Moving Money, Moving Lives

This week, to paraphrase the song, I've had money on my mind. Not the paper stuff, but the invisible variety. In the same week I'm prepping and packing to join SWIFT's Innotribe in Mumbai, India for the upcoming event on mobile payments for the unbanked, start-up Square unveiled its play to make the smartphone the register, and Google also announced its wallet strategy. Both companies are promising, through the miracle of the same ubiquitous mobile, to alter forever the physical transaction of standing at a cash register and swiping a card or handing over currency. As Ljuba Miljkovic of Adaptive Path points out, we are suddenly being asked to give up many of our preconceived notions about the act of the transaction—and physical retail shopping in general—and anticipate the possibilities of even lower friction commerce.

Ironically, but perhaps not surprisingly if you watch this space closely as I do, despite all of the handwaving and liveblogging around the two latest innovations coming from Silicon Valley, it's what we will find happening in Mumbai and across emerging markets perhaps more indicative of the future of money and commerce. Finding solutions to allow the currently unbanked to tap into the same ubiquitous mobile—albeit not as expensive or powerful (yet) as an iPhone or Android—may shape a far greater part of the next few decades of commerce, as well as health, quality of life, and many other important human factors. Getting a coupon for the Gap is great, and those shorts will look *awesome* this summer, but enabling a remittance payment to get from a worker in one country to a family back home x 1 million may help us learn so much more than unlocking incremental advertising revenue in Seattle or Chicago.

Don't get me wrong. Square, smartphone wallets and the boom in competition both will drive will have wide-ranging impacts. For one, they may both help to eventually minimize the role of the physical card in payment, and drive new technologies such as NFC through the retail environment. They will both yield an enormous amount of transaction and other behavioral data over time (why else do you think Google is in the game?). Doubtless money will become more "social" again, in the social media sense. Don't think for a second that deals won't be attached to practically every transaction you make over your smartphone in the developed world. But these innovations, or exploitations of possibility, largely serve to increase velocity. They will make consumer spending move even faster, but in many ways only incrementally. 

Meanwhile, in Mumbai and beyond, the first thing to unlock is the ability to move money at all—to receive it, send it, save it, pay bills with it, and more. These capabilities will enable something we take for granted: they save time, increase the security and predictability of money. Lower risks, as banks will tell you, increase opportunities. Accessing opportunities to improve life is what financial inclusion should be all about. Insights gained solving the money issue could very well help solve health, legal, education and a raft of other issues along the way.

So, looking at the potential future impact of these events relative to each other, I'm betting that innovating around mobile money for the unbanked is the one that, with fewer innovations spread more broadly, will be the lever that lifts much more (see this graphic for just how big an impact it could make). Change is often relative, depending on where one stands. I'm betting in 20 years, my life will be more impacted by solving this problem than making it a little easier for me to buy lunch without a card.