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Standard, Spar in 'mobile money' venture

30 March 2010

South Africans will soon be able do more than just pick up a bag of groceries at their local Spar - they will also be able to send money instantly to friends or family anywhere in the country via mobile phone.

Standard Bank is introducing a new person-to-person money service, Instant Money, which will enable clients to send and receive money through retailer Spar's network of 850 stores countrywide, with the transaction information being sent via mobile phone.

Instant Money has been developed in such a way that the service can be accessed on even the simplest mobile phone models and across networks. The service will initially be available from Spar stores in the Eastern Cape.

Standard Bank South Africa CEO Sim Tshabalala said the new service means people no longer have to take the risk of giving an envelope full of cash to a middleman - like a friend or a taxi driver - and telling them where to deliver it.

"It's a way for users who don't have a bank account to get access to financial services," he said in a statement this week.

"Financial services are largely limited to urban areas at the moment, mainly because of the expense of rolling out banks and services in less affluent areas. What this means is that most people in rural areas operate on a cash basis."

Mobile money transfers, payments

Leading market research organisation Gartner believes money transfers and payments over mobile phones will be among the top 10 most important mobile applications by 2012 - ahead of location-based services, search and browsing.

Money transfers are already popular in a number of developing countries, and will continue to attract more users, according to Gartner's Top 10 Consumer Mobile Applications for 2012.

"With Instant Money, people can now transact and send money without the need for a bank account," said Tshabalala. "It is estimated that some 35-million [South Africans] have a cell phone, while only 11-million have a bank account."

Mobile money transfers not only offer a safer, more reliable way to send cash, but could breathe new life into the economies of remote areas.

Like many developing countries, South Africa has countless breadwinners who live and work in urban economic hubs, but have extended families back home in poorer rural areas. There is a high demand for smart banking services that will make sending money back home simpler and less costly.

SAinfo reporter