Mobile Devices Alone Won’t Solve American Financial Inclusion Problem
Friday, November 1, 2013
Part of the discussion at the Unconference in New York last week, addressed the potential of mobile technology to bank the underserved.
This notion, which has been proposed on BankThink before,largely originates from the success of M-PESA, a mobile money transfer service launched in Kenya by Safaricom in 2007. M-PESA is used by more than two-thirds of Kenya’s adult population and around 25% of the country’s gross national product flows through it. The service has, notably, enabled poor farmers and merchants to sell more goods more easily, saving users an average of three hours per transaction.
There are a lot of reasons why M-PESA’s success may not be so easily replicated in the U.S., mostly related to regulatory barriers. But a central idea behind its inception certainly resonates here: Not all consumers, particularly low-income ones, have access to a traditional bank, but most do have access to a mobile phone.