A barber in Bangladesh could not afford the
rent for a shop space. So he bought a mobile
phone and a motorbike instead, scheduling
appointments by phone and going to his clients'
homes. This was more convenient for clients
and he was able to serve a larger client base and
charge higher fees.
Mobility is opening up new business possibilities.
Digitization and Virtualization are overcoming the
geographic barriers for the knowledge-driven industry.
Business treaties among countries are causing talent
to be mobile. In emerging economies for instance,
where penetration of credit cards is low, approximately
four billion people have mobile phones. With mobile
phones now so commonplace, new opportunities
beckon. Mobile money, for instance, allows cash to
travel as quickly as a text message.
Common payment areas are coming of age in
countries that have huge volumes of trade and closely
integrated financial systems. The European Union
has already set up the Single European Payment
Area. China is calling for the introduction of a new
reserve currency. The Gulf Cooperation Council is
contemplating a common currency for its member
states. All this points to a new order where trade transactions, payments and banking
systems will be harmonized and made
seamless across borders.
With the evolution of technology, consumer behavior
is changing like never before – consumers increasingly
want to pay for a song and not for the entire album;
someone wants an article and not the entire book.
Sellers are responding by inventing new ways to
address micro demands. Typical instruments like credit
cards find it tough to enable purchases below US $1.
Opportunities in micro payments lie in enabling
technology to support a huge volume of low-value
transactions.
Small-value transactions usher in an inclusive commerce – microfinance and rural banking have
emerged as bottom-of-the-pyramid commerce
solutions. There are about 1.7 billion working adults in
the world who earn less than US $2 a day, and have no
access to basic banking and financial services. This is
the long tail of banking that can be tapped and served.
Microfinance is spreading into developed economies
too – institutions from the developing world are
opening microfinance branches in countries such as
the U.S. Incidentally, Finacle™ is deployed across 2,000
branches of regional rural banks in India, leading the
financial inclusivity initiatives in the country.
Technology has morphed commerce in a manner
that has made it mobile, enabled it to shrink to micro
chunks and crisscross into the lives of more people like
the barber from Bangladesh. |