Digital wallets will subsume paper money in 30 years: Sam Pitroda (Interview)

NEW DELHI - With some five billion mobile phones in use today globally and over 10 billion credit and debit cards issued each year, tech evangelist Sam Pitroda has predicted the virtual death of paper money in 30 years thanks to innovative convergence.

“Paper money will disappear as transactions become digitised in another three decades,” said the inventor of Casio Digital Diary, which was a rage in the 1980s, speaking about his latest innovation — the “digital wallet” that uses the concept of “mobile money”.

“If you can make your home and office paperless, why not banks, trade and your wallet? All transactions will be online in the future,” Pitroda told IANS in an interview on his invention, now explained in the book: “The March of Mobile Money: The Future of Lifestyle Management”.

“Every mobile telephony service provider will embrace it. With declining average revenue per user, digital wallet could lure more subscribers who would pay more for the services offered,” he said.

“It is completely foolproof.”

Pitroda’s book covers the evolution of the mobile phone in India, which is fast becoming a lifestyle emblem in the country, its emerging links with banking and the concept of money, to make eventual, but certain, room for what he calls the “mobile wallet”.

“The mobile revolution is like a big train coming. India will have a billion connected people in 10 years and everything, including health, education and social service, will have to be done through mobile telephony,” he said.

India has over 650 million mobile phone connections just behind China’s 795 million.

“The mobile service provider or networks will become the management platforms. Nobody is thinking about it — but you cannot conduct your life the way you are doing it now. The cell phone has made India younger, mobile and connected.”

First, he says, the mobile telephony blitz will deal with uploading of content in areas such as education and health, with handset storing health data, doctor’s address, phone numbers, drug schedules, lab test reports and even a list of regular chemists.

The mobile phone will also be a boon for the education sector, and in a a decade’s time, students will be able to solve math, trigonometry and answer their examination on their cell phones. The concept is currently under trial across four states in the US, he said.

Pitroda then presented a live demonstration of the services provided by his personal digital wallet — a sleek black blackberry with a rather large display screen — to explain the premise on which the technology of “digital wallet” operated.

His mobile phone has four icons in the money menu — for wallet, bank, my-commerce and my-city, which lists information about Delhi, where he is now. The wallet contains an electronic imprint of his plastic cards and bonuses collected on it.

He said if he were to go out for lunch and decided to split the bill with the host, all that was needed was to send two messages — one from his phone to the host and another to his bank to transfer the money to the host’s account.

Similarly, if he wished to buy a pair of jeans, all that he needed to do was to go to the payments icon on his phone, and the magnetic stripe of the card will automatically be swiped and money transferred to the merchant.

“If, for example, I go to WalMart, the payments screen can even fish out my WalMart discount card and offer me fresh discounts on my cell phone. You could have up to 50,000 coupons stored in your mobile telephone.”

But why the book?

“Several people, especially in India, have been inquiring about the security of digital wallets, the mechanism and its feasibility. It was not possible to explain to everyone. Hence, I thought let us write about the digital wallet and mobile money,” he said.

“It is an effort to educate the average consumer on how banks started digitising their systems and connected to our mobile phones — changing the nature of money transaction in a layman’s language,” Pitroda said of the book, co-authored by Mehul Desai.

According to him, there were three fundamental requirements to make banking, e-commerce and eventually the complete lifestyle management of an individual and his family over mobile phones a reality.

“Phones have to be smarter with bigger colour displays. They must be equipped with the underlying network infrastructure to connect to the Internet. And they must be able to download cards, tokens and applications directly from issuers - anywhere any time.”

He said phones also have to be simple with interfaces that mock the traditional wallet, including branding and familiar images of cards, coupons and bills, to provide consumers a single platform to conduct a host of transactions in the virtual world.

The telecom and tech whiz, who is advisor to Prime Minister Manmohan Singh on public information, infrastructure and innovation and chairs the National Innovation Council, said he is now planning to write more books.

“I am working on a book on innovation. It may be followed by a book on knowledge and information infrastructure. But the project closest my heart is a chronicle of all my experiences working in India — my love affair with my country.”

(Madhusree Chatterjee can be contacted at madhu.c@ians.in)