Reading something about payments in a 3rd world country I’m struck by the presumption that their infrastructure will look like ours. Their phone infrastructure doesn’t. Resource limits are sure to make much of their infrastructure different than ours. Finally currency substitutes exist only because the state has relinquished some portion of the job of managing the currency. That means that there are a huge range of alternatives depending on how the state manages the currency system. If the state fails to provide a dependable (which includes highly and electronically fungible) currency then currency substitutes then substitutes will arise – scratch cards for example.

It seems to me that cell phones totally change the game. To people with cell phones can obviously use an intermediary to broker a transaction. The buyer gives the celler his an id #, the buyer then sends an SMS to the intermediary with that # and the amount of the transaction. The intermediary then sends an SMS to the buyer with the authorization code which he gives to to the seller. etc. The barrier to establishing this infrastructure small and the per message costs of SMS low enough. Of course it would be better if the buyer didn’t hand over an id # but that would require either training, more message exchanges, or some modification to the phones.

Payments at the bottom of the pyramid, particularly in the presence of weak states, look to me like a very interesting problem domain.