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Cellular Banking: Cellphones Take Over for Banking in Certain Countries
The Economist has an article (subscription required) about South Africans using cellphones as banks. About half a million South Africans now use their mobile phones as a bank. Apparently, while most South Africans do not have traditional bank accounts, most do have mobile phones. And a company called Wizzit (among others) is taking advantage of the situation.
An example is given of a hair salon owner who lives two hours from his
bank. After signing up with Wizzit, the salon owner uses his cellphone
to send or receive money wherever or whenever he wants. In fact, half
his customers have stopped paying him in cash and instead just send him
funds over their phones.
And it’s not just limited to the transfer of money. These cellphone users do much more traditional banking from their phones including checking balances, paying utility bills, paying for goods, etc. Up until now, traditional banks have seen this kind of service as an add-on option usually offered to the more affluent customers. But over half the adult population of South Africa (16 million people) have no bank account. How many of those without bank accounts have cellphones? Nearly 5 million!
If this technology continues to spread, it could change the way banking is done in certain countries (namely, most of Africa where only a very small portion of people have bank accounts). Cellular banking could become the norm.