Mobile banking cashes in

Mobile banking is expected to become more than three times more popular than traditional banking by 2011.

So says Paul Stemmet, GM of Mxit, who gave an overview of market trends and drivers of mobile payments in Africa during the ITWeb Mobile Payments conference at the Campus in Bryanston, yesterday.

Stemmet said: “The biggest barrier to rolling out mobile banking solutions is enabling trust, especially for a new brand coming into the market. In addition, a challenge to overcome is the cost of access onto the mobile network.”

According to Stemmet, there are currently four billion mobile phones in the world and only 1.6 billion bank accounts, as well as 73 million transactions by end 2009. Around 300 million adults in Africa have no access to financial services.

A panel discussion pointed to the success of the popular M-Pesa service in Kenya, with one in three adults using the system. According to panel experts, the M-Pesa model has enabled people working in cities to send money to their family members in remote villages via the mobile payment system. Other successful mobile payment systems have been implemented in Nigeria and Ghana.

Adrian Vermooten, head of Absa mobile banking, said Absa is also innovating in the mobile payment space. It has invested R12 million in a training initiative to drive awareness of mobile banking in rural areas.

Vermooten added that Absa receives around seven million transactions a month in mobile payments. “This space is growing rapidly. The need to constantly get updated on available balance is critical, and a level of trust needs to be built as well as people getting used to using a mobile device as a banking instrument.”

According to Vermooten, 67% of Absa's customer base for the NotifyMe mobile service are mass market customers. Users are able to make bank enquiries, profile management, prepaid airtime, transfers, payments, bill payments to retailers and send money on their cellphone. Also, Absa's CashSend service allows an Absa customer to send money to anyone in the country, whether they are banked or unbanked. MTN has partnered with Absa to drive mobile banking services.

Vermooten said the new Rica regulations will have an impact on cellphone banking as well as Internet banking, because the two systems are connected: “Rica may be an enabling factor that we can all take benefit from. However, if we don't sort out Rica, then Internet banking won't work, because users rely on getting their SMSes to use the service.”