Bill Gates and the end of the bank account

Written by on February 6, 2015 in BillingViews, Opinion with 0 Comments

little boy is engaged in home accountingOn his latest trip to Africa to stamp out malaria, Bill Gates stopped briefly to be enthusiastic about mobile money. With reason. The penetration of bank accounts in Africa is still very low, but the penetration of mobile phones (or at least access to a mobile phone) is rising steeply.

The benefits are clear, people can manage money without needing the rules and regulations that govern a bank account. And Vodafone, the architect of the much loved M-pesa scheme has just reported 78,000 transactions a day via M-pesa. So excited are the Vodafone folk that they (and 40 other companies) have applied for Payments Banking licenses in India.

Mr Gates believes that the ability to transfer money between people will revolutionise the lives of two billion people in the next fifteen years, and we agree. It will also drive the maturity of the whole banking (or non banking) culture. Already the very fact that it is possible to transfer money without a bank account is driving the adoption of, er, bank accounts and credit cards. This is possibly because the potential for fraud in the M-pesa and similar schemes relies on people – and people, when it comes to money, are essentially flawed.

There are many ways to get money from the M-pesa network beyond the law. You can dress up in the company’s uniform and collect the cash. You can distract the M-pesa operative and enter an amount you want to transfer without leaving the cash. At the other end, your accomplice pitches up and takes the money. You can simply roll up with a gun or knife….you get the picture.

Oddly, this is not the reason that we think this is interesting.

We think this is interesting because a disruptive generation is about to become that most mature of items, the ‘bill payer.’ And not just in Africa.

There is a trend towards freedom in communication. It will not be long before we realise that the newly fashioned hippy that is John Legere is ahead of his time. He used to be the corporate stereotype (nice picture, Ed). Now he wears his baseball caps on back to front and crashes his competitors’ parties. And he starts crusades like his ‘Uncarrier‘ revolution.


Because the ‘just about there’ generation of bill payers do not think like the ‘old’ generation of bill payers. The old timers accept contracts and fixed terms and penalties for breaking a contract like lambs to the slaughter.

The ‘just about there’ generation will not.

They will not accept the fact that they should be bound into a contract for a phone because ‘we have always done it that way.’ They will want to do exactly what they want to do, when they want to do it. Seamless, digital communications is their right.

They will question everything. They already have.

So why not the bank account?

Why do we/they need to comply with the rules and regulations, the rubbish interest rates and other strictures of a ‘bank.’ When person-to-person (P2P) cash transfers really catch on everyone will be a bank, and everyone will be a lender and a borrower. Some will produce more resources than they need, and others will consume them.

This fundamental shift will dictate the new rules of business across every arena and this will dictate the survival or death of many, many established companies. Including telecoms companies, who must reinvent themselves now, not tomorrow, and banks, who must do the same.

The alternative is retirement and a nice cushy pension. Oh, if that has not already been spent. Sorry.

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About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .


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