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Mobile is big. Even bigger than you think. No technology in the history of mankind has achieved the reach and penetration globally that rivals that of the mobile phone. According to the International Telecommunications Union, at the end of 2011, there were approximately six billion mobile phone subscriptions. This is equivalent to 87% of the world’s population and a huge increase from 5.4-billion in 2010 and 4.7-billion mobile subscriptions in 2009.
Initial excitement about the rise of the mobile phone was dominated by talk of the rise of mobile voice at the expense of fixed line operators, and then more recently by the second most used service on a mobile phone — mobile messaging, dominated by SMS. What is currently generating the most interest in mobile is the rise of mobile money.
In Africa itself, mobile penetration has been extraordinary. In 1998 there were less than two-million phones. According to data from The World Bank, by 2009 this number had grown to over 400-million — an increase of almost 20 000%! On the back of this extraordinary growth, Africa is leading the world with a large share of the 117 current and 88 planned mobile money deployments globally.
Africa’s mobile operators and banks have been quick to realise that while an estimated 40% of Africa’s population does not have access to banking facilities, over 60% of the adult population in Africa has access to a mobile phone, which makes the move to mobile banking natural.
For banks, the main advantage of the mobile phone is that it breaks down geographical constraints and can reach everyone, everywhere, no matter how remotely they are located. Mobile banking solutions also reduce the need for expensive, time-bound bricks and mortar branch infrastructure. A customer can pay wherever they are, as long as they have access to a mobile phone and a cellphone tower — making the solution immediate, secure and efficient. For mobile operators, the opportunity exists to offer their own subscribers additional services beyond voice and data.
Globally, mobile banking is 19% cheaper when compared with the costs of operating traditional banking infrastructure. Compared to informal options for money transfer prevalent in Africa, mobile banking is as much as 54% cheaper, a massive saving considering that almost half of the African population is still living on less than US$1.25 per day.
Mobile money is also increasingly replacing cash with services like First National Bank’s eWallet in South Africa. The solution is capable of storing money and turning handsets into mobile wallets. More than one-million eWallets have been created, and over R1.6-billion paid into them, since the launch of the mobile money solution in 2009 .
FNB’s eWallet allows customers to send money to anyone in South Africa with a valid mobile phone number. Funds can be transferred instantly, and the recipient receives an SMS indicating that funds have been sent to their cellphone. eWallet allows payments to be made into accounts held at all major South African banks, and to nominated beneficiaries, including municipalities and major retail stores.
All payments via mobile might still seem like a lofty near-term goal to some and so, quite appropriately in the short-term, the use cases are fairly simplistic. How about being able to top-up your phone airtime without having to go to the store? Tomorrow it could just as easily include other simple value-added services (VAS), including electricity, lottery tickets and water & sewerage municipal services.
Mobile payment platforms offer bank customers a real-time, direct, prepaid airtime top-up solution today. This differs from the traditional ‘indirect’ prepaid top-up methods in that no prepaid PINs or vouchers are required and it is easily extendable to a range of other bank-defined value-added services.
The adoption of mobile transaction services is already transforming lives and livelihoods, not just by connecting Africa’s largely impoverished population to the resources of the digital economy, but also by enabling Africans to become digital producers and service and technology innovators.
In the mobile age, the mobile phone will be the #1 channel of engagement between all businesses and their customers, whether they are large banks, retailers, or the smallest SMEs. The scale of this change will make the internet revolution look like a storm in a teacup.