Steve Sidley Skype Credits vs Vodacash vs national payment

There have been literally hundreds of global attempts a e-wallets in the last 10 years (I have personally been involved in 2 of them, one here, and one the Philippines). THe problem has always been threefold.
1) How do you fund the wallet? (usually from a credit card, which makes it a non-starter in SA and Africa - too few with credit cards).
2) How do you redeem value? - need merchants to trust and accept the e-wallet - which is where Visa/Mastercard/Amex have the best chance of competing with PayPal et al.
3) Need the reserve bank to approve - will never happen in SA, becuase the authorities need to track money flow. PayPal in the US has managed to get enough critical mass to become part of the national payment system

Nevertheless, PayPal, particularly is a monster threat to the established payment monolopies (banks, card associations, national monetary authorities).

Watch for US legislation here - they will absolute have to regulate, otherwise tax evasion and lack of monetary visibility could become a national security issue.
Posted: 7 June 2007 at 09:11

Karen Slabbert RE: Skype Credits vs Vodacash vs national ...

The tax man always wins:
The tax man has repeatedly managed to find clever ways to crack down on companies that trade online. E.g. Online gaming is banned is America, so the Internet Gaming companies based their servers in other countries. The government responded by making it illegal for the banks in America to transact with online Gaming companies.....end of that one!

If you cannot make the money online, you cannot pay it i do you fill the wallet?

That being said, the developers that would work on this are far better paid and hence more motivated to succeed than the taxman. If they can stay one step ahead, they will make money and take us into the future with them.
Posted: 13 June 2007 at 23:14


Just to confirm what you're saying, I discovered that the person who will look after my Second Life Art Gallery in SoHo while I'll be on holiday with WEG ... has opened a Bank in SL. My Gallery shows beautiful Kandinsky lithographs, rarely seen, and she will be paid a commission. Sales are doing well. She is quire smart, and just sold her SL house (paid 1024 L$, for 80,000 L$)....
Posted: 7 June 2007 at 09:57

Gareth Ochse Currencies, lock-ins, and bad dollars

Seems to me that:
(a) it wont be too long before Sarbanes-Oxley hits the online communities and transfer between them and real-world becomes tightly regulated,
(b) currencies specific to one game, such as second life, are really just a form of lock-in (as they are with loyalty schemes described in the bullet). As such they will be faced with all the traditional dangers of loyalty points i.e. they are worthless unless they can be redeemed or exchanged for value. This means the merchants have to accept them. Which means they can be easily regulated, or else the cost of exchange will be too high.
(c) just as with our own real world economies, and I hasten back to the early days of the US economy with its unregulated banking environment here, the bad dollars will drive out the good, which will eventually force regulation just as it did in the real world.

So I don't see this threat emerging: in reality international funds flow is a tightly controlled space - more so after 9/11. There will always be pressure to work around any controls, but I just don't see how any government could tolerate the removal of large amounts of tax income from the fiscus for any sustained period of time?

Posted: 10 June 2007 at 16:09

Doug Vining RE: Currencies, lock-ins, and bad dollars

Gareth, you are missing a couple of important points here: SL dollars and Skype credits are both transferable to real US or Euro currencies - they are not loyalty points. Of course there is a cost involved, but organizations with lots of cash and little legitimacy are less worried about costs than opportunity. I agree that the governments won't be amenable to exploitation of these systems, but how much power will they really have to intervene? That's the key question raised by this scenario.
Posted: 10 June 2007 at 21:39

Doug Vining Second Life's looming tax threat

Posted: 6 August 2007 at 20:35

Doug Vining Mobiles to become digital wallets

Soon you could be paying for parking with a handset.
The UK's big five mobile phone firms have switched on a payment system that turns handsets into digital wallets.
Called PayForIt, the scheme is designed for those buying goods and services with a value of up to £10.
Posted: 3 September 2007 at 21:42

Anton Musgrave World's 3rd most populous 'country' embraces new payments

Can traditional banks stem the tide and regain customers passion in the face of ever increasing new threats from outside the industry?
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Posted: 18 November 2011 at 12:15

Anton Musgrave Cash is no longer king?

Imagine a world with little if any cash! Certainly a corruption buster on the streets. And the business model challenges for banks remain. What is Visa without a card?
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Posted: 24 November 2011 at 23:25

Anton Musgrave Mastercard a tech Co?

What could a credit card business be without a credit card? It seems that Mastercard are quite open about what their game plan is...and it's different! In an age of innovation, commoditization, turbulence and uncertainty, the quality of strategic thinking is paramount. Incremental change will often not be enough to ensure survival, not to even mention step change success! WIll Mastercard be the judge! is your business transforming? And at what pace? WIll this be enough? You be the judge.
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Posted: 14 February 2012 at 20:07

Wolfgang Grulke Interesting new blog on the future of money and cash

Discussions seem to be hotting up's another platform for debate.
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Posted: 16 March 2012 at 16:14

Doug Vining Interesting new blog on the future of money and cash

We've talked before about 'social banking' and the opportunity for someone like Facebook to become a banking platform. A new startup from South Africa, ZunguZ, wants to do just that:

ZunguZ wants to turn Facebook into a bank
Posted: 20 March 2012 at 15:59

Wolfgang Grulke Barclays mobile payments move mirrors PayPal

This announcement is simplicity itself - hope the reality lives up to the hype. You don't even have to be a Barckay's customer.
These are the kind of services that will bite into PayPal's market share. Check it out here.
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Posted: 10 June 2012 at 12:22

Neil Jacobsohn Barclays mobile payments move mirrors PayPal

And so the game of ping pong continues...and the ultimate winner is....the mobile device! The banks are fighting frantically to keep hold of the payments and transaction flow, but this is steadily moving out of their hands, to new-style organisations without bloated infrastructure and tangles of red tape.
Posted: 14 June 2012 at 09:52

Anton Musgrave Data insights drive value...and new players see the gap!

Once again, new players are seeing gaps where industry leaders are blind. This is a really cool app...innovation, utility, left field disruption, customer value...all in one simple but really useful service!
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Posted: 6 July 2012 at 16:09

Doug Vining Stripe or Square

What's your virtual money choice? Soon that will be the question, rather than "Visa or MasterCard?" That's if you agree with this this rather effusive blog on the subject. But certainly the transaction space is changing, and these scenarios, or similar ones, will become the new reality. The losers will be traditional banks and credit card companies.

This MindBullet was published more than five years ago. Imagine if the headline had read "IT'S STRIPE VS SQUARE..."
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Posted: 17 July 2012 at 11:20

Anton Musgrave Cashless society getting closer?

A collection of new technologies is enabling the shift in how we understand money, value transfer, transactions and so on. Cash based corruption could reduce, 'e' trails increase and 'big brother' world grows its tentacles.
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Posted: 4 October 2012 at 00:15

Wolfgang Grulke Cashless society getting closer?

I don't want a "cashless" society. I want a society in which cash becomes electronic. E-cash is very different to no-cash, which is what this consortium is suggesting. The banks do not want to lose their roles as intermediaries.
Posted: 4 October 2012 at 10:11

Neil Jacobsohn Towards the non-cash world

The latest World Payments report (which you can download by following the link on the right) is full of fascinating insights, underscoring the seismic shifts happening in the world of money.
In particular, the growth of non-cash payments is spectacular, as electronic and mobile payments move to the fore, And the rate of growth of non-cash payments in emerging markets is twice that of the developed markets.
In Russia and China, non-cash payments grew at more than 30%, while such payments in Brazil leapt to more than S$20-billion, making Brazil the second largest non-cash ,market in the world after the US. Regulators and businesses in the developed world should start paying attention, says the report.
I am reminded of that great quote from the recent New Scientist study on the future of money:  ”…the internet is allowing groups of people to set up means of exchange that are independent of both the banks and the state…”
And are our beloved mainstream banks paying attention? You decide!
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Posted: 17 October 2012 at 10:22

Anton Musgrave Governments wise up to new threats

As Governments realise the potential threats form Bitcoin and other digitalised solutions they react as any threatened incumbent would...legislate, make new rules and try to strong arm the threat out of existence. Unfortunately for them, as for nay company faced with new threats driven by the market, these old style reactions only serve to energise the new entrants into creating even more market friendly solutions. Ultimately, if the market rates a new radical solution to a need, it will re-innovate, build market support and eventually replace the old solutions. Of course a new virtual currency threatens the very existence of Governments and their ability to raise taxes to fund their operations. Initially the threat may seem minor, and the solution favoured by a small minority but if it addresses a fundamental need in the market it will grow in popularity and market acceptance until it becomes mainstream. And then it game over for the old regime/solution.
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Posted: 14 October 2013 at 10:36
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