The rise of e-money and the use of cellphones as a banking channel to reach the unbanked were at the heart of most discussions at the ITWeb Mobile Payment conference held in Johannesburg this week.
The general consensus among the presenters and industry representatives was that the cellphone is key to getting the unbanked in Africa, banked, due to the high mobile penetration across the continent.
Mark Chirnside, CEO of Ukash, a mobile payment solution company which uses PIN vouchers to enable mobile payments, noted the evolution of payments is converging with the growth of mobiles globally.
He said: “Africa is leading the way as consumers jump past fixed-line and PCs straight to mobile Internet and flexible use of airtime as a currency.”
Len Pienaar, CEO of mobile and transact solutions at FNB, pointed out that in SA, mobile penetration is higher than access to financial services, so it was natural for banking to adopt cellphones as a channel.
This corresponds with results from analyst firm World Wide Worx's Mobility 2009 report, also released this week. The findings state cellphone banking has already overtaken banking on PCs in SA, and that “more than a quarter of bank customers are turning to their cellphones for services ranging from informational transaction types such as balance enquiries to financial transaction types which include account payments”.
Pienaar added that “customers in rural and peri-urban areas have become reliant on prepaid products and other services on cellphone banking, and in some cases mobile phones are the only access to electronic banking for many people.”
Deciding factors
For Ukash, according to Chirnside, the biggest challenge is to get e-money in mobile wallets so it can be used by consumers. He said: “The perception of high banking costs is the biggest barrier to entry,” and therefore Ukash does not charge customers anything to do this.
Pienaar agreed that banking costs is one of the biggest barriers to entry, along with the ease of use of these mobile payment methods. “A simple interface, convenience and low cost are the key factors to the success of mobile banking,” Pienaar said.
According to Chirnside, security is still a big concern for users when it comes to mobile banking, and Pienaar cites trust as another issue. According to World Wide Worx, South Africans are becoming comfortable with cellphone banking, but half of general banking customers are still nervous of it, citing trust as their major concern.
However, Pienaar added that two-thirds of cellphone banking customers are satisfied with the security of this banking channel.
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