Mobile Banking

[Aerosmith]

Salam all,

I have been doing a research on Mobile banking and cannot seem to understand how the conventional banking sector can use mobile companies (who provide virtual money transfer) as tools for expansion, especially into the rural un-banked market?

To my knowledge of mobile banking or wallet money as they call it, do not require users(mobile phone users with this value added service) to setup a bank account, instead offering a variety of services; from money transfer, mobile payments and balance checking to mobile purchases, and the ability to buy airtime in real-time.

Heck some mobile phone operators with the help of ATM Vendors have taken money transfers a step further. Now a mobile wallet user can basically withdraw money from an ATM without essentially having a debit card. This is kinda unique in the sense it allows a mobile wallet user to come and access the ATM without the need for a bank card. It works like this, a customer gets an authentication code on his phone. Walks up to an ATM, pushes the button, enters the authentication code on his cell phone and basically withdraws cash. This is fantastic in the sense it opens up real world banking infrastructure to the virtual world of mobile money transfer.

Sorry about the details as I felt it maybe needed to explain my earlier question which I'll re-write again being how does this help the conventional banking sector expand? To me I see it as a direct competitor? How do they aid one another and mobile wallet offered by mobile phone carriers become an inclusive product to help expand banking facilities especially to the un-banked population in developing countries.

I am specifically interested in how can they look at it as a tool for expansion and increasing their distribution?

I can't seem to get it, even though I know its easy walahi, mise waan waashay.
Please Help folks. Thanks

[Aerosmith]

No one Camon' where are the engineers, entrepreneurs and finance folks. Help me out akhyaarey.

[AbdiWahab252]

Aerosmith,

Well it depends on your background, if you have never had a bank account and were told you could use a phone as a place to store your funds and withdraw from there, it may be a hard sell. If you do have a bank account, I dont see a reason to own such a device especially if you have ATM cards or credit cards.

I get the sense its one of those innovations that sound good and every bank wants a piece of the action as a pioneer just for the sake of being an innovator.

[Aerosmith]

Aerosmith,

Well it depends on your background, if you have never had a bank account and were told you could use a phone as a place to store your funds and withdraw from there, it may be a hard sell. If you do have a bank account, I dont see a reason to own such a device especially if you have ATM cards or credit cards.

I get the sense its one of those innovations that sound good and every bank wants a piece of the action as a pioneer just for the sake of being an innovator.

It isn't actually, a casing point being in Kenya's Safaricom where most urban and rural clients use their m-pesa money transfer service as a virtual bank for storage. This has given conventional banks a run for their money as they have avoided rural clients given the high costs.
What I am more interested in is given that already in developed countries like US, there are virtual banks or brokerage firms like Ing Direct, Schwab etc whether such customized software can be used to remittance purposes both regionally and to neighboring developing countries like Mexico and tapping into Western Union market. Also whether this is applicable to Somali Hawalas and how would one implement such? Any ideas

[Aerosmith]

bump