In the developed world, we are using cash less and less. Wages and bills are paid directly from one account to another, whilst day-to-day transactions are paid for by debit or credit card. But this is not the case in the developing worls, according to an article in the The Economist. And this reliance on cash is slowing down their economic development, because handling cash is time consuming and risky.
However, in Kenya one the largest mobile phone operators has set up M-PESA, which allows money to be sent and received on mobile telephones. This is so successful that 25% of the country’s GNP flows through the system, and its used by 70% of the adult population. Mobile money has a number of advantages:
- transactions are easily traceable
- it is safer than carrying cash
- users are able to save more easily
- transfers to other family members, who may live hundreds of miles away in rural areas, are facilitated.