Africa as a mobile banking benchmark

Africa probably boast the most advanced, oldest and most successful examples of mobile banking solutions on the planet today. It is not difficult to understand why, as this is also one of the fastest growing markets for mobile telephony in the world.

The Celpay deployment in Zambia was one of the first mobile payment solution deployed and is still operational today. This implementation currently manages about 2% of Zambia's GNP on mobile payments. I am not aware of any other mobile payment solution that can make the same claim. One of the other Celpay deployments (in the DRC - a country as large as most of Europe and with a population of more than 120 million people) runs roughly five million mobile payment transactions a month.

Other solutions (like the m-Pesa deployment) is often quoted by Vodafone as THE Vodafone mobile payment reference. This solution runs on the Vodafone network in Kenya (Safaricom) and boasts advanced cash management capabilities. Wizzit (an innovative mobile banking deployment for the under-banked) is often quoted as an example of empowerment of under-banked and the creation of jobs.

In a country like Nigeria (one of the most oil-rich countries in the world) one finds many advanced mobile banking and payment solutions - supported by advanced central bank regulations. Deployments like eTranzact, Flash-me-Cash and mobile banking provided by the central switch (Interswitch) must definitely be rated as some of the most advanced deployments in the world, with a large take-up and growing.

Every bank in South Africa have deployed advanced mobile banking and payment solutions. This market is currently growing at the rate of more than thirty-five thousand subscribers per month. The mobile banking market have grown to one million subscribers in just over two years. Few countries can claim this achievement. The MTN banking deployment in South Africa (an innovative product supported by MTN - the largest operator in Africa and Standard Bank - the largest bank in Africa) features advanced and unique characteristics (like a banking starter pack and "pay-as-you-go" banking to name a few).

It is no doubt that Africa is one of the leaders in mobile banking with advanced solutions and successful references.

Mobile payments to really take off

The Juniper research company predict a massive growth in mobile payment volumes. This prediction is based on the assumption that 204 million users will generate transactions worth approximately $22bn by 2011. The analyst firm predicts that the market will be driven by increased uptake of person-to-person fund transfers, along with the commercialisation of mobile payments using near field communications (NFC) technology. The prediction is based on the awareness in large industry players to start embracing mobile phones as transactional devices.

What does this mean?

It is now imperative for serious players in the transactional payment and banking arena to consider their position regarding mobile payments. These companies should develop positioning strategies and consider investment in early pilot projects and mainstream business initiatives. It is important to partner with leading suppliers with relevant track records, so as to minimise risks in this complex solution space. Fundamo is the leading supplier of mobile banking solutions and is the ideal partner for large banks and mobile operators considering the deployment of mobile payments.

New initiatives in Mobile Banking

New initiatives in mobile banking is now being announced all of the time. Just a sample of the announcements made during the past week is given below.

Citibank launches mobile bill payment service in Malaysia - Citibank launched a new service in Malaysia that will enable its customers to pay bills using their mobile handsets. The SMS-based service enables customers to use their credit cards to pay bills. Customers can also receive reminders when bills need paying and personalise their payments by assigning key words or texts.

Masabi signs YourRail to mobile ticketing technology. YourRail has contracted London-based Masabi to build a mobile application which enabled train tickets to be securely bought and displayed on mobile phones.

Vodafone offers direct access to bank accounts via MoniLink. The service allows customers of MoniLink banks to check their balance, request a mini-statement and top-up their or their friends'/family's 'pay as you talk' mobile phones. The Monilink system has been set up by Monitise and VocaLink and has so far signed up HSBC, first direct, Alliance & Leicester, Royal Bank of Scotland, NatWest and Ulster Bank in Northern Ireland.

Wells Fargo and Visa to conduct public mobile payments trial. Wells Fargo and Visa are to undertake a public trial of mobile payments technology with up to 500 customers in the fourth quarter of the year. The move to a public pilot follows positive feedback from an internal laboratory trial conducted by the bank in April.

Alliance & Leicester is to pay younger customers £10 for signing up to its mobile banking services. A&L is introducing the offer to customers who have signed up to its Premier 21 current account. But the bank says only the first 20,000 customers who register for the m-banking service and use it before the end of June will receive the £10.

Telsecure launches securePay m-payments system in UK. UK mobile payments start-up Telsecure is launching its securePay front-end payments system that is designed to protect customers from card-not-present (CNP) fraud. Telsecure said in 2003 that it was teaming with business and technology consultancy Generics Group to develop the mobile authentication system, which uses a cardholder's mobile hand set to verify and authenticate transactions made via the Internet, mail and telephone.

What is interesting about most of these announcements is that they almost all are from UK banks and mobile operators. Does this mean that the UK has now become the hot-bed for mobile banking/payments. Or is this only because the British like to talk about what they do more?

It would be interesting to know how many initiatives are being launched that is not announced. We at Fundamo, have deployed a number of mobile banking initiatives for clients that has not been announced. So this may point to much more activity in this space that is just not visible to all. I think it is safe to say that mobile banking is taking off.