Life In Kenya Sparked 'Phone Banking' Firm

Carol Realini, CEO of Calif.-based Obopay, recently spoke with Investors Business Daily (IBD) about mobile banking and how she got the idea for her four-year-old company while in Kenya in 2002.

I walked into a prepaid cell phone store in Kinshasa, and it looked exactly like a bank. People were standing in line with bags of money. The currency had been devalued, so it took basically a shopping bag of money to buy your prepaid minutes. I said, "This is interesting. What if we generalized the value that was being loaded on the phone?" If we did that, we could have a banking system, and people could have mobile bank accounts.

IBD: So, you were in Kenya ... ?

Realini:... It turns out that the mobile phone is inherently more secure than traditional banking products, like (debit) cards. Here's the reason: You know within six minutes if you've lost your mobile phone. It takes you (an average of about) 18 hours to know that you've lost your debit card.

IBD: What's different about mobile banking in emerging markets vs. developed nations?

One of the big differences is the application that's going to drive the initial adoption, because it's got to start somewhere. In the Philippines, it was prepaid "top off" — a better way to prepay to top off your phone. In Kenya, it was domestic remittances (a family member working in a remote location sending money to family members at home) because there's a lot of urban migration going on.

Read full article.

Image from CGAP "Mobile Banking: From Concept to Reality" - June 2009

emily | 8:50 AM | SMS and Banking |
The Permanent Link to this page is: http://www.textually.org/textually/archives/2009/11/024851.htm