Mobile Banking: Reaching the Next 3 Billion

Street-level innovations in mobile money are sparking advanced, mobile banking business plans… a catalyst
for providers of banking and telecommunications to reach the remaining
3-or-so billion humans who don’t own a mobile phone (1 in 2 of us,
roughly). The personal, convenient nature of mobile phones – which,
according to Jan Chipchase, Nokia’s chief usability researcher,
“transcends space and time” can leap the hurdles of illiteracy, poverty
and distance.

Today, mobile phone makers such as Nokia and mobile operators are acting as de facto banks, because of their Trusted Brand
status. The percentage of citizens in developing countries (e.g.,
Central and East Africa) who have a financial identity (“banked
citizens”) stands at about 2%, whereas about 10% of citizens are
mobile-connected. Here’s where the street-level innovation comes into
play.

Obopay, which uses text messaging and mobile internet access, charges users a
fee to send money or to top up their accounts. Simpler still, though, is
the Phone-as-ATM idea: purchase of a pre-paid calling card and
subsequent transfer of its credits to be converted into hard cash
currency. Chipchase recently profiled examples of this wherein money is
sent from one family member, the wage earner living in a city, to
another family member living in a “one-phone” village. The guardian of
the single phone, banks the rest of the phone time, keeps a small
commission, and gives its cash equivalent to the recipient.

International pre-paid calling cards are getting closer to hard cash currency in a simply elegant way, too. We see service providers such as
RegaloCard presenting simple, free solutions for money transfer that
rely upon pre-payment and secure-access PINs thus providing traceable
use of funds sent from one country to another. RegaloCard’s 1-2-3 instructions
point out the ease of use and trustworthiness of the service. It’s a
boon for immigrants used to pushing large sums of money to their
homeland without knowing how the funds are being spent, and paying high
fees. A boon, also, for merchants at both ends of the chain: fees are
paid to issuing merchants in the country or origin while commissions are
earned from sales resulting from the card’s usage in the destination
country.

RegaloCard is driving real-time, high-velocity, low-value-but-all-cash-based transmissions… a plum of a business plan
for any industry. This vital service will likely up-end such traditional
money transfer services such as those offered by Western Union.

Where are the hot spot markets for mobile financial services? Those with the greatest near-term growth are our globe’s emerging markets, the
underdeveloped and poor countries — we don’t hear that statistic too
often — with of course our developed markets ripening in the longer
term.

Read more:
about Jan Chipchase of Nokia Fast
Company
about Mobile
Money for the Unbanked, Bill and Melinda Gates Foundation-funded
effort