Saturday, November 03, 2007

Mobile banking in Africa

Fundamo was one of the first companies that demonstrated a working mobile payment solution with the first pilot in conjunction with Boland Bank announced during 2000. Absa Bank launched the first commercial mobile banking solution during 2002 in South Africa. Absa claims that more than 300 000 subscribers have enrolled for the service to date. This early launch have been followed up with launches of different types of solutions from Standard Bank, FNB, Nedcor, Investec and others. Although numbers are not readily available, a rough estimate of more than a million mobile banking subscribers is not far off. This is amazing if one considers the short time that mobile banking has been available.
During the past five years many initiatives were announced and often launched in South Africa. Many large technology companies and smaller ones made announcements and then disappeared again. South African companies that offered mobile banking solutions include Prism, Namitech, Cointel and Paym8. The launch of Wizzit in conjunction with Bank of Athens was so spectacular that they featured on CNN, Financial Mail and many other publications. Citibank and Standard and Chartered played with ideas to use the mobile channel to enter the South African market with a different and exciting angle, but did not implement.
The launch of MTN Banking during 2005 can be considered as the ultimate mobile banking solution with many new angles and an exciting offering. Combining mobile concepts with banking a totally new banking experience was created. Some of the concepts like "a banking starter pack", "pay as you bank" etc. worked well to grow a subscriber base quickly into hundreds of thousands of subscribers.
Today, South Africa is one of the leading examples of successful mobile banking deployments.
With the exception of South Africa and the successful deployments of Celpay in the DRC and Zambia (supported by Fundamo technology), quite a number of other examples of mobile payment and banking solutions exist in Africa. Celpay is one of the first mobile payment solutions deployed in the world and provides advanced payment functionality in countries with little (if any) payment infrastructure. It has been reported that Celpay payments in Zambia now accounts for almost 4% of the GNP.
has turned into a hotbed of mobile payment innovation with one of the mobile operators Glo offering a product called Glomoney since launch. This solution provides mobile payment features on ATM cards from most banks. The solution is supported by one of the ATM switches called Interswitch who is now rolling this out to other banks and talking of providing it also via Celtel. (The solution initially available on special SIM cards, is now also available via a Java client to be downloaded on the phone). Other successful initiatives are from a company called eTranxact whom operates the solution themselves. The same technology is currently in production in Zimbabwe with Kingdom Bank. Flash-me-Cash is a SMS based viral payment mechanism that are claiming to have more than 500 000 subscribers and is based on a structured SMS solution.
Another area in Africa with a number of initiatives under way or in production is Kenya and surrounding countries. A number of banks recently announced mobile banking solutions. A noteworthy example is Consolidated Bank with a USSD mobile banking offering. South African company, Paym8 have deployed their solution since 2005 with Safaricom and is claiming an acceptable take-up. Card payment acquirer, iVeri (a Blue Label company) offers mobile payment functionality in Rwanda. One of the most important initiatives, however is the Vodafone backed mPesa initiative. This technology (developed in London) has been in pilot deployment since early 2006 and was recently placed in production with Vodafone subsidiary Safaricom. mPesa is receiving massive backing from London and is poised to be rolled out to other Vodafone networks (Egypt and possibly South Africa). The technology is SIM based and well designed with good “cash-out” functionality. A recently announced collaboration with Citibank allows for money remittance from London to Kenya.

A North African example is the roll-out of a mobile payment solution in conjunction with VISA in Morocco. The technology utilised was provided by French company Upaid and supported in country by Maroc Telecom and BCP (a bank). Other examples in North Africa are initiatives launched in Egypt and Tunisia.

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