Llewellyn le Hané*
As children we stared in wonderment as parents pulled money out of a machine in the wall or when they used a small plastic card and a signature to be able to take goods out of a shop. No money ever changed hands. This wonderment has now increased a hundredfold as financial transactions, payments of goods or services rarely seem to involve actual money. We have something called Fintech, or Financial Technology to thank for that. Getting cash from an ATM or swiping your credit or debit card will seem positively old school within the next few years. Part of the reason for this is that technology is becoming increasingly safe, online shopping is not a rarity any more, even here in Namibia. A large part of the super-fast development of FinTech is that ‘cold hard’ cash is just simply a pain. It’s bulky, dangerous to carry around, it’s unhygienic and you can’t pay for goods and services with cash online. Solutions had to be created, can’t very well wait for money orders, or imagine buying something on Amazon by sending cash in an envelope.
Fintech is everywhere. Just look at internet banking. We no longer stand in line, but carry out EFT (Electronic Financial Transfers), and even something as seemingly simple as Mobile Money is based on complex and very secure technology. With regards to Mobile Money, African nations and banking outshines the Europeans as a matter of fact. We can simply send people money by SMS, this is almost impossible in Europe. Yet, we all know it’s perfectly safe to do, right here in Namibia. Transferring a couple of buck to your loved ones or receiving the much-needed airtime from your mum, dad or very good friend. It’s all thanks to FinTech. The subject is complex and very diverse, with not just banks pursuing this technology, service providers like PayPal, but also locally here in Namibia we have our very own National Payment Solutions, with many new forms coming. All facets of FinTech can’t and won’t be covered in a single article, but it is necessary to be aware of the uses, implementation, implications, benefits as well as pitfall of this technology.
Security and safety of transactions whenever money is involved is of course paramount, this remains a challenge when technology is involved. Is it truly safe, do consumers, whether business to business or private individuals feel comfortable taking their financial activities online? So far, it seems they will and have. Customers have embraced the idea of on-demand finance, thanks to mobile and cloud computing. Fintech trends show that people are quite comfortable managing their money and business online. Mobile Money remains the most basic example of the embracing of this new technology.
Overall, the financial technology sector is red-hot, with traditional financial institutions increasing their FinTech investments and competing with start-ups to offer financial services products faster and more efficiently. But, once again, for FinTech to work properly, a solid, secure, always-on and connected array of technology needs to support fintech. Whether it is hi-tech mining of Bitcoin or still our well-known and trusted Mobile Wallet or electricity purchase with the most basic phones, right here in Namibia.
Online banking was only the beginning, in a few years our children’s minds won’t boggle by the notion of using an ATM-machine or swiping a card as payment. Their minds will boggle at the fact that we are still using actual cash for transactions. Fingerprints, smartphones, crypto-currencies and peer-to-peer technology encrypted through block-chain will the standard. However, I believe this may be a something for a follow-up article on financial technology.
* Llewellyn le Hané is the managing director of Green Enterprise Solutions.