Africa is now showing a significant embracing of Mobile Money Transfers than before. More people in Africa’s poorest countries have mobile phones than bank accounts. Projections show that 68% of Africans will have a mobile phone by 2015.
First National Bank (FNB) recorded 150% growth in December 2011 for its Cellphone Banking service and 1384% growth for eWallet. 2.4 million transactions were conducted on cellphones during December 2011 in Botswana, Namibia, Zambia, Swaziland and Lesotho.
“Innovation has played a key role in growing cellphone banking across Africa. Our ability to adapt the service for use on any cellphone has been an important driver of this growth,” Ravesh Ramlakan, CEO FNB Cellphone Banking Solutions told. In total R214 million was transferred compared to December 2010 when it was only R986 000, showing a significant growth.
Making transactions by mobile phone can be cheap, efficient and safe, alternative to the usual channels of employing money transfer companies and Banks. Money can easily be sent to remote areas quickly, provided the recipient has access to a cell phone.
Kenya’s Safaricom and the UK telecommunications firm Vodafone started the blaze in 2007, when M-Pesa (M for “mobile” and pesa meaning “money” in Kiswahili) was launched. Its growth was rapid, considering that at first was, “virtually ignored by the financial institutions,” recalls Bernard Matthewman, chief executive of Paynet, which developed software for M-Pesa that allows cardless transactions at ATMs. Some $100 million has been withdrawn by remittance recipients from PesaPoint ATMs, without the need for bank cards or bank accounts.
Vodacom recently teamed up with Nedbank to offer the service for domestic transfers in South Africa, that saw 140,000 customers and set up more than 3,000 M-Pesa outlets and 2,000 ATMs throughout the country by May 2011.
“By making it easy for unbanked people to hold money in the mobile wallets linked to their mobile phone numbers, the hope is that eventually the money will find itself in an actual bank account,” explains Mr. Osare, Ecobank’s head of transaction banking in Ghana. In May, Ecobank introduced a mobile savings account that can be linked to a mobile wallet for customers in West Africa.
With the current growth rates, Africa and the rest of the world will soon move from cash transactions to mobile and internet-based transactions, due to the advantages it possesses over regular cash transactions.