a>, the total value of all mobile money transactions reached 156 billion GHS (29 billion US dollars) in 2017, compared to 35 billion GHS (6.5 billion US dollars) in 2015. Gradually the range of mobile accessible goods and services has successfully expanded to the purchase of mobile communication credits, payment of public service bills or salaries.</p>
<h2>Next step, government-to-people</h2>
<p>To achieve sustainable change, Ghana’s next challenge revolves around digitizing government collections and utility payments – government-to-people (G2P) and vice versa – the majority of which is still paid in cash. Digitizing these payments will help broaden the tax base, increase the size of the formal economy, as well support financial inclusion efforts.</p>
<p>An interesting example is the digital renewal process of Ghana’s National Health Insurance Authority (NHIA), whose role is to ensure access to basic healthcare services for all residents. </p>
<p>At the end of 2018 the system had approximately 11 million members who were required to renew their membership in person at a district office. The process was time consuming, sometimes taking up to 11 hours, and slowed the growth in coverage, which had levelled off at around 40% of the population. Supported by the <a href="http://www.impactinsurance.org/sites/default/files/CB17.pdf">Impact Insurance Facility</a> of the <a href="https://www.ilo.org/global/lang--en/index.htm">International Labour Organisation</a> and the <a href="https://www.afd.fr/en">Agence française de développement</a> (AFD), a user-friendly platform now allows Ghanaians to renew their membership via a mobile phone. Using design thinking, the aim was to ensure that the technology would actually <a href="https://thebftonline.com/2019/business/insurance/nhia-urges-use-of-mobile-renewal-to-reduce-long-queues/">reach target communities</a> with simple messages and an interface that would be easy to understand. </p>
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<span class="attribution"><a class="source" href="http://www.impactinsurance.org/sites/default/files/CB17.pdf">National Health Insurance Authority’s digital renewal process</a></span>
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<span class="attribution"><a class="source" href="http://www.impactinsurance.org/sites/default/files/CB17.pdf">National Health Insurance Authority’s digital renewal process</a></span>
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<p>As with other such initiatives, the National Health Insurance programme faces a number of challenges. However, the application of technology has helped to <a href="https://www.businessghana.com/site/news/general/190467/Public-advised-to-get-NHIA-handbook-to-clear-misconceptions">address some of the logistical issues around renewal</a>. Today, 54% renewals now take place using mobile phones, reducing the queues at district offices for those who renew in person at district offices.</p>
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<a href="https://images.theconversation.com/files/283673/original/file-20190711-173370-6n3gcq.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/283673/original/file-20190711-173370-6n3gcq.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/283673/original/file-20190711-173370-6n3gcq.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=329&fit=crop&dpr=1 600w, https://images.theconversation.com/files/283673/original/file-20190711-173370-6n3gcq.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=329&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/283673/original/file-20190711-173370-6n3gcq.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=329&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/283673/original/file-20190711-173370-6n3gcq.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=413&fit=crop&dpr=1 754w, https://images.theconversation.com/files/283673/original/file-20190711-173370-6n3gcq.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=413&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/283673/original/file-20190711-173370-6n3gcq.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=413&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><a class="source" href="https://www.slideshare.net/IIFacility/population-coverage-from-pilot-to-nationwide-scaleup-of-the-nhis-mobile-renewal-and-digital-authentication-project-148909492">Impact Insurance Facility</a></span>
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<p>The other aspects of digitisation include verifying member identity at healthcare providers, claims authorisation, and also notify users when claims are being made in their name, helping flag potential fraud. Increasing digital renewals and authentication is expected to both increase revenue and decrease costs, potentially leading to an estimated 15-25% reduction in NHIA’s annual deficit.</p>
<p>The success and sustainability of the initiative will depend the ability to increase usage in <a href="https://doi.org/10.1186/s12939-019-0946-x">rural areas and among workers in the informal economy</a>. As indicated in the March 2019 study, <a href="https://equityhealthj.biomedcentral.com/articles/10.1186/s12939-019-0946-x">“Determinants of paying national health insurance premium with mobile phone in Ghana”</a>, “making the process as user-friendly and as simple as possible could motivate many who otherwise would not participate to do so”.</p>
<h2>Enabling innovation</h2>
<p>Ghana provides a unique case of governmental commitment to create a suitable working environment for innovation. Digital solutions have enabled wider access to financial services such as health insurance, mobile-based pension schemes (see <a href="https://www.cgap.org/sites/default/files/publications/2019_05_Focus_Note_Fintech_and_Financial_Inclusion_1_0.pdf">People’ Pension Trust</a>) and microcredit loans. More and more previously unbanked users are now using micro-loan services (starting at 2 US dollars). For the first time, users will also earn interest on their digital saving accounts, with total interest paid to holders of electronic money wallets amounting to 24.8 million GHS (4.5 million US dollars) in 2016.</p>
<p>However, in an environment of low financial literacy, many of those using digital credit products don’t fully understanding their rights and obligations as consumers, and sometimes fall victim to predatory practices. Going forward, the Ghanaian consumer-protection regulation will have to tackle client-protection issues raised by digital financial services, in line with <a href="https://sptf.info/responsible-digital-financial-services">Social Performance Task Force recommendations</a>, supported by AFD.</p><img src="https://counter.theconversation.com/content/119625/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Selin Ozyurt ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.</span></em></p>In just five years, the number of mobile-money accounts in Ghana have jumped six-fold, providing fresh perspective on the country’s digital transformation.Selin Ozyurt, Economist, Agence française de développement (AFD)Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/906132018-02-07T11:29:11Z2018-02-07T11:29:11ZEstate planning for your digital assets<figure><img src="https://images.theconversation.com/files/204891/original/file-20180205-14064-18d6b5c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Digital documents are not nearly as easy to retrieve.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/man-searching-documents-archive-737512603">Africa Studio/Shutterstock.com</a></span></figcaption></figure><p>What will happen to your Facebook account when you die? What about all your photos shared on social media, your texts with loved ones, or documents on cloud-storage systems? In just the two-year period from 2012 to 2014, humans <a href="https://harvardmagazine.com/2014/03/why-big-data-is-a-big-deal">produced more data than in all of human civilization</a> before that – and the pace is only accelerating.</p>
<p>It’s not clear what people’s digital presences will look like in years to come, but it’s sure that an increasing number of people will be creating and accumulating growing reams of data until the day they die. But then what?</p>
<p>The law is very clear about handling paper documents and other physical property when someone dies. But as a law professor at Drake Law School who has been studying property transfers for years, I’ve seen that laws, regulations and court rulings are only recently trying to figure out how to handle <a href="https://ssrn.com/abstract=2561871">the ever-changing realm of digital technology</a>. So far, in most cases the information is controlled by the companies that store it – regardless of what users want or direct to happen after their death.</p>
<h2>Law catching up with technology</h2>
<p>Many people have had email and other digital accounts for decades, some stretching back to the early pioneers in the 1960s. But large numbers of average people really only began creating significant digital footprints in the early part of the 21st century. <a href="https://www.theguardian.com/technology/2007/jul/25/media.newmedia">Facebook</a> and <a href="http://time.com/43263/gmail-10th-anniversary/">Gmail</a> began operations in 2004; <a href="https://sites.google.com/a/pressatgoogle.com/youtube5year/home/short-story-of-youtube">YouTube started in 2005</a>; <a href="https://thenextweb.com/twitter/2011/07/15/5-years-ago-today-twitter-launched-to-the-public/">Twitter launched in 2006</a>; the <a href="https://theconversation.com/understanding-the-real-innovation-behind-the-iphone-79556">iPhone came out in 2007</a>.</p>
<p>Almost a decade later, a group of lawyers from around the country <a href="http://www.uniformlaws.org/Act.aspx?title=Fiduciary%20Access%20to%20Digital%20Assets%20Act,%20Revised%20(2015)">developed a draft uniform law</a> they encouraged all 50 states to adopt, which would allow people to specify in their wills that the executor of their estate can access their email and social media profiles. So far, 39 state legislatures have adopted it and seven more are considering it this year.</p>
<p>The uniform law doesn’t specify – and courts have not yet been asked to rule on – exactly how that access should happen. So for the moment, a dead person’s executor must contact the company behind each digital platform to determine how to get into the person’s accounts.</p>
<p>In <a href="http://www.uniformlaws.org/LegislativeMap.aspx?title=Fiduciary%20Access%20to%20Digital%20Assets%20Act,%20Revised%20(2015)">states that haven’t passed this law</a>, companies themselves can decide whether to allow loved ones access to a late relative’s digital assets. <a href="https://policies.yahoo.com/us/en/yahoo/terms/utos/index.htm">Yahoo</a>, for example, is notorious for terminating an account upon a user’s death and forbidding access afterward. </p>
<p>The company’s refusal to grant access to surviving family members is being challenged in Massachusetts, a state that has not adopted the uniform digital assets law. In October 2017, the <a href="https://www.mass.gov/files/documents/2017/10/16/12237.pdf">Massachusetts Supreme Judicial Court</a> ruled that an executor could consent to the disclosure of emails on behalf of the dead person whose estate was being managed. The case is back before a lower court to decide on other issues, including whether the estate will be able to access the account despite <a href="https://policies.yahoo.com/us/en/yahoo/terms/utos/">Yahoo’s terms of service agreement</a>.</p>
<h2>The role of privacy</h2>
<p>With so many legal issues yet to be decided, people should be sure they include digital assets in their estate planning and encourage their loved ones to do the same. </p>
<p>Access to the email of a person who has died may be the most important to unlock: Messages and images are likely to be emotionally important. In addition, banking, utilities and other accounts are often linked to an email address; gaining online access to those can help administer a person’s estate.</p>
<p>Of course, it’s important to <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2798812">protect the privacy of a person who has died</a> – despite the general legal assumption that a dead person no longer has privacy that needs protecting. The uniform state law does this by requiring a person to have left specific written permission for an executor to access an email account.</p>
<h2>Making plans for yourself</h2>
<p>To prepare yourself for a digital afterlife, the first task is to state, in writing, what you want to happen to your digital assets. Create a list of the accounts in your name, and determine which ones you want your executor to access – and which should be deleted. </p>
<p>Crucially, do not list usernames or passwords in your will, because a person’s will becomes a public document upon their death. Instead, consider recording access information for these accounts in a safe place – like <a href="https://theconversation.com/why-we-choose-terrible-passwords-and-how-to-fix-them-76619">password management software</a> – and leave instructions for your executor to find them.</p>
<p>It’s not yet clear whether credits and purchases with digital media accounts (like the Google Play Store or iTunes) or online reward account points can be transferred when their holder dies. The only solution for now may be to leave your executor with instructions on how to access the value stored in those accounts – and back up the media on external hard drives stored in a safe place.</p>
<p>Finally, check with the companies whose online services you use to see if they provide their own method to transfer assets at death. For example, <a href="https://myaccount.google.com/inactive?pli=1">Google has pioneered a method</a> for its users to indicate what they want to have happen to their account if they don’t access it for several months.</p>
<p>By engaging in some simple estate planning, you can protect your privacy as well as ease the management of your estate after your death. Plan for your digital assets in the same way you would any other valuable tangible or intangible asset. After all, digital assets are today’s shoeboxes of photos, letters and other mementos. Planning can preserve your legacy in its digital form.</p><img src="https://counter.theconversation.com/content/90613/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Natalie Banta does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>What happens to your Facebook account, your iTunes purchases and your email messages when you die?Natalie Banta, Associate Professor of Law, Drake UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/717042017-02-21T07:46:40Z2017-02-21T07:46:40ZIndia’s demonetisation drive has boosted banks and start-ups, but it’s still a failure<p>When Indian Prime Minister Narendra Modi <a href="https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=38520">announced the withdrawal of ₹500 (US$7.40) and ₹1,000 (US$15) banknotes</a> from circulation in November 2016, the government said its demonetisation drive would curb India’s shadow economy and <a href="http://indiatoday.intoday.in/story/live-pm-narendra-modi-addresses-nation/1/805755.html">suppress the use of illicit and counterfeit cash in the economy</a>.</p>
<p>If there’s one sector that’s done particularly well as a result of government’s move, it’s the banking sector. </p>
<p>Banks received deposits worth ₹6 trillion (US$88 billion) and overall banking deposits with the Reserve Bank of India <a href="http://www.livemint.com/Industry/XALVUcyigyTrbn7KogaIfM/Demonetisation-impact-Bank-deposits-with-RBI-reach-a-record.html">reached a record high of ₹4.3 trillion (US$63.1 billion)</a> within two weeks of the currency ban.</p>
<p>So the demonetisation was a well-planned move in terms of the health of the Indian banking system. Five months before the drive, the total amount of gross non-performing assets (loans are classified like this after 90 days of non-payment of interest or principal) for public and private sector banks was around <a href="http://www.thehindu.com/data/Details-of-NPA-figures-of-public-private-sector-banks/article16670548.ece">₹6lakh crore (US$88 billion)</a>. </p>
<p>To understand how big this problem was, one needs to see the figure against the total loans given out by India’s banking system. That ratio corresponded to 11.8% of total credit advanced in September 2016, and it’s expected to reach 12.5% by March 2017. </p>
<p>The bulk of these non-performing assets are from public sector banks, and were mainly lent to finance the basic metal and metal products sector, the textile industry and the beverages sector. </p>
<p>In its <a href="https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=39074">December 2016 Financial Stability Report</a>, the Reserve Bank noted that the asset quality of public sector banks had deteriorated further between March and September 2016. This reflected the failing health of the Indian banking system, which is a major provider of credit to industry and business. If not checked in time, it can have serious repercussions for the economy. </p>
<h2>Bringing currency back</h2>
<p>So calling the demonetisation drive a complete failure, as <a href="http://www.indialegallive.com/commercial/special-story/demonetization-will-adversely-impact-97-percent-indians-15912">many economists</a> and <a href="https://www.bloomberg.com/view/articles/2016-11-16/india-s-strike-against-black-money-backfires">financial analysts</a> have done then, is to fail to respect this well thought-out strategy for saving India’s banks. Demonetisation has fulfilled the objective of bringing currency back into the banking system. </p>
<p>Within the first month, practically all demonetised currency notes in the country were <a href="http://timesofindia.indiatimes.com/toi-features/business/97-of-scrapped-notes-deposited-with-banks-as-on-dec-30-report/articleshow/56344692.cms">back in the bank vaults</a>. The sudden flow of cash to public sector banks gave them an instant lifeline clearly visible across the banking system. </p>
<p>Enriched by these higher deposits, the country’s largest lender, the State Bank of India, <a href="http://www.thehindu.com/business/Economy/Loans-to-be-cheaper-as-SBI-slashes-rate/article16973380.ece">slashed its benchmark lending rate</a> by 0.9%. In other words, after difficulty dealing with bad loans, after demonetisation banks are now able to provide cheap financing. </p>
<p>Not only did lending rates get slashed, the overnight marginal cost of funds-based lending rate (the minimum interest rate below which a bank cannot lend) <a href="http://profit.ndtv.com/news/banking-finance/article-state-bank-of-india-cuts-lending-rate-by-0-9-across-maturities-1643910">fell to 7.75% from 8.65%</a>. Meanwhile, <a href="http://www.businesstoday.in/current/policy/state-bank-of-india-cuts-lending-rates/story/243342.html">three-year loan rates came down</a> to 8.15% from 9.05%. While these percentages may seem small, it was a huge turnaround, which were reeling under the pressure of the bad loans.</p>
<h2>Another winning sector</h2>
<p>Amid the frenzy after demonetisation, another sector that got a big boost was that of financial technology start-ups, including digital wallet and other mobile payment companies. Due to the cash crunch, <a href="http://www.mydigitalfc.com/news/delhi-govt-joins-cashless-surge-929">many people turned to digital wallets</a> that can be used in conjunction with mobile payment systems, allowing them to pay for purchases with their smartphones.</p>
<p>Digital wallet companies saw an <a href="http://economictimes.indiatimes.com/small-biz/money/digital-wallets-and-mobile-wallets-surge-to-their-highest-level-modern-trade-grows-five-fold-nielsen/articleshow/55605863.cms">unprecedented surge</a> in the number of people signing up for their services and adding money to their wallets after demonetisation.</p>
<p>Among mobile wallet companies, <a href="https://paytm.com/">Paytm</a> was the biggest beneficiary. We can gauge <a href="http://www.hindustantimes.com/business-news/mobile-wallet-is-the-new-cash-demonetisation-is-all-set-to-become-the-turning-point-for-the-sector/story-4ZhcBq4OtAgk1GWwrETodK.html">the impact of the demonetisation drive on its business</a> by looking at the company’s user base, which has reached 160 million – a fourfold increase since May 2016. Paytm’s traffic rose by 435%, app downloads grew by 200%, and the company saw a 250% rise in overall transaction value. </p>
<p>In fact, “<em>Paytm karo</em>” (literally, “do Paytm”) became one of the most common phrases during the early parts of the demonetisation drive, and sectors that have been traditionally cash-based, for example small shopkeepers and public transport, such as taxis and auto rickshaws, started accepting Paytm. </p>
<p>Such was a stardom of Paytm that <a href="http://economictimes.indiatimes.com/small-biz/startups/paytms-story-now-a-case-study-at-harvard/articleshow/56865077.cms">it featured in a Harvard Business School case study</a> of the company’s transformation from online recharge platform to India’s largest mobile payments platform.</p>
<h2>Ultimate failure</h2>
<p>The demonetisation drive, then, <a href="http://www.hindustantimes.com/india/modernising-india-modi-govt-makes-digital-dash-e-gaon-every-mile/story-I5mbDkXKyhELpg4betsERJ.html">could be seen as a blessing for India’s move</a> towards a cashless economy and for encouraging consumers to use digital payment platforms. It also supports the <a href="http://digitalindia.gov.in/">government’s Digital India initiative</a>, which aims to encourage cashless payment solutions across the country by putting technological infrastructure in place.</p>
<p>But it’s difficult to assess whether India is ready for a cashless economy. Traders tend <a href="http://tech.economictimes.indiatimes.com/news/technology/are-we-really-ready-for-a-cashless-future-/55574423">not to reveal their actual income</a> to avoid taxes and people are so used to paying for services in cash that for them to shift to new mode of payments <a href="http://economictimes.indiatimes.com/industry/banking/finance/banking/payments-going-the-plastic-way-is-india-ready-for-cashless-transactions/articleshow/55570808.cms">requires a big habitual change</a>. </p>
<p>The government’s demonetisation drive, then, can be seen as an effort to curb the corruption and the flow of black money as stated, but also to force the general population to embrace digital payment options.</p>
<p>Unfortunately, it seems to have failed in both aspirations. Even though the main stated aim of demonetisation was to curb the extent of black money in the economy, during the first two months of the drive, almost 90% of the scrapped and demonetised notes were <a href="http://www.forbes.com/sites/timworstall/2016/12/28/90-of-scrapped-notes-in-banking-system-india-gets-the-tax-not-the-dividend/#3146aad92aca">back in the banking system</a>. This stands in contrast to the government expectation that roughly ₹3 lakh crore (US$44 billion) of <a href="http://timesofindia.indiatimes.com/india/90-of-scrapped-notes-back-in-system-big-dividend-unlikely/articleshow/56210235.cms">the scrapped notes would never return</a> because they would be part of black money hoards. </p>
<p>The second consequence of moving towards a cashless economy may also be a failure. When cash returns to the system, <a href="http://www.hindustantimes.com/business-news/mobile-wallets-see-a-soaring-growth-post-demonetisation/story-zwdBi3UGqG1qZD92AEF9GK.html">many Indians are likely go back to the cash-based transactions</a> given the over-dependence on cash-based transactions in the country due to limited connectivity and privacy issues related to transactions. </p>
<p>Ultimately, the demonetisation drive has been successful in making the banking sector healthier, but not what it was projected to do in terms of bringing in “black money” and turning the country into “digital India”.</p><img src="https://counter.theconversation.com/content/71704/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nafis Alam does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The demonetisation drive has made the banking sector healthier but failed to curb ‘black money’.Nafis Alam, Professor of Finance, Sunway UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/192982013-11-06T03:43:18Z2013-11-06T03:43:18ZWhat is near field communication (and how secure is it)?<figure><img src="https://images.theconversation.com/files/34305/original/dg76wy2h-1383526099.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Near field communication isn't a new phenomenon, but it's only just now getting a real push into Australia.</span> <span class="attribution"><span class="source">vernieman</span></span></figcaption></figure><p>Coles and the Commonwealth Bank of Australia <a href="http://delimiter.com.au/2013/10/17/strong-nfc-push-commbank-coles/">declared last month</a> their intention to make use of near field communication (<a href="http://en.wikipedia.org/wiki/Near_field_communication">NFC</a>) technology, allowing users to transfer their personal and other banking details from a smartphone to a point of sales register by simply holding their device near a reader.</p>
<p>So how does NFC work – and how secure is it?</p>
<p>In its simplest form, NFC can operate in three modes:</p>
<ol>
<li>In <strong>passive mode</strong>, the contact pad generates a very short range radio frequency field which is used to read data contained in the receiving chip while passing through this radio field. Common examples include credit or payment cards, where the tiny receiving chip is inserted within the plastic card.</li>
<li>In <strong>active mode</strong>, NFC-enabled devices can communicate with other NFC-enabled devices and contact points to exchange data bi-directionally. They allow users to access, for example, any data from a “tap point” such as a public transport turnstile, reading information at a museum exhibit, or a so-called <a href="http://www.nfc-forum.org/resources/white_papers/NFC_Smart_Posters_White_Paper.pdf">smart poster</a>. A smart poster, for the most part, takes the form of a poster or billboard in or on which readable NFC tags have been placed. These NFC tags contain information which is read by your smartphone, such as the web address of the advertiser, information relating to a sales promotion, or bus timetable.</li>
<li>In <strong>paired or peer-to-peer (<a href="https://theconversation.com/could-peer-to-peer-lending-challenge-our-banks-7585">P2P</a>) mode</strong>, data can flow in both directions between two devices using the NFC Data Exchange Format (<a href="http://ieeexplore.ieee.org/xpl/articleDetails.jsp?reload=true&arnumber=5476460">NDEF</a>). Connecting devices in NFC P2P mode is in stark contrast to the cumbersome <a href="http://en.wikipedia.org/wiki/Bluetooth">Bluetooth</a> pairing processes. Bluetooth pairing typically involves a number of steps including identifying the target device from the list of devices within radio range of your phone, selecting that device then entering the PIN code associated with that device. This process may take anything from 30 seconds to a minute or so.</li>
</ol>
<p>The appeal of convenience for consumers of NFC is driving smartphone providers to integrate NFC into their latest devices. With the exception of <a href="http://www.computerworld.com/s/article/9242303/Once_again_Apple_bypasses_NFC_in_its_new_iPhones">Apple</a>, all leading smartphone manufacturers are implementing, or have already implemented, NFC technology into their devices. Nokia and BlackBerry are in various stages of developing and deploying NFC-ready mobile devices, whereas Samsung smartphones are already NFC capable.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/34491/original/qcd6dmkx-1383703233.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/34491/original/qcd6dmkx-1383703233.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/34491/original/qcd6dmkx-1383703233.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=448&fit=crop&dpr=1 600w, https://images.theconversation.com/files/34491/original/qcd6dmkx-1383703233.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=448&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/34491/original/qcd6dmkx-1383703233.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=448&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/34491/original/qcd6dmkx-1383703233.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=563&fit=crop&dpr=1 754w, https://images.theconversation.com/files/34491/original/qcd6dmkx-1383703233.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=563&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/34491/original/qcd6dmkx-1383703233.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=563&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">{Guerrilla Futures | Jason Tester}</span></span>
</figcaption>
</figure>
<h2>Fast on the hype, slow on the uptake</h2>
<p>Despite the increasing use of contactless credit and payment cards, expectations of a broad and rapid adoption of NFC based technologies have <a href="http://secureidnews.com/news-item/survey-why-nfc-has-not-fully-taken-off-yet/?tag=nfc">failed to be realised</a>, with many deployment still in the <a href="http://nfctimes.com/report/year-ahead-nfc-entering-commercialization-phase">field trial stage</a>.</p>
<p>Similarly, the road towards the <a href="http://theconversation.com/is-google-wallet-a-virtual-game-changer-3451">digital wallet</a>, is not paved with gold. The <a href="http://www.businessweek.com/articles/2013-06-06/google-wallet-is-leaking-money">failure</a> of the <a href="https://theconversation.com/is-google-wallet-a-virtual-game-changer-3451">Google Wallet</a> to reach market critical mass, meaning their US$300 million investment in the Android-based solution is unlikely to yield a return. </p>
<p>Where Google goes, however, others are sure to follow – one such example being the <a href="http://www.bit.com.au/News/361001,commonwealth-bank-coles-to-offer-contactless-payment-stickers-for-phones.aspx">Commonwealth Bank</a>, which recently announced a NFC-capable sticker for smartphones without NFC capabilities, which turns a smartphone into a digital wallet. Time will tell whether these developments ultimately become the norm, or end up becoming a small supplement to an ever increasing range of payment methods.</p>
<h2>The never-ending security/convenience arms race</h2>
<p>As a consumer, how can you ensure you’re never caught up in the crossfire of the never-ending war between the cybercriminals and legitimate organisations? </p>
<p>The answer is: you can’t. Card skimming is a well-known phenomenon, and the advent of NFC takes this to a new level.</p>
<p>In a paper published in September in the Journal of Engineering, entitled <a href="http://digital-library.theiet.org/content/journals/10.1049/joe.2013.0087;jsessionid=3bggvbgimjqg9.x-iet-live-01">Eavesdropping near-field contactless payments: a quantitative analysis</a>, the authors illustrated the relative ease with which NFC can be intercepted from distances of as far as a metre using easily concealable antennae and low-cost electronics.</p>
<p>With respect to NFC-enabled mobile devices, smartphone applications activate the NFC chip which works as a NFC reader, a point illustrated by a <a href="http://www.forbes.com/sites/andygreenberg/2012/07/27/hacker-demos-android-app-that-can-read-and-use-a-credit-card-thats-still-in-your-wallet/">hacker who showed</a> how to use an Android phone to make payments from a stranger’s contactless credit card.</p>
<p>The <a href="http://www.hpenterprisesecurity.com/collateral/whitepaper/HP2012CyberRiskReport_0213.pdf">Hewlett Packard 2012 cyber risk report</a> cites the main security concern arising from a NFC chip in a payment card is the fact that the chip can always be read. When the card is in the field of a NFC reader, the information on the NFC chip can be read and stolen.</p>
<h2>So what’s at the end of the NFC rainbow?</h2>
<p>When it comes to NFC based technologies, consumers are well advised to check where their personal liability for information security ends and that of the financial institution or related parties begins. </p>
<p>One thing is certain, the inherent risks in the digital world are real, and they may be something over which you have little control.</p><img src="https://counter.theconversation.com/content/19298/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rob Livingstone has no financial interests in, or affiliations with any organisation mentioned in this article. Other than his role at UTS, he is also the owner and principal of an independent Sydney based IT advisory practice.</span></em></p>Coles and the Commonwealth Bank of Australia declared last month their intention to make use of near field communication (NFC) technology, allowing users to transfer their personal and other banking details…Rob Livingstone, Fellow of the Faculty of Engineering and Information Technology, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/160442013-07-12T13:38:33Z2013-07-12T13:38:33ZBitcoin fuels Africa’s banking revolution<figure><img src="https://images.theconversation.com/files/27388/original/nq49ns79-1373634673.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Moving with the times. Mobile phones are a vital tool in African banking</span> <span class="attribution"><span class="source">whiteafrican</span></span></figcaption></figure><p>Bitcoin has landed in Kenya. The online currency that was, until recently, the preserve of tech entrepreneurs and only the most pioneering financiers, is to go mainstream in Nairobi while the rest of us continue to look on gingerly from the sidelines.</p>
<p>This is thanks to <a href="http://kipochi.com/">Kipochi</a> a Bitcoin wallet that will enable users to transfer bitcoins to each other before converting them into local currency.</p>
<p>Kipochi - Swahili for “wallet” - will allow Kenyans to send money quickly and cheaply, effectively avoiding the high transaction fees charged by existing services such as moneygram. Enabling the transfer of funds between countries is significant given the huge importance of remittances to Africa’s economy. Remittances from outside Africa dwarf Western aid, for example, and the growth of economic migration across African borders means that transactions are increasingly international.</p>
<h2>M-Pesa</h2>
<p>Mobile phone banking is already flourishing in Africa much more quickly than here in the UK. It is driven by widespread mobile phone use and the relative scarcity of banks. The numbers are illuminating. In Kenya, the heartland of <a href="http://www.safaricom.co.ke/?id=257">M-Pesa</a> – the world’s leading mobile money service, approximately 70% of adults do not have access to a formal bank account. At the same time around 70% do have access to a mobile phone, and the overwhelming majority of those with phones have used them to access M-Pesa to transfer money. </p>
<p>M-Pesa, M for mobile and Pesa – Swahili for money - is one of the relatively rare examples of “technological catch-up”, where the rapid adoption of a new technology allows less developed parts of the world to make substantial strides forward. </p>
<p>M-Pesa is very straightforward. Once one has registered an account and deposited some money, one simply dispatches cash to the intended recipient via a text message. The recipient then converts the text message into cash at one of the 40,000 agents dotted around the country. The service is a godsend in many ways, it avoids lengthy bank queues, it negates the rigmarole of setting up a formal bank account and it facilities the support of the many rural-urban households that stretch across the country in an effort to secure a livelihood.</p>
<h2>Leaping forward</h2>
<p>Many parts of Africa have managed to effectively leapfrog the era of wired telecommunications by taking advantage of cheap, contract-free mobile phones to keep in touch. In turn, the massive demand for communication has driven private sector investment to ensure the growth of wireless networks across the continent.</p>
<p>It was therefore only a matter of time before a company woke up to the potential of a service like Kipochi. The advent of Bitcoin has provided the perfect vehicle for the next stage in the revolution. </p>
<p>What mobile phones have done in Africa is meet a need in a way that is affordable to the majority of the population in many African countries. And he growth in their use demonstrates the power of the African consumer to mobilise the private sector. Tellingly, by 2012, more than 30% of Kenya’s GDP was transacted through M-Pesa.</p>
<p>There are risks, however. Bitcoin has proved itself to be <a href="http://www.guardian.co.uk/technology/2013/apr/10/bitcoin-new-high-losing-160">volatile</a>, fuelled by speculators - although this is not something that Africans are unaccustomed to. M-Pesa as a brand might be a trusted one, but the more abstract connection to Bitcoin might be a harder sell. Currently, Kipochi above all else represents possibility, as M-Pesa once did. </p>
<p>The growth of mobile money also represents something more profound. In Kenya, this emergent global economy isn’t about the internet, or mobile phones, or new technological platforms and opportunities. Ultimately its about customers. </p>
<p>The transformative power of technology for Africa is actually a story of the transformation of Africans from recipients to customers, and the emergence of Africa as a place of opportunity and entrepreneurship. Monetary innovation is a story of needs finally being met.</p><img src="https://counter.theconversation.com/content/16044/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>James Smith receives funding from the Economic and Social Research Council, the European Research Council and the Scottish Government. </span></em></p>Bitcoin has landed in Kenya. The online currency that was, until recently, the preserve of tech entrepreneurs and only the most pioneering financiers, is to go mainstream in Nairobi while the rest of us…James Smith, Professor of African and Development Studies, The University of EdinburghLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/95242012-09-13T20:29:50Z2012-09-13T20:29:50ZWill Apple’s Passbook be a pocket rocket in the digital wallet wars?<figure><img src="https://images.theconversation.com/files/15438/original/38jvkbtm-1347519450.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Will Apple's Passbook succeed where so many other digital wallet ventures have failed?</span> <span class="attribution"><span class="source">Image from www.shutterstock.com</span></span></figcaption></figure><p>You might not realise it, but there is a virtual queue of organisations snaking around you just waiting to make you more valuable than you actually are. Your spending patterns, loyalty program memberships and location at any point in time is worth good money – especially to others. </p>
<p>Apple is the latest to join this queue, with their Passbook offering on iOS6 iPhones. This offering will allow you to store and redeem discount vouchers, movie tickets, passenger boarding passes, and any other loyalty-based incentives offered by organisations with the resources to invest in this proprietary Apple technology. This is also likely the first step taken by Apple on its journey to insert itself into the actual payments stream. Unlike the <a href="https://theconversation.com/is-google-wallet-a-virtual-game-changer-3451">Google Wallet</a> , the Passbook, however, neither uses <a href="https://theconversation.com/digital-economy-why-tech-firms-want-a-piece-of-your-wallet-4686">Near Field Communications (NFC)</a> nor stores credit card or other financial data – for now at least. </p>
<p>The consolidation of your life’s transactions into a single point, such as your smartphone, is probably the end goal of any organisation that is interested in you as the product. Utilising smartphone technologies, organisations wishing to sell their services to you are constantly working on ways to personalise their offers to you – preferably in real time. By combining the geospatial and other positioning data in real-time, either from your GPS or cell phone location information, organisations are able to deliver real-time data to you that are both relevant and timely.</p>
<p>Consider this scenario. As you are walking (or driving) towards a cinema, you receive a text or email offering you a free upgrade to premier seating for the movie about to screen. You decide to take up the offer and buy your movie ticket on your smartphone there and then. When you walk into the cinema, you just present your smartphone at an automated turnstile, and then head off the watch your movie. No paper or people involved. During that time, your digital trace has been tracked, collated and all financial and other rewards or loyalty systems have been updated with the transactions that have just occurred. This is merely another brick in the digital superhighway, and another dollar towards those putting a value on your interests and spending behaviours. </p>
<p>From the merchant’s perspective, there are potential cost savings in each transaction they have with you. The costs associated with voucher printing, staff handling conventional point of sale transactions and so on are potentially more than offset by moving customers to the digital wallet / Passbook. No doubt as you read this article many organisations vying for your attention, are weighing up the return on investment in the latest offering from Apple.</p>
<p>Interestingly enough, though, the uptake of the Google Wallet smartphone has been a lot slower than the initial hype predicted. Barriers to uptake are not trivial. The challenge for organisations such as Google and Apple lies in gaining a critical mass of retailers and business partners that are willing to invest effort and money in the digital wallet model. </p>
<p>Designing enterprise-strength, secure digital wallet software for the volatile ecosystem of smartphones — and running a range of operating systems with short half-lives — is neither cheap nor easy. Which horse do they pick? Apple or Android? Which OS? Maybe hedge bets by developing 2 systems, one for each ecosystem. Twice the cost, half the value. </p>
<p>The reality is that it’s not what flight you take or movies you see that’s important per-se. It’s you, your community; your societal living patterns that are a potential gold mine for organisations wanting to shape products and services that they think you may want or need – all wrapped up in the convenience of your mobile device. In this game, you as the end consumer of these services have a choice. Choose wisely!</p><img src="https://counter.theconversation.com/content/9524/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rob Livingstone does not work for, consult to, own shares in or receive funding from any company or organisation mentioned in this article. He is the owner and principal of an advisory practice that provides independent IT advice as well as other strategic consulting services to industry.</span></em></p>You might not realise it, but there is a virtual queue of organisations snaking around you just waiting to make you more valuable than you actually are. Your spending patterns, loyalty program memberships…Rob Livingstone, Fellow of the Faculty of Engineering and Information Technology, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.