Issue 5 October 2008
Mobile Money:
Changing the face of banking
by Roy Vella, Director of Mobile
Mobile phones have ‘leapfrogged’ the traditional telecommunications
industry, bringing connectivity to regions that will never have landlines
– and now they are having the same effect in financial services. Mobile
technology may well redefine banking as we know it.
Across the globe, over 3.5 billion people can connect with services for people who have previously been excluded.
simplicity and ease via their mobile phones, and handsets We are now seeing the emergence of universal access
are now as powerful as laptops. Over 2 billion people who to simplified financial services in both emerging and
have never had a landline are now connected via the mobile developed economies. While this convenience and control
network and the mobile handset is increasingly becoming is appealing in developed markets, the benefits are even
the epicentre of daily life combining; computing, identity, more pronounced in the emerging markets, where the
access and financial transactions into one device. technology is transforming banking.
MobIle Money Rather than build the infrastructure of bank branches
“Mobile money” is monetary value that can be accessed and ATMs, the developing world is moving directly to the
and used via a mobile device. Today, mobile subscribers digitisation of funds, facilitating the flow of money from one
can use mobile money for transactions and services as party to another using a communications infrastructure
varied as international remittances, bill payments, payroll that already connects 3.5+ billion customers around the
deposits, loan receipt and repayments, and purchases world. Compare that to a global network of just over half a
of goods and services such as prepaid airtime or even million bank branches and only 1.4 million ATMs
1
.
transport tickets. In principle, there is no limit to ways in
which mobile money could eventually be used. MobIle oPPorTunITIes
Mobile operators recognise that their customers will
This has significant implications for economic activity, increasingly use their handsets to access banking services.
particularly as it reduces the cost and risk inherent in An entirely new array of participants are now looking to
dealing with cash. Mobile technology has redefined take advantage of the opportunity to develop significant
traditional banking by lowering the costs of providing new revenue streams. See figure 1.
banking services and thus providing access to financial
8 | Perspectives on the future
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