I often wonder about the changes as a result of mobile technology in so called rural and under-developed areas. The cost of infrastructure can be prohibitive compared to deployment of wireless technologies. My first introduction to this was when Brazil announced cell phones were being sold within 24 hours at a time when a phone line there could take as long as a year to install. That was over ten years ago. Brazil went from extremely low telephony penetration (sorry I don’t remember exact stats) to over 50% by 2006. The Ukraine in 2010 reported 115% penetration for 54 million users. Just one mobile provider in India (e.g. Bharti Airtel) can report over 2 million new subscribers in a single month! Imagine trying that with this system:

Now I see companies racing to deploy ATMs with the same mobile technology. A point of sale (POS) device and/or a cash dispenser can be placed anywhere you have power. It became clear that the switch from land lines to wireless could significantly reduce the cost of creating and expanding capital for a market. This trend towards micro-capital on a giant scale is why I was excited when asked to help draft a security standard for ANSI that will ensure ATM and POS wireless implementations can be done securely.

A friend in Asia just pointed out a recent paper that is extremely helpful to me for this project. It is a detailed study of the economic impact of information technology in India that confirms the theory above. Wireless technology significantly assists the growth of markets in under-developed areas at a fraction of the overhead and cost of traditional IT. This paper from 2007 called “The Digital Provide: Information (Technology), Market Performance, and Welfare in the South Indian Fisheries Sector” provides the following synopsis:

Between 1997 and 2001, mobile phone service was introduced throughout Kerala, a state in India with a large fishing industry. Using microlevel survey data, we show that the adoption of mobile phones by fishermen and wholesalers was associated with a dramatic reduction in price dispersion, the complete elimination of waste, and near-perfect adherence to the Law of One Price. Both consumer and producer welfare increased.

This begs the question of information resilience in terms of confidentiality, integrity and availability. It is truly exciting to think of the benefits described in the paper, but as a security professional my job is usually to focus on the risks. That is why I have dedicated a chapter in the new ANSI draft to the problem of security in mobile technology for finance. We need to plan and create more dynamic controls for distributed commerce — decentralized or federated markets. This is only possible once business managers can see how and why risks from wireless really are different from wired, especially in terms of new business models.