Mobile money transactions on the rise

8 July 2010

The growing use of mobile phones has opened the door for innovative financial transactions, says First National Bank, with consumers now able to use their mobiles as virtual wallets, giving them the ability to transact in even the remotest of locations.

With the advent of various m-commerce models like mobile money and mobile banking, access to and the facilitation of financial transactions and financial information has become a method and means of business for African entrepreneurs.

Access anytime, anywhere

Mobile banking services is rapidly creating a service driven industry allowing consumers access to their financial information anytime, anywhere.

"The power of telephony has always been underestimated, with the launch of mobile phones in Africa, no one expected the radical change it would create, and recently Africa has become one of the fastest growing mobile markets on the globe," said FNB Smart Services CEO Yolande van Wyk in a statement this week.

According to FNB, while the service itself sounds simple, the ecosystem behind it is what really makes it tick. It is the collective companies, networks, and agents that work behind the scenes that bring the services into the hands of the consumer.

Once there is a complete network providing access into this ecosystem, true cashless transactions become a reality, said Van Wyk.

Significant growth

To date, FNB Smart Services has seen a significant growth in demand for paid-for content services, airtime transfer, mobile banking, merchant payments and even person-to-person money transfers.

According to FNB, its eWallet solution specifically, has seen a remarkable up-take in a very short period, predominantly because it speaks to people's needs to replace cash easily and safely.

Since its inception in November 2009 more than 100 000 eWallets have been created with over R80-million been sent to friends and family from FNB accounts.

"The reality is that mobile money offers everyone access, no matter the physical infrastructure around them, or their income bracket," the statement read.

"It also dramatically reduces the costs of transactions as the negation of bricks and mortar services reduces the total cost of service provision; a cost saving that is then translated back into a benefit for the customer."

Customer-centric approach

Van Wyk said that to effectively bring mobile banking solutions to the African market, service providers needed to bring the customer to the centre of the environment and make the stakeholders secondary.

There is a need to place emphasis on partnerships, investigate interoperability, deploy incentives for users and partners, and deploy business models that reward qualified risks, Van Wyk explained.

SAinfo reporter