NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, May 24, 2005

In countries and communities where banks and credit card companies have far less sway than in the Western world, mobile banking suddenly seems much more attractive.
M-banking always seems like such an obvious evolution of the mobile phone. Talk of the electronic wallet and cashless society has been with us for years now, and what better tool to enable it than the ubiquitous mobile?
If only the reality was as easy. There are at least four major stakeholders in m-banking: the financials (banks and credit card companies), mobile operators, retailers and vendors (including SIM card manufacturers, payment system platform providers and handset vendors). A veteran of the European mobile market and senior exec at an operator told me recently that although many issues in the mobile world were filled with self-interest and conflicting agendas, the world of m-banking was in a “league of its own”. He was very pessimistic on the ability of the European players to draw up common standards and push ahead with m-banking.
However, maybe a lot of us in the Western economies have been looking at m-banking opportunities in the wrong way. It’s common to think of m-payments as another form of payment channel, for a user who has a wallet or purse stuffed with credit cards, debit cards and so on. But what about for a user who doesn’t have a credit card or even a traditional bank account? And in a market where mobile penetration far exceeds Internet usage.
Story found here.