Addressing the topic of credit-worthiness, a Cambridge, MA company called Cignifi aims to help banks meet the needs of the 2.7 billion such people worldwide by offering credit and marketing scores for consumers using just mobile phone behavior data. Developed with the help of behavioral mathematicians, it assess credit risk using as little as four weeks calling history.
Fewer than 10 percent of the people in Bangladesh have bank accounts, but bKash, a joint Bangladeshi-American venture, says its mobile banking and payments platform fills the gap, reports All ThingD.
bKash is growing rapidly in Bangladesh, a country with 95 million mobile phones. The company oversees a network of 45,000 agents across the country who let people connect to its service like mom-and-pop ATMs. That way it gets around the overhead expenses that a traditional bank would have to pay.
In India, awareness levels, implementation and use of mobile money is at its early stages. While accepted in urban cities and metros, rural India is still an untapped market due to technological constraints. ZDNet reports.
For years within India, mobile phones have being used for banking purposes, such as account balances and real-time transaction details.
Now, we are talking about using a mobile phone as an alternative to making traditional transactions, such as swiping cards at the cash register or till, with the goal of eventually replacing both credit and debit cards by swiping your mobile phone.
TechInAsia on the success of Digital bank VOX in Indonesia, fueled by SMS.
Founded by Joseph Gaol in 2008, VOX, which stands for Virtual Online Exchange, aims to help the rural population in Indonesia set up bank accounts.
VOX has “mobile street vendors” to connect with the local people. A total of 12,000 of them are in the outskirts of Jakarta and these vendors also act as micro-lenders. As lenders, they sign an agreement with VOX and comply with all terms and conditions set by them to ensure that money is managed in a legal manner.
These lenders – or rather, street vendors by trade – are usually very well connected within the local community. They are also in charge of educating customers in using VOX’s mobile banking system while at the same time helping customers to deposit, withdraw, or to make a loan.
Customers will send a short code via SMS to VOX. The street vendors will then meet the user to collect or pass the cash to the customers. Using the same SMS code system, users can also use their accounts to purchase Facebook credits and pay their utility bills. Right now, VOX is hoping to include more merchandisers within its digital bank system to make payment more simple for its 1.5 million customers. Joseph reveals that, on average, the bank balance per user is at 300,000 Rupiah ($31). So the amount per transaction can’t be high.
A new report from Juniper Research finds that over 1 billion mobile phone users will have made use of their mobile devices for banking purposes by the end of 2017, compared to just over 590 million this year.
Whilst the forecast of 1 billion users by 2017 represents over 15% of the mobile subscriber base, it should be acknowledged that around half of all mobile subscribers remain unbanked, with limited access to traditional financial services.
... The new Juniper report, Mobile Banking: Handset & Tablet Market Strategies 2013-2017, found that most banks have at least one mobile banking offering, either via messaging, mobile browser or an app-based service. Yet a number of the larger banks are now confidently deploying two or more of these technologies together, particularly where there is significant smartphone and tablet penetration.
“From the banks’ perspective the triple play platform is advantageous as it avoids them having to switch suppliers for different approaches as well as maximising client reach. While messaging remains highly popular and relevant in the financial sector, apps will be the dominant access mode in developed markets with banks reporting an increased number of visits per month on their mobile apps”, noted report author Nitin Bhas.
With food prices high in Malawi's markets, many families are struggling to find enough to eat. A new program by WFP is sending cash to the most vulnerable people through their mobile phones. AllAfrica reports.
Working with the Malawi government, local partner Save the Children, and the mobile phone provider, Airtel, WFP has launched a program that aims to address this problem of access to food. Hungry farmers are being introduced to a mobile phone banking system that will deliver the cash they need to spend on food at the market.
... In many places where we have a surplus of food, the problem is not that there's no food in the locality, but that poor people cannot afford it," says WFP Senior Program Officer, Charles Inwani. "In a situation like this in Malawi, where the country has been producing a surplus of food for a while, having money in their pockets at least enables people to reach it."
More than 100,000 people are participating in the mobile cash transfer program, which is being funded by UKAID. Each will be provided with low-cost mobile phones and they will receive monthly text messages that entitle them to collect cash from Airtel agents.
A beginner’s guide to m-Pesa and an examine its implications for financial access in developing economies. By Ken Banks for National Geographic.
New innovations are challenging the idea that development requires handing ideas down from developed to developing. In banking and finance, the big ideas in cashless transfers and mobile, flexible exchanges are not to be found in Geneva or London or New York. A revolution in mobile money transfer has occurred, but not in these financial centres. Instead, it’s happened in Kenya, with m-Pesa.
The service was developed between Safaricom and Vodafone, and launched in 2007. And it’s not just something used in cities or by big commercial interests. By 2010, over 50% of Kenya’s population had used it – this means rural villagers haggling over produce, then using their Nokias to make the final deal. It means Masai herdsmen bringing their phones to market along with their cattle, ready to stock up on essentials to bring back to their homes.
... For people who live in isolated areas, the service means no longer having to carry lots of cash to markets or towns, risking losing huge amounts to banditry and theft. For people without permanent addresses or bank accounts, the service means they can pay what cash they have to m-Pesa in exchange for mobile credit, making payments and transfers and building up savings – becoming participants in an economy from which they had previously been locked out. For migrants, the service allows them to send money home to their families and villages safely and simply.
So how does it work? m-Pesa relies on a network of small shop-front retailers, who register to be m-Pesa agents. Customers come to these retailers and pay them cash in exchange for loading virtual credit onto their phone, known as e-float. E-float can be swapped and transferred between mobile users with a simple text message and a system of codes. The recipient of e-float takes her mobile phone into her nearest retailer when she wants to cash in, and swaps her text message code back for physical money. There are already more m-Pesa agents in Kenya than there are bank branches.
For a good look at the future of retail banking -- and mobile-phone profits -- in the developing world, consider the competition between corporate giants in Dharavi, the Indian shantytown that was the setting for the film “Slumdog Millionaire.” Business Week reports.
In India, wireless carriers, including Vodafone Group Plc (VOD) and Bharti Airtel Ltd. (BHARTI), are stepping in to offer money transfer services as the companies compete for a share of $10 billion in annual rural-bound remittances in a nation where mobile phone connections outnumber bank accounts.
Vodafone and Bharti have tied up with banks to let customers deposit and withdraw cash and transfer money using their phone. Faced with slowing subscriber growth and a proposed 11-fold increase in license fees, the companies are betting mobile banking will help them boost airtime sales.
“Because of India’s sheer numbers in terms of population, if you get the numbers, even a moderate margin could make mobile banking a good revenue game,” said Jaideep Ghosh, a partner at KPMG India in Mumbai. “Revenue is quite significant compared to overall voice revenue” if the subscriber base is large.
... About half the 1.2 billion people in India, the world’s most populous nation after China, don’t have a bank account. Ragged rural infrastructure and poverty make it hard for banks to justify branches in small towns and villages. In contrast, there were 919 million mobile connections at the end of March, of which 323 million were rural, according to the Telecom Regulatory Authority of India.
In response to a ATM skimming scheme that hit some 700 DBS Bank customers in Singapore - DBS is one of the largest retail banks in South East Asia - the bank announced last week plans to launch a real-time SMS/text alert service. BankInfoSecurity reports.
DBS's move to launch SMS/text alerts for ATM transactions is innovative. Most mobile alert services have been limited to Internet banking; mobile serves as a channel to which an additional verification code for online login can be sent.
"This kind of countermeasure has most typically been deployed with Internet banking systems to thwart Trojan-based fraud attacks, but it can work very effectively in just about any transaction environment," Wills says. "This flexibility offers FIs a good way to leverage their investment in a customer alert system."
... One of the factors constraining loan payments is the distance between rural households and financial institutions; currently, farmers travel long distances to make payments in person. To bridge this distance, approximately 500 farmers, as part of a pilot program, in Kunar, Laghman and Nangarhar, will use M-paisa to make loan repayments, on their mobile phone.
The rising competition among the banks and cellular operators in Pakistan for mobile banking has turned the country into a virtual laboratory for innovation in financial services that make the country a market worth watching for the world to learn new lessens in mobile banking within the next 12 months.
Entrepreneurs in Africa are pioneering a remote electronic money network for the continent’s “unbanked” rural people, allowing customers to use their cell phones like a debit card. Investing in this social entrepreneurship could bring prosperity to markets that need it most.
... Thanks to the efforts of companies like Mobile Transactions in Lusaka, Zambian cotton farmers without bank accounts can now electronically receive payments for their crop direct to their mobile phones.
About 80 percent of Zambians, particularly in rural areas, don’t have bank accounts. By using mobile banking, farmers are not only able to get paid more quickly and transparently, but they can also use their mobile accounts to send money transfers, buy phone credit, pay school fees for their children, and order agriculture inputs such as fertilizer and seed. Electronic payments also allow them to build up a credit history over time, which will make getting loans easier in the future.
The cashless system has several benefits. First, money stored electronically is less likely to be stolen or misused. Second, electronic transactions can be instant – lowering transaction costs – whereas in-person cash transactions often mean investing time and money in transportation. Electronic money can benefit more marginalized people who often have to rely on middlemen to help them access markets.
Following a tomiahonen tweet on Jibun Bank, the worlds first full bank that only exists on mobile, I wanted to find out more about it. I came across this article from the Financial Services Club. It dates back to 2009, so the figures are not up to date, but the principal is the same.
Jibun Bank is a Japanese bank which translates into ‘my bank’ in English.
Why is Jibun Bank an innovation?
Because it is designed purely and simply for mobile telephone access.
Jibun Bank was launched in July 2008 by the Bank of Tokyo-Mitsubishi UFJ (BTMU) and KDDI, the Japanese telecommunications carrier.
The difference with Jibun Bank is that it is intended for mobile access only, and only has a shell website to back it up.
The aim instead is that, through KDDI’s mobile telephone stores and BTMU’s branches, you get full service access via 24*7 telephony.
The 24-hour bank is also designed for mobile phone subscribers of KDDI's au service, allowing au users to pay for goods and services they purchase with their mobile handsets and making money transfers between au subscribers as easy as just entering the receiver's telephone number and the amount of money to be transferred into the handset.
Meanwhile, to deposit or withdraw cash, customers can use BTMU’s ATMs or those of Seven Bank and the Japan Post Bank.
Nokia has started shipping mobile phones in India that are preloaded with its banking application, in a bid to popularize mobile banking in the country. PC World reports.
India is the first market where Nokia is preloading the Mobile Money client on its phones, a company spokeswoman said on Monday.
Nokia has already teamed up with Union Bank of India, and Yes Bank, and rolled out a mobile banking service based on the https://www.obopay.com/consumer/welcome.shtml mobile payment platform, on a revenue-sharing basis.
The company is preloading the banking application on all phones, including entry-level devices that lack an Internet connection. The user interface for the application is SMS, but the device's data transport can be SMS, GPRS or Wi-Fi, Nokia said.
Ericsson has launched its m-payment service across seven European countries. Dubbed Ericsson Money, the new service allows mobile phone users in the UK, France, Germany, Italy, Spain, Poland and Sweden to send and receive money and withdraw cash. intoMobile reports.
According to the Swedish company, this is the “first step toward bringing a full suite of convenient, cost-efficient, secure and instant mobile financial services to consumers globally.”
Money can be loaded to an eWallet via a credit or debit card and can be used to transfer funds to anyone with another Ericsson Money account. Additionally, there’s an option to link the Ericsson Money PrePaid MasterCard to make purchases using the account.
Standard is breaking from its main business of drawing customers to its branches and automatic teller machines in favor of a low-cost mobile-phone model that is based on proximity to people.
Since an official launch last year, Standard has opened more than 8,300 of these so-called "bank shops" at sites ranging from street-side convenience stores to raucoustaverns.
By the end of this year, Standard intends to have 10,000 set up around the country, mostly in South Africa's predominantly black townships, and has recruited local sales agents to find customers. The shops aim to tap what executives estimate is a pool of about 15 million people in South Africa, or about 30% of its population, who don't have active bank accounts but now have the means to spend and save.
According to USA Today, three of the nation's largest banks have launched a program that will allow customers to use their computers or smartphones to make electronic payments to another person's checking account.
The venture, announced Wednesday by Bank of America, JPMorgan Chase and Wells Fargo, will allow customers to transfer money electronically from their online checking accounts to another person's account, using an e-mail address or cellphone number.
Bank of America will begin piloting a program where customers have the opportunity to approve debit card purchases that will result in negative balances via text messages.. MyBankTracker reports.
Currently, Bank of America is one of two major banks — the other being Citibank — that will decline debit card transactions resulting in a negative account balance.
Under the pilot program, expected to start early 2012, customers will receive a text message immediately after their debit cards are rejected during a point of sale purchase. A customer can respond to the text message that will permit an overdraft occur in order to process the debit card purchase.
These new mobile sites make the repayment process more accessible for many student loan borrowers,” said PHEAA Board Vice Chairman Wayne Fontana. “Anytime PHEAA can make it easier to manage student loan payments, we are helping borrowers avoid delinquency and default – which can ultimately save borrowers from a lifetime of credit issues, while safeguarding millions of federal tax dollars.”
Student loan borrowers can visit aesSuccess.org or MyFedLoan.org and check their account balance, the next payment amount and due date, and make a payment 24/7.
In the dusty village bazaar in Jalrez, eastern Afghanistan, Asif Shahrukhi is getting help from Microsoft founder Bill Gates to convert his mud-brick mobile-phone shop into a virtual bank. Bloomberg reports.
Shahrukhi offers money transfers for 45,000 people in the Jalrez Valley through a system created by Vodafone Group, to offer banking services in Kenya.
The Interior Ministry says a pilot project to pay police via phone in areas without banks will be expanded this year to cover 5 percent of the 110,000 officers nationwide.
The change “brings me more money because it has stopped the people who used to steal part of my salary every month” said Khair Muhammad, a Jalrez policeman.
Corrupt bureaucrats who used to skim as much as 20 percent from state employees’ salaries have opposed the government’s shift to electronic payments through banks and mobile phones, said Hanif Atmar, a former interior minister.
Repeating Vodafone’s African success amid Afghanistan’s war will mean overcoming Taliban threats in addition to corrupt bureaucrats, said Shahrukhi, the agent in Jalrez for Roshan, the Afghan cell-phone network that’s building the banking system. “We can’t even bring a computer to the shop to help with our work because the Taliban are against computers and they would try to kidnap or kill us,” Shahrukhi said.
Last year, fear of Taliban attack or robbery led Shahrukhi to stop bringing in the cash supplies needed to pay Jalrez’s 45 policemen at his shop. The officers, who get the cash by showing text messages on their phones that verify the money transfers, now must drive to Roshan agents in other towns to be paid.
AmEx is expected to announce on Wednesday that it is the lead investor in a $19 million financing for Payfone Inc., a New York start-up.
"The phone number is the most ubiquitous identification in the world. Using that as a way to check out means it can be used on a global basis," said Rodger Desai, co-founder and chief executive of Payfone.
The deal represents the latest effort for AmEx to position itself for new forms of payment. The company, which built a reputation on exclusivity and is best known for catering to affluent customers, is seeking to ready itself for an anticipated explosion in mobile payments.
AmEx also is seeking to attract younger customers, who ultimately are expected to be more comfortable paying for products with their phones rather than swiping a credit card.
Over half of Chinese mobile internet users have accessed some form of mobile banking service, according to a survey by 3G.cn, cited by the People's Daily newspaper.
According to the results of a sample survey, more than 52 percent of mobile phone Internet users had used mobile banking services by the end of February 2011, a considerable increase from the proportion of 37 percent in July 2010.
South Africa's First National Bank, which is based in Johannesburg, South Africa, yesterday announced the launch of a new service that allows customers to withdraw funds from ATMs using their mobile phones instead of their bank cards. Self Service World reports.
To use First National Bank's cell phone banking, customers must log onto Cellphone Banking and select a banking option. They then must choose withdraw cash and the account from which they want to take the funds, such as checking or savings.
Once the customer completes this step, the bank sends an SMS text message with a temporary PIN. The PIN is good for 30 minutes to make a cash withdrawal from one of the bank's more than 4,500 ATMs. Customers only can use the temporary PIN once.
First National Bank initially launched cell phone banking in 2005, and the financial institution has more than 2.7 million customers, said a bank spokesperson.
The New York Times in a lengthy article on mobile wallets and the players involved: mobile phone carriers, banks, credit card issuers, payment networks and technology companies - all vying for control. And how now, the pieces are finally starting to fall into place.
With irregular bank hours, but a high mobile penetration, Afghanistan is, in some ways, ideal for mobile payments, reports MIT's Technology Review. "The gulf between what's there now and what could be there if it is successful is enormous," says Jan Chipchase, executive creative director of global insights at Frog Design and textually favorite.
Similar mobile payment systems have been very successful elsewhere. The first system designed for cash transfer via text messages, called M-PESA, was launched in 2007 by Vodafone and Kenya's telecom provider Safaricom and is used by about 55 percent of Kenya's adult population for paying everything from electricity bills to school fees.
Setting up a system of mobile payments in Afghanistan proved to be especially complicated, according to Chipchase's two-week survey. Sporadic attacks on cell-phone towers by the Taliban have crippled coverage in parts of the country, and the regime has decreed that cell towers be turned off at night.
Another stumbling block is the lack of cash trade in certain parts of the country, where people still trade in commodities such as goats and gold. Many rural Afghans still lack a basic education, limiting their access to the text-based M-Paisa service in Afghanistan, the first country after Kenya to launch this innovative service.
Fotini Christia, a political scientist at MIT, who has studied civil war in Afghanistan, agrees that these issues are real obstacles to M-Paisa. "People still trade in kind, in a week's supply of crops," she says. "If it was to pick up, it's more likely to pick up in urban centers rather than anywhere else."
According to the Huffington Post, HSBC Bank customers have been receiving fraudulent text messages in recent days asking them to dial in to a 1-800 number and enter their account information over the phone.
Customer service personnel at HSBC confirmed that the text message scam had impacted numerous bank customers since Monday, but a spokesman for the bank said there is no evidence of any HSBC "data breach" or of any customer information, including credit card numbers, being compromised.
The text message read, "HSBC ALERT," and provided a number to call, which led to a professional recording that asked for account information.
South Africa's Global Post on Wizzit, a mobile banking service launched in 2004 that aims to provide affordable, accessible banking for low-income people.
In South Africa, many people don’t use banks because they are seen as expensive and elitist, and they don’t have locations and hours that meet the needs of the country’s poor, often rural, people.
The key innovation: understanding how mobile phones are actually used in South Africa.
Almost everyone in South Africa now has one, despite their economic standing. Cell phone penetration is estimated at 98 percent in the country. “Interestingly, in Africa they might not have shoes, but they have a cell phone,” Brian Richardson, a former banker said.
... Customers are given Maestro debit cards, which can be used at ATMs and points of sale. They can use their cell phones for such functions as viewing bank statements, sending money and paying bills, all with low transaction fees.