Mobile Money in South Africa: What’s in It for Banks?
The 2015 State of the Industry Report on Mobile Financial Services tabled at the World Mobile Congress in Barcelona brings some interesting but not unexpected figures on the state of mobile money today. I say “unexpected” because any innovation that delivers simple, affordable and accessible product is bound to make its presence felt and disrupting the traditional systems.
The report said mobile money is reaching more than 411-million people globally and available in 85% of countries where the vast majority of the population lacks access to a formal financial institution. It also states that more than one billion transactions were processed in December 2015 which is more than double what PayPal processed globally.
It’s no secret that even in countries where mobile money is slow in adoption like South Africa, banks are watching with keen interest driven by fear of being left behind especially in a world where some speculate that virtual currency might replace cash in the near future. To say these things are impossible with technological innovation that we are witnessing today would be delusional.
Like any other business, banks should be interested and eager to be part of any financial revolution that makes sense to their bottom line. In South Africa where close to 30% of the population is unbanked financial institutions should be asking themselves hard questions on how to reach this market with affordable, accessible and simple products to use. Mobile money is the answer; the ability to pay in store or online using a phone or access insurance policies and other financial products by the click of phone buttons without touching cash.