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Banking on your phone

by: Linda Pintro, Senior Legal Advisor, International Bureau

October 12, 2010 - 11:35 AM

(Part of the ongoing WISENET Series)

[[wysiwyg_imageupload:243:height=61,width=70]]It should come as no surprise that “mobile money” has taken off in the developing world because the need for it there is massive, and the opportunity it presents for network operators and banks is also huge.  The term “mobile money” includes all monetary transactions done through a mobile phone.  When I talk about mobile money in the developing countries, I am not talking about the advanced services in which you can wave your telephone at the vending machine for contactless payment of your candy bar.  For the most part I’m talking basic services like getting loans and paying bills.  This basic mobile banking is forecast to generate $5 billion in fees by 2012.  In Africa, for example, approximately 80% of the people have no or very little access to banking services, but they are not alone in being “unbanked” or “under-banked.” There are a number of reasons why people are unbanked.  They may not have one or more basic things that a bank may require to open a bank account:  an ID card, permanent address, a job.  In some cases, they may have all that is required but simply not live near a bank branch.  Because most financial transactions in the developing world take place at the corner “mom and pop stores,” mobile money services allow these small shops to act like branches.  Although they may not offer you a free toaster for signing up for banking services, these convenience stores are getting the job done.  Let me tell you how in my next few blog posts.

Updated: April 18, 2012 - 11:46 AM
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