11
Transaction-Centric Software
11.1 Financial Transactions
Transactions are normally thought of as financial transactions. Many of them are, but a transaction can cover almost any exchange between two or more people or two or more devices and are normally enabled by some form of identification and trust-establishment protocol.
However, let us start first with financial transactions and the role of mobile phones in the financial transaction process. Economic theory suggests that economic activity expands in line with population growth, particularly in developing countries. This may be true up to a point but at some stage growth becomes limited by resource and/or environmental constraints, and politics often gets in the way as well.
The disputed election at the end of 1997 in Kenya resulted in 1500 deaths and the displacement of 600 000 people. No shops or banks were open for 5 days and no air time resellers were available to top up prepay accounts. Safaricom1 the local operator continued to allow calls and texts but more significantly a few months earlier a service called M-PESA had been established.
The service was disarmingly simple. A sender wishes to send money to a friend or pay for a product or service. He/she enters the recipient's phone number, the amount and a PIN number. The SIM-based software (either downloaded over the air or factory loaded) encrypts the SMS message. A centralised accounting system then transfers the funds and a confirmation message is sent. If the ...
