With the announcement of Amazon’s next generation of Kindles, I’ve been thinking a lot about One Laptop Per Child, the non-profit program started by the founder of MIT’s Media Lab that aimed to develop a hundred-dollar-laptop to be distributed to children in developing countries.

The principle of One Laptop Per Child was to improve living conditions in developing countries through access to information. The thinking went that the internet could act as the great equalizer; assuming you can read and write–which, admittedly, is a pretty big assumption–you can use the internet to teach yourself skills you might need to improve your own conditions. This ranges from more efficient farming practices to health and safety information to access to microfinancing.

The first deployment of OLPC took place in 2007, which models costing $188. The latest iteration is set to come out in 2012, with a price point below $100. It basically looks like a pared down tablet.

Or, well, a Kindle.

When OLPC began its mission, one of their concerns was providing internet connectivity in areas where there often isn’t any sort of internet infrastructure. What OLPC couldn’t have foreseen is just how much the mobile phone penetration rates in Africa have been increasing in the past few years. Far more people have cellphones than have bank accounts. They may not have a fancy 3G connection, but evidently it’s enough to conduct financal transactions with [1].

Hey, remember what Kindles have? Worldwide 3G coverage.

Obviously Amazon has profit-driven motives for offering unlimited worldwide 3G coverage. Given the limited nature of the browser, you’re likely to be using the 3G primarily for buying books, which drives revenue for Amazon. However, if Amazon was capable of negotiating a ‘lifetime’ agreement for internet access with global carriers, surely a non-profit or governmental program would be capable of reaching a similar deal with carriers, if only for tax write-offs and good PR?

I’m glad to see that OLPC and its ilk are moving towards the tablet format for its computers. The average computer is vastly overpowered for the average user, who really just needs to be able to get on the internet and compose/read documents. There’s no sense in spending a lot of money to develop a powerful computer capable of processing, say, Photoshop for less than $150 when even just access to Wikipedia would make a huge difference for the developed nations being targeted by OLPC. Even dumb cellphones have been capable of mobile browsing for years and years and years. No sense in reinventing the wheel.

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[1]

One of the rising stars of economic development in Africa has been a mobile banking system called M-Pesa, which is a money transfer system that operates on regular cellphones. You can add balances to your account at all sorts of different retail locations. M-Pesa provides all the benefits of a central bank–the ability to conduct long-distance transactions, the safety of not having to carry cash on your person–without charging the fees that deter many from actually opening up a bank account. Certain transactions, such as sending money across the country, incur a small fee, but there are also lots of transactions that you can conduct for free. Hell, it could even facilitate direct donations from the Global North. Neat, Huh?

Bank accounts, believe it or not, are a pretty big deal for economic development. It’s not just that they facilitate capital pooling and helps you build credit to access the wider financial market, but they keep your money safe while giving you reliable access to it and encourage economic stability in the economic environment in which they are situated. The success of something called Prize-Linked Savings accounts in Africa (pdf) in encouraging citizens to open up bank accounts and save, for example, have led to discussion of the possibility of something like that being instituted in the US in order to bolster America’s dismal savings rate.

People without bank accounts, incidentally, are far more susceptible to predatory lending practices like Payday loans, where the interest on a two-week loan can be the annual equivalent of 300%. You thought credit card rates were bad? Credit card rates are federally capped. Payday loans….are not.

Google Wallet is a mobile banking platform that recently went live to Nexus 4G users on the Sprint network in the US. Unlike the M-Pesa, it links to an actual bank account in a regulated bank. I remember thinking, back when Google first launched its field tests in San Francisco and New York City in Mayof 2010, that was simply yet another step in the growing digital divide. After all, people who can’t afford smart phones and the concomitant data plans simply won’t have access to this branch of the financial system.

But evidently the thought that mobile banking has to be tied to smartphones is a pretty North American and European concept. What if a system like M-Pesa were implemented in North America? If we see more and more people moving towards a mobile phone as their primary phone line, what implications would that have for people of lower income being able to participate in the financial market?

(Of course, there might not be much of one to participate in for much longer, but…at least they would have more equalized access to said non-existent financial market.)