The M-PESA mobile money transfer and payments service took the world by surprise in 2007 when it debuted a successful business based on serving an previously underserved population: the rural poor. Mobile technology made it possible to reach unbanked and under-banked people in developing markets without having to build, staff and secure brick-and-mortar branches.
Mobile operator Safaricom, part of the Vodafone group, developed the idea and launched the service. Many operators recognized the same opportunity in their own coverage areas and followed its lead, including Cellcom Malaysia (AirCash), Globe Telecom (G-Cash), Mobicom Africa (MobiKash), MTN Uganda (Mobile Money), Orange (Orange Money) and Smart (SMART Money).
So far, it’s been the operators leading the charge in developing markets. But now, we’re seeing a shift, as more banks are beginning to invest in their own mobile financial services.
Dutch Bangla-Bank Limited (see my colleague Haridas Nair’s blog post about DBBL) launched a suite of award-winning mobile banking services early this year, aimed at bringing mobile financial services to the unbanked and under-banked. ONE Bank Limited is planning to jump in to mobile in Bangladesh as well, and there’s plenty of room for competition in the country, where 45 percent of the population has mobile phones and just 13 percent have bank accounts.
Two of Pakistan’s largest banks, Allied Bank Limited and Habib Bank Limited, will also soon offer mobile banking services, both with the aim of reaching the unbanked and under-banked population of the country. With approximately 130 million mobile users, Pakistan is the fifth largest mobile phone market in Asia, and one of the fastest developing markets for branchless banking in the world.
The momentum of mobile finance is increasing, and banks are pulling into the lead.