After staying off podcast for awhile, I got back to listening Planet Money during my morning drive. A few item down the list was this one that’s titled “Invisible Plumbing Of Our Economy”. If you have the chance to listen to it, you will come to understand why it take several days for money to get transferred from one bank to the other. It’s not a movie, so I’m not too worried about spoilers.
The idea is that the system was built back in the 70s. A system called ACH (Automated Clearing House) that you might have seen on your online bank statement from time to time. And because of it’s age, many of its settings are ancient, and does not respond well to the fast-paced Internet era that we are now familiar with.
This lack of speed in money transfers is certainly an irritant in an otherwise instantaneous society, where you can buy tickets to a movie minutes prior from your cellphone, order meals online, or get groceries delivered to your door next day (diapers were used as an example in the podcast).
The Proposed Solution
Some new propositions have been raised, including the latest innovation by Square — Square Cash, where you can send money through email. We have seen similar attempt from Gmail, utilizing its own in-app attachment.
While these press releases are getting a lot of attention for being innovative, more advanced solution have already existed elsewhere. It’s not in South Korea, or anywhere in Europe, but Africa.
I learnt about the “M-Pesa" from a minister in Moshi, Tanzania, who uses the service to send small amount of money (USD $60~$100) to other missionaries in the region.
By charging your money to your phone at a local M-Pesa service point (available at every corner), you can send money to a phone number. And with that message, the recipient can bring the phone to her/his local M-Pesa service point, show it to the person on staff, and get paid. No 3~5 days delay, or even exclusion of weekends. The money gets transferred as soon as the message is sent and received.
Travel does open your eyes, not only with the beauty of sceneries, but with the varying concept of how people live that involves, in this case money.
I can better understand the role of Jan Chipchase at Frog now.