Alternative Banking - Other options

[sterne.law@gmail.com]

Any thoughts on practicalities, costs and efficiencies of the alternatives to brick and mortar banks?
Ex the cell phone banking, use of SPAR ect

For context..
A remote group of people with no real access to banks. They need a place to put money and at times to withdraw it.
The people need to deposit and withdraw.
I know SPAR a person can pay money into your account and then message you a pin and you collect it at any SPAR. Pretty smart. R500 drew a charge of R30 (probably same as a bank given that it was a cash transaction..and it was instant).

Any thoughts ?

[adrianh]

Anthony, how can I put this without sounding like a total know-it-all-embellishing twat; My Namibian banker brother and his group of super-genius-hyper-qualified - know-how-to-make-shitloads-of-cash buddies did just that. They launched the service in Namibia a couple of weeks ago.

I can give you some interesting insights into the service if you are keen. The most important one being that the Visa/Mastercard network is no longer required to act as transacation clearing house. Another is that the the 'cell phone bank' does not need to run a network of ATMs so that their clients have ready access to cash because participating retail organizations allow their tills to to serve the same purpose. There are many more important implications and I think that the service is going to change the face of banking forever.

http://paymentsafrika.com/payment-news/mobile/mtc-launches-namibian-mobile-money-service/

[adrianh]

I'm posting this link so that you are able to see that my brother and his buddies are the real deal, but more importantly, why I have so much regard and respect for them.

http://www.ijg.net/directors.html

[sterne.law@gmail.com]

[QUOTE=adrianh;105934]Anthony, how can I put this without sounding like a total know-it-all-embellishing twat;

Just because you mock my IT knowledge does not mean you need to be apologetic.
Sounds like they have done what I envisage.

[adrianh]

I did not mean to knock or offend you, please accept my sincere apologies.

My off the top of the head examples/analogies are not always thought through.

[Justloadit]

The only major problem with this, and I have been through it, had the system ready, spent the time and money to develop it, is that you require a Deposit taking license, or else you will be contravenning the banking act.

This whole system was going to run off a secure web server where any individual can be a deposit taker, or a cash giver. In other words there is no institution required to make or receive payments, or even receiving or paying cash. All transactions were going to cost 20c. So any individual could register immediately to receive money, but to make payments, they would first be required to FICA themselves, which was a system done on line, and their bank account number became their cellphone number.

In other words if I was in a rural area and I physically required cash, I could approach a friend who may have physical cash on him, or approach the local SPAZA who invariably always has cash, make a simple transfer of funds to the other persons account, and they simply gave me the cash.

The idea was to remove cash from the system, by making the transfer of money very low, like 20c.
There was no need to carry cash as it would be virtual, and you could pay any one or organization from your transfer, even if it is Checkers, what ever as the system would make a real time EFT on your behalf.

Unfortunately our financial backers, after having signed an agreement, did not pay in the cash to the company, and we decided it would be cheaper to walk away rather than get involved in a long legal protracted battle which would suck in valuable resources.

The software is available for any one wishing to buy it

[irneb]

You know, this isn't actually anything "new". If you remember from the 90s, NBS made a partnership with Pick-n-Pay by making the IcanOnline "bank" - where your card was accepted at any PnP till for normal banking transactions (including payments and withdrawals) - this meant NBS didn't need to build numerous ATMs all over the country, while still not requiring their customers to pay exorbitant "Saswitch" fees for withdrawing from other banks' ATMs: you could withdraw from any PnP for no charge whatsoever. I had one of those since the bank charges was a fraction of any other bank (something like R10 max per month).

Later NedBank bought out NBS and renamed the service to GoBank - still working with PnP. Lately however it seems they've "discontinued" this service ... I wonder what the reason(s) behind this was. My ICanOnline account was changed to the GoBank one, bank charges shot up to R70/m (avg) and these days NedBank constantly tries to make me change to one of their "normal" accounts (phoned at least once a month) - so they can charge me double that or more! I'm probably one of very few people simply refusing to give up my cheaper account.

[Marq]

I needed to change the postal address on my gobanking account last year. They did everything under the sun to avoid doing that so that I would be forced to change the account.

I then showed them that it was easier to close the account than to do anything else with Nedbank.
End result - closed account in 5 minutes with no fuss or question and took cheque across road to opposition bank.
Now Nedbank advertise, sms, email,snailmail and have even phoned me to open an account with them.

Up yours Nedbank - you will never see me again.

[Marq]

That was off topic - so back to alternative banking.

The minute you develop a system that is not regulated by the central bank (reserve/fed etc.), The big brother system will ensure that you conform or are closed down.
Big corporations like pnp, spar and the cell networks will not paint outside the lines, so you can be guaranteed that if they are part of an 'alternate banking' scenario, it isn't.
Barter systems and internet cashless systems will always be closed down as the Order are unable to monitor and/or collect vat on transactions.
Effectively these systems will only work between people who are all 'off the grid'.

As an alternative where you still conform but just avoiding physical banking halls, the cell phone will be the way to go. Again I am negative on this because at the end of the day the banks want control but appear unable to develop and maintain software to do this. They battle with their systems for traditional banking so new stuff will only create bigger problems for them. End result is...shelve the problem, put paperwork and rules in place and up the bank charges.

I look forward to a system where one does not have to go into bank halls and talk to indifferent people or even a system that bypasses them altogether, but I am not going to hold my breathe.

[adrianh]

@Marq - All I'll say is that there are people who stand with one foot in banking and the other in private enterprise. You must understand that there are people in the world who are not constrained by "big brother" because they understand the inner workings of "big brother" and know how to utilize its shortcomings to their advantage.

What I will say is that at the end of the day it is all about making money and business follows the money. If the money is in pushing a system then they do and if the money is in shutting a system down they do that too. I just think that one needs to realize that David often f*cks Goliath right in the eye because Goliath is too arrogant to see it coming.

[irneb]

I needed to change the postal address on my gobanking account last year. They did everything under the sun to avoid doing that so that I would be forced to change the account.

I had the exact same problem - fortunately one of my family members is staying at my previous address, so I could get my statements forwarded to me. Otherwise I'd probably also have gone to the opposition, though I've done that before (ABSA/Standard & FNB) - and they're all the same (as if there's a competition on about who can be a worse bank - at the moment I think ABSA's leading in that race, neck-n-neck with Standard).

After 8 years of trying to force them (NedBank) to change my address they finally gave in last November - they had to since it was because of a car loan I made through them: i.e. as adrianh mentions, sometimes their rules screw themselves!

[Marq]

I fully agree - while we are forced to live under Goliath, one has to fight clever, use them and beat them at their own game.

I have always been in two camps - the money one, powering my way through on and up, and the esoteric one looking for a clean alternative, fighting the good fight.
The first camp is fairly set out for us and we have to bob and weave through it. The main hassle there is that it takes money to make money. Obtaining the kind of money required to take on goliath often requires one to step outside the guidelines as drawn up by big brother. Not a safe call for most so they stay sheeple.
The second is the unknown, the conspiracy theorists domain and the area that the majority say is BS and cannot work. The anti establishment is unfortunately also anti community because sheeple are what they are.

I believe that as long as we are aware of all the potential paths then we can create a road for ourselves utilising both.

When we talk alternative banking, I automatically think of an exchange system away from reserve bank, government and large corporations. The problem being that they all talk to each other and at the end of the day achieve very little as an alternative.
If youre a private enterprise obviously going for the money but they are playing in a pool that is limited and extracting from the controlling brothers, who will only seek to get it back. Unless you have traction, say like capitec did, and take them by surprise and delve into areas they are scared of, Its going to be a rocky ride.

I will always root for the 'Davids' of the world, and hope this new system takes off but I wonder if the hill is a bit too steep.

[adrianh]

As Malcolm Gladwell puts it "All it takes is a tipping point" The small business just needs to push the buttons of the correct influencers and those influencers create the shit-storm that is needed to effect change.

[sterne.law@gmail.com]

Bitcoin..a whole new currency..

http://verdict.justia.com/2014/02/25/bitcoin-cant-ban-regulate?utm_source=Justia+Law&utm_campaign=fb5ed9007e-summary_newsletters_jurisdictions&utm_medium=email&utm_term=0_92aabbfa32-fb5ed9007e-406031077

[Marq]

A Run on the Bitcoin bank?
http://www.news24.com/Technology/New...theft-20140225