The free transfering of mobile credit from one prepaid phone to another

Have you any idea if there are legal restrictions on doing this in NZ @terangikaiwhiriake ?
Personally I would like to be able to send data capacity from phone to phone. But to do that a standard price would need to be established amongst carriers.

Like a lot of digital currencies, the concept of transferring credit remains in a non-legal status until it is challenged/clarified.

Right now I can buy $100 worth of Vodafone prepaid credit either with EFTPOS or cash, I can then send that via mail to someone else, or just hand it to them in person and they could do the same. So technically its already possible to use prepaid credit as a limited form of digital currency.

I could also when setting up a trade on Trademe, stipulate cellphone credit as an alternative means of payment since Trademe currently does not restrict the 'Other' forms of payment options.

What the current restriction prevent though is partial sending of credit or data, the sending of it from one phone to another, and the sending of credit between carriers as you quite rightly pointed out.

The main reason this caught on in Africa is because people trusted phone companies more than banks, governments, and money-printers (which isn't saying much). It will be a while before it catches on here, but it is still a good idea to have many alternative currencies lurking underground, waiting for their time in the sun.

From what I have read on the issue, the M-Pesa appears to have caught on because it addressed a short fall in the economy over there - that being many millions still did not have bank accounts due to the rural diaspora or remote villages.

But many of those villages have a cell phone plugged into a solar charger - so the M-Pesa appears to have evolved from the base ability to transfer cell credit, of which the cell companies in cohoots with banks, developed a mobile EFTPOS method or sorts, which allows someone to buy a bag of rice with a few minutes of credit.

Yes there is more trust in cell companies than banks, its probably not as bad here but when someone puts $100 credit on a prepaid phone/assign $100 worth of airtime/data usage to a device, there is more social trust in that system than say online banking.

@nathanielcurrier Well if there's anybody I trust as little as banks and the government, it's telecommunication companies.

When someone enters the prepaid code into the ol burner for say $50 credit, and a text arrives stating the new balance, that's about the end of the concern for most prepaid device users with the cell provider of their choice.

A cell provider could secretly change the algorithm so that the minute rate cost more, and 99% of users would be totally oblivious. They don't do this because it would be bad for business.

But that is really where most peoples trust begins and ends with telcos.

What this proposal is about is looking at the advantages and pitfalls of allowing current prepaid users to send $20 or whatever of that $50 balance to another prepaid cell phone ( for starters ).

The most pressing issue I would think would be the use of such a system by the black market, money laundering, for example setting up black market cell phone credit retail outlets etc where a drug gang buys $10,000 worth of legit credit using cash, then sell that credit through a front outlet that has the appearances of being legit, thus washing the money.

Those are just some of the pitfalls that would need addressing in order for something like this to not get out of control.

2degrees has offered this service since 2009.

Its called me2u and it was my idea.

@blairrobson1 I just went to top up my Skinny mobile, and saw it on the site there too.

The only problem is these services only work within carriers.

The main problem with this idea is that it leaves mobile operators open to fraud.
There are many overseas rogue mobile networks that operate out of states like Andorra, Jersey, San Marino etc... These operators get away with operating SMS transaction services that transfer money in the form of mobile credit to an account with a stolen credit card. NZ mobile operators limit the fraud capability by having fraud alerts. You can only transfer up to $20 per day between accounts to prevent abuse of this service as a money laundering gateway.

Theres no reason why this service couldnt be provided as a 3rd party service.