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M-Pesa is obviously an interesting TECHNICAL development. But for those of us interested in economics, money and banking, there is nothing very significant here. The M-Pesa system, far as I can see from Kaminska’s article, does not act in the same way as a commercial bank: it does not create credit or money. It does not expand M4. It is simply a more efficient way of making payments using the EXISTING stock of money.
Right, Ralph. And I suspect it is an important development in ways probably not yet foreseen or understood. I am more familiar with PayPal, which Izzy also mentions. It has really altered ecommerce globally by eliminating the need for an intermediary in monetary transactions, even cross-border.I suspect this idea will have ramifications on the order of what happened after the introduction of credit card by Visa International, which was the invention of Dee Hock. He expanded on the basic idea in Birth of the Chaordic Age. Coupled with the profliferation of IT, this result in global ecommerce from the lowest level, making it possible for virtually everyone to participate. PayPal built on top of that.
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