Is it time for an iBank, iMoney or iCash?
I was prompted to ponder on this at the weekend after the Wall Street Journal reported that Apple Computers is working on a plan to expand mobile payments.
Apple’s idea, from early indications, is about going beyond the realm of digital goods such as music and books into letting users pay for physical goods and services with an iTunes account. This is an idea whose time has come. Dozens of startups the worldover have been working on all sorts of payment options for e-commerce, from mobile cash transfers to scratch cards. Banks are already on it as well.
If you look hard, money is only a piece of information that conveys value between two transacting entities, and the potential for digital money in this context is really vast. The problem is with regulation and banking. In a world where counterfeit notes are problem enough for regulators, virtual money is more so. That explains why central bankers worldwide are wary of the bitcoin, the volatile digital currency that is catching on among geeks but is giving the jitters to prudent financiers.
There, is however, nothing stopping from anything that looks like barter mapped to a common measure of value. The old-world currency saw "hawala" (illegal foreign exchange) trade flourish in India, because outlawing forex transactions is bound to have limited impact when people see underlying value in the dealings. In the digital era, anything that looks like "hawala" is even more feasible.
The sooner regulators worldwide move to resolve the issue, the better it is for the world. Both opportunities and threats loom in digital currency. Apple, which gave us the Mac 30 years ago, and then the iPod, iTunes, the iPhone and the iPad, may well be pushing the world on to a new revolution.
Now, Apple has a cash pile of about $150 billion (That's well over Rs 9 lakh crore!). It can easily start a bank or two or three. Enough said.