7 ms·

This is a big thing. Mastercard is a global company. In Nigeria, a country that has nothing to loose and some small advantages to gain this may seem like a no b

by vicpara 12y ago

This is a big thing. Mastercard is a global company. In Nigeria, a country that has nothing to loose and some small advantages to gain this may seem like a no brainer. However, if this new tech proves itself reliable enough I expect it to be pushed to many more countries. Think about it. A BANK will OWN your biometric data (10 fingerprints, iris signature, facial signature). Everything. And this is not a governmental entity. Nigeria, as a poor country, cannot challenge the tech brough by Mastercard. An then what would be the next step? No more cash payments? If you pay by cash the whole system would flag you as potential threat? Plus, is there any prove that access to credit for really poor people is actually creating wealth ? This is the modern slavery and anyone who has credit in west either for education or commercial purpose has felt on its own skin what means to work for paying up the debt. God help us all!

pilsetnieks 12y ago
MasterCard can be (and is) used all around the world as a debit card. Giving credit to the customers and defining its limits is up to the issuing bank.
- icebraining 12y ago
  It doesn't even have to provide debit. Banks here in Portugal also issue cards for university students, in partnership with them. In the end it's just an advertising scheme, you don't need to have an account to attend school :)
jjoonathan 12y ago
I can see it now: for the low, low price of $40 (times three companies) you can check once to see if someone has bypassed the 30-year-old security on your MasterCard(tm)(c)(r)(pp) ID and fraudulently used it for border crossing or employment. Then, for the low price of a few hundred dollars and many hours of your time (x 3 companies, natch) you can dispute the ID usage and get yourself removed from the watch lists that pop up nasty red symbols and words like "suspected forgery / illegal alien / terrorist watch list" whenever a future employer tries to verify your biometrics. Of course, the police and TSA still get the vague but serious-sounding warnings, so you still get pulled off of planes for extra pat downs and an extra 45 minutes added to every traffic stop, but hey, at least you can get a job. Efficiency! Value creation! Huzzah!
- guard-of-terra 12y ago
  ID is (expectedly) a different application on the card chip. Not in any way related to MasterCard acccount. You can't have Nigerian ID on your card and Nigerians can't enter country illegally on your MasterCard credit account. It's orthogonal things.
  - jjoonathan 12y ago
    I know. I was projecting the shitshow in the payment processing industry onto a national ID program in order to argue that the same techniques used to extract money (not to mention anticompetitive staying power) from the payment-processing system would work just as well if not better in a national ID system. Is MasterCard to blame for those ridiculous sytems? Not specifically, but if the same incentives are in place (and they are, that was the point of my imaginitive story) then I fear that anyone involved in the business end of a privatization effort for, say, US IDs could copy the business model of "half-ass the security to generate pain, make your money as the exclusive provider (or licensor) of half-assed solutions to the generated pain." It's a good business model, which is why it's imperative that we keep business interests away from the most lucrative targets. Alternatively we could try to fix this horrendous perverse incentive, but I think that's a much shakier approach that would be much easier for the wrong people to work around.
fredbrown 12y ago
> An then what would be the next step? No more cash payments? Yes. From the article: "“In close collaboration with both the public and private sectors to achieve the full potential of this program, NIMC is focused on inclusive citizenship, more effective governance, and the creation of a cashless economy, all of which will stimulate economic growth, investment and trade,” he adds."
rhodri 12y ago
Don't confuse consumer credit – which is taking out loans in order to buy goods like toasters that will decrease in value – from a business loan – which is a bet that you can add value to what you buy with the loan, and thus earn enough to pay it back (and more, hopefully). Having a quick look around, I found this blog post from Kiva who helped pioneer microlending in the developing world. The answer seems to be "yes, but credit isn't enough to turn anyone into an entrepreneur": http://fellowsblog.kiva.org/fellowsblog/2013/03/22/how-effective-is-microcredit-really http://fellowsblog.kiva.org/fellowsblog/2013/03/22/how-effec... As a bit of a rant: the West is generally overburdened with consumer credit. People panic when the value of their house goes below that of their mortgage, which is called negative equity. But (almost) every consumer credit agreement leads to this negative equity. It's mad.
- schoen 12y ago
  What a useful way of putting it. Can you think of an institutional or cultural way to get people in the West out of some of their consumer credit traps? I don't think the lenders are going to help!
  - schoen 12y ago
    I wonder if this got downvoted because someone read it as sarcastic. It wasn't meant to be so; I thought the parent comment was useful and I was wondering how to change the culture around consumer lending, which I agree has got a lot of people trapped (or at least burning a lot of their income on interest payments and fees).
- jessriedel 12y ago
  Your distinction between consumer credit and business credit is not as clean as you make it seem. Your example of consumer credit (toasters) is most clearly exemplified in a home loan. In this case, the point of the loan is to allow someone to own an item and draw utility from it over a long period of time; they could not afford the purchase at the beginning of the time period, but their income over that period can cover the cost. To a good approximation, the income of that person would be independent of whether they were given the loan (i.e. if they had to rent a smaller place). But there are lots of personal purchases financed by consumer loans that increase one's income just like a business loan. The most notable is a student loan, but especially in poor countries (and poor people in rich countries) there are lots of other examples: Buying a vehicle to allow one to work at a higher paying job outside of walking distance, buying a tin roof that doesn't need to be replaced every year, http://www.givedirectly.org/blog_post.php?id=2845341784910255488 http://www.givedirectly.org/blog_post.php?id=284534178491025... buying basic health care allowing one to stay healthy to work, etc.
guard-of-terra 12y ago
"Nigeria, a country that has nothing to loose" Why is that? Nigeria seems to be quite successful by African standards. They even make good movies. Of course not without problems, but they seem to have both spare money and some political will - a very rare thing to have in Africa.
- placeybordeaux 12y ago
  They are in the top 25 global economies, they are doing quite well on a global scale, not just an African scale.
  - JoeAltmaier 12y ago
    Huh. There's only one globe in global. The top 25, heck the top 3 or 4, probably add up to most of the global economy. Top 10 - that'd be pretty impressive.
pessimizer 12y ago
>Plus, is there any proof that access to credit for really poor people is actually creating wealth? Not that I can detect. It just seems to be a mantra that is repeated enough to be assumed true. It was one of the repeated justifications for a similar card recently created for public transportation payment in Chicago.
- GeneralMayhem 12y ago
  I don't know about adding to total wealth, but from a personal finance/welfare standpoint, it's a very good thing. Access to credit smooths out cash flow, which is the hardest part of being poor. You might be able to save up for something over a month or a year, but what if you have to have it right now (healthy groceries, car problems, hell, maybe even lightbulbs)? What are your options? Either you get a shoddy version that winds up costing you more in the long run, or, currently, you go to a loanshark. If you could just float it on a credit card for a few weeks or even a couple months at low interest, it would be drastically easier. I'm not advocating living off of credit cards - at some point you have to come up with the money - but if it can turn one absolutely impossible payment that would put you on the streets into three moderate payments, then that can be a very powerful option to have, and it's currently something that rich people can generally do and poor people generally can't.
  - pessimizer 12y ago
    If you can't save enough to not live from check to check, what are the odds that you're going to come up with the money every time that you borrow vs. the odds that you become a revolving borrower borrowing a steadily increasing amount to cover interest payments? Also: poor people don't have low interest credit cards. As a middle-class 40 year old who has spent time in his life poor to the point of homelessness, I've never had a credit card or understood the necessity. I understand that people with money use them for the promotional treats, but for people without money? Money should be borrowed in order to purchase capital IMO, not to paper over poverty until a catastrophic bankruptcy.
    - GeneralMayhem 12y ago
true_religion 12y ago
Nigeria is a poor country? It's the oil king of West Africa, more akin to a middle eastern state than anything else.
- frandroid 12y ago
  Unlike the Persian Gulf states though, it doesn't spread the oil wealth to its citizens. So it's a country full of poor people, more than the Gulf oil monarchies.
  - vidarh 12y ago
    The Gulf oil monarchies are also full of poor people. The difference is the gulf states don't let the poor people become citizens.
eaurouge 12y ago
Nigeria, as a poor country, cannot challenge the tech brough by Mastercard. That's a ridiculous statement. Yes, the country has been mismanaged by corrupt, inept leaders for a half-century. But despite their best attempts it's currently the largest economy in Africa and ranked 20th by the World Bank in gross national income (not per capita) for 2013.
- placeybordeaux 12y ago
  Yeah that comment reads as someone that only knows about Nigeria from 419 scammers.
sliverstorm 12y ago
An then what would be the next step? No more cash payments? MasterCard does seem to be working towards that. It isn't a meritless goal either; a recent study estimated that cash costs the USA $200B a year, or around 1.5% of GDP: http://www.amren.com/news/2013/10/paying-with-cash-costs-americans-200-billion-a-year/ http://www.amren.com/news/2013/10/paying-with-cash-costs-ame... Obviously currency is worth spending money on, but that doesn't mean it has to be bank notes.
vidarh 12y ago
While this does not change all of your issues, Mastercard is not a bank. The banking services would have to be backed by partner banks. Mastercard is also not intrinsically linked to credit. You can get Mastercard debit cards in large parts of the world (as you can for VISA).

by vicpara 12y ago

pilsetnieks 12y ago

MasterCard can be (and is) used all around the world as a debit card. Giving credit to the customers and defining its limits is up to the issuing bank.

icebraining 12y ago
It doesn't even have to provide debit. Banks here in Portugal also issue cards for university students, in partnership with them. In the end it's just an advertising scheme, you don't need to have an account to attend school :)

jjoonathan 12y ago

I can see it now: for the low, low price of $40 (times three companies) you can check once to see if someone has bypassed the 30-year-old security on your MasterCard(tm)(c)(r)(pp) ID and fraudulently used it for border crossing or employment. Then, for the low price of a few hundred dollars and many hours of your time (x 3 companies, natch) you can dispute the ID usage and get yourself removed from the watch lists that pop up nasty red symbols and words like "suspected forgery / illegal alien / terrorist watch list" whenever a future employer tries to verify your biometrics. Of course, the police and TSA still get the vague but serious-sounding warnings, so you still get pulled off of planes for extra pat downs and an extra 45 minutes added to every traffic stop, but hey, at least you can get a job. Efficiency! Value creation! Huzzah!

guard-of-terra 12y ago
ID is (expectedly) a different application on the card chip. Not in any way related to MasterCard acccount. You can't have Nigerian ID on your card and Nigerians can't enter country illegally on your MasterCard credit account. It's orthogonal things.
- jjoonathan 12y ago
  I know. I was projecting the shitshow in the payment processing industry onto a national ID program in order to argue that the same techniques used to extract money (not to mention anticompetitive staying power) from the payment-processing system would work just as well if not better in a national ID system. Is MasterCard to blame for those ridiculous sytems? Not specifically, but if the same incentives are in place (and they are, that was the point of my imaginitive story) then I fear that anyone involved in the business end of a privatization effort for, say, US IDs could copy the business model of "half-ass the security to generate pain, make your money as the exclusive provider (or licensor) of half-assed solutions to the generated pain." It's a good business model, which is why it's imperative that we keep business interests away from the most lucrative targets. Alternatively we could try to fix this horrendous perverse incentive, but I think that's a much shakier approach that would be much easier for the wrong people to work around.

fredbrown 12y ago

> An then what would be the next step? No more cash payments? Yes. From the article: "“In close collaboration with both the public and private sectors to achieve the full potential of this program, NIMC is focused on inclusive citizenship, more effective governance, and the creation of a cashless economy, all of which will stimulate economic growth, investment and trade,” he adds."

rhodri 12y ago

Don't confuse consumer credit – which is taking out loans in order to buy goods like toasters that will decrease in value – from a business loan – which is a bet that you can add value to what you buy with the loan, and thus earn enough to pay it back (and more, hopefully). Having a quick look around, I found this blog post from Kiva who helped pioneer microlending in the developing world. The answer seems to be "yes, but credit isn't enough to turn anyone into an entrepreneur": http://fellowsblog.kiva.org/fellowsblog/2013/03/22/how-effective-is-microcredit-really http://fellowsblog.kiva.org/fellowsblog/2013/03/22/how-effec... As a bit of a rant: the West is generally overburdened with consumer credit. People panic when the value of their house goes below that of their mortgage, which is called negative equity. But (almost) every consumer credit agreement leads to this negative equity. It's mad.

schoen 12y ago
What a useful way of putting it. Can you think of an institutional or cultural way to get people in the West out of some of their consumer credit traps? I don't think the lenders are going to help!
- schoen 12y ago
  I wonder if this got downvoted because someone read it as sarcastic. It wasn't meant to be so; I thought the parent comment was useful and I was wondering how to change the culture around consumer lending, which I agree has got a lot of people trapped (or at least burning a lot of their income on interest payments and fees).
jessriedel 12y ago
Your distinction between consumer credit and business credit is not as clean as you make it seem. Your example of consumer credit (toasters) is most clearly exemplified in a home loan. In this case, the point of the loan is to allow someone to own an item and draw utility from it over a long period of time; they could not afford the purchase at the beginning of the time period, but their income over that period can cover the cost. To a good approximation, the income of that person would be independent of whether they were given the loan (i.e. if they had to rent a smaller place). But there are lots of personal purchases financed by consumer loans that increase one's income just like a business loan. The most notable is a student loan, but especially in poor countries (and poor people in rich countries) there are lots of other examples: Buying a vehicle to allow one to work at a higher paying job outside of walking distance, buying a tin roof that doesn't need to be replaced every year, http://www.givedirectly.org/blog_post.php?id=2845341784910255488 http://www.givedirectly.org/blog_post.php?id=284534178491025... buying basic health care allowing one to stay healthy to work, etc.

guard-of-terra 12y ago

"Nigeria, a country that has nothing to loose" Why is that? Nigeria seems to be quite successful by African standards. They even make good movies. Of course not without problems, but they seem to have both spare money and some political will - a very rare thing to have in Africa.

placeybordeaux 12y ago
They are in the top 25 global economies, they are doing quite well on a global scale, not just an African scale.
- JoeAltmaier 12y ago
  Huh. There's only one globe in global. The top 25, heck the top 3 or 4, probably add up to most of the global economy. Top 10 - that'd be pretty impressive.

pessimizer 12y ago

>Plus, is there any proof that access to credit for really poor people is actually creating wealth? Not that I can detect. It just seems to be a mantra that is repeated enough to be assumed true. It was one of the repeated justifications for a similar card recently created for public transportation payment in Chicago.

GeneralMayhem 12y ago
I don't know about adding to total wealth, but from a personal finance/welfare standpoint, it's a very good thing. Access to credit smooths out cash flow, which is the hardest part of being poor. You might be able to save up for something over a month or a year, but what if you have to have it right now (healthy groceries, car problems, hell, maybe even lightbulbs)? What are your options? Either you get a shoddy version that winds up costing you more in the long run, or, currently, you go to a loanshark. If you could just float it on a credit card for a few weeks or even a couple months at low interest, it would be drastically easier. I'm not advocating living off of credit cards - at some point you have to come up with the money - but if it can turn one absolutely impossible payment that would put you on the streets into three moderate payments, then that can be a very powerful option to have, and it's currently something that rich people can generally do and poor people generally can't.
- pessimizer 12y ago
  If you can't save enough to not live from check to check, what are the odds that you're going to come up with the money every time that you borrow vs. the odds that you become a revolving borrower borrowing a steadily increasing amount to cover interest payments? Also: poor people don't have low interest credit cards. As a middle-class 40 year old who has spent time in his life poor to the point of homelessness, I've never had a credit card or understood the necessity. I understand that people with money use them for the promotional treats, but for people without money? Money should be borrowed in order to purchase capital IMO, not to paper over poverty until a catastrophic bankruptcy.
  - GeneralMayhem 12y ago

true_religion 12y ago

Nigeria is a poor country? It's the oil king of West Africa, more akin to a middle eastern state than anything else.

frandroid 12y ago
Unlike the Persian Gulf states though, it doesn't spread the oil wealth to its citizens. So it's a country full of poor people, more than the Gulf oil monarchies.
- vidarh 12y ago
  The Gulf oil monarchies are also full of poor people. The difference is the gulf states don't let the poor people become citizens.

eaurouge 12y ago

Nigeria, as a poor country, cannot challenge the tech brough by Mastercard. That's a ridiculous statement. Yes, the country has been mismanaged by corrupt, inept leaders for a half-century. But despite their best attempts it's currently the largest economy in Africa and ranked 20th by the World Bank in gross national income (not per capita) for 2013.

placeybordeaux 12y ago
Yeah that comment reads as someone that only knows about Nigeria from 419 scammers.

sliverstorm 12y ago

An then what would be the next step? No more cash payments? MasterCard does seem to be working towards that. It isn't a meritless goal either; a recent study estimated that cash costs the USA $200B a year, or around 1.5% of GDP: http://www.amren.com/news/2013/10/paying-with-cash-costs-americans-200-billion-a-year/ http://www.amren.com/news/2013/10/paying-with-cash-costs-ame... Obviously currency is worth spending money on, but that doesn't mean it has to be bank notes.

vidarh 12y ago

While this does not change all of your issues, Mastercard is not a bank. The banking services would have to be backed by partner banks. Mastercard is also not intrinsically linked to credit. You can get Mastercard debit cards in large parts of the world (as you can for VISA).