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Alipay on the bus in Hangzhou. Photo: VCG/Getty

In a trend that has been coming for about a decade, the developing world is dragging the advanced economies into the age of cashless, credit card-less payments in which we will do most of our business by smartphone.

What's happening: Starting first in east Africa and spreading to China, internet-based, mobile payment systems may be on the verge of cracking the ultra-difficult U.S. and Europe markets, potentially threatening the long stranglehold of big banks and credit card companies.

The big picture: The world first began to move away from cash in a big way in the 1960s, when the advanced economies began to build up an immense payment infrastructure around convenient credit cards.

But this all-but left out the developing world. Then, a very different, localized revolution bubbled up.

  • In 2007, Safaricom, Kenya's mobile phone giant, launched M-Pesa, a long-shot service that allows its customers to text small payments to each other. M-Pesa took off, eventually growing to more than 30 million people in 10 sub-Saharan countries.
  • In China — where credit cards are also exceedingly rare — Alibaba and later Tencent meanwhile launched their own mobile payment systems linked to an app. They exploded in popularity to a combined 1.7 billion users — virtually the entire population of China, plus people outside the country.

Various similar stabs in the U.S. and Europe — Paypal, Venmo, Apple Pay and Bitcoin among them — failed to gain popularity in the same way.

But now, there is a new push to spread the mobile payment boom:

By far the most prominent is Libra, Facebook's planned cryptocurrency, which the platform announced 10 days ago. The idea is that, starting next year, Facebook users could message and receive money through WhatsApp, Facebook's Messenger, or standalone apps. As Axios' Kia Kokalitcheva wrote, "With more than two billion users, Facebook is arguably better positioned to roll out a global digital currency than any other company, government, or organization."

But, in a white paper released yesterday, the IMF and the World Bank said that several central banks are also in the game — they are on the verge of launching digital currencies like Bitcoin. They include the central banks of Sweden, the Bahamas, and the Eastern Caribbean Currency Union. European Central Bank officials have also thrown their support behind the issuance of a digital currency.

"We are going through a digital transformation in banking. It is accelerating due to these new technologies," Tobias Adrian, director of the IMF's Monetary and Capital Markets Department, tells Axios.

  • The shift is potentially "transformative" if it brings people currently outside the banking system — women, the urban poor and migrants — into contact with payments and credit, the white paper said.
  • In terms of the central banks contemplating digital currencies, Adrian said, "Whether they are going ahead with them, we don't know. But many are exploring it."

The bottom line: "I think that developed economies are on track to move beyond cash and cards," said Itay Goldstein, a professor at UPenn. "But it will take more time than in many developing economies."

  • "The current established infrastructure in developed economies is so strongly rooted that it is an impediment to fundamental changes," Goldstein said. "But better technology will eventually win, I believe. It will just take more time."

Go deeper

"Atmospheric river" to whiplash Northern California from drought to flood

A map depicting 24-hour preciptation forecast (inches) ending Monday at 5a.m. local time. Photo: NOAA

A series of powerful "atmospheric river" storms are set dump historic amounts of rainfall across parts of drought-stricken California and the Pacific Northwest from this weekend, forecasters warn.

Why it matters: A strong atmospheric river, packing large amounts of moisture, is predicted to whiplash Northern California from drought to flood.

10,000 trees near giant sequoia groves to be removed after fires

A firefighter looks up at a giant sequoia tree after fire burned through the Sequoia National Forest near California Hot Springs, California, on Sept. 23. Photo: Patrick T. Fallon/AFP via Getty Images

"Upwards of" 10,000 trees near giant sequoia groves have been "weakened by drought, disease, age, and/or fire" and must be removed in the wake of California's wildfires, the Sequoia and Kings Canyon National Parks announced.

Why it matters: The damage to these trees, considered "national treasures," and work to remove them means a nearby key highway must remain closed to visitors as they have "the potential to strike people, cars, other structures, or create barriers to emergency response services," per a statement from the national parks.

Obama stumps for McAuliffe, urges Virginians not "to go back to the chaos"

Photo: Win McNamee/Getty Images

Former President Barack Obama framed a Nov. 2 gubernatorial race as a bellwether for the Democratic Party and the country, telling a crowd at a campaign event for Terry McAuliffe on Saturday that "I believe you, right here in Virginia, are going to show the rest of the country and the world that we're not going to indulge in our worst instincts."

Why it matters: With just over a week to go before Election Day in the Commonwealth, McAuliffe is bringing out the big guns. The 44th president appeared on the campus of Virginia Commonwealth University to urge supporters to get to the polls.