I got a sneak peak the other day at this report on mobile banking. It's published by the World Economic Forum. (That's right: the same people who never invite me to their shindig in Davos because they know I would embarrass them on the slopes.)

It's hard not to be optimistic about how mobile phones can promote financial inclusion, help people save money, and combat poverty. This subject is addressed in some detail in my forthcoming book, The End of Money, but one useful point that stands out from this report could be summarized as follows: chill out a little, people.

Speaking by phone Monday with two co-authors of the study, I was struck by some of the basics that have been overlooked amidst all the euphoria about this technology. For example, in a number of countries, telecom companies don't count the number of people with accounts, but the number of Simcards instead. That may sound like splitting hairs, but when it comes to gleaning dependable data about these programs, this is a fundamental oversight. More generally, the authors make the (admittedly dull) call for more research and collaboration between industry, donors, and governments.

"The question we need answered is: How do you prove the impact?" says Bill Hoffman, head of the Telecommunications Industry at the World Economic Forum USA. "We're optimistic, but we don't want it to get caught in the hype cycle trap." Yet hype and visionary talk share a lot of DNA. When I asked about mobile money sessions at Davos in recent years, Hoffman says the takeaway for many people was a simple line delivered last winter by some government or industry bigwig: "Imagine the possibility of connecting two billion people to the formal economy." Mobile money could do that.

One other snippet worth looking into is the importance of agents, who are the people who connect phone users to the economy, a little like bank tellers, except these agents are local shop owners in your neighborhood, not bank employees sitting behind iron bars. Because it's money, Hoffman explained, people need to have that sense of trust, and for that, they need people, at least at first. This issue of trust, or faith, and its relationship to money is also one that I delve into in the book, with the help of a pastor and a most unusual granite monument in rural Georgia. Stay tuned.

AuthorDavid Wolman