Monday, May 21, 2007

Phoney Money

The Emirates Economist describes the burgeoning Third World Industry of transfering money by telephone and asks: if it telephone money real money can it be stolen? Can it be used to hedge against inflation?


The lives of many Kenyans are being transformed by an innovative mobile phone money transfer service. The free account - M-Pesa - is offered by Safaricom Kenya, a leading mobile phone service operator and is a technological breakthrough say the operators. It enables subscribers to send large volumes of money in an instant transaction. The service, which is in the process of rolling out to most major towns in Kenya, is also cheap - costing on average about $1 to send or receive money. Just a month after launch, M-Pesa is already providing cut throat competition to existing money transfer agencies, notably the government-owned Postal Corporation, a market leader with a massive network of branches.

Commentary

Some cops I talked to have expressed concerns about this service -- and others like it -- being used to move terrorist money around. In some places there's a dollar cap on the amount that can be transacted, but there's no reason in principle that it can't be used to dribble money to and from terrorist cells.

2 Comments:

Blogger Marcus Aurelius said...

I do not think it would be the greatest of terrorist tools. Perhaps for when a lack of money means sure discovery or just for the last shot of cash prior to carrying out an attack.

I would think think this would be every bit as traceable as any other source, if not more so.

5/21/2007 07:35:00 PM  
Blogger wretchard said...

I don't think it would be so easy because a lot of legitimate users will use phone money to send money for schoolbooks, personal loans, rental payments, grocery money etc. This is especially true in the Third World where several households may be dependent on one wage earner in a capital city who can't send money so easily because of the underdevelopment banking system.

In some bizarre way, the cell phone system has leapfrogged many of the arthritic institutions of the Third World, creating a 21st century system alongside some 19th century ones.

So the problem will be finding the needles in the huge haystack.

5/21/2007 08:20:00 PM  

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