The number of eWallet holders has doubled in the last six months, from 250 000 to 500 000, says First National Bank (FNB).
Research has also shown that 68% of eWallet clients use the service to send money to people who are financially dependent on them. The majority of users who send money via eWallet services are under 40 years of age.
“This is not surprising since most of the senders are techno-savvy cellphone banking users. Forty percent of the senders originate from Gauteng, followed by 14% in KwaZulu-Natal and 12% in the Eastern Cape,” says FNB.
“More than 13 million adults in SA still remain unbanked, with the biggest percentage of these adults based in remote or rural towns,” says CEO of FNB eWallet Solutions Yolande van Wyk.
The eWallet allows for money to be sent to anyone with a valid South African phone number. The money can be withdrawn from an ATM without the recipient needing a bank account. The money can also be used to buy airtime, pay for goods and services online, and to transfer to another eWallet.
Cash in hand
“We've been tracking the eWallet withdrawal footprint across the country and it is interesting to note that we've even seen eWallet ATM withdrawals in small towns such as Modjadjiskloof, in Limpopo, and Ngcobo, in the Eastern Cape,” says Van Wyk.
“Mobile money is one of the fastest growing sectors in the financial services environment - with many people opting for an electronic wallet instead of a leather one,” says Van Wyk.
According to research conducted by World Wide Worx that looked at mobile banking, close to two out of 10 South Africans (18%) use their phones to transfer cash to family and friends. FNB says this is proof that this form of banking is rapidly growing.
“With at least 35 million cellphone users in SA, mobile money transfer services have become the most convenient way of sending money, as with cellphones one is able to reach anyone from any part of the country.
“These latest trends show how the banked population is beginning to play a significant role in introducing the unbanked to some form of banking, like cash withdrawal from ATMs,” explains Van Wyk.
“We want to use such information to help extend the formal reach of banking to the unbanked population and eventually introduce them to mainstream banking through these channels,” she concludes.
Growing market
Other mobile money services have been unveiled in SA within the last few years in order to help the unbanked gain access to financial services.
M-Pesa from Vodacom and Nedbank is said to have over 60 000 users since its inception last year. The service was originally released in Kenya where it has 10 million users. Absa also offers a similar service called CashSend.
Last year, Standard Bank partnered with Spar to provide a person-to-person money system that allows users to send and receive money at Spar outlets using a cellphone.
According to Gartner research, money transfers and payments over mobile phones will be among the top 10 most important mobile applications by 2012, beating out location-based services, search and browsing.
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