Monday, March 28, 2011
Mobile Banking for the Unbanked
CGAP (the Consultative Group to Assist the Poor) reports that the mobile phone is the first communications device in history to have more users in poor countries than rich. In 2010, mobile phone owners in poor countries accounted for two-thirds of the world’s 4.77 billion phones.
But as people in poor countries become increasingly well-connected via mobile, they remain far less well-connected financially. An emerging market consumer is more than twice as likely to own a mobile phone as to have a bank account in their name.
So, doesn't it seem like mobile phones hold a lot of promise for reaching the unbanked?
Now hear this - other providers — mobile operators, tech firms — which want to enter financial services for the first time can also employ agents to cost-effectively roll out. That means that those who create the software for phones (Google), those who make the software and the phone (Apple), those who have the networks (AT&T and Verizon) and those who have competing payment networks already in place (Discover) all stand to benefit from the inability of banks and merchants to get on the same page - which they have not been able to do. This was the case when I first developed the business case for EFTPOS at First Interstate in the early 1980's with KMPG, and since then, merchant-bank relations have decidely not improved.
No wonder this is developing outside the U.S. so much faster, where there are far fewer, far less powerful entities battling for control.