For some years now, payments between British bank accounts have been as good as instant. While contactless cards make the experience of traveling in London (as far as payment is concerned) and of buying, fairly convenient.
Under pressure from the rise of digital currencies and fintech companies, banks have been innovating, with some even planing of launching their own bank coin.
They are innovating more slowly than fintechs, and certainly more slowly than digital currencies, but are nonetheless trying to keep up with the times in many aspects, including payment settlement times, which the US Office of the Comptroller of the Currency (OCC) has suggested could be lowered slightly.
But the world’s poorest continent, and many developing nations, from Brazil and Argentina to even Russia as well as communist China, do not enjoy the same banking infrastructure we have in the west.
Banks there are a fairly rare sight, with branches limited to city centers, if lucky, as opposed to ATMs in every street corner.
That lack of infrastructure has led to a lack of bank accounts. Which further makes taxation very challenging. In turn, it leaves roads unpaved or schools unfurnished. Creating a vicious cycle.
The reasons are numerous and a legacy of times past. Proving property ownership, for example, can be difficult, and usually, if not exclusively, is done on paper. Making borrowing, or mortgage lending, challenging. Thus lowering incentives for banks to enter the market.
The lack of banking, in turn, leads to a lack of digitization. Creating a catch 22 of sorts. Because in a cash economy, where no one reports to anywhere how much anyone is paid, taxation is voluntary at best.
Without the tax funding, governments can barely survive. Let alone afford investment towards digitizing their civil service. Without that digitization the country is at best, half a century behind, if not, a full century or more. With their living standards corresponding.
But although they are poor, they are not that poor. South Africa’s capital can be a buzzing city. Same for Kenya. We’ve all received those Nigerian e-mails. And Zimbabwe is sort of recovering.
That makes it a land of opportunity. Because banking is new to them. And just what sort of banking system they implement can be very new too with many projects trying to employ digital currencies.
Instead of copying 19th century or 20th century practices, the elite Africans, Brazilians, or wherever else, educated at Oxford or Harvard, may think of employing 21st century cutting edge technology to bring, to some extent futuristic, banking to their people.
Instead of opening a bank account they could just download a wallet on their smart phones, gadgets which should be very cheap now for older versions such as iphone 4.
Instead of walking to city bank branches and all the rest, even villagers, the younger of them, could transact just through apps.
And however imperfect QR codes may be, phones produce them easily and can read them easily. So giving us the improbable image of of a young African selling his cow to another by a simple scanning.
That’s if someone doesn’t take his phone and runs away with it, but a simple password shouldn’t be a hard task, so making the practice useless.
With this buzzing commerce through added liquidity, their governments may eventually become sufficiently wealthy, making common petty bribes expensive, thus naturally reducing, if not fully eliminating, common corruption.
And with the rule of law established, they might too enjoy our pleasures. Drive on paved roads and digitize their schools. Learn of our knowledge, present and ancient.
It may appear far fetched, but if imagination can see it, it can be done. Thus 30 years on from that call to go west, it may be time to go to a new land of opportunity: the leapfrogging world.