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Egypt, weak lines, and the thread of money holding us all together

  • By Timothy Roberts
  • Thursday, February 10, 2011

The huge political upheaval in Egypt (which as I write is still going on) actually has implications for Mobile Money, and hopefully every company in the space is going to be checking their “weaknesses and threats” part of their business plan.

What happens to the money, and more importantly the customers, who are relying on a data connection from their phone, or internet access from their computer, when the network goes down? In Egypt’s case the whole country’s internet was effectively switched off.

Just stop and consider what that means for a mobile payments system. What if this was a few years in the future, and a significant number of the population were using NFC enabled mobile phones to make small payments, carrying no small change in their pocket and relying on the automatic transfer of money?

What would happen to the companies that couldn’t move money around between users, their operating account, and the national (and international) banks? What if this lasted a day. Or three. A whole week? What would you and your company do if it happened in your country?

Any sort of incident in a major city could see server farms isolated, and communications interrupted. Cash flow is king, and how many start-ups could absorb a loss on the order that any based in Egypt would theoretically be going through.

And then there’s the human element. If the public trusts the phone to the point of abandoning a lot of coins and notes for small transactions, effectively leaving little liquidity in the hard currency on the street, what then? There’s something reassuring about pieces of paper being traded for goods and services. It works and everyone trusts it. Saying you’ll come back later, or send cash via email “when it come back” won’t cut it during a revolution.

Any mobile service is only as strong as its weakest link. The recent troubles and casual use of a kill switch mean that the link could be very very tenuous in the nations where mobile transactions are already big business.