NEW YORK, USA: If you think mobile banking is becoming popular, consider the market for mobile-enabled person-to-person payments.
Nearly three times as many consumers globally will use their mobile phones to make domestic person to person payments than those who will use their mobile phones to conduct traditional banking functions by the end of 2011, according to an ABI Research forecast.
“The developing world is embracing mobile domestic person to person payments with enthusiasm wherever they are offered,” says senior analyst Mark Beccue. “It is becoming the first financial service for previously unbanked people, and may make a real contribution towards lifting them out of poverty.”
In addition to gaining an ideal introductory financial service, banks –- with the help of Mobile Network Operators (MNOs) –- are extending their reach. Traditional banks have had a hard time supporting bricks-and-mortar operations in many developing regions. Mobile gives them a chance to extend their banking services without having to build major infrastructure.
There has to be an interface between a number on a screen and the real, cash economy. So in many such regions, MNOs retail agents are becoming “stored value operators,” and conduits for local bankers.
However, there are some impediments to this markets development. “Growth of mobile financial services in the developing world is sometimes hindered by regulatory barriers,” says Beccue.
“Every country has different banking rules. Some are more sophisticated, some less. Whoever is trying to put such a financial ecosystem together may have a lot of hoops to jump through. But they are increasingly successful despite the obstacles.”