Technology Intelligence Series: Spotlight on m-banking

Friday, May 13, 2011

As smartphones increase in popularity, it is only natural that consumers familiar with internet-based account management will transfer the habit to internet-capable phones, so to some degree m-banking is inevitable.

However, Pyramid Research's recent estimate of 140mn Latin American m-banking users by 2015 translates into only 22% of the total mobile users expected in that year, compared to about 3% at present.

Nevertheless, the emergence of near field communications (NFC) technology and SMS-based services promises to expand the options for the banked and unbanked alike, as well as change the way all of us pay for goods.

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The true groundbreaker, given the region's low banking penetration, is the pseudo-bank account based on the mobile user's prepaid account, and Latin America has seen at least 10 such launches in the last three years.

But markets where mobile wallet is most applicable are also where there is the least liquidity among consumers, meaning operators and banks can charge little in the way of commissions. The wallet option can be an attractive differentiator for carriers with low market share, but for groups that already have a solid client base, there is not much incentive to dedicate time and resources to implement such platforms.

This suggests that the push to promote m-banking is going to come more from financial institutions than mobile operators.

BNamericas has touched on m-banking in the regular Mobile VAS reports (Telecom Intelligence Series), but given the population-wide socioeconomic benefits that governments and banks expect from the concept, it is worthy of a report of its own.

So it is that our latest Technology Intelligence Series focuses on this topic. Follow this link for more information.