Welcome to the United Nations | Department of Economic and Social Affairs

The following are the outputs of the real-time captioning taken during the Tenth Annual Meeting of the Internet Governance Forum (IGF) in João Pessoa, Brazil, from 10 to 13 November 2015. Although it is largely accurate, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription errors. It is posted as an aid to understanding the proceedings at the event, but should not be treated as an authoritative record. 

 

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>> MODERATOR:  Good afternoon, ladies and gentlemen.  May I have your attention?  The workshop is Number 56, Mobile Payment Boosts Internet Economy and Challenges.  I would like to express ‑‑ sincerely express the apologies for the organizer of this workshop, because they couldn't come to this because of the Visa problems.  So I take place of this moderator.  We will and create a miracle here.

Let's begin.  Firstly, this workshop is hosted by the Internet Society of China, the China Association for Science and Technology and the China Internet Network Information Center.  I was the moderator for this workshop.  Firstly, I will give you some ‑‑ sorry.  I will give you some ‑‑ firstly, I will give you some brief introduction of the background of the workshop.  Along with the rapid development of eCommerce and economy, the payment emerged.  In recent years various industries met great innovation opportunities based on mobile payment.  On the other hand, the development of mobile payment greatly boosts the Internet economy by facilitating the consumers online transactions operations and encouraging the shopping behavior.  However, the mobile payment payments do face challenges, banking issues, theft issues, lack of global payment standard and regulatory laws.  It is urgent task to strengthen the construction and the capacity building.  More importantly from the policy design, that's the background of this workshop. 

So I would like to introduce our distinguished panelists here.  They are Dr. Ziafeng Tao, professor of Posts and Telecommunications;  and Mr. Mitchell, Senior Director Tech Policy Department of Legal and Recovery from Microsoft.

And Ricardo ‑‑ perhaps I couldn't pronounce.  So could you self‑introduce.  Ricardo works at Colombia telecommunication regulatory commission as an advisor on Internet Governance.  And Mr. Hossam Elgamal, International Commission of Alliance.  The workshop will be divided into two parts.  The first one is the presentation one by one in short.  And the second one is the panel discussion.  After that we will start the Q&A onsite. 

So the first one I will give the floor to Dr. Tao.

>> DR. TAO:  Thank you.  There is no mic.  Okay.  Thank you.  Good afternoon, ladies and gentlemen.  My name is Xiaofeng Tao from BOPT, University of Telecommunication.  Also, I'm a member of CCIT, from CRISP.  CRISP is Chinese Association of Science and Technology.  You can see a figure from the year 2011, 100 ‑‑ too high.  But you can say this year, the year 2015, you can see is about 300 billion.  This is for mobile payments.  You can say mobile payment is more and more popular in financial services. 

And this data from the analysis report of mobile payment industry.  You can see there are some kinds of mobile payment.  You can see the first few IPP, the second on the message.  We also call this remote payment, because sometimes we use with this kind of IPP payment.  You can see the mark on the payment and bar code payment.  The code is near field payment.  These are two kind of payment.  This is your mobile phone and your pay may be 10 centimeters, but remote payment, maybe I can stay here and make a payment, for example, in Beijing. 

This data was also from a company many search for market services.  You can say mobile payment is the old fashioned among young people.  It's actually sometimes some of my students in the dormitory orders the meals, their foods.  They sometimes I tell them to make practice, not only in the dormitory to buy something.  Of course mobile payment you can by some food and also buy some ticket for entertainment, and also make a taxi, order a taxi, of course booking hotels.  You can see, this year in June there is Alibaba.  And Alibaba make corporation.  In KFC restaurant we can use Alibaba to make mobile payment.

In Shanghi, there are about 300 KFC restaurant.  In this restaurant we can use mobile payment.  And you can see if we use Alibaba in the KFC restaurant, only two second we can make or finish our payment.  So this is very efficient for the public and the restaurant.  Nowadays we can buy coffee, KFC, scan the code to make payment.

There is a story I wanted to show you that's very good story about our condition.  You can imagine the story in a small village, very large country, so many kinds of small advantage.  Traditionally the farmers plant crops, some corn and they sale to the market.  The market usually buy food traditionally from farm.  When I was a childhood, when I want to go from a village to Hong Kong, it is usually about one hour from village to the town.  So it's very far away, the farmer want to sell something.  At the same time labor in village the farmers and labor in village almost plant the same crops.  So it's very hard for farmers who sells their goods.  So I don't think is very easy to make their lively hood better.  Sale something is not very good. 

Young person, 20 to 40, move to the same field as a migrant workers and leave their hometown.  This is ‑‑ this one.  This story is the second story that if we use Internet payment, the farmer can sell the goods all over the world, even Hong Kong.  This is very important for the farmers.  So nowadays more and more farmers go back to home and then the family can stay together.  This is our condition where especially for older persons who want the family member ‑‑ a family stay together. 

Here is an example farmer named Kiaobang Wang live far away from Beijing, in the Shanxi Province and five kilometer from the town.  Several years ago online shop from 2008 and sells different kinds of goods.  The first leader sell goods about 50 tins.  So the province now has 76,000 farmers sell online.  This very important.  I don't think this is a special case.  Company also joins mobile payment.  Alibaba do something to achieve collaborative parity and launched thousands of villages and countries program last year, and want to invest about 10 billion within three years, and want to establish rural eCommerce in 100,000 villages.  Here now almost in 60,000 villages this belong to Alibaba's plan. 

Of course year should be face some problems especially for, for example, sometimes some issues of software, and the mobile payment may wreck our life and loss to us.  So what should we do?  I think maybe way can do something for the security safety.  The first one as an NGO, a larger NGO in China, and the one issue of cost is science popularization.  So maybe can do something to learn to illegal website and educate public to improve the safety awareness such as make a micro film, such like this, and also do something more.

How about companion?  Ten cents put forward with a page in Shanghai and other manager.  You can see the Lenovo is a local manufacturer.  Extract information for alliance, very important for some company.  And here was a story about Alibaba.  Alibaba develop an APP named Alipay.  It's kind of an agent among seller and customer, kind of money insurance.  And maybe just something different from Amazon.  Different. 

For the public for each of us increase safety awareness, form good habits of personal payment.  For example, sometimes should pay attention to some wifi access point.  This is very important.  Maybe sometimes some wifi access point maybe is better for us. 

So this is a summary.  A mobile payment bring lots of advantages.  I think it's ideal way to link the outside world and can develop our living standard and improving economic growth.  But the safety of the mobile payment is worth our attention. 

Thank you very much. 

>> MODERATOR:  Many thanks to Professor Tao.  He's an example is very ‑‑ here I want to share some experience.  We finish another workshop in the morning telling some stories of Internet + action plan in China.  The conception of Internet + was proposed ‑‑ was proposed and recorded into the Chinese government report by our Prime Minister.  So the Internet + means to use the data, big data, cloud computing and other Internet technologies to integrate with the traditional industries and to realize industry upgradings in evolution. 

Yesterday is a very unique day, because it's November 11.  So you may ‑‑ 11 of November means single.  So in China we call it Single Day Festival yesterday Alibaba platform, the eCommerce platform, they realized some of the total sum of the transaction, went up to 90 billion mmb, and 14.3 U.S. dollars.  So it's very great and unbelievable transaction.  I think Alibaba group who created a miracle in the Internet integrated eCommerce.  And I don't know the specific amount of the payment by mobile, but I think the most ways of this transaction is initiated by the mobile phone payment.  So some comments here. 

Next we will give the floor to Hossam.

>> HOSSAM ELGAMAL:  It was very interesting the presentation seemed interesting.  Excuse me, I'm not an expert in the matter, although I have been advocating for African ICT for some time.  So I've been involved with experiences happening in Africa.  I would love to share with you some information about mobile payment in Africa.  In fact, according to statistics, according to GSME in 2014, nearly 70% of the globe's 82 million mobile customer are from Africa.  Mainly it was a success of M‑Pesa that led to this result.  M‑Pesa is mobile transfer application that started in 2007.  And it started, in fact, by ‑‑ not by an international organization, but mainly by African entrepreneurs.  It started based on need. 

Transferring cash from one reason to another in Africa is somehow dangerous.  Mainly African citizen do not use normal bank.  Some there are no bank branches in remote areas.  They had to transfer through buses or things like that.  It's quite dangerous to do so.  Capitalizing on the mobile network in Kenya, M‑Pesa project started and it became quite successful at the beginning it didn't start with the low income people here.  I have some here that maybe it would explain the situation.

It's used by 70% of the Kenyan population M‑Pesa through national value, but a staggering 67% of the total MPS through volume.  So the number of transactions account for 26% of the transaction, although it is mainly for small amount transfer, which is 7% of the total value. 

People rely on M‑Pesa mainly to prevent potential fraudulent crime.  The cost of M‑Pesa has been structured in a way to be extremely low for low value transfer and higher for larger amount, although it is using the same wireless transfer, mobile transfer. 

As they say, M‑Pesa in 2008, you fewer than 28% of the nation living outside Nairobi on less than $1.25 per day used M‑Pesa.  By 2011, this share expanded from 20% to 72%, which means that it proved to be very useful for low income people to use M‑Pesa for transferring money from one end to another. 

They added some services which is loan accounts.  Now there is almost ‑‑ the statistics are in November 2012.  They launched a commercial bank product with Africa and now they have almost 1 million new accounts and 5.6 million deposit accounts, 26% of the country's total. 

I want to highlight something comparing M‑Pesa and Sub‑Saharan.  It is clear that each region has its own circumstances and system.  While this was quite successful in Sub‑Saharan, less technology was available there.  The North Africa region and the east were much slower in having mobile payment.  In fact, for example, in Egypt from the central bank of Egypt was only announced in 2013 when M‑Pesa started in 2007.  In fact, maybe because there were a lot of bank branches everywhere, maybe because people relied more because Egypt had more than 500 branches in old places people were able to have postal account which were much easier than bank account and were able to transfer small amount of money through the post ‑‑ started a little bit earlier in 2011. 

Another project started in Egypt, which is not a mobile app but more of a network solution between banks and retailers to be able to make transfer and payments in an easier way.  So they were not using mobile banking.  In fact, this solution started in 2011, if I remember, had been recently a few days back by $100 million from a venture capital because of the amount of value it was bringing from transferring the money, although it is not a mobile banking solution. 

Meanwhile, from 2013, when the Central Bank of Egypt put the regulation, the tele‑operators started the mobile banking, and by the end of mid‑2014, there were more than half a million user, which is still not too much compared to the numbers that we have seen in Sub‑Saharan. 

Is it because there was family there?  People still prefer cash and having the cash with their own good self?  Is it because there is enough branches ‑‑ bank branches?  The most important part was for M‑Pesa was not the idea of transferring the money, but was more of paying bills, because you don't want to stand in rows or long queue to pay bills.  If I administered provided them through retail.  They go with a retailer having a logo and they just pay there and get the slip for it.  And it is then transferred to the bank through a system like MasterCard and Visa, etc. 

I think it's started to implement mobile banking as well now.  But it is quite interesting to see those two approaches that are picking up.  One is mobile banking and another one is mainly based on having a large network of retailer close to the consumer, and to the citizen and how they capitalized on that. 

In fact, again, in Egypt, when is it started with operators, there was a limit set.  The minimum transfer amount was $1.50 and the maximum was at that time, when it was set, the equivalent of $500.  It went okay.  Because of that, during the World Congress, Mobile Congress in Barcelona this year, there was an agreement with MasterCard and the Ministry of Communication of Egypt to leverage mobile banking with MasterCard, having each adult match each other ID with a bank account with mobile banking, reaching 250 million Egypt once and providing them the opportunity to use mobile payment. 

Currently we don't have yet the statistics of the results of this solution, but it's just a shaft from almost half a million to 52 million account mobile pay.  It is certainly a very important progress yet to be seen the result of it, but it is certainly in Developing Countries a very lucrative subject because it minimized with traffic jam, with queues, with potentially fraud, with ‑‑ even with the corruption in payment of things.  It tells a lot in this.  This is all I can say.  Thank you. 

>> MODERATOR:  Many thanks to Hossam.  Many thanks for the statistics shared by your presentation.  And I think at the time the mobile payment boosts the Internet economic development.  Meanwhile, it also inspired me to think about more problems and potential problems.  How to use the mobile payment to boost the Internet economy more safely and more stably and easily.  Because, you know, using the mobile payment is definitely much easier than the traditional ways.  But at the same time, perhaps it brought about some security problems potential.  So maybe we can leave these questions to the second part for the outside audience.  I'll give the floor to Ricardo.

>> RICARDO BARRIOS:  Thank you. 

Good afternoon, everyone.  Let me bring the government perspective to the table on this subject, and more specifically the regulator perspective.  When we review the context of mobile payments system, we have to understand there is a lot of elements involved in general.  The first thing is that the world has become 100 percent‑plus mobile penetration of 100 percent‑plus in many countries, almost all the world.  Nevertheless, the mobile penetration, mobile Internet penetration, has not the same rate across the different countries.  In fact, there is a big difference in mobile Internet penetration from developing ‑‑ developed, developing economies.  The most common Internet plan is the prepaid plan in developing and less developed countries. 

On the banking side, there is an important share of the market that has been on bank by many, many years for several reasons.  If you look the same market from the telco side, you have been seeing in all your countries a shift from delivering telecom services to ICP services and more and more this ICP has become even IT shops of apps and other new cloud‑based services.

In terms of the mobile payment entry itself, there is a variety of options.  Professor Tao has explained some of them and even Hossam.  There was a huge range between micropayments done by SMS and typical example have been three years ago or four years ago at the IGF in Kenya, the government in Kenya and some other companies show us a great example.  There has been also the cloud‑based POS systems, and more recently the mobile wireless and digital money.  So I'm giving you the whole full range of options that regulatory is trying to understand. 

And we try to identify this different players in the mobile payment systems.  We see there are some specific rules that apply to the different players involved.  I mean, as has been mentioned by the previous panelist, under mobile payment systems there are several industries involved.  More traditional is the banking system or the banking industry.  It has a strong national and international regulatory system.  There are all the telcos and ISP operators have a, let's say, traditional regulation telecommunication format and are increasing getting more responsibilities as an Internet intermediaries in the different regions of the world. 

You have new players in the mobile industry like have been mentioned, like retail chains that get associated with some network operators.  You have global payment platforms that have been mentioned, Alibaba, PayPal, and others.  And to get more complexity on these entry, you have to add Bitcoin and the Wallet payments in the various ways of offers. 

Apart from that, we are facing different legal systems.  In mobile payment transactions usually can involve or may involve different jurisdictions when it takes place.  It gets more complex to understand and even in my opinion kind of regulation. 

So with that, I just want to share with you that has been said and Professor Tao brought up at the end of the presentation, what you do wonder is the kind of fraud in the process.  When everyone is suspecting the government to jump in and give a response.  But as you can see, there are several regulatory bodies involved given the fact that there are many industries involved in this mobile payment system. 

So I believe we are going to talk about it in the second part about the solutions, but in any case, what we want to stress that, again, from the government perspective, we still see a huge opportunity, especially for the underserved communities.  My predecessors are clearly identified that there is a lot of people that has been for long time out of the banking and financial system.  And there have been others that have been choosing not to be because they believe and specially on microbusinesses, that traditional financial system is too expensive for them.  So there are other ways of saving and payment and even lending money. 

So what we want to address is that based on the last McKenzie research, there are now over 2.5 billion people that still do not use the banking and the financial institution.  So there is a huge potential to come and bring in services to them. 

The example that Professor Tao shared with us is a good example from the developing economies on how this kind of new services can bring wealth to everyone, but especially for these communities that has been underserved. 

So just to conclude, what our advice from a government perspective to other regulators around the world is that instead of being focused as the regulators have been traditionally to ensure a fair, competitive market, and to ensure the quality of service, and to protect the consumer by making laws, in this case regarding the mobile payment system, we should be instead trying to become an evangelist of the benefits of what this kind of solutions and apps brings for the ‑‑ for our local communities. 

And that role of evangelist is even inside the government to talk about other branches of the government and explain them, how the industry they are responsible for could be improved in terms of productivity if they embrace these new services and apps. 

And the other role of the regulator will be to also guide the legislative body of the government to understand that it's very probable that they need to obey the existing laws that in some way impede the development and rapid adoption of the Digital Economy solutions. 

So my last comment regarding this advice for government is that we need to honor with the different actors the private sector, the Civil Society to create trust.  It was this morning attending the cybersecurity session, and it was really interesting to realize that in a lot of countries there are a group of people that hasn't been involved in Internet because they are afraid of the system.  They are afraid of being some way affected. 

The only way to get them connected is to with the help of the government with the private sector, to create that trust in the system, in the system that not only on the mobile payment system, but Internet in general, and more specifically on the Digital Economy benefits. 

Thank you. 

>> MODERATOR:  Many thanks to Ricardo.  Please allow me to make some short comments to the presentation of Ricardo.  I think Ricardo proposed four things here.  The first one is mobile payment system and the finance corresponding financial system, because when we use the mobile to pay the transaction, we have to combine our account to the entity bank.  And so that is the two system.  One is the virtue, and the other is the entity how to make the two system together safely is the big question.  And the second one is the standards, because we use the different mobiles.  We use the different operation operating system.  So the standards is to realize the mobile payment much easier.  That's the second issues. 

The third one is the literacy, because I would like to share my story here, because my father and mother generation, they are not familiar with in technology.  And they are not good at to pay the bills by mobile phones, such as in China, the Ministry of Railways, they set up the application to buy the railway tickets online.  But my mother always told me, "Oh, I'm scared to use this system," because she is always concerned about the system is tricky, you know.  And so that's the third problem, how to improve and promote the literacy of the relevant scales is a capacity building field. 

The fourth one is the government roles.  I think the mobile payment is motivated by the enterprises, by the innovation of the companies and the technologies.  But it's like the two human beings.  One is the market orientation and the other one is the rules and regulations, even laws.  So if we only use the practice and the innovation of technology without any rules and regulations, maybe it will resulting some very bad results.  So I think the government rules and even the Civil Society and the nonprofit groups and NGOs rules should be make the respective rules in the system.  That's thinking about mobile payment.  The last for the floor I will give to Paul.

>> PAUL MITCHELL:  I'll try not to repeat anything that's already been said.  I think you can see that there is a range of issues.  I want to tell you a little bit of a story.  The theme here is about mobile payments sort of boosting the Internet economy.  That, of course, presupposes that these mobile payments are actually somehow engaged in an Internet economy. 

We just heard the two and a half billion people are roughly unbanked.  I think the statistic is 4.1 billion are not connected.  It's a pretty safe bet that 99.999% of the 2.5 billion are in that 4.1 billion population, which really says that we have simultaneous problems in terms of or opportunities, which is a better word, in terms of using mobile payments and simultaneously connecting people to the Internet.  On the one hand, we heard about mobile payments being used to transfer money from one part of a country to another part of a country or even across countries at times.  That's one type of transaction.  Another type of transaction is the kind of transaction that those of us with credit cards and bank accounts do every day.  We purchase things, we return things, we engage in commerce and economic activity. 

This year, just in September, we had the accession to the 17 new sustainable development goals.  The interesting thing about sustainable development is the word "sustainable" implies there must be in fact a business model something that can be self‑sustaining.  That charity itself, which might be grant funding, which might be part of getting something started, cannot be the fundamental and business model.  Often that gets lost in a lot of discussions about sustainability and we do sustainability projects that don't sustain because the grant funding runs out and the project has no economic flywheel. 

Here is the example.  The issue is a little town called Nanyuki, which has 30,000 people.  It's 125 miles from Nairobi in Kenya.  The population there lives on an average per capita income of $358 a year.  Not a whole lot of men.  It's the lowest population on the planet, but nevertheless, it's a really beautiful place.  His subsistence farming there, it's sustainable, but it has no economic growth.

In the case of Nanyuki, two British expatriates bought a farm and they turned it into a flower farm, a small farm, but the largest employer in the area.  It employs 500 of those 30,000 people in what are basically good jobs.  They grow flagrant roses and they ship them all around the world about 5 million a year.  I mention this as a setup, because in town, until two years ago, had no Internet connectivity whatsoever.  Virtually none of the town has electricity, but the farm has electricity.  There is 2G cell coverage if you go just to the right part of town with your 2G cell phone. 

There is healthcare clinic, Red Cross, the things you would find there.  The Hobbs, the folks that operate the flower farm, they had to Drive eight miles to operate their business, which did not take eight minutes like it might in the United States, but typically would take them an hour plus each way to go and use 120 kill a bit per second mode you mean to send an e‑mail to take and confirm orders.  This is not a good situation.  There's an Internet economy that I guess you could say that Tambuzi was involved in by driving to a place.  So we got involved with USA ID with the Hobbs and with some other folks to see if we could try to create an ecosystem that in and of itself would be sustainable, and more importantly, would actually generate new economic return into the community. 

So in order to actually have economic growth, you have to produce something to get some revenue coming from somewhere that isn't just right there.  Otherwise, you sort of are like passing it around and trading it amongst ourselves.  That's not the point.  This is all leading up to what's the role of the mobile payment thing. 

The first problem was to create an ecosystem in an environment in which people are living on that kind of money, is you can't create an Internet connection ecosystem at the cost base of the Internet connection ecosystem that we see here or in most of the developed countries.  We have to think about how do you dramatically lower the cost.  In this case we leveraged wireless technologies that use unlicensed spectrum and put together a wireless network that connected all of those schools and the health clinic and everything that I mentioned. 

So far all of that ‑‑ right up to that point you just say well, that's like a typical development project.  You've connected people.  We haven't created any economic activity, but we did connect schools.  So 20 years from now maybe we would find that the kids graduated and did something. 

But instead, what we did was we added in cybercafe, which is a converted shipping container that's equipped with solar panels, because there is no electricity.  This is like a cybercafe you would find in Brussels or maybe in João Paulo.  It has charging stations and all of a sudden we have an entity that has a business.  So this is a business, as long as there's a way to use it to get something from elsewhere. 

And so this container sells Internet and mobile charging for the equivalent of roughly $3 a month.  At that, that's a profitable business model.  Now, what happens next is that because there's an Internet connection there that the entire community can use at an affordable rate, they, of course, have to be able to pay for it with something. 

Now, we have one large employer, Tambuzi, which helps because they have commercial uses for this connectivity.  So that helps with delivering the network.  But in terms of moving it forward, you have this population which I mentioned had 2G mobile phones.  That is in fact a payment vehicle for how the money works in that community.  Now the guy with the container is able is able to sell Internet services, but more importantly there are now people within the town who are earning a living via the Internet through what they can do through the container. 

So one particular person, a guy names Chris Veraca has now got himself certified as a Windows tech by doing online work.  And he does tech support and blogging and writing for people all around the world from this little place in Nanyuki.  And they pay him.  They pay him over the Internet.  Now all of a sudden we have money that's coming back into this community.  He's now earning a living that's greater than he could've earned before.  And that money gets to be spread around.

Another part of this is the one who runs the shipping container, part of his business is managing the mobile payments and that is sort of the funds transfer around the community as well.

(Audio off)

Most of their device is their bank, so to speak.  And so now this that they have connectivity, there is new income coming in, now the challenge for them is all of the issues that we just heard about, which is trust in the system, the competition fees that may be associated with it, which may not be too high initially, but have the potential to be abused.  Security at this point is less of a real issue than a potential issue.  The security of the transactions.  That process is actually working pretty well.  So I'll stop there.  The primary point I wanted to make is that whether it's a credit card like we would use here or a mobile device like they're using there, the primary issue in sustainability and in sort of alleviating poverty on a permanent basis is finding a way to put it together in a committee ecosystem way where it's generative and helping the community.  That's something that's seemingly often missed

>> MODERATOR:  Okay.  Many thanks to Paul.  And I think, yes, I will also make some short comments here.  I noticed you mentioned the ecosystem here.  So that inspired me to think about the ecosystem, yes, payment ‑‑ mobile payment is kind of paradigm shift of the transaction and shopping models.  But that means it's not the isolated things here.  So it needs the coordination of other things because if we want to buy something and pay by mobile, on the basis of that is the traditional products.  So the traditional protects the mobile payment.  That's why I mentioned the tradition and the innovation.  The tradition and innovation, there is the confrontation, but there is no confrontation.  It seems to be dilemma, but I think it is philosophy things.  Okay? 

Maybe we can approach more discussion in the next subsession.  Here I would give you some potential questions here to think about that, but it's not to stick to the four questions. 

The first one is how could mobile payment further promote Internet economy development and how to define the future development directions of mobile payment.  That's the first.  And the second one is how to strengthen the construction of mobile payment security and how to give proper education to the users.  And the third one is what are the fiscal policies that the government can make to boast, promote mobile payment development, and keep its vitality. 

The last one is how to get over the difficulties in establishing worldwide technical standard on mobile payment realized cross‑border payment and to protect users' information.  So we can discuss this questions and the audience can raise your hand to propose some others.  Let's begin.  Who will be the first?

>> PAUL MITCHELL:  I have the advantage, I can see her screen; so I can actually read the questions.  So the first question I think kind of what I was trying to answer what I had before, which is how could mobile payments sort of promote Internet economy development and fundamentally by being a payment mechanism that is payment for and payment that enables transactions and commerce that flows on and through the Internet?  And that really means that the mobile payment system needs to not be its own little isolated thing.  It's part of the broader ecosystem that makes the economy flow.  There are some things that certainly can be done with the payment systems to make it more versatile.  Although the example the professor gave was two second, which is great.  My experience in watching it it's not usually two seconds in practice.  There are things that could be done technically to make it simpler, safer, a little bit more secure, and easier to understand, but I think the predominant challenge that is facing the system is one of ultimately regulation and the mechanisms that either enable or disable these systems to interact with each other.  Because if you think about sort of traditional payment system like the Visa or MasterCard or American Express, all of the interbank things, they all operate at ‑‑ they're all interconnected and all exchange information and data.  There is all these agreements that sort of make sure what rules the transactions are occurring under and how the consume zero user is protected from fraudulent activity and all these kinds of things.  Most of that is missing in the mobile payment universe.  And so we have isolated ecosystems, like the M‑Pesa as we heard.  Two different examples.  So if we want to answer to the question of how this system could actually improve the situation, those are areas in which the systems need to grow and mature and actually work to this while still competing, like Visa and MasterCard compete, but they work together at the same time. 

>>HOSSAM ELGAMAL:  I'd like to just link on what Paul have said regarding the lack of common framework of development that ensures the security and quality of the service that the consumer or the user wants to have.  And in that sense, the government has two options.  One is the typical one is to try to regulate it in a traditional way, but as I told you on the first part, it's extreme extremely difficult when you have so many regulators among all of them.  The second one, and that's the one we believe will be is in a common ground with in different suppliers and even are competing in this market, with the hand of some governments, tried to come into this new framework that led to the general standard that will ensure the maximum security and the views for the consumer. 

Something that has been in some way done, when you think about the association of the DSM and other standards, here the difference is you have a broader scope of people involved and players.  But I believe it will be ‑‑ it will take it longer.  It will be more suitable to do it in that way.  Thanks.

>> MODERATOR:  Many thanks.  And I noticed there are some audience want to make some comments.  So since I'm the only female panelist here, so lady first, okay?  The staff?  Can you put the microphone here?  Thank you. 

>> AUDIENCE:  Thank you, sister, for the floor.  My first question is for Professor Tao, because I'm curious to know ‑‑ I think you raised it, madam chair praised it.  I want to know how in China you did with the issue of access to equipment and especially for the rural people, and also I wanted to know how people finally access the money.  Is it just virtual payment and they use it only for virtual transactions or at some point they actually access the money? 

The third question is about is for all the panelists.  I want to know how you deal with the issues of trust in the bank system, because I come from Congo where 20 years ago and everybody is still remembering the bank system collapse and people lost their money and now there's really a problem of restoring that trust, because you can use money transfer and all these things, but at some point you need to trust the system enough to give them the money or to lend them your portfolio. 

Thank you. 

>> PROFESSOR TAO:  Thank you very much for the question to me.  It's my honor.  In China we establish we establish 3 4G network, so many stations on mobile terminals.  Many don't know, I have IT background.  Actually, for last ten years I mainly work for 4G design.  So selection 4G still a network or wifi network, if you want safety, I prefer select network, even if sometimes you should pay much money for the network fee E for wifi, there's no special security functions.  So wifi systems are sometimes shortage of security.  This very important.  Take me as example.  If we want to transfer some money to my wife, I usually use 4G.  Sometimes I use wifi in my home, in my family I use wifi.  Outside I want to use 4G or some kind of system to make me safe. 

Very important TV program, our TV program in China Central Television Station to make almost like this, this room, so many audience and also moderator.  The moderator said, "okay, ladies and gentlemen, there is wifi in this room.  You can make a photo and then send your photo to your friends.  So most of audience do like this.  Minutes later, their photo just sent to friends, displayed in the screen of the room, of the room.  So this is to say wifi is not safe here.  They want to make the selection, I prefer network.  It's much better safety. 

Just when I said you asking me for how to make safety for buyer and seller; right?  And Alibaba is very good example.  Usually it's a buyer and the seller not face to face, not face to face.  So the buyer gives the money of Alipay and we transfer seller to the buyer.  Seller says this good is okay and send a message to Alibaba agent, Alipay.  Alipay transfers the money to the seller.  This is very important for the money transaction safety.  And I think if you want, you can connect website of Alibaba.  There is an Internet version introduction of the payment. 

Thank you very much.

>> MODERATOR:  It's a kind of third party payment system, right. 

We have the lady first, but I have to follow the order, you know.  I saw APLD, the general manager of APTLD.  I saw he's the second one who raised up.

>> AUDIENCE:  Yes, for, Leon APTLD.  First of all, thank you all the exciting accounts from the real life.  What I found real kind of discouraging for these audience ‑‑ for the speakers is that we really miss someone in this room, and that would be an institutional economist.  An economist who studied institutions, because after all, whatever we talk about is not about money and is not about purely economic development, but about establishing certain institutions and promoting certain institutions, because if you just kind of put away whatever transactions, you will come ‑‑ the bottom line will be the same. 

Exchange of trust, and that, by itself, is a situation and very important to understand that when people first traded something for something, it was trust.  So with that you can build whatever sophisticated things, like with Alibaba, for example, platforms, or these very interesting system in Kenya.  But after all, you trust someone to make that transaction happen, but what is important for our case, I mean, is that Internet, the Internet and it was also missing in this discussion.  The Internet creates absolutely new institutions and absolutely new instructions, by which I mean Bitcoin.  So it's a new parallel institution.  Just think of this.  Through the whole history of mankind, there was government.  The lady next to me is just trying to refine her presentation on taxation of Digital Economy.  What I mean is for the first time ever, some people agreed just between themselves to issue a new currency, which is parallel to any government and then the government would say wait a minute, where are we in these ‑‑ let's say new paradigm.  So we should think of this also.

So this could be better embedded in our society.  And not only Bitcoin, because it was just yesterday that I read an article about Microsoft launching its own currency, which would be called 9,000 people that are ready to contribute to this project and buy this new currency.  Then I'll be very short.  Then we come to this inevitable question, whether government should step in and regulate or not.  This is like a demarcation line.  And I certainly understand why you say so, because Chinese tradition would presuppose that the government has that wisdom and understanding far better than any other one.  You can take a guy from the United States who will tell you no, that's the invisible hand of the market, which should do its justice, you know.  Then people would better understand what works, what not, and then we'll switch to more reliable or more trust physical services. 

So this is, again, invites some institutional economist.  Thank you.

>> HOSSAM ELGAMAL:  I'm not sure, but I think there is some confusion.  We are talking about one thing, is money transfer.  It doesn't matter what is the name of the currency we are still in the regulation of the central bank of any country.  And what we do next, but let's agree and this is a financial transaction.  A financial transaction is under the regulation of the central bank.  And it has to be regulated by the central bank.  It has nothing to do with the telecommunication.  The central bank of any country will put along with the regulation the security regulation required.  This applies to the mobile banking, Internet banking, mobile payment, anything related to money by law. 

Now, it creates flexible forum.  It creates a new form of communication.  It might be worldwide because it minimized the cost occurring with the transaction.  Otherwise you need to have a branch, you need to have a teller, you need to have a safe and all of that.  Now, you don't need to have all of that, whether it is Bitcoin or it is named you have money on an account that you have and then you get it from the retailer.  But at the end it is under the regulation of a central bank. 

Going one step further, two things.  One is most of them mobile banking was originally within the countries.  It started being across, but it was within the countries because, again, the level of security and trust, as you were saying, was not good enough, so it had to be ‑‑ and also to prevent fraud and to prevent money laundry.  So it was limited in amounts and it was within the country. 

Now, one thing that I mentioned quickly and it is mentioned in several places, mobile banking is capitalizing on existing international organization like MasterCard, Visa, and others, and PayPal and others.  Those are already accepted by the regulations.  And they follow the regulation of the countries and they report to them.  So currently this is what happened in Egypt, for example.  During Barcelona Congress, that Egyptian government agreed with MasterCard to make this swift approach.  Then suddenly there is no used to apply on MasterCard.  The card is no longer a hard card.  It is a soft card on the mobile. 

Now, beyond this, the more there is implementation of worldwide banking, the more we are going to face challenges, bottlenecks in transfer, security, as was mentioned by our colleagues, the professor, that in fact if you are using Wi-Fi, you may face some security breaches against the 4G.  And going further into that, business mobile banking is higher risk even, because then the reputation of organization may be harmed if misused.  I just wanted to clarify. 

Thank you very much.

>> MODERATOR:  Thanks to Hossam. 

Before the next round of Q&A, I have to as the moderator, I have to ask you please keep your short questions and short answers within one or two minutes.  Because for the making sure about more interactions.  Next one I saw the last row, yes.  From here. 

>> AHMED USMAN:  I have the microphone.  I'm Ahmed Usman with PayPal.  I have a question about the interoperability that was mentioned by last speaker.  Would you recommend that governments should work together to kind of impose that?  Or do you think that it should had been solved by business or by kind of standards or best practices or how would you actually recommend that interoperability be created.  Lastly, do you think the Internet is the solution to that? 

>> HOSSAM ELGAMAL:  Again, it seems to be the same confusion.  For the time being, until things change, it is still regulated by the central bank of countries that make ‑‑ most of the payment are organized and allowed within a country by central bank.  So even PayPal cannot apply PayPal payment in Egypt, for example, except if there is an approval on it.  I don't know if you have a different ‑‑

>> AUDIENCE

(Off microphone)

>> HOSSAM ELGAMAL:  Sorry.

>> PAUL MITCHELL:  This was multiple choice.  Government does it, industry standard, all chaos reigns.  I don't think you would find me recommending that governments just impose something, but I think the more nuanced response is the government's role is to ensure that chaos does not reign.  So in an environment in which industry can't get it together, standards are not coming together and consumers or users, whatever words you want to use for people, are negatively impacted by that, then government has a role in bringing closure.  I don't think that it's the appropriate role of government to be designing the technology standards.  I can't think of a single one where that would make sense.  But it could be, in the event of an industrial failure, it could be the role of government to facilitate industry solve the problem.  I hope that gets to the point you're getting for. 

>> EVELYN NAMARA:  Hi.  My name is Evelyn.  I'm Internet Society Ambassador, and I come from Uganda, which is the most entrepreneurial country in the world.  You can check it out.  I didn't just make that up. 

So banking on the success of M‑Pesa in Kenya, we have lots of entrepreneurs who are doing lots of things to enable innovations that are serving the unbanked.  They are not helping the innovation go on, so they don't open up their platform, don't allow them to use API's.  That really diminishes the work that they're trying to do.  So even as we're trying to think about mobile payments and thinking of how they can really hip force the innovation, how do we ‑‑ it's a thought ‑‑ how do we sort of find ways to evolve the telcos to be more open to allow the innovations to go on.  Ultimately they are serving the unbanked and the people that telcos do not serve.  That's a comment I had to make. 

Thank you. 

>> AUDIENCE:  I come from BOBT, telecommunications.  Usually we work with operators.  Operators you open structures.  The main concern ‑‑ you make the structure robust.  Very important.  If we if we think about Alibaba, they need not open because services named OTT, over the top, over the top services.  They can do just behind the operators in the structure, behind operator structure.  And if you do connect this way, make can cooperation with you, what don't demand the operator can open the real physical infrastructure.  This is almost impossible, because they want to make their network solid and the network robust.  It's very important for the operators. 

Thank you very much. 

>> AUDIENCE:  My name is Gilford from Zimbabwe.  It's about insurance of mobile network operators.  They are transaction services as opposed to the traditional banking services.  And then my second question is the issue of the social fabric which seems to be suffering from the transfer of money.  I'll give you a quick example.  In Zimbabwe, when we used to go to the rural areas to get money to the grandparents, you then spend a couple of days with them, hobnob with them, and really have quality time but that time is now totally gone, courtesy of the mobile operators. 

Thank you. 

(Laughter)

>> MODERATOR:  Next?  And before that, because our workshop starts later, so may I occupy several minutes?  Yes.  Several minutes. 

>> AUDIENCE:  I'm from Kenya where M‑Pesa works.  I can do it right here and do everything.  So it really works at a global level.  So that jurisdiction issue arise.  My sister from Uganda, entrepreneurial country, there is a business started there because M‑Pesa also worked in Uganda.  Some Kenyans who are there started a parallel money system, somebody appointed himself to be transferring money away from the Uganda money system.  The money started flowing across border.  So then the issue of arise because of cross‑border money movement.  As much as it's bringing convenience in Brazil, the issue arise that they are cross‑border are real.

I do know there are challenges, but M‑Pesa is great.  I'm just showing how it works.  But they also start problems that never raised at this fora about M‑Pesa.  Number one, and it's related to the question he has raised, and also the one and his question, and that this instruments of mobile payments have become links of monopolization.  When you now want to introduce something on a mobile number portability, the dominant player, 70 something of the market share, blocks out others.  So consumers are suffering because then because they have so much of their services there and other friends on that one, so they are being locked in.  So there are ways they are losing.  This need to be addressed if we are to optimize on the use for all this. 

Now, there is also the other question of ‑‑ the other question is reversal.  When you send money to somebody, it could take some time as high as 22 hours before your money is reversed.  This is terrible, because if somebody was an emergency and you make the mistake and went to the other person, where is the money for 22 hours?  You can't reverse it, it's a problem. 

Now, I do know they have been trying to address it, but it's not enough.  It's a problem that sticks out.  There is also the final comment I want to say.  The social problems that also arise, like you're saying, because the assumption is we always have M‑Pesa, just sending money to M‑Pesa.  Supermarket, shops, they are expected to have money. 

So it becomes a new norm and private funding doing it.  Sometimes it's problematic when people think it's a requirement.  It is not a legal tender.  There was a similar case where they tried to introduce ‑‑ you have to pay the fees.  You say they are not buying me a phone to be transferring the money.  And then finally, there is also the question of intellectual property rights.  Whereas this was developed in Kenya, it's not a Kenya property.  The royalty with Kenya benefits, the United Kingdom, Vodafone. 

Thank you. 

>> MODERATOR:  And I will give the floor to that gentleman. 

>> AUDIENCE:  My comment is to let you know just in case you're not aware, is that Worldwide Web calls has a working group on the Web payments to assure the interoperability of many different players and devices in this Web payment ecosystem.  That brings me ‑‑ there isn't a concern or what is the best platform for mobile payments to assure interoperability?  I mean, there are many different native applications on mobile phone which is not interoperable at all.  And how can we make then interoperable?

In some cases, we have been seeing in this field is that there are a lot of companies and organizations that are trying to get Germany as the platform for mobile payments.  We have to look for, perhaps, getting better standards and also to have a look in a different platform or the best platform.  In my point of view, I still consider the best platform for interoperability. 

The time is always short.  The discussion is always.  Maybe if you have any questions further after the panel, you can ask our panelists even ask the e‑mail name cards and keeping in touch after the session. 

>> MODERATOR:  So many thanks to our panelists and the excellent audience here. 

Finally, on behalf of Internet Society of China, China Association of Science and Technology, we have the co‑organizers of this panel.  Thank you for coming and listening and for your attention.  See you next time.

(Applause)